UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

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

For the transition period from ___________ to __________

Commission file number 000-53851

Mobivity Holdings Corp.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		26-3439095
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

3133 West Frye Road, # 215

Chandler, Arizona 85226

(Address of Principal Executive Offices)

(877) 282-7660

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 14, 2022,~~May 11, 2023, the registrant had ~~61,311,155~~65,797,567 shares of common stock, par value $0.001 per share, issued and outstanding.

Table of Contents

	*September 30,*			*December 31,*			*March 31,*			*December 31,*
	*2022*			*2021*			*2023*			*2022*
	(Unaudited)			(Audited)
ASSETS
Current assets
Cash	$	1,016,745		$	735,424		$	2,581,597		$	426,740
Accounts receivable, net of allowance for doubtful accounts $59,190 and $56,340, respectively		869,965			578,303
Accounts receivable, net of allowance for doubtful accounts $10,820 and $34,446, respectively								749,986			1,081,183
Other current assets		252,504			227,458			212,939			195,017
Total current assets		2,139,214			1,541,185			3,544,522			1,702,940
Goodwill		411,183			411,183
Right to use lease assets		1,032,132			1,187,537			930,658			981,896
Intangible assets, net		584,369			1,124,720			143,857			194,772
Other assets		153,756			173,325			142,464			137,917
TOTAL ASSETS	$	4,320,654		$	4,437,950		$	4,761,501		$	3,017,525
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	3,636,629		$	3,823,909		$	3,335,917		$	3,412,612
Accrued interest		443,448			172,239			442,269			443,448
Accrued and deferred personnel compensation		298,316			495,533			495,209			569,347
Deferred revenue and customer deposits		613,997			377,170			704,740			902,727
Related party notes payable, net - current maturities		1,812,500			819,531			1,327,265			2,711,171
Notes payable, net - current maturities		35,875			69,052			24,354			32,617
Operating lease liability		245,816			229,240
Operating lease liability, noncurrent								257,614			251,665
Other current liabilities		142,238			9,071			15,462			49,541
Total current liabilities		7,228,819			5,995,745			6,602,830			8,373,128

Non-current liabilities
Related party notes payable, net - long term		2,315,607			2,498,711			3,896,763			2,481,290
Notes payable, net - long term		36,666			39,086			29,565			31,092
Operating lease liability		1,001,579			1,188,589			870,057			936,924
Total non-current liabilities		3,353,852			3,726,386			4,796,385			3,449,306
Total liabilities		10,582,671			9,722,131			11,399,215			11,822,434

Stockholders' equity (deficit)
Common stock, $0.001 par value; 100,000,000 shares authorized; 61,311,155 and 55,410,695, shares issued and outstanding		61,311			55,411
Common stock, $0.001 par value; 100,000,000 shares authorized; 65,607,411 and 61,311,155, shares issued and outstanding								65,607			61,311
Equity payable		100,862			100,862			317,086			324,799
Additional paid-in capital		108,273,597			102,446,921			113,423,638			108,806,353
Accumulated other comprehensive income (loss)		(128,950	)		(52,088	)		(69,461	)		(100,963	)
Accumulated deficit		(114,568,837	)		(107,835,287	)		(120,374,584	)		(117,896,409	)
Total stockholders' equity (deficit)		(6,262,017	)		(5,284,181	)		(6,637,714	)		(8,804,909	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	4,320,654		$	4,437,950		$	4,761,501		$	3,017,525

	*Three Months Ended*						*Nine Months Ended*						*Three Months Ended*
	*September 30,*						*September 30,*						*March 31,*
	*2022*			*2021*			*2022*			*2021*			*2023*			*2022*
Revenues
Revenues	$	1,890,437		$	2,311,548		$	5,787,168		$	7,561,966		$	1,881,482		$	2,029,569
Cost of revenues		1,806,022			1,008,703		$	4,183,719			3,322,639			1,066,575			1,174,948
Gross profit		84,415			1,302,845			1,603,449			4,239,327			814,907			854,621

Operating expenses
General and administrative		983,428			1,245,085			3,088,588			3,491,855			1,544,106			1,207,176
Sales and marketing		614,600			978,968			1,778,371			2,987,411			691,220			597,501
Engineering, research, and development		784,804			678,209			2,360,863			2,076,194			734,375			702,223
Impairment of intangible asset		238,143			—			238,143			8,286
Depreciation and amortization		118,317			182,663			353,050			524,474			63,902			124,312
Total operating expenses		2,739,292			3,084,925			7,819,015			9,088,220			3,033,603			2,631,212

Loss from operations		(2,654,877	)		(1,782,080	)		(6,215,566	)		(4,848,893	)		(2,218,696	)		(1,776,591	)

Other income/(expense)
Interest income		—			—			—			5
Other Income		—			891,103			—			891,103
Loss of settlement of debt														(10,857	)		—
Interest expense		(193,501	)		(88,331	)		(520,454	)		(144,714	)		(238,446	)		(159,827	)
Loss on disposal of fixed assets		—			—			—			(880	)
Foreign currency gain (loss)		(339	)		(4,329	)		2,470			(6,577	)
Settlement Losses														(10,000	)		—
Foreign currency gain														(176	)		3,319
Total other income/(expense)		(193,840	)		798,443			(517,984	)		738,937			(259,479	)		(156,508	)
Loss before income taxes		(2,848,717	)		(983,637	)		(6,733,550	)		(4,109,956	)		(2,478,175	)		(1,933,099	)
Income tax expense		—			—			—			—			—			—
Net loss		(2,848,717	)		(983,637	)		(6,733,550	)		(4,109,956	)		(2,478,175	)		(1,933,099	)
Other comprehensive loss, net of income tax
Other comprehensive income (loss), net of income tax
Foreign currency translation adjustments		(76,228	)		(13,150	)		(76,862	)		(22,391	)		31,502			(12,895	)
Comprehensive loss	$	(2,924,945	)	$	(996,787	)	$	(6,810,412	)	$	(4,132,347	)	$	(2,446,673	)	$	(1,945,994	)
Net loss per share:
Basic		(0.05	)		(0.02	)		(0.12	)		(0.07	)
Diluted		(0.05	)		(0.02	)		(0.12	)		(0.07	)
Basic and Diluted														(0.04	)		(0.03	)
Weighted average number of shares:
Basic		60,297,083			55,410,695			58,544,432			55,410,695
Basic and Diluted														62,078,218			57,233,309

	*Nine Months Ended*						Three Months Ended
	*September 30,*						March 31,
	*2022*			*2021*			2023			2022
OPERATING ACTIVITIES
Net loss	$	(6,733,550	)	$	(4,109,956	)	$	(2,478,175	)	$	(1,933,099	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on Settelment of Debt - related party		2,421			—
Loss on Settlement of Debt - related party								10,857			—
Bad debt expense		45,685			72,773			(10,576	)		(10,705	)
Stock-based compensation		994,384			751,878			810,157			589,650
Loss on Disposal of Fixed Assets		—			880
Intangible asset impairment		238,143			8,286
Gain on Forgiveness of Debt		—			(891,103	)
Depreciation and amortization expense		353,050			448,062			63,902			124,312
Amortization of Debt Discount		83,334			9,833			31,567			24,205
Increase (decrease) in cash resulting from changes in:
Accounts receivable		(337,347	)		(1,402,518	)		341,773			98,004
Other current assets		(17,148	)		99,614			(17,891	)		(105,749	)
Operating lease assets/liabilities		(15,029	)		76,414			(9,680	)		2,822
Contracts receivable, long-term		—			707,928
Other assets		—			4,475			(3,423	)		—
Accounts payable		(187,280	)		1,368,027			(76,695	)		(320,445	)
Accrued interest		432,959			69,330			204,188			133,125
Accrued and deferred personnel compensation		(195,975	)		258,916			(77,402	)		(203,103	)
Right to Use Lease					(415,767	)
Other liabilities - non-current		—			—
Other liabilities - current		133,167			(135,273	)		(34,079	)		—
Other liabilities - non current								—			(9,071	)
Deferred revenue and customer deposits		236,827			(111,310	)		(197,987	)		(203,791	)
*Net cash used in operating activities*	$	(4,966,359	)	$	(3,189,511	)	$	(1,443,464	)	$	(1,813,845	)

INVESTING ACTIVITIES
Purchases of equipment		(18,712	)		(78,217	)		(14,111	)		—
Capitalized software development costs		(12,030	)		(310,546	)
*Net cash used in investing activities*		(30,742	)		(388,763	)		(14,111	)		—

FINANCING ACTIVITIES
Payments on notes payable		(29,145	)		(490,174	)		(9,978	)		(6,354	)
Payments on related party notes payable		—			(80,000	)
Proceeds from related party debt		800,000			1,456,250
Proceeds from conversion of common stock warrants		2,550,552			—			3,587,487			2,550,553
Proceeds from PIPE funding		2,050,000			—
*Net cash provided by (used in) financing activities*		5,371,407			886,076
*Net cash provided by financing activities*								3,577,509			2,544,199

*Effect of foreign currency translation on cash flow*		(92,985	)		(21,726	)		34,923			(10,631	)

*Net Change in cash*		281,321			(2,713,924	)		2,154,857			719,723
*Cash at beginning of period*	$	735,424		$	3,282,820		$	426,740		$	735,424
Cash at end of period		1,016,745			568,896			2,581,597			1,455,147


Non cash investing and financing analysis:
Interest Paid	$	—		$	66,237		$	—		$	—

Fair Value of Options issued with related party debt	$	73,469		$	—		$	—		$	6,201
Refinancing of debt-related party	$	—		$	543,750
Fixed Asset Contribution by Lessor	$	—		$	110,000
Initial ROU and asset and lease liability	$	—		$	1,458,527
Shares issued for settlement of debt - related party	$	161,750		$	-		$	205,367		$	—
Debt Discount on related party debt	$	—		$	124,388
Shares issued from stock payable for settlement of debt - related party							$	223,937		$	—
Par Value of stock for RSU's issued - termination of director's service							$	545		$	—

Mobivity Holdings Corp. (the “Company” or “we”) is in the business of developing and operating proprietary platforms over which brands and enterprises can conduct national and localized, data-driven mobile marketing campaigns. Our proprietary platforms, consisting of software available to phones, tablets, PCs, and Point of Sale (“POS”) systems, allow resellers, brands, and enterprises to market their products and services to consumers through text messages sent directly to consumers via mobile phones, mobile smartphone applications, and dynamically printed receipt content. On November 14, 2018, we completed the acquisition of certain operating assets relating to Belly, Inc.’s proprietary digital customer loyalty platform, including client contracts, accounts receivable, and intellectual property. We generate revenue by charging the resellers, brands, and enterprises a per-message transactional fee, through fixed or variable software licensing fees, or via advertising fees.

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, ~~2021~~2022filed with the SEC on March 30, 2022.

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, 2022~~March 31, 2023, and for the three ~~and~~ ~~nine~~months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022. The results of operations for the three ~~and~~ ~~nine~~months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the operating results for the full year ending December 31, ~~2022.~~2023.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates used are those related to stock-based compensation, asset impairments, the valuation and useful lives of depreciable tangible and certain intangible assets, the fair value of common stock used in acquisitions of businesses, the fair value of assets and liabilities acquired in acquisitions of businesses, the fair value of options issued with related party debt, and the valuation allowance of deferred tax assets. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.

Certain prior year amounts have been reclassified to conform to the current year’s presentation. The reclassifications did not affect previously reported net losses.

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.

We minimize our credit risk associated with cash by periodically evaluating the credit quality of our primary financial institution. Our balances at times may exceed federally insured limits. We have not experienced any losses on our cash accounts.

Accounts receivable 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, 2022~~March 31, 2023, and December 31, ~~2021~~2022, we recorded an allowance for doubtful accounts of ~~$59,190~~$10,820 and ~~$56,340~~$34,446 respectively.

Goodwill is tested for impairment at a minimum on an annual basis. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit.

We conducted our annual impairment tests of goodwill as of December 31, ~~2021~~2022. As a result of these tests, we had a total impairment charge of ~~$85,169.~~$963,659.

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 ~~long-lived~~goodwill and intangible assets resulted in ~~$238,143 and $8,286 of intangible~~no impairment ~~expenses during~~charges for the ~~nine~~three months ended ended ~~September 30, 2022~~March 31, 2023 and ~~2021,~~2022, respectively.

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 period.

The Company evaluates the future recoverability of capitalized software development costs on an annual basis. For products that have been released in prior years, the primary evaluation criterion is ongoing relations with the customer. The Company’s evaluation of its capitalized software development assets resulted in no impairment charges ~~of $0~~ for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~$0 for the year ended~~ ~~December 31, 2021~~2022,. respectively

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.

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.

Our Recurrency platform is a hosted solution. We generate revenue from licensing our software to clients in our software as a service model, per-message and per-minute transactional fees, and customized professional services. We recognize license/subscription fees over the period of the contract, service fees as the services are performed, and per-message or per-minute transaction revenue when the transaction takes place. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting. Some customers are billed on a month-to-month basis with no contractual term and 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.

During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, two customers accounted for ~~50%~~51% and ~~54%~~53% of our revenues, respectively.

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 ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, the comprehensive loss was ~~$6,810,412,~~$2,446,673, and ~~$4,132,347~~$1,945,994 respectively.

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 are expensed as incurred, and consist primarily of compensation costs, outside services, and expensed materials.

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 ~~$315,540~~$54,248 and ~~$698,761~~$163,734 for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, respectively. ~~The decrease in advertising expense is due to lower engagement and content creation costs.~~

We account for income taxes using the assets and liability method, which recognizes deferred tax assets and liabilities determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets when, based on available objective evidence, it is more likely than not that the benefit of such assets will not be realized. We recognize in the consolidated financial statements only those tax positions determined to be more likely than not of being sustained.

Basic net loss per share 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, 2022~~March 31, 2023 and ~~2021~~2022, we had securities outstanding which could potentially dilute basic earnings per share in the future. ~~Those~~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.

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 August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 requires that the if-converted method of computing diluted Earnings per Share. The Company adopted ASU 2020-06 on January 1, 2022.

We had ~~$1.0 millioin~~$2,581,597 of cash as of ~~September 30, 2022.~~ March 31, 2023. We had a net loss of ~~$6.7 million~~$2,478,175 for the ~~nine~~three months ~~then~~ endedMarch 31, 2023, and we used ~~$5.0 million~~$1,443,464 of cash in our operating activities during that time. In the ~~2021,~~three months ended March 31, 2022 we had a net loss of ~~$4.1 million~~$1,933,099 and used ~~$3.2 million~~$1,813,845 of cash in our operating expenses. We raised ~~$2.6~~$3.6 million in cash from the exercise of warrants in February ~~2022~~ ~~and~~of 2023. There is substantial doubt that our additional cash from our warrant conversion along with our expected cash flow from operations, will be sufficient to fund our 12-month plan of operations, there can be no assurance that we ~~have raised $2.1 million in Private Placement financing to date.~~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 ~~$114.6~~$120.4 million as of ~~September 30, 2022~~March 31, 2023. Further losses are anticipated in the development of the Company’s business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next 12 months with proceeds from the sale of securities, and/or revenues from operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

The carrying value of goodwill at each of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~$411,183.~~$0.

The following table presents details of our purchased intangible assets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022:

The intangible assets are being amortized on a straight-line basis over their estimated useful lives of one year to twenty years.

Amortization expense for intangible assets was ~~$35,724~~$8,970 and ~~$35,738~~$38,888 for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~~~, respectively.~~

~~Amortization expense for intangible assets was $107,211 and $107,478 for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~ 2022~~and~~ ~~2021~~, respectively.

The estimated future amortization expense of our intangible assets as of ~~September 30, 2022~~March 31, 2023 is as follows:

The Company has capitalized certain costs for software developed or obtained for internal use during the application development stage as it relates to specific contracts. The amounts capitalized include external direct costs of services used in developing internal-use software and for payroll and payroll-related costs of employees directly associated with the development ~~activities~~activities.

The following table presents details of our software development costs as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022:

Software development costs are being amortized on a straight-line basis over their estimated useful life of two years.

Amortization expense for software development costs was ~~$61,764~~$41,945 and ~~$104,870~~$73,289 for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~~~, respectively.~~

~~Amortization expense for software development costs was $207,027 and $309,618 for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~ 2022~~and~~ ~~2021~~, respectively.

The estimated future amortization expense of software development costs as of ~~September 30, 2022~~March 31, 2023 is as follows:

The Company entered into a lease agreement on February 1, 2021, for 8,898 square feet, for its office facilities in Chandler, AZ through January 2027. Monthly rental payments, excluding common area maintenance charges, are $25,953 to $28,733. The first twelve months of the lease included a 50% abatement period and a deposit of $110,000 was required. The lessor contributed $110,000 towards the purchase of office furniture as part of the lease agreement. As of ~~September 30, 2022~~March 31, 2023, we have an operating lease asset balance of ~~$1,032,132~~$930,658 and an operating lease liability balance of ~~$1,247,395~~$1,127,671 recorded in accordance with ASC 842, Leases (ASC "842").

The following are additional details related to leases recorded on our balance sheet as of ~~September 30, 2022~~March 31, 2023:

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:

The following table presents details of our notes payable as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022:

On November 6, 2017, Livelenz (a wholly-owned subsidiary of the Company), entered into an amendment of the original agreement dated December 2, 2014, with the Atlantic Canada Opportunities Agency (“ACOA”). Under this agreement, the note will mature, and the commitments will terminate on February 1, 2024. The monthly principal payment amount of $3,000 CAD increased to $3,500 CAD beginning on November 1, 2019, $4,000 CAD on August 1, 2021, $4,500 CAD on August 1, 2022, and $2,215 CAD during the remaining term of the agreement. Payments from April- December of 2020 were voluntarily deferred by ACOA due to COVID-19.

During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 we repaid ~~$32,263~~$9,878 USD of principal.

On ~~April~~ ~~10,~~~~2020,~~ ~~we entered into a commitment loan with Chase Bank, N.A. under the CARES act and SBA Paycheck Protection Program, in the principal aggregate amount of $891,103, which is due and payable~~ ~~two~~ ~~years after issuance. This note bears interest on the unpaid balance at the rate of~~ ~~one~~ ~~percent (1%) per annum. The note contains a deferral period of~~ ~~six~~ ~~months, for which~~ no ~~interest or principal payments are due. Forgiveness of the loan~~ ~~may~~ ~~be obtained by meeting certain SBA requirements. The entire loan was forgiven on~~ ~~July 21, 2021,~~ ~~at which time the company recorded a gain on extinguishment of debt in the amount of $891,103.~~

On April 22, 2020, we entered into a commitment loan with TD Bank under the Canadian Emergency Business Account (“CEBA”), in the principal aggregate amount of $40,000 CAD, which is due and payable on December 31, 2023. This note bears interest on the unpaid balance at the rate of zero percent (0%) per annum during the initial term. Under this note, no interest or principal payments are due until December 31, 2023. Under the conditions of the loan, thirty-three percent (33%) of the loan will be forgiven if sixty-seven percent (67%) is repaid prior to the initial term date.

On June 30, 2021, ~~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 $6,000,000 under ~~this~~the Credit Agreement ~~amended on~~ ~~September 30, 2022.~~ ~~As of~~ ~~December 31, 2021,~~ ("the company has drawn a total of $3,478,125 including cash in the amount of $3,206,250 and $271,875 of principal and accrued interest under the above-described Note that was rolled into the Credit Facility and paid a total of $200,000 toward the principal balance of the loan,"Credit Facility").

The ~~loan~~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 (15%) per annum. The Company may prepay this loan without notice, penalty, or charge. In consideration of the ~~lender’s~~Lender’s agreement to provide the ~~facility,~~Credit Facility, the Company issued warrants to purchase shares of its common stock at an exercise price of $1.67 per share in connection with the issuance of funds under ~~this~~the Credit Agreement. The warrants are exercisable for a period commencing upon issuance of the corresponding notes and ending 36 months after issuance of the financing. In addition, the Company has agreed to issue to the ~~lender~~Lender additional warrants entitling the ~~lender~~Lender to purchase a number of shares of the Company's common stock equal to twenty percent (20%) of the amount of the advances made divided by the volume-weighted average price over the 30 trading days preceding the advance (the "VWAP"). Each warrant will be exercisable over a three-year period at an exercise price equal to the VWAP.

Under the original terms of the Credit Agreement, the Company was to begin repaying the principal amount, plus accrued interest, in 24 equal monthly installments commencing on June 30, 2022, and ending on June 30, 2024. On ~~August 13, 2022,~~ ~~the Lender agreed to postpone the~~ 24~~-month repayment period to a later period commencing on~~ ~~January~~ ~~31,~~~~2022,~~ ~~and further agreed that interest accrued on the loan between~~ ~~July 1, 2022~~ ~~and~~ ~~December 31, 2022~~ ~~is to be settled in shares of the Company’s common stock.~~

On ~~June 10, 2022,~~ ~~The Company took a draw of an additional $500,000 under the Credit Agreement.~~

On ~~August 09, 2022~~ ~~the Company took a draw of an additional $300,000 under the credit agreement.~~

~~During the~~ ~~nine~~ ~~months period ending~~ ~~September 30, 2022,~~ the Company issued warrants to purchase an aggregate of 177,571 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under the Credit Agreement. The estimated aggregate fair value of the warrants issued is $73,469 using the Black-Scholes option valuation model as of ~~September 30, 2022.~~

~~As of~~ ~~September 30, 2022,~~ the Company has drawn a total of $4,078,125 including cash in the amount of $3,806,250, and $271,875 of principal and accrued interest under the above-described UP Notes which were rolled into the Credit Agreement, and we have accrued interest of $387,918. A total of $151,398 of accrued interest was settled into 140,185 shares of common stock and the Company recorded a loss on debt settlement of interest payable $2,259.

On January 31, 2023, the Company entered into Amendment No.1 (the “Amendment”) to the Amended and Restated Credit Facility Agreement and Convertible Notes which amends our existing Amended and Restated Credit Facility Agreement, dated as of November 11, 2022, between the Company and Thomas B. Akin, a director of the Company (the “Existing Credit Agreement” and as amended by the Amendment, the “Credit Agreement”) and any convertible notes issued thereunder. The Amendment amends the Existing Credit Agreement to extend the maturity of the Credit 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 Credit 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 OTCQB® Venture Market operated by OTC Markets Group Inc. over the ninety (90) trading days immediately preceding such date. The Amendment provides for corresponding amendments to the form of convertible note to be issued under the Credit Agreement in the future and any outstanding convertible notes issued under the Existing Credit Agreement.

During the three months ended March 31, 2023, a total of $195,171 of interest was accrued and settled to equity payable for the issuance of 180,715 shares of common stock. The company recorded a loss of settlement of interest payable of $10,315 . The company issued 154,106 shares from equity payable related to accrued interest settled during the fourth quarter of 2022.

As of March 31, 2023, the Company had drawn a total of $5,173,125 and we have accrued interest of $387,918.

On July 1, 2021, 1,~~2021,~~we entered into ~~Unsecured Promissory~~UP Notes ~~(each individually, a “UP Note” and collectively, the “UP Notes”)~~ in the aggregate principal amount of $271,875 ~~to certain investors, officers,~~with Talkot Fund, LP and ~~directors of~~investor in the Company. Each UP Note bears interest on the unpaid balance at the rate of fifteen percent (15%) per annum and the principal and accrued interest are due and payable no later than December 31, 2023. We may prepay any of the UP Notes without notice, subject to a two percent (2%) pre-payment penalty. The UP Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation. The Company issued to Talkot Fund LP warrants to purchase an aggregate of 33,017 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under this ~~Credit Agreement.~~UP Note.

On ~~August 13, 2022,~~January 31, 2023, ~~an amendment~~the Lender agreed to postpone the ~~Credit Facility agreement was~~24-month repayment period to a later period commencing on January 31, 2024, and further agreed ~~upon. The amendment updated the date to begin payment from~~ ~~July 31, 2022,~~ to ~~December 31, 2022.~~ ~~In addition, the~~that interest accrued ~~monthly~~on the loan between July 1, 2022 and December ~~31, 2022,~~01, 2025 ~~will~~is to be settled ~~into equity. Common Stock will be issued at the end of each month at a rate of $1.08 per share of Common Stock~~ in ~~the amount~~shares of the Company’s common stock quarterly.

During the three months ended March 31, 2023, a total of $10,196 of interest was accrued and settled to equity payable for ~~each month.~~the issuance of 9,441 shares of common stock. The company recorded a loss of settlement of interest payable of $542 . The company issued 9,651 shares from equity payable related to accrued interest settled during the fourth quarter of 2022.

As of ~~September 30, 2022,~~March ~~The~~31,2023, the Company ~~has~~had a principal balance of $271,875, and accrued interest of ~~$55,530 and a total of $10,352 of interest was converted into 9,585 shares of common stock and The Company recorded a loss on settlement of interest payable of $162.~~$54,351.

Interest expense was ~~$193,501~~$238,446 and ~~$88,331~~$159,827 during the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, respectively.

~~Interest expense was $520,454 and $144,714 during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, respectively.~~

~~During the year ended~~ ~~December 31, 2021~~~~, the Company did~~ ~~not~~ issue any shares but, recorded a stock-based compensation expense of $260,005 related to restricted stock units for members of our board of directors. The Company recorded a stock-based compensation expense of $187,501 related to restricted stock units for employee compensation.

On February 9, 2022, 17 warrant holders exercised their common stock purchase warrant for 3,188,190 shares at the exercise price of $0.80 per share, resulting in additional capital of $2,550,552. As an inducement for the holders' exercise of the warrants, we issued the holders 3,188,190 new warrants to purchase common stock at $1.50 per share over a three-year period expiring in February 2025. We have recorded an additional stock-based expense of ~~$382,048.~~$382,048 in 1st quarter of 2022.

On June 29, 2022, the Company received private investment funds to purchase 1,062,500 shares of its common stock at a price of $0.80 per share, resulting in additional capital of $850,000, and issued the holders 1,062,500 new warrants to purchase common stock at $1.50 per share over a three-year period expiring in June 2025.

On August 24, 2022, the Company received private investment funds to purchase 1,500,000 shares of its common stock at a price of $0.80 per share, resulting in additional capital of $1,200,000, and issued the holders 1,500,000 new warrants to purchase common stock at $1.50 per share over a three year period expiring in August 2025.

~~During~~On November 13, 2022 a total of 140,185 shares of common stock were issued from equity payable to Thomas Akin as settlement of $151,398 of interest payable. The Company recorded a loss on settlement of interest payable of $2,259.

On November 13, 2022 a total of 9,585 shares of common stock were issued from equity payable to Talkot Fund LP as settlement of $10,352 of interest payable. The Company recorded a loss on settlement of interest payable of $162.

On December 31, 2022 a total of $166,432 of interest was accrued and settled to equity payable for the issuance of 154,106 shares of common stock. The company recorded a loss of settlement of interest payable of $44,325.

On ~~nine~~December 31, ~~months ended~~ ~~September 30,~~ 2022 a total of ~~$161,750~~$10,423 of interest was ~~converted into 149,770~~accrued and settled to equity payable for the issuance of 9,651 shares of ~~Common Stock.~~common stock. The company recorded a loss of settlement of interest payable of $2,757,

On January 31, 2023 a total of 545,012 shares were issued to John Harris, a former director. The shares were issued based on the total Restricted Stock Units earned by Mr. Harris as director compensation that were fully vested as of March 29, 2022. Restricted stock expense is recorded on the date it vests and no expense was recognized during the three months ended March 31, 2023.

On March 27, 2023 a total of 154,106 shares of common stock were granted from equity payable to Thomas Akin as settlement of $166,432 of interest payable. The Company recorded a loss on settlement of interest payable of $44,325 on December 31, 2022.

On March 27, 2023 a total of 9,651 shares of common stock were granted from equity payable to Talkot Fund LP as settlement of $10,423 of interest payable. The Company recorded a loss on settlement of interest payable of $2,757 on December 31, 2022.

On March 31, 2023 a total of $195,171 of interest was accrued and settled to equity payable for the issuance of 180,715 shares of common stock. The company recorded a loss of settlement of interest payable of $10,315.

On March 31, 2023 a total of $10,196 of interest was accrued and settled to equity payable for the issuance of 9,441 shares of common stock. The company recorded a loss of settlement of interest payable of $542.

During March, 15 warrant holders exercised their common stock purchase warrant for 3,587,487 shares at the exercise price of $1.00 per share, resulting in additional capital of $3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders' 1,793,745 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in February 2025. The Company recorded $577,000 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.

During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 ~~The Company recorded~~ a ~~stock-based compensation expense~~total of ~~$ 195,005~~163,757 shares were issued from stock payable related to ~~restricted stock units for members~~related party accrued interest settled during the fourth quarter of ~~our board of directors. The company recorded a stock-based compensation expense of $799,379 related to stock units for employee compensation.~~2022.

As of the ~~nine~~ ~~months ended~~ ~~September 30, 2022~~March 31, 2023 we had an equity payable balance of ~~$100,862.~~$317,086.

The following table summarizes stock option activity for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023.

~~The weighted average exercise price of stock options granted during the period was $0.96 and the related weighted average grant date fair value was $0.61 per share.~~

On ~~March~~ ~~26,~~~~2021,~~ ~~the Company granted five employees a total of 67,500 options to purchase shares of the Company's common stock at the closing price as of~~ ~~March~~ ~~26,~~~~2021,~~ ~~of $1.80 per share. The option shares will vest 25% on the~~ ~~first~~ ~~anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until~~ ~~March~~ ~~26,~~~~2031.~~ ~~The total estimated value using the Black-Scholes Model, based on a volatility rate of 73.97% and an option fair value of $1.16 was $78,492.~~

On ~~May~~ 2,~~2021,~~ ~~the Company granted one employee a total of 20,000 options to purchase shares of the Company's common stock at the closing price as of~~ ~~May~~ 2,~~2021,~~ ~~of $1.48 per share. The option shares will vest 25% on the~~ ~~first~~ ~~anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until~~ ~~May~~ 2,~~2031.~~ ~~The total estimated value using the Black-Scholes Model, based on a volatility rate of 74.79% and an option fair value of $0.93 was $18,628.~~

On ~~August~~ ~~11,~~~~2021,~~ ~~the Company granted one employee a total of 5,000 options to purchase shares of the Company's common stock at the closing price as of~~ ~~August~~ ~~11,~~~~2021,~~ ~~of $1.75 per share. The option shares will vest 25% on the~~ ~~first~~ ~~anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until~~ ~~August~~ ~~11,~~~~2031.~~ ~~The total estimated value using the Black-Scholes Model, based on a volatility rate of 73.29% and an option fair value of $1.12 was $5,606.~~

On March 29, 2022, the Company granted one employee 150,000 options to purchase shares of the Company's common stock at the closing price as of March 29, 2022, of $0.8289 per share. The option shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until March 29, 2032. The total estimated value using the Black-Scholes Model, based on a volatility rate of 72.33% and an option fair value of $0.54 was $81,035.

On May 16, 2022, the Company granted three employees 45,000 options to purchase shares of the Company's common stock at the closing price as of May 16, 2022, of $0.97 per share. The option shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until May 16, 2032. The total estimated value using the Black-Scholes Model, based on a volatility rate of 73.45% and an option fair value of $0.642608 was $28,917.

On September 22, 2022, the Company granted one employee 1,000,000 options to purchase shares of the Company's common stock at the closing price as of September 2022, of $0.98 per share. The option shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter, and are exercisable until September 29, 2032. The total estimated value using the Black-Scholes Model, based on a volatility rate of 76.15% and an option fair value of $0.697499 was $697,499.

The impact on our results of operations of recording stock-based compensation expense for the three ~~and~~ ~~nine~~months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 were as follows:

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~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022.

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 ~~2022~~2023 and ~~2021~~2022 is based on the historical publicly traded price of our common stock.

The following table summarizes restricted stock unit activity under our stock-based plans for the year ended December 31, ~~2021~~2022 and for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023:

On ~~March~~ ~~26,~~~~2021,~~ ~~the Company issued to four independent directors a total of 36,112 restricted stock units. These restricted stock units were issued for the $65,000 of board compensation earned for the~~ ~~first~~ ~~quarter of~~ ~~2021.~~ The units were valued at $65,002 or $1.80 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) ~~March~~ ~~26,~~~~2024,~~ ~~(B) a change in control of the Company, and (C) the termination of the director’s service with the Company.~~

On ~~March~~ ~~26,~~~~2021,~~ ~~the Company granted to one employee 1,000,000 restricted shares of the Company’s common stock at $1.80 per share, closing price as of~~ ~~March~~ ~~26,~~~~2021,~~ ~~all of which were subsequently forfeited upon the termination of the employee’s service with the Company on~~ ~~December 31, 2022.~~

On ~~May~~ ~~12,~~~~2021,~~ ~~the Company issued to four independent directors a total of 38,924 restricted stock units. These restricted stock units were issued for the $65,000 of board compensation earned for the~~ ~~second~~ ~~quarter of~~ ~~2021.~~ The units were valued at $65,002 or $1.67 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) ~~May~~ 2,~~2024,~~ ~~(B) a change in control of the Company, and (C) the termination of the director’s service with the Company.~~

On ~~August~~ ~~11,~~~~2021,~~ ~~the Company issued to four independent directors a total of 37,143 restricted stock units. These restricted stock units were issued for the $65,000 of board compensation earned for the~~ ~~third~~ ~~quarter of~~ ~~2021.~~ The units were valued at $65,000 or $1.75 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) ~~August~~ ~~11,~~~~2024,~~ ~~(B) a change in control of the Company, and (C) the termination of the director’s service with the Company.~~

On ~~December~~ ~~15,~~~~2021,~~ the Company granted four independent directors a total of 42,484 restricted stock units. The units were valued at $65,000 or $1.53 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) ~~December~~ ~~15,~~~~2024,~~ ~~(B) a change in control of the Company, and (C) the termination of the director’s service with the Company.~~

~~During the year ended~~ ~~December 31. 2021~~ ~~the company recorded $260,003 in restricted stock expense as board compensation and $187,501 in restricted stock expense as employee compensation.~~

On March 29, 2022, the company grated granted four independent directors a total of 78,420 restricted stock units. The units were valued at $65,002 or $0.829 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) December 15, 2024, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company.

On May 16, 2022, the company grated granted four independent directors a total of 54,168 restricted stock units. The units were valued at $65,002 or $1.20 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) December 15, 2024, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company.

On September 30, 2022, the company grated granted four independent directors a total of 65,100 restricted stock units. The units were valued at $65,002 or ~~$.9985~~$ per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) December 15, 2024, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company.

On December 31, 2022 the Company granted four independent directors a total of 47,104 restricted stock units. The units were valued at $65,004 or $1.38 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) December 31,2025, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2022, the Company recorded ~~$ 195,005~~$65,002 in restricted stock expense as board compensation.

On March 31, 2023, the company grated granted four independent directors a total of 61,342 restricted stock units. The units were valued at $65,002 or $1.05 per share, based on the closing stock price on the date of the grant. All units vested immediately. The shares of common stock associated with the restricted stock units will be issued to each director upon the earliest to occur of (A) December 15,2024, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company.

In the three months ended March 31, 2023, the Company recorded $65,003 in restricted stock expense as board compensation.

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, 2022~~March 31, 2023 and ~~2021~~2022 was as follows:

As of ~~September 30, 2022~~March 31, 2023, there was no unearned restricted stock unit compensation.

The following table summarizes investor warrants as of ~~September 30, 2022~~March 31, 2023 and the years ended December 31, ~~2021~~2022 and ~~2020~~2021:

On ~~June~~ ~~30,~~~~2021,~~ the Company issued warrants to purchase an aggregate of 227,994 shares of its common stock at an exercise price of $1.67 per share for 119,760 inducement warrants and VWAP for 108,234 additional warrants in connection with the issuance of a loan by a related party. The warrants are exercisable for a period commencing upon issuance of the notes and ending 36 months after issuance of the financing. The estimated aggregate fair value of the warrants issued is $119,103 using the Black-Scholes option valuation model.

On ~~August~~ ~~11,~~~~2021,~~ ~~the Company issued warrants in connection with the Credit Facility Agreement by the related party exercisable at a rate equal to the~~ 30-day VWAP for 10,072 additional warrants in connection with the issuance of a loan by a related party. The warrants are exercisable for a period commencing upon issuance of the notes and ending 36 months after issuance of the financing. The estimated aggregate fair value of the warrants issued is $5,285 using the Black-Scholes option valuation model

~~As of~~ ~~September~~ ~~30,~~~~2021,~~ ~~we had outstanding warrants to purchase 2,666,459 shares of common stock at $2.06 per share. These warrants expire in~~ ~~2023.~~ ~~We also have outstanding warrants to purchase 238,066 shares of common stock at the stated price per share in connection with the issuance of a loan with a related party. These warrants expire in~~ ~~2024.~~

On February 9, 2022, 17 warrant holders exercised their common stock purchase warrant for 3,188,190 shares at the exercise price of $0.80 per share, resulting in additional capital of $2,550,553. As an inducement for the holder’s exercise of the warrants, we issued the holders' 3,188,190 new warrants to purchase common stock at $1.50 per share over a three-year period expiring in February 2025. The Company recorded $382,048 of stock-based expense related to warrants issued during the warrant conversion offer on February 9, 2022.

On June 29, 2022, six private investors purchased 1,062,500 new warrants to purchase common stock at $1.50 per share over a three-year period expiring in June 2025, and 1,062,500 shares at the exercise price of $0.80 per share, resulting in additional capital of $850,000.

On August 24, 2022, five private investors purchased 1,500,000 new warrants to purchase common stock at $1.50 per share over a three-year period expiring in August 2025, and 1,500,000 shares at the exercise price of $0.80 per share, resulting in additional capital of $1,200,000.

During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023, the Company issued warrants to purchase an aggregate of 177,571 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under the Credit Agreement. The estimated aggregate fair value of the warrants issued is $73,469 using the Black-Scholes option valuation model as of ~~September~~March 31, 2023.

During the three months ended March 30, ~~2022~~2023, .15 warrant holders exercised their common stock purchase warrant for 3,587,487 shares at the exercise price of $1.00 per share, resulting in additional capital of $3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders 1,793,745 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in February 2025. The Company recorded $577,000 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.

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, 2022~~March 31, 2023 on a recurring and non-recurring basis:

The following table presents assets that are measured and recognized at fair value as of December 31, ~~2021~~2022 on a recurring and non-recurring basis:

As of the date of this report, ~~there are~~ the company has noone pending legal proceeding related to TCPA (Telephone Consumer Protection Act) Violation. This is a putative class action complaint alleging that Defendant initiated telephone solicitations through text messages in violation of the Florida Telephone Solicitation Act, Fla. Stat. §501.059 (“FTSA”). The defense of the matter was tendered to the Company by its client, Sonic Industries, Inc., and our firm is managing the defense of the matter. The Company intends to seek an individual settlement of the matter, and if one cannot be reached, the Company intends to vigorously defend the matter. The discovery process has not begun so it is not possible at this time to calculate an accurate assessment of the Company’s exposure. No settlement loss has been accrued as it is too early in the proceedings ~~to which we or our properties are subject.~~estimate what it if any settlement loss will occur.

During the three months ended March 31, 2023 the Company has settled three TCPA claims for a total settlement loss of $10,000.

As described in Note 6, the Company has a lease agreement for 8,898 square feet, for its office facilities in Chandler, AZ through January 2027. Monthly rental payments, excluding common area maintenance charges, are $25,953 to $28,733. The first 12 months of the lease included a 50% abatement period. As of ~~September 30, 2022~~March 31, 2023, we have an operating lease asset balance for this lease of ~~$1,032,132and~~$930,658 and an operating lease liability balance for this lease of ~~$1,247,395recorded~~$1,127,671 recorded in accordance with ASC 842.

On ~~July~~ 1,~~2021,~~ ~~we entered into an Unsecured Promissory~~Secured Notes (each, individually, a “UP Note” and collectively, the “UP Notes”) in the aggregate principal amount of $271,875 to certain investors, officers, and directors of the Company. Each UP Note bears interest on the unpaid balance at the rate of ~~fifteen~~ ~~percent (15%) per annum and the principal and accrued interest are due and payable~~ no ~~later than~~ ~~December 31, 2023.~~ We ~~may~~ ~~prepay any of the UP Notes without notice, subject to a~~ ~~two~~ percent (2%) pre-payment penalty. The UP Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation. The Company issued warrants to purchase an aggregate of 33,017 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under the Credit Agreement.

On ~~August 13, 2022,~~ ~~an amendment to the Credit Facility agreement was agreed upon. The amendment updated the date to begin payment from~~ ~~July 31, 2022,~~ to ~~December 31, 2022.~~ ~~In addition, the interest accrued monthly between~~ ~~July 1, 2022,~~ ~~and~~ ~~December 31, 2022,~~ ~~will be settled into equity. Common Stock will be issued at the end of each month at a rate of $1.08 per share of Common Stock in the amount of the interest accrued for each month.~~

~~As of~~ ~~September 30, 2022,~~ The Company has a principal balance of $271,875, accrued interest of $55,530 and a total of $10,352 of interest was converted into 9,585 shares of common stock and The Company recorded a gain on settlement of interest payable of $162.

On June 30, 2021, we entered into a Credit Facility Agreement (the “Credit Agreement”) with Thomas Akin, one of the Company’s ~~directors.~~ directors (the "Lender"). The Credit Agreement was amended on November 11, 2022. The Company can borrow up to $6,000,000 under ~~this~~the Credit Agreement ~~amended on~~ ~~September 30, 2022.~~ ~~As of~~ ~~December 31, 2021,~~ ("the company has drawn a total of $3,478,125 including cash in the amount of $3,206,250 and $271,875 of principal and accrued interest under the above-described Note that was rolled into the Credit Facility and paid a total of $200,000 toward the principal balance of the loan,"Credit Facility").

Under the original terms of the Credit Agreement, the Company was to begin repaying the principal amount, plus accrued interest, in 24 equal monthly installments commencing on June 30, 2022, and ending on June 30, 2024. On ~~August 13, 2022,~~ ~~the Lender agreed to postpone the~~ 24~~-month repayment period to a later period commencing on~~ ~~January 31, 2022,~~ ~~and further agreed that interest accrued on the loan between~~ ~~July 1, 2022~~ ~~and~~ ~~December 31, 2022~~ ~~is to be settled in shares of the Company’s common stock.~~

On ~~June 10, 2022,~~ ~~The Company took a draw of an additional $500,000 under the Credit Agreement.~~

On ~~August 09, 2022~~ ~~the Company took a draw of an additional $300,000 under the credit agreement.~~

On November ~~13,~~11, 2022, an amendment to the Credit ~~Facility agreement~~Agreement was signed. The amendment updated the payment terms to the following: "Without limiting the foregoing Section 2.3(a), Borrower shall repay the principal amount of all Advances, plus accrued interest thereon, in 24 equal monthly installments commencing on January 31, 2023 and continuing thereafter on the last day of each month (or, if such last day is not a Business Day, on the Business Day immediately preceding such last day. Interest on the unpaid Advances will accrue from the date of each Advance at a rate equal to fifteen percent (15%) per annum. Interest will be calculated on the basis of 365 days in a year." The amendment raised the maximum amount of the Credit ~~Agreement~~Facility to $6,000,000. In addition, the interest which is accrued monthly between July 1, 2022, and December 31, 2022, will be settled into equity. Common Stock will be issued at the end of each month at a rate of $1.08 per share of ~~Common Stock~~common stock in the amount of the interest accrued for each month.

During the three months ended March 31, 2023, a total of $195,171 of interest was accrued and settled to equity payable for the issuance of 180,715 shares of common stock. The company recorded a loss of settlement of interest payable of $10,315. The company issued 154,106 shares from equity payable related to accrued interest settled during the fourth quarter of 2022.

As of March 31, 2023, the Company had drawn a total of $5,173,125 and we have accrued interest of $387,918.

On July 1, 2021, we entered into UP Notes in the aggregate principal amount of $271,875 with Talkot Fund, LP and investor in the Company. Each UP Note bears interest on the unpaid balance at the rate of fifteen percent (15%) per annum and the principal and accrued interest are due and payable no later than December 31, 2023. We may prepay any of the UP Notes without notice, subject to a two percent (2%) pre-payment penalty. The UP Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation. The Company issued to Talkot Fund LP warrants to purchase an aggregate of 33,017 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under this Credit Agreement.

On January 31, 2023, the Lender agreed to postpone the 24-month repayment period to a later period commencing on January 31, 2024, and further agreed that interest accrued on the loan between July 1, 2022 and December 01, 2025 is to be settled in shares of the Company’s common stock quarterly.

During the three months ended March 31, 2023, a total of $10,196 of interest was accrued and settled to equity payable for the issuance of 9,441 shares of common stock. The company recorded a loss of settlement of interest payable of $542 . The company issued 9,651 shares from equity payable related to accrued interest settled during the fourth quarter of 2022.

As of March 31,2023, the Company had a principal balance of $271,875, and accrued interest of $54,351.

On March 2, 2023, Thomas Akin exercised his common stock purchase warrant for 749,987 shares at the exercise price of $1.00 per share, resulting in additional capital of $749,237. As an inducement for the holder’s exercise of the warrants, we issued the holders 374,994 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in March 2026. The Company recorded $120,598 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.

On February 7, 2022, Talkot Fund LP exercised his common stock purchase warrant for 750,000 shares at the exercise price of $1.00 per share, resulting in additional capital of $749,250. As an inducement for the holder’s exercise of the warrants, we issued the holders 375,000 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in March 2026. The Company recorded $120,600 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.

On ~~November 13, 2022,~~May ~~the Company entered into an amended and restated credit facility agreement with Thomas B. Akin,~~8,2023 a ~~director~~total of the Company (the “A&R Credit Agreement”) and a corresponding convertible note in the amount of $4,466,043 (the “Convertible Note”). The A&R Credit Agreement amends and restates the current Credit Agreement and allows for the Company to borrow up to $6 million in advances. The Convertible Note accrues interest monthly at 15% per annum. Principal and accrued interest payments are due in 24 monthly installments under the Convertible Note beginning on ~~January 31, 2023~~ ~~and continuing on the last day of each of the next~~ 23 ~~months thereafter. The Convertible Note and all accrued interest thereon are convertible into~~180,715 shares of ~~our~~ common stock ~~from time~~were issued to ~~time, at the option~~Thomas Akin as settlement of the holder thereof, at a conversion price per share equal to 85% of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the ~~thirty~~ ~~(30) trading days immediately preceding such date (the “Conversion Price”). The Convertible Note and all accrued~~ interest ~~thereon will be automatically converted into common stock at the Conversion Price on the dated that is~~ ~~five~~ business days prior to the date on which the Company becomes listed on a national securities exchange if all listing requirements have been satisfied by the Company (other than the Company satisfying any stockholders’ equity requirement to be listed on such national exchange).payable.

~~The foregoing description~~On May 8,2023 a total of ~~the A&R Credit Agreement and Convertible Note does~~ ~~not~~ ~~purport~~9,441 shares were issued to ~~be complete and is qualified in its entirety by reference to the A&R Credit Agreement and Convertible Note, which fill be filed separately.~~

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 2020 annual report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 30, 2021, 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.

Mobivity’s Recurrency platform enables multi-unit retailers to leverage the power of their own data to yield maximum customer spend, frequency and loyalty while achieving the highest Return on Marketing Spend (ROMS) possible. Mobivity’s customers use Recurrency to:

Mobivity’s Recurrency, delivered as a Software-as-a-Service (“SaaS”) platform, is used by leading brands including Subway, Sonic Drive-In, Baskin Robbins, Chick-fil-A and Checkers/Rally’s across more than 40,000 retail locations globally.

We’re living in a data-driven economy. By 2003 — when the concept of “Big Data” became common vernacular in marketing - the amount of data being created every two days was equal to the amount created in all of the time prior to 2003. Today, 90% of the world’s data has been created in just the past two years. Unfortunately, despite there being so much data accumulated, only one percent of data is being utilized today by most businesses.

The challenge for multi-unit retailers isn’t that they don’t have enough data; in fact, national retailers are collecting millions of detailed transactions daily from thousands of points of sale around the world. The challenge is being able to make sense of this transaction data, which is riddled with data entry errors, collected by multiple POS systems, and complicated by a taxonomy compiled by thousands of different franchisee owners. To normalize such an overwhelming amount of data into usable intelligence and then leverage it to optimize media investment and promotion strategy requires numerous teams of data analysts and data scientists that many retailers and restaurant operators simply don’t have. This is why so many technology and data companies, that can help solve these challenges, have been invested in and acquired by brands including, McDonald’s, Starbucks, and Yum Brands.

Mobivity’s Recurrency platform fills this need with a self-service SaaS offering, enabling operators to intelligently optimize their promotions, media, and marketing spend. Recurrency drives system-wide sales producing on average a 13% increase in guest spend and a 26% improvement in frequency, ultimately delivering an average Return on Marketing Spend of 10X. In other words, for every dollar invested in marketing, retailers using Recurrency to manage, optimize and deliver multi-channel consumer promotions generate an average of ten dollars in incremental revenue from their customers.

Mobivity’s Recurrency™ platform unlocks valuable POS and mobile data to help transform customer transactions into actionable and attributable marketing insights. Our technology provides transactional data, in real-time, that uncovers market-basket information and attributes both online and traditional promotions. Recurrency is comprised of seven components, described in detail below.

Recurrency captures, normalizes, integrates, and stores transaction data and is compatible with most POS systems used by restaurants and retailers today. The result is a clean useful dataset upon which to predict and influence customers’ buying behavior and deliver basket-level insights.

Recurrency uses Machine Learning (“ML”) to uncover patterns in the buying behaviors of consumers and leverages that data to suggest pricing optimizations, and guide marketing campaigns.

Recurrency provides a digital wallet system for creating and managing dynamic offers and promotions, enabling accurate and complete closed-loop attribution across all channels, media, and marketing efforts. Retailers can deploy one-time, limited-use, and multi-use promotions across all online and offline marketing channels that are scannable at the POS or redeemable online, enabling fraud-free, controllable promotion delivery and attribution at scale. Marketing teams can use the comprehensive attribution analysis and insights to optimize media mix and spend for maximum Return on Marketing Spend (“ROMS”).

Recurrency leverages the normalized data captured at the POS and applies Artificial Intelligence (“AI”) to build profiles of both known and anonymous customers, analyzes pre and post-redemption behavior, and then predicts offers that will drive the highest increases in customer spend and frequency at the lowest discount possible. The result is optimized, personalized promotions that produce the highest ROMS possible.

Recurrency unlocks the power of transactional data to create relevant and timely customer messages printed on the receipts already being generated at the POS. Both clients and agencies are using Recurrency to drive better results and make decisions around offers, promotions, and customer engagement through the medium of the printed receipt. Software integrated with leading POS systems, such as Oracle or MICROS, or installed directly onto receipt printer platforms, such as Epson’s OmniLink product, dynamically controls what is printed on receipts including images, coupons, announcements, or other calls-to-action, such as invitations to participate in a survey. Recurrency offers a Web-based interface where users can design receipt content and implement business rules to dictate what receipt content is printed in particular situations. All receipt content is transmitted to cloud-based Recurrency for storage and analysis.

Recurrency transforms standard short message service (“SMS”), multimedia messaging service (“MMS”), and rich communication services (“RCS”) into a data-driven marketing medium. Recurrency tracks and measures offer effectiveness at a more granular level than other solutions, allowing clients to create smarter offers and drive higher redemption rates. Our proprietary platform connects to all wireless carriers so that any consumer, on any wireless service (for example, Verizon), can join our customer’s SMS/MMS mobile marketing campaign. Our customers use Recurrency’s self-service interface to build, segment, target and optimize mobile messaging campaigns to drive increased guest frequency and spend. Recurrency is an industry leader in RCS messaging and has an industry-leading broadcast reach.

Mobivity’s Belly Loyalty solution drives increased customer engagement and frequency with a customer-facing digital rewards platform via an app and digital pad. Using Belly, customers can customize rewards and leverage pre-built email campaigns and triggers to encourage greater frequency as well as to identify and reactivate lapsed customers.

Our objective is to build an industry-leading SaaS product that connects consumers to merchants and brands. The key elements of our strategy are:

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.

During the ~~year~~quarter ended December 31, 2021, we issued to Talkot Capital LLC, unsecured notes in the principal aggregate amount of $271,875, which are due and payable two years after issuance (the "Talkot Notes"). These Talkot Notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay the advances and accrued interest, in whole or in part, without notice, penalty, or charge.

On August 13, 2022, an amendment to the Credit Facility agreement was agreed upon. The amendment updated the date to begin payment from July 31, 2022, to December 31, 2022. In addition, the interest accrued monthly between July 1, 2022, and December 31, 2022, will be settled into equity. Common Stock will be issued at the end of each month at a rate of $1.08 per share of Common Stock in the amount of the interest accrued for each month.

~~As of September~~March 30, 2022, The Company has a principal balance of $271,875, accrued interest of $55,530 and a total of $10,352 of interest was converted into 9,585 shares of common stock and The Company recorded a gain on settlement of interest payable of $162.

On June 30, 2021, we entered into a Credit Facility Agreement (the “Credit Agreement”) with one of the Company’s directors. The Company can borrow up to $6,000,000 under this Credit Agreement amended on September 30, 2022. As of December 31, 2021, the company has drawn a total of $3,478,125 including cash in the amount of $3,206,250 and $271,875 of principal and accrued interest under the above-described Note that was rolled into the Credit Facility and paid a total of $200,000 toward the principal balance of the loan,

The loan 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 (15%) per annum. The Company may prepay this loan without notice, penalty, or charge. In consideration of the lender’s agreement to provide the facility, the Company issued warrants to purchase shares of its common stock at an exercise price of $1.67 per share in connection with the issuance of funds under this Credit Agreement. The warrants are exercisable for a period commencing upon issuance of the notes and ending 36 months after issuance of the financing. In addition, the Company has agreed to issue to the lender additional warrants entitling the lender to purchase a number of shares of the Company's common stock equal to twenty percent (20%) of the amount of the advances made divided by the volume-weighted average price over the 30 trading days preceding the advance (the "VWAP"). Each warrant will be exercisable over a three-year period at an exercise price equal to the VWAP. Under the original terms of the Credit Agreement, the Company was to begin repaying the principal amount, plus accrued interest, in 24 equal monthly installments commencing on June 30, 2022, and ending on June 30, 2024. On August 13, 2022, the Lender agreed to postpone the 24-month repayment period to a later period commencing on January 31, 2022, and further agreed that interest accrued on the loan between July 1, 2022 and December 31, 2022 is to be settled in shares of the Company’s common stock.

~~On June 10, 2022, The Company took a draw of an additional $500,000 under the Credit Agreement.~~

~~On August 09, 2022 the Company took a draw of an additional $300,000 under the credit agreement.~~

During the nine months period ending September 30, 2022, the Company issued warrants to purchase an aggregate of 177,571 shares of its common stock at the stated exercise price per share in connection with the issuance of funds under the Credit Agreement. The estimated aggregate fair value of the warrants issued is $73,469 using the Black-Scholes option valuation model as of September 30, 2022.

As of September 30, 2022, the Company has drawn a total of $4,078,125 including cash in the amount of $3,806,250, and $271,875 of principal and accrued interest under the above-described UP Notes which were rolled into the Credit Agreement, and we have accrued interest of $387,918. A total of $151,398 of accrued interest was settled into 140,185 shares of common stock and the Company recorded a loss on debt settlement of interest payable $2,259.

On November 13, 2022, an amendment to the Credit Facility agreement was signed. The amendment updated the payment terms to the following: "Without limiting the foregoing Section 2.3(a), Borrower shall repay the principal amount of all Advances, plus accrued interest thereon, in 24 equal monthly installments commencing on January 31, 2023, and continuing thereafter on the last day of each month (or, if such last day is not a Business Day, on the Business Day immediately preceding such last day. Interest on the unpaid Advances will accrue from the date of each Advance at a rate equal to fifteen percent (15%) per annum. Interest will be calculated on the basis of 365 days in a year." The amendment raised the maximum amount of the Credit Agreement to $6,000,000. In addition, the interest accrued monthly between July 1, 2022, and December 31, 2022, will be settled into equity. Common Stock will be issued at the end of each month at a rate of $1.08 per share of Common Stock in the amount of the interest accrued for each month.d for each month.

~~On February 9, 2022, 17~~15 warrant holders exercised their common stock purchase warrant for ~~3,188,190~~3,587,487 shares at the exercise price of ~~$0.80~~$1.00 per share, resulting in additional capital of ~~$2,550,553.~~$3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders ~~3,188,190~~1,793,745 new warrants to purchase common stock at ~~$1.50~~$2.00 per share over a three-year period expiring in February 2025. ~~As an inducement for~~

On January 31, 2023, the ~~holders' exercise~~Company entered into Amendment No. 1 (the “Amendment”) to the Amended and Restated Credit Facility Agreement and Convertible Notes which amends our existing Amended and Restated Credit Facility Agreement, dated as of November 11, 2022, between the Company and Thomas B. Akin, a director of the ~~warrants, we~~Company (the “Existing Credit Agreement” and as amended by the Amendment, the “Credit Agreement”) and any convertible notes issued thereunder. The Amendment amends the ~~holders 3,188,190 new warrants~~Existing Credit Agreement to ~~purchase common stock at $1.50 per share over~~extend the maturity of the Credit Agreement and related convertible notes thereunder until December 1, 2025. Principal payments have been deferred to a ~~three-year~~ period ~~expiring~~beginning on January 1, 2024 and ending December 1, 2025, and further provides that any accrued interest on unpaid advances under the Credit Agreement is to be paid quarterly in ~~December 2023. The company recorded $382,048 of stock-based expense related to warrants issued during the warrant conversion offer on February 9, 2022.~~

~~In June 2022, we commenced a private placement of 1,062,500 units of our securities, at a price of $.80 per unit. Each unit consists of one share~~shares of our common stock, ~~and~~at a ~~common stock purchase warrant~~price per share equal to ~~purchase one share~~the volume-weighted average price of our common stock quoted on the OTCQB® Venture Market operated by OTC Markets Group Inc. over ~~a three-year period, at an exercise price~~the ninety (90) trading days immediately preceding such date. The Amendment provides for corresponding amendments to the form of ~~$1.50 per share. The offering was conducted by our management~~convertible note to be issued under the Credit Agreement in the future and ~~no commission or other selling fees were paid by us.~~ any outstanding convertible notes issued under the Existing Credit Agreement.

~~In August 2022, we commenced~~The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a ~~private placement~~copy of ~~1,500,000 units of our securities, at a price of $.80 per unit. Each unit consists of one share of our common stock~~which was filed with the SEC on the Company's Current Report on Form 8-Kdated January 31, 2023, and ~~a common stock purchase warrant~~is attached as Exhibit 10.1 to ~~purchase one share of our common stock, over a three-year period, at an exercise price of $1.50 per share. The offering was conducted~~such Current Report on Form 8-K and incorporated herein by ~~our management and no commission or other selling fees were paid by us.~~ reference.

On ~~September 19, 2022,~~January 31, 2023 a total of 545,012 shares were issued to John Harris, a former director. The shares were issued based on the ~~directors~~total Restricted Stock Units earned by Mr. Harris as director compensation.

On March 27, 2023 a total of ~~Mobivity Holdings Corp. (the “Company”) approved the Mobivity Holdings Corp. 2022 Equity Incentive Plan (the “2022 Plan”). As provided in the 2022 Plan, 12,000,000~~154,106 shares of ~~the Company’s~~ common stock ~~$0.001 par value per share (“Common Stock”), are available for issuance as the subject of awards and~~were issued to ~~employees, consultants, and advisors~~Thomas Akin as settlement of ~~the Company or any subsidiary,~~interest payable.

On March 27, 2023 a total of 9,651 shares were issued to Talkot Fund LP as ~~well as non-employee directors~~settlement of ~~the Company.~~interest payable.

We entered into a six-year office lease starting in February of 2021 for 8,898 square feet of office space located at 3133 W. Frye Road, Suite 215, Chandler, Arizona. Monthly rental payments, excluding common area maintenance charges, will be $25,953 to $28,733. The first 12 months of the lease included a 50% abatement period.

U.S. Patent number 10,949,868 B1 was granted on March 16, 2021. This patent covers the single use of electronic retailer coupons and a referral program. The method and system prevent fraud, are specific to geolocation, and provide an audit trail of the customer, cashier, and marketing platform. A user can also earn a subsequent coupon by referring a friend.

~~US Patent number~~ ~~6,788,769 B1~~ expired in March of 2021. This patent covered a method and system for using telephone numbers as a key to address, email, and online content without the use of a look-up database. Using this system, a phone number is used to access a website or an email address in exactly the same way it is used to dial a telephone.

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, 2022,~~March 31, 2023, were ~~$1,890,437~~$1,881,482 a decrease of ~~$421,111~~$148,087 or ~~18%~~7% compared to the same period in ~~2021.~~

~~Revenues for the nine months ended September 30, 2022, were $5,787,168 a decrease of $1,774,798 or 23% compared to the same period in 2021.~~2022.

This decrease is primarily due to a decrease in ~~revenue of $421,111 quarterly due to the restructuring of customer a contract related to Smart Receipt services.~~subscription fees offset by increased gaming developer sales.

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, 2022,~~March 31, 2023, was ~~$1,806,022, an increase~~$1,066,575, a decrease of ~~$797,319,~~$108,373, or ~~79%~~9%, ~~for~~compared to $1,174,948for the same period in ~~2021.~~

~~Cost of revenues for the nine months ended September 30, 2022, was $4,183,719, an increase of $861,080, or 26%, for the same period in 2021.~~

This ~~increase~~decrease is primarily due to an ~~increase~~decrease in ~~customer~~client text club member acquisition costs ~~SMS messaging costs, and MMS messaging costs~~from 2022.

General and administrative expenses consist primarily of salaries and personnel-related expenses, consulting costs, and other expenses.

General and administrative expenses ~~decreased $261,657~~increased $336,930 or ~~21%,~~28% to ~~$983,428,~~$1,544,106, during the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$1,245,085~~$1,207,176 for the same period in ~~2021.~~2022. The ~~decrease~~increase in general and administrative expenses was primarily due to a decrease in ~~legal fees.~~

~~General~~expenses related to the the current warrant exercise and administrative expenses decreased $403,267 or 12%, to $3,088,588, during the nine months ended September 30, 2022, compared to $3,491,855 for the same period in 2021. The decrease in general and administrative expenses was primarily due to a decrease in legal fees.

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 ~~decreased $364,368,~~increased $93,719, or ~~37%~~16%, to ~~$614,600~~$691,220 during the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$978,968~~$597,501 for the same period in ~~2021.~~2022. The ~~decrease~~increase is primarily due to ~~reductions in~~increased customer service payroll expenses ~~and share-based compensation.~~

~~Sales and~~off set by a decrease in marketing expenses decreased $1,209,040, or 40%, to $1,778,371 during the nine months ended September 30, 2022, compared to $2,987,411 for the same period in 2021. The decrease is primarily due to reductions in payroll expenses and share-based compensation.

Engineering, research & development costs include salaries, stock-based compensation expenses, travel, consulting costs, and other expenses.

Engineering, research & development expenses increased ~~$106,595,~~$32,152, or ~~16%~~5%, to ~~$784,804~~$734,375 during the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$678,209~~$702,223 for the same period in ~~2021.~~2022. This increase is primarily due to the ~~end of the ASC 606 deduction, an~~and increase in payroll and ~~an increase in professional services.~~

Engineering, research & development expenses increased $284,669, or 14%, to $2,360,863 during the nine months ended September 30, 2022, compared to $2,076,194 for the same period in 2021. This increase is primarily due to the end of the ASC 606 deduction, an increase in payroll, and an increase in professional services.

~~Impairment on intangible assets consists of an intangible asset valued at less than its carrying value.~~

Impairment on intangible assets increased 100% from $0 to $238,143 for the three months ended September 30, 2022, compared to the same period in 2021 The increase is a result of the impairment analysis performed.

Impairment on intangible assets increased from $8,286 to $238,143 for the nine months ended September 30, 2022, compared to the same period in 2021. The increase is a result of the impairment analysis performed.consulting expenses.

Depreciation and amortization expenses consist of depreciation on our equipment and amortization of our intangible assets.

Depreciation and amortization expenses decreased ~~$64,346~~$60,410 or ~~35%~~49%, to ~~$118,317~~$63,902 during the three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$182,663~~$124,312 for the same period in ~~2021.~~2022. This decrease is primarily due to the reduction in amortization of intangibles ~~on software development costs.~~

Depreciation and amortization expenses decreased $171,424 or 33%, to $353,050 during the nine months ended September 30, 2022 compared to $524,474 for the same period in 2021. This decrease is primarily due to ~~the reduction in amortization~~impairment of intangibles ~~on software development costs.~~

~~Interest income consists~~at the end of ~~stated interest income on our cash balances. Interest income was $0 during the three months ended September 30, 2022, compared to the same period in 2021.~~

Interest income consists of stated interest income on our cash balances. Interest income decreased $5 or 100% to $0, during the nine months ended September 30, 2022, compared to the same period in 2021. 2022.

Interest expense consists of stated or implied interest expense on our notes payable, amortization of note discounts, and amortization of deferred financing costs.

Interest expense increased ~~$105,170,~~$78,619 or ~~119%~~49%, to ~~a total of $193,501~~$238,446 during the three months ended ~~September 30, 2022, from~~March 31, 2023, compared to ~~$88,331~~$159,827 in the same period in ~~2021. This increase in interest expense is primarily related to the new line of credit taken out in 2021.~~

~~Interest expense increased $375,740, or 260%, to a total of $520,454 during the nine months ended September 30, 2022, compared to $144,714 in the same period in 2021.~~2022. This increase in interest expense is primarily related to an increase in ~~borrowings from our related parties.~~the balance on the line of credit taken out in 2021.

Settlement losses for the three months ended March 31, 2023 were $10,000, an increase of $10,000, compared to $0 for the three months ended March 31, 2022. The increase is due to additional TCPA claims.

~~On July 21, 2021, SBA authorized full forgiveness~~Loss on Settlement of debt consists of the ~~$891,103 PPP Loan after~~expense from the ~~Company applied for loan forgiveness and met all the requirements for such loan forgiveness under the SBA program. The balance~~settlement of ~~the loan was forgiven and recorded as a gain~~notes payable when they are settled into shares.

Loss on ~~forgiveness~~settlement of debt for the three months ended March 31, 2023 were $10,857, an increase of ~~$891,103. Gain on forgiveness of debt decrease 100%~~$10,857, compared to $0 for the three ~~and nine month periods~~months ended ~~September 30,~~March 31, 2022

~~Loss~~ . This increase is due to the amendment allowing for the settlement of interest on ~~Disposal of Fixed Assets~~

~~The loss on disposal of assets decreased by 100% from a September 30, 2021, balance of $880 to a September 30, 202, balance of $0.~~our outstanding related party notes payable.

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, 2022,~~March 31, 2023, was $1 Canadian equals ~~$0.78~~$0.74 U.S. Dollars. This compares to an average rate of $1 Canadian equals $0.79 during the same period in ~~2021.~~2022. 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 change in foreign currency was a loss of ~~$76,228~~$31,502 and a loss of ~~$13,150~~$12,895 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

~~The change in foreign currency was a loss of $76,862 and a loss of $22,391 for the nine months ended September 30, 2022 and 2021, respectively.~~

As of ~~September 30, 2022,~~March 31, 2023, we had current assets of ~~$2,139,214,~~$3,544,522, including ~~$1,016,745~~$2,581,597 in cash, and current liabilities of ~~$7,228,819,~~$6,602,830, resulting in a working capital deficit of ~~$5,089,605.~~$3,058,308.

We used cash from operating activities totaling ~~$ 4,966,359~~$1,443,464 during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and used cash from operating activities totaling ~~$ 3,189,511during~~$1,813,845 during the ~~nine~~three months ended ~~September 30, 2021.~~

Investing activities during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, consisted of ~~$18,712~~$14,111 of equipment purchases ~~and $12,030 of capitalized software development costs.~~

~~Investing activities during~~compared to $0 in the ~~nine~~three months ended ~~September 30, 2021, consisted of $78,217 of equipment purchases and $310,546 of capitalized software development costs.~~March 31, 2022.

Financing activities during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, consisted of ~~$2,550,552 additional paid-in capital~~proceeds of $3,587,487 from a warrant conversion to common stock ~~$2,050,000 additional paid-in capital from two private placement financings, $800,000 proceeds for related party notes payable,~~ and ~~$29,145~~$9,978 in payment on notes payable.

Financing activities for the three months ended March 31, 2022 consisted of proceeds of $2,550,553 from a warrant conversion to common stock and $6,354 in payments on notes payable.

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.

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.

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 Chief Executive Officer and 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 Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that as of ~~September 30, 2022~~March 31, 2023 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.

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~~three months ended ~~September 30, 2022~~March 31, 2023 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

As of the date of this report, the company has one pending legal proceeding related to TCPA (Telephone Consumer Protection Act) Violation. This is a putative class action complaint alleging that Defendant initiated telephone solicitations through text messages in violation of the Florida Telephone Solicitation Act, Fla. Stat. §501.059 (“FTSA”). The defense of the matter was tendered to the Company by its client, Sonic Industries, Inc., and our firm is managing the defense of the matter. The Company intends to seek an individual settlement of the matter, and if one cannot be reached, the Company intends to vigorously defend the matter. The discovery process has not begun so it is not possible at this time to ~~time, we may become involved in legal proceedings or be subject to claims arising~~calculate an accurate assessment of the Company’s exposure. No settlement loss has been accrued as it is too early in the ~~ordinary course~~proceedings estimate what it if any settlement loss will occur.

During the three months ended March 31, 2023 the Company has settled three TCPA claims for a total settlement loss of ~~our business. We are not currently a party to any material legal proceedings.~~$10,000.

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.

~~On June 29, 2022, we sold 1,062,500 shares of~~During the quarter ended March 31, 2023, 15 warrant holders exercised their common stock ~~and~~purchase warrant for 3,587,487 shares at the exercise price of $1.00 per share, resulting in additional capital of $3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders' 1,793,745 new warrants to purchase ~~up to 1,062,500 additional shares of~~ common stock ~~for an aggregate offering price of $849,999. The warrants are exercisable for~~at $2.00 per share over a three-year period ~~of three years from the date of issuance at an initial exercise price of $1.50 per share.~~

On August 24, 2022, we sold 1,250,000 shares of common stock and warrants to purchase up to 1,250,000 additional shares of common stock for an aggregate offering price of $1,000,000. The warrants are exercisable for a period of three years from the date of issuance at an initial exercise price of $1.50 per share.expiring in February 2025.

For the foregoing warrants, the exercise price of the warrant and the number of the shares issuable upon exercise of the warrant are subject to customary adjustments prior to exercise upon the occurrence of certain events affecting all outstanding shares of common stock.

The foregoing securities were issued in reliance on an exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) to a limited number of persons who were “accredited investors,” as defined in Rule 501 of Regulation D of the Securities Act, without the use of any general solicitations or advertising to market or otherwise offer the securities for sale. None of the shares, warrants or shares of common stock issued upon exercise of the warrants have been registered under the Securities Act or applicable state securities laws and none may be offered or sold in the United States absent registration under the Securities Act, or an exemption from such registration requirements. Neither this quarterly report on Form 10-Q nor any exhibit attached hereto shall constitute an offer to sell or the solicitation of an offer to buy any securities.

The information set forth below is included herein for purposes of providing the disclosure required under “Item 1.01 Entry Into a Material Definitive Agreement; Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. ” of Form 8-K.

On November 13, 2022, the Company entered into an amended and restated credit facility agreement with Thomas B. Akin, a director of the Company (the “A&R Credit Agreement”) and a corresponding convertible note in the amount of $4,466,043 (the “Convertible Note”). The A&R Credit Agreement amends and restates the current Credit Agreement and allows for the Company to borrow up to $6 million in advances. The Convertible Note accrues interest monthly at 15% per annum. Principal and accrued interest payments are due in 24 monthly installments under the Convertible Note beginning on January 31, 2023 and continuing on the last day of each of the next 23 months thereafter. The Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of the holder thereof, at a conversion price per share equal to 85% of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the thirty (30) trading days immediately preceding such date (the “Conversion Price”). The Convertible Note and all accrued interest thereon will be automatically converted into common stock at the Conversion Price on the dated that is five business days prior to the date on which the Company becomes listed on a national securities exchange if all listing requirements have been satisfied by the Company (other than the Company satisfying any stockholders’ equity requirement to be listed on such national exchange).

In addition, in connection with the execution of the A&R Credit Agreement and the Convertible Note, the Company issued Mr. Akin 140,185 shares of common stock on November 14, 2022.

The foregoing description of the A&R Credit Agreement and Convertible Note does not purport to be complete and is qualified in its entirety by reference to the A&R Credit Agreement and Convertible Note, which fill be filed separately.

(1) Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on October 20, 2008, File No. 333-154455

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

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’ Equity (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	1615
Item 3. Quantitative and Qualitative Disclosures about Market Risk.	1918
Item 4. Controls and Procedures.	1918
PART II – OTHER INFORMATION	2019
Item 1. Legal Proceedings	2019
Item 1A. Risk Factors	2019
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2019
Item 3. Defaults Upon Senior Securities	2019
Item 4. Mine Safety Disclosures	2019
Item 5. Other Information	2019
Item 6. Exhibits	2019
SIGNATURES	2120

	*Balance at December 31, 2021*		*Additions*		*Impairments*			*Amortization*			*Fx and Other*		*Balance at September 30, 2022*		*Balance at December 31, 2022*		*Additions*		*Impairments*		*Amortization*			*Fx and Other*		*Balance at March 31, 2023*
Patents and trademarks	$	57,595	$	—	$	—		$	(3,676	)	$	3	$	53,919	$	52,698	$	—	$	—	$	(1,223	)	$	3	$	51,475
Customer and merchant relationships		545,533		—		(238,143	)	$	(72,635	)		—		234,755		30,690		—		—	$	(6,138	)		—		24,552
Trade names		32,393		—		—		$	(6,781	)		—		25,612		8,050		—		—	$	(1,609	)		—		6,441
Acquired technology		112,191		—		—		$	(12,224	)		—		99,967
Non-compete agreements		29,212		—		—		$	(11,895	)		—		17,317
	$	776,924	$	—	$	(238,143	)	$	(107,211	)	$	3	$	431,570	$	91,438	$	—	$	—	$	(8,970	)	$	3	$	82,468

Year ending December 31,	*Amount*
2022	$	35,736
2023		140,436
2024		103,840
2025		59,042
2026		23,793
Thereafter		68,723
Total	$	431,570

Year ending December 31,	*Amount*
2023	$	26,913
2024		12,639
2025		4,891
2026		4,891
2027		4,891
Thereafter		28,243
Total	$	82,468

	*Balance at December 31, 2021*		*Additions*		*Amortization*			*Balance at September 30, 2022*
Software Development Costs	$	347,796	$	12,030	$	(207,027	)	$	152,799
	$	347,796	$	12,030	$	(207,027	)	$	152,799

	*Common Stock*				*Equity*		*Additional Paid-in*		*Accumulated Other Comprehensive*			*Accumulated*			*Total Stockholders' Equity*			*Common Stock*				*Equity*		*Additional Paid-in*		*Accumulated Other Comprehensive*			*Accumulated*			*Total Stockholders' Equity*
	*Shares*		*Dollars*		*Payable*		*Capital*		*Loss*			*Deficit*			*(Deficit)*			*Shares*		*Dollars*		*Payable*		*Capital*		*Loss*			*Deficit*			*(Deficit)*
Balance, December 31, 2020		55,410,695	$	55,411	$	100,862	$	101,186,889	$	(23,446	)	$	(99,575,503	)	$	1,744,213
Balance, December 31, 2021																			55,410,695	$	55,411	$	100,862	$	102,446,921	$	(52,088	)	$	(107,835,287	)	$	(5,284,181	)
Issuance of common stock for warrant exercise																			3,188,190		3,188		—		2,547,365		—			—			2,550,553
Fair value of options issued with related party debt		—		—		—		124,388	$	—		$	—		$	124,388			—		—		—		6,201	$	—		$	—		$	6,201
Stock based compensation		—		—		—		751,878		—			—			751,878			—		—		—		589,650		—			—			589,650
Foreign currency translation adjustment		—		—		—		—		(22,391	)		—			(22,391	)		—		—		—		—		(12,895	)		—			(12,895	)
Net loss		—		—		—		—		—			(4,109,956	)		(4,109,956	)		—		—		—		—		—			(1,933,099	)		(1,933,099	)
Balance, September 30, 2021		55,410,695	$	55,411	$	100,862	$	102,063,155	$	(45,837	)	$	(103,685,459	)	$	(1,511,868	)
Balance, March 31, 2022																			58,598,885	$	58,599	$	100,862	$	105,590,137	$	(64,983	)	$	(109,768,386	)	$	(4,083,771	)

Leases	*Classification*	*Balance at September 30, 2022*		*Classification*	*Balance at March 31, 2023*
Assets
Current
Operating lease assets	Operating lease assets	$	—	Operating lease assets	$	—
Noncurrent
Operating lease assets	Noncurrent operating lease assets	$	1,032,132	Noncurrent operating lease assets	$	930,658
*Total lease assets*	*Total lease assets*	$	1,032,132	*Total lease assets*	$	930,658

Liabilities
Current
Operating lease liabilities	Operating lease liabilities	$	245,816	Operating lease liabilities	$	257,614
Noncurrent
Operating lease liabilities	Noncurrent operating lease liabilities	$	1,001,579	Noncurrent operating lease liabilities	$	870,057
*Total lease liabilities*	*Total lease liabilities*	$	1,247,395	*Total lease liabilities*	$	1,127,671

Year ending December 31,
2022	$	79,526
2023		324,221		$	243,583
2024		330,894			330,894
2025		337,568			337,568
2026		344,241			344,241
2027					28,733
Thereafter		28,733			—
Total future lease payments		1,445,183			1,285,019
Less: imputed interest		(197,788	)		(157,348	)
Total	$	1,247,395		$	1,127,671

Weighted Average Remaining Lease Term (years)
Operating leases	~~5.9~~3.83

Weighted Average Discount Rate
Operating leases	6.75	%

Facility		*Maturity*	*Interest Rate*			*Balance at September 30, 2022*			*Balance at December 31, 2021*				*Maturity*	*Interest Rate*			*Balance at March 31, 2023*			*Balance at December 31, 2022*
ACOA Note		February 1, 2024		—			43,510			76,642			February 1, 2024		—			24,354			34,231
TD Bank		December 31, 2022		—			29,031			31,496			December 31, 2023		—			29,565			29,478
Related Party Note		various		15	%		4,128,107			3,318,242			various		15	%		5,224,028			5,192,461
*Total Debt*	*Total Debt*						4,200,648			3,426,380		*Total Debt*						5,277,947			5,256,170
Less current portion	Less current portion						(1,848,375	)		(888,583	)	Less current portion						(1,351,619	)		(2,743,788	)
*Long-term debt, net of current portion*	*Long-term debt, net of current portion*					$	2,352,273		$	2,537,797		*Long-term debt, net of current portion*					$	3,926,328		$	2,512,382

	*Options*
~~Outstanding at December 31, 2020~~		~~6,007,552~~
~~Granted~~		~~637,500~~
~~Exercised~~		—
~~Forfeited/canceled~~		~~(272,029~~	)
~~Expired~~		~~(126,557~~	)
Outstanding at December 31, 2021		6,246,466
Granted		~~1,195,000~~1,375,000
Exercised		—
Forfeited/canceled		(330,623	)
Expired		(~~484,209~~599,627	)
Outstanding at ~~September 30,~~December 31, 2022		~~6,626,634~~6,691,216
Granted		—
Exercised		—
Forfeited/canceled		(72,916	)
Expired		(29,030	)
Outstanding at March 31, 2023		6,589,270

	*Shares*
~~Outstanding at December 31, 2020~~		~~1,436,728~~
~~Awarded~~		~~654,663~~
~~Released~~		—
~~Canceled/forfeited/expired~~		~~(406,250~~	)
Outstanding at December 31, 2021		1,685,141
Awarded		~~197,688~~244,792
Released		—
Canceled/forfeited/expired		—
Outstanding at ~~September 30,~~December 31, 2022		~~1,882,829~~1,929,933
Awarded		61,324
Released		(545,012	)
Canceled/forfeited/expired		—
Outstanding at March 31, 2023		1,446,245

Expected to vest at ~~September 30, 2022~~March 31, 2023		~~1,882,829~~1,446,245
Vested at ~~September 30, 2022~~March 31, 2023		~~1,882,829~~1,446,245
Unvested at ~~September 30, 2022~~March 31, 2023		—
Unrecognized expense at ~~September 30, 2022~~March 31, 2023	$	—

	*Shares*			*Weighted Average Exercise Price*		*Weighted Average Remaining Contractual Term (Years)*		*Shares*			*Weighted Average Exercise Price*		*Weighted Average Remaining Contractual Term (Years)*
Outstanding at December 31, 2020		2,691,459		$	1.99		2.94
Granted		580,231		$	—		—
Exercised		—		$	—		—
Canceled/forfeited/expired		(25,000	)	$	—		—
Outstanding at December 31, 2021		3,246,690		$	2.26		3.59		3,246,690		$	2.26		3.59
Granted		5,928,261		$	—		—		6,089,398		$	—		—
Exercised		(3,188,190	)	$	—		—		(3,188,190	)	$	—		—
Canceled/forfeited/expired		—		$	—		—		—		$	—		—
Outstanding at September 30, 2022		5,986,761		$	2.72		2.02
Outstanding at December 31, 2022									6,147,898		$	1.45		2.27
Granted									1,793,745		$	—		—
Exercised									(3,587,487	)	$	—		—
Canceled/forfeited/expired									—		$	—		—
Outstanding at March 31, 2023									4,354,156		$	1.83		2.37

Description	*Level 1*		*Level 2*		*Level 3*		*Gains (Losses)*		*Level 1*		*Level 2*		*Level 3*		*Gains (Losses)*
Goodwill (non-recurring)	$	—	$	—	$	411,183	$	—	$	—	$	—	$	—	$	—
Intangibles, net (non-recurring)	$	—	$	—	$	584,369	$	—	$	—	$	—	$	143,857	$	—

Description	Level 1		Level 2		Level 3		Gains (Losses)		*Level 1*		*Level 2*		*Level 3*		*Gains (Losses)*
Goodwill (non-recurring)	$	—	$	—	$	411,183	$	—	$	—	$	—	$	—	$	—
Intangibles, net (non-recurring)	$	—	$	—	$	1,124,720	$	—	$	—	$	—	$	194,772	$	—

	●	Transform messy point-of-sale (POS) data collected from thousands of points of sale into usable intelligence.
	●	Measure, predict, and boost guest frequency and spend by channel.
	●	Deploy and manage one-time use offer codes and attribute sales accurately across every channel, promotion, and media program.
	●	Deliver 1:1 promotions and offers with customized Mobile Messaging, Personalized Receipt Promotions, and Integrated Loyalty programs.

	●	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.

	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2022			2021			2023			2022
Net cash provided by (used in):
Operating activities	$	(4,966,359	)	$	(3,189,511	)	$	(1,443,464	)	$	(1,813,845	)
Investing activities		(30,742	)		(388,763	)		(14,111	)		—
Financing activities		5,371,407			886,076			3,577,509			2,544,199
Effect of foreign currency translation on cash flow		(92,985	)		(21,726	)		34,923			(10,631	)
Net change in cash	$	281,321		$	(2,713,924	)	$	2,154,857		$	719,723


Exhibit No.		Description
~~3.1~~10.12		Amended and Restated ~~Articles~~Credit Facility Agreement, dated as of Incorporation filed with the Nevada Secretary of State on August 12, 2022November 11, 2022, between Mobivity Holdings Corp. and Thomas B. Akin
~~3.2~~10.13		~~Bylaws (1)~~Convertible Note, dated as of November 15, 2022 *
~~3.3~~10.14		Amendment No. 1 to ~~the Bylaws, effective~~Amended and Restated Credit Facility Agreement and Convertible Notes, dated as of ~~November 25, 2011 (2)~~January 31, 2023, between Mobivity Holdings Corp. and Thomas B. Akin *
10.15		Form of Exercise Notice for Offer to Amend and Exercise completed March 16, 2023 *
10.16		Form of New Warrant issued March 16, 2023 *
31.1		Certification by Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002 *
31.2		Certification by Chief 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)


	Mobivity Holdings Corp.

Date: ~~November 14, 2022~~May 15, 2023	By:	/s/ Dennis Becker
		Dennis Becker
		Chairman and Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 14, 2022~~May 15, 2023	By:	/s/ Lisa Brennan
		Lisa Brennan
		Chief Financial Officer (Principal Accounting Officer)