Table of Contents

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

 

FOR THE QUARTERLY PERIOD ENDED June 30, 20222023

 

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


COMMISSION FILE NUMBER: 001-41117

 

MOBIQUITY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

 

new york 11-3427886
(State of jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
   
35 Torrington Lane, SHOREHAM, NY 11786
(Address of principal executive offices (Zip Code)

 

(516) 246-9422

(Registrant's telephone number)

 

                       Not Applicable                        

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

 

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

 

Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $.0001 par valueMOBQThe Nasdaq Stock Market LLC
Common Stock Purchase WarrantsMOBQWThe Nasdaq Stock Market LLC

 

Securities registered pursuant to Section 12(g) of the Act: 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. (Check one)

 

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

 

The number of shares outstanding of the registrant’s common stock, as of August 10, 2022,July 7, 2023, was 8,729,19138,611,261.

 

   

 

  

MOBIQUITY TECHNOLOGIES, INC.

 

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

 

 

  PAGE 
PART I. FINANCIAL INFORMATION  3 
     
Item 1. Condensed Consolidated Financial Statements  3 
     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations  2625 
     
Item 3. Quantitative and Qualitative Disclosures  35 
     
Item 4. Controls and Procedures  35 
     
PART II. OTHER INFORMATION36
Item 1. Legal Proceedings36
Item la. Risk Factors36
Item 2. Changes in Securities36
Item 3. Defaults Upon Senior Securities37
Item 4. Mine Safety Disclosures  37 
     
Item 5. Other Information1. Legal Proceedings  37 
     
Item 6. Exhibits and Reports on Form 8-KlA. Risk Factors  37 
     
SIGNATURESItem 2. Changes in Securities  4037
Item 3. Defaults Upon Senior Securities39
Item 4. Mine Safety Disclosures39
Item 5. Other Information39
Item 6. Exhibits39
SIGNATURES42 

 

 

 

 2 

 

 

MOBIQUITY TECHNOLOGIES, INC. AND SUBSIDIARIES

Mobiquity Technology, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

       
Assets June 30,  December 31, 
  2022  2021 
       
Current Assets        
Cash $2,165,977  $5,385,245 
Accounts receivable, net of allowance for doubtful accounts $820,990  602,592   388,112 
Prepaids and other  21,825   11,700 
Total Current Assets  2,790,394   5,785,057 
         
Property and equipment - net  23,476   20,335 
Intangible assets - net  946,652   1,247,019 
Goodwill  1,352,865   1,352,865 
Total Assets $5,113,387  $8,405,276 
         
Liabilities and Stockholders' Equity        
Current Liabilities        
Accounts payable and accrued expenses $1,659,186  $2,367,600 
Convertible notes payable  100,000   656,504 
Total Current Liabilities  1,759,186   3,024,104 
         
Notes payable  150,000   2,462,500 
Total Liabilities  1,909,186   5,486,604 
         
Stockholders' Equity        
AAA Preferred stock; $0.0001 par value, 4,930,000 shares authorized; 31,413 shares issued and outstanding 
 		 
 		493,869 
 		 
 		 
 		493,869 
 
Series C, Preferred stock, $0.0001 par value, 1,500 shares authorized, 0 shares issued and outstanding  0   0 
Series E, Preferred stock, $80 par value, 70,000 shares authorized, 61,688 shares issued and outstanding  4,935,040   4,935,040 
Common stock, $0.0001 par value, 100,000,000 shares authorized 8,399,584 and 6,498,251 shares issued, respectively and 8,362,084 and 6,460,751 shares outstanding, respectively 
 		 
 		 
841		 
 		 
 		 
 		 
650		 
 
Additional paid in capital  208,670,675   204,373,816 
Treasury stock $0.0001 par value 37,500 shares at cost  (1,350,000)  (1,350,000)
Accumulated deficit  (209,546,224)  (205,534,703)
Total Stockholders' Equity  3,204,201   2,918,672 
Total Liabilities and Stockholders' Equity $5,113,387  $8,405,276 

Mobiquity Technologies, Inc.

Consolidated Balance Sheets

 

       
  June 30,  December 31, 
  2023  2022 
  (Unaudited)    
       
Assets        
Current Assets        
Cash $1,598,160  $220,854 
Accounts receivable, net  101,666   340,935 
Prepaid and other current assets  11,700   59,200 
Total Current Assets  1,711,526   620,989 
         
Property and equipment, net  10,692   15,437 
         
Goodwill  1,352,865   1,352,865 
Intangible assets, net  345,916   646,284 
Capitalized software development costs, net  842,575   – 
         
Total Assets $4,263,574  $2,635,575 
         
Liabilities and Stockholders' Equity (Deficit)        
Current Liabilities        
Accounts payable and accrued expenses $1,128,260  $2,067,244 
Accrued interest - related party  –   235,563 
Contract liabilities  189,790   193,598 
Debt, current portion, net of debt discount  –   – 
Total Current Liabilities  1,318,050   2,496,405 
         
Long Term Liabilities        
Debt, less current portion  –   150,000 
Total Long-Term Liabilities  –   150,000 
         
Total Liabilities  1,318,050   2,646,405 
         
Stockholders' Equity        
AA preferred stock; $0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding  –   – 
AAA preferred stock; $0.0001 par value, 1,250,000 shares authorized, 31,413 shares issued and outstanding  3   3 
Preferred stock Series C; $0.0001 par value, 1,500 shares authorized, no shares issued and outstanding  –   – 
Preferred stock Series E; $80 par value, 70,000 shares authorized, 61,688 shares issued and outstanding  6   6 
Preferred stock Series F; $0.0001 par value, 1 share authorized, 1 share issued and outstanding  –   – 
Common stock; $0.0001 par value, 100,000,000 shares authorized, 31,436,261 and 9,311,639 shares issued and outstanding  3,145   931 
Treasury stock $0.0001 par value 37,500 shares outstanding at June 30, 2023 and December 31, 2022  (1,350,000)  (1,350,000)
Additional paid in capital  218,625,335   211,845,452 
Accumulated deficit  (214,332,965)  (210,507,222)
Total Stockholders' Equity (Deficit)  2,945,524   (10,830)
Total Liabilities and Stockholders' Equity (Deficit) $4,263,574  $2,635,575 

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

 

 

 3 

 

 

Mobiquity Technology,Technologies, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

                
                 Three Months Ended Six Months Ended 
 Three Months Ended
June 30,		  Six Months Ended
June 30,		  June 30, June 30, 
 2022 2021 (Restated) 2022 2021 (Restated)  2023  2022  2023  2022 
                      
Revenues $1,920,954  $702,434  $2,463,123  $1,224,307  $131,515  $1,920,954  $263,739  $2,463,123 
                                
Cost of revenues  673,769   811,519   979,896   1,748,799  $104,089   673,769   166,897   979,896 
                                
Gross profit (loss)  1,247,185   (109,085)  1,483,227   (524,492)
Gross profit  27,426   1,247,185   96,842   1,483,227 
                                
Operating expenses                
General and administrative expenses  2,255,965   2,047,428   4,784,554   3,631,822   1,364,170   2,103,260   2,637,704   4,479,322 
Depreciation and amortization  173,809   152,705   326,022   305,232 
Total operating expenses  1,537,979   2,255,965   2,963,726   4,784,554 
                                
Loss from operations  (1,008,780)  (2,156,513)  (3,301,327)  (4,156,314)  (1,510,553)  (1,008,780)  (2,866,884)  (3,301,327)
                                
Other income (expenses)                
Other income (expense)                
Interest expense  (23,270)  (415,312)  (143,967)  (603,327)  (382,159)  (23,270)  (743,396)  (143,967)
Loss on extinguishment of debt – related party  (828,496)  0   (855,296)  0 
Loss on debt extinguishment, net  (396,323)  (828,496)  (396,323)  (855,296)
Inducement expense  (101,000)  0   (101,000)  0   –   (101,000)  –   (101,000)
Original issue discount  0   (110,000)  0   (110,000)
Gain on debt forgiveness  0   265,842   0   265,842 
Interest income  574   0   574   0   791   574   1,555   574 
Loss on disposal of fixed assets  (695)  –   (695)  – 
Gain on settlement of liability  389,495   0   389,495   0   –   389,495   –   389,495 
Total other expense - net  (562,697)   (259,470)  (710,194)   (447,485)
Total other expense, net  (778,386)  (562,697)  (1,138,859)  (710,194)
                
Net loss before income taxes  (2,288,939)  (1,571,477)  (4,005,743)  (4,011,521)
                
Income tax benefit  180,000   –   180,000   – 
                                
Net loss $(1,571,477) $(2,415,983) $(4,011,521) $(4,603,799)  (2,108,939)  (1,571,477)  (3,825,743)  (4,011,521)
                                
Loss per share – basic and diluted $(0.20) $(0.81) $(0.50) $(1.58)
Loss per share - basic  (0.09)  (0.20)  (0.21)  (0.50)
Loss per share - diluted  (0.09)  (0.20)  (0.21)  (0.50)
                                
Weighted average number of shares outstanding - basic and diluted  7,963,151   2,984,332   8,048,558   2,922,280 
Weighted average number of shares outstanding - basic  24,088,671   7,963,151   18,374,200   8,048,558 
Weighted average number of shares outstanding - diluted  24,088,671   7,963,151   18,374,200   8,048,558 

 

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

 

 4 

 

 

Mobiquity Technologies, Inc.

Mobiquity Technology, Inc.

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)

For the Three and Six Months Ended June 30, 20222023 and June 30, 2021 (Restated)2022

                                                     
  Series F Preferred Stock  Series AAA Preferred Stock  Series E
Preferred Stock		  Common Stock  Additional Paid-in  Treasury Shares  Accumulated  Total Stockholders' Equity 
  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Shares  Amount  Deficit  (Deficit) 
Balance, at December 31, 2022  –   –   31,413  $3   61,688  $6   9,311,639  $931  $211,845,452   37,500  $(1,350,000) $(210,507,222) $(10,830)
Incentive common stock shares and warrants issued with debt  –   –   –   –   –   –   522,727   53   708,411   –   –   –   708,464 
Common stock and pre-funded warrants issued under public offering, net of issuance costs  –   –   –   –   –   –   3,777,634   378   3,207,122               3,207,500 
Common stock issued under cashless warrant exercises and exercise of pre-funded warrants  –   –   –   –   –   –   3,439,893   344   (344)  –   –   –   – 
Stock based compensation  –   –   –   –   –   –   –   –   12,304   –   –   –   12,304 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   (1,716,804)  (1,716,804)
Balance, at March 31, 2023  –   –   31,413   3   61,688   6   17,051,893   1,706   215,772,945   37,500   (1,350,000)  (212,224,026)  2,200,634 
Common stock and pre-funded warrants issued under public offering, net of issuance costs  –   –   –   –   –   –   5,625,000   563   2,527,436   –   –   –   2,527,999 
Common stock issued under cashless warrant exercises and exercise of pre-funded warrants  –   –   –   –   –   –   6,895,379   689   (689)  –   –   –   – 
Common stock issued for services rendered  –   –   –   –   –   –   478,326   48   80,362   –   –   –   80,410 
Common stock issued for conversion of interest  –   –   –   –   –   –   1,385,663   139   235,424   –   –   –   235,563 
Stock based compensation  –   –   –   –   –   –   –   –   9,757   –   –   –   9,757 
Series F preferred stock issued for cash  1   –   –   –   –   –   –   –   100   –   –   –   100 
Net Loss  –   –   –   –   –   –   –   –       –   –   (2,108,939)  (2,108,939)
Balance, at June 30, 2023  1   –   31,413   3   61,688   6   31,436,261   3,145   218,625,335   37,500   (1,350,000)  (214,332,965)  2,945,524 

  Series F Preferred Stock  Series AAA Preferred Stock  

Series E

Preferred Stock

  Common Stock  Additional Paid-in  Treasury Shares  Accumulated  Total Stockholders' 
  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Shares  Amount  Deficit  Equity 
December 31, 2021 (restated)  –   –   31,413  $3   61,688  $6   6,460,751  $650  $206,712,907   37,500  $(1,350,000) $(202,444,894) $2,918,672 
Stock issued for services  –   –   –   –   –   –   50,000   5   84,495   –   –   –   84,500 
Stock based compensation  –   –   –   –   –   –   –   –   34,416   –   –   –   34,416 
Conversion of convertible debt to common stock and warrants  –   –   –   –   –   –   1,443,333   145   2,680,020   –   –   –   2,680,165 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   (2,440,044)  (2,440,044)
Balance, at March 31, 2022 (restated)  –   –   31,413  $3   61,688  $6   7,954,084  $800  $209,511,838   37,500  $(1,350,000) $(204,884,938) $3,277,709 
Stock based compensation  –   –   –  $–   –  $–   –  $–  $509,338   –  $–  $–   509,338 
Convertible notes converted to common stock and warrants related party  –   –   –  $–   –  $–   408,000  $41  $988,590   –  $–  $–   988,631 
Net Loss  –   –   –  $–   –  $–   –  $–  $–   –  $–  $(1,571,477)  (1,571,477)
Balance, at June 30, 2022  –   –   31,413   3   61,688   6   8,362,084   841   211,009,766   37,500   (1,350,000)  (206,456,415)  3,204,201 

                                                             
          AAA  Series E Preferred Stock  Series C Preferred Stock        Additional           Total 
          Preferred Stock  Preferred Stock  Preferred Stock  Common Stock  Paid-in  Treasury Shares  Accumulated  Stockholders' 
          Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Shares  Amount  Deficit  Equity 
Balance, at January 1, 2022 –  –   31,413  $493,869   61,688  $4,935,040   –  $–   6,460,751  $650  $204,373,816   37,500  $(1,350,000) $(205,534,703) $2,918,672 
Common stock issued for services          –   –   –   –   –   –   50,000   5   84,495   –   –   –   84,500 
Stock based compensation          –   –   –   –   –   –   –   –   34,416   –   –   –   34,416 
Convertible notes converted to common stock and warrants          –   –   –   –   –   –   1,443,333   145   2,680,020   –   –   –   2,680,165 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   –   –   (2,440,044)  (2,440,044)
Balance, at March 31, 2022  –   –   31,413   493,869   61,688   4,935,040   –   –   7,954,084   800   207,172,747   37,500   (1,350,000)  (207,974,747)  3,277,709 
Stock based compensation          –   –   –   –   –   –   –   –   509,338   –   –   –   509,338 
Convertible notes converted to common stock and warrants related party          –   –   –   –   –   –   408,000   41   988,590   –   –   –   988,631 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   –   –   (1,571,477)  (1,571,477)
Balance, at June 30, 2022  –   –   31,413  $493,869   61,688  $4,935,040   –  $–   8,362,084  $841  $208,670,675   37,500  $(1,350,000) $(209,546,224) $3,204,201 

  AAA          Series E Preferred Stock  Series C Preferred Stock        Additional           Total 
  Preferred Stock          Preferred Stock  Preferred Stock  Common Stock  Paid-in  Treasury Shares  Accumulated  Stockholders' 
  Shares  Amount          Shares  Amount  Shares  Amount  Shares  Amount  Capital  Shares  Amount  Deficit  Equity 
Balance, at January 1, 2021  56,413  $868,869   –   –   61,688  $4,935,040   1,500  $15,000   2,803,685  $282  $184,586,420   37,500  $(1,350,000) $(186,168,926) $2,886,685 
Common stock issued for services  –   –           –   –   –   –   10,000   –   81,825   –   –   –   81,825 
Common stock issued for cash  –   –           –   –   –   –   91,502   10   548,980   –   –   –   548,990 
 Stock based compensation  –   –           –   –   –   –   –   –   16,839   –   –   –   16,839 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   –   –   (2,187,776)  (2,187,776)
Balance, at March 31, 2021  56,413   868,869   –   –   61,688   4,935,040   1,500   15,000   2,905,187   292   185,234,064   37,500   (1,350,000)  (188,356,702)  1,346,563 
Common stock issued for services  –   –           –   –   –   –   5,000   –   37,975   –   –   –   37,975 
Common stock issued for cash  –   –           –   –   –   –   58,334   6   349,994   –   –   –   350,000 
Stock based compensation  –   –           –   –   –   –   –   –   555,892   –   –   –   555,892 
Notes converted to common stock  –   –           –   –   –   –   92,761   9   451,993   –   –   –  

  

452,002 
Original issue discount shares  –   –           –   –   –   –   39,500   5   268,145   –   –   –   268,150 
Net Loss  –   –   –   –   –   –   –   –   –   –   –   –   –   (2,415,983)  (2,415,983)
Balance, at June 30, 2021  56,413  $868,869   –   –   61,688  $4,935,040   1,500  $15,000   3,100,782  $312  $186,898,063   37,500  $(1,350,000) $(190,774,685) $552,559 

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

 

 5 

 

 

Mobiquity Technologies, Inc.

Mobiquity Technology, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

  

              
 Six Months Ended
June 30,		  Six Months Ended
June 30,		 
 2022 2021  2023  2022 
    (Restated)        
Cash Flows from Operating Activities:                
Net loss $(4,011,521) $(4,603,799) $(3,825,743) $(4,011,521)
                
Adjustments to reconcile net loss to net cash used in operating activities:                
Allowance for uncollectible receivables  46,458   – 
Depreciation  4,863   3,703   4,050   4,863 
Loss on disposal of asset  695   – 
Amortization of intangible assets  300,367   900,367   300,368   300,367 
Amortization of capitalized software development costs  21,604   – 
Amortization of debt discount  738,141   – 
Stock issued for services  84,500   119,800   –   84,500 
Loss on debt extinguishment – related party  855,296   0 
Loss on debt extinguishment - related party  –   855,296 
Loss on debt extinguishment  396,323   – 
Gain on settlement of liability  (389,495)  0   –   (389,495)
Stock based compensation  543,754   572,731 
Stock issued with short-term convertible notes  –   310,150 
Stock-based compensation  22,061   543,754 
Inducement expense  101,000   0   –   101,000 
Gain on debt forgiveness  0   (265,842)
Income tax benefit  (180,000)  – 
Changes in operating assets and liabilities                
(Increase) decrease in accounts receivable  (214,480)  840,740   192,811   (214,480)
(Increase) decrease prepaid expenses and other assets  (10,125)   16,500   47,500   (10,125)
Decrease in accounts payable and accrued expenses  (318,919)  (343,134)  (678,574)  (318,919)
Net cash in used in operating activities  (3,054,760)  (2,448,784)
Contract liabilities  (3,808)  – 
Net cash used in operating activities  (2,918,114)  (3,054,760)
                
Investing Activities                
Purchase of property and equipment  (8,004)  0   –   (8,004)
Increase in software development costs  (864,179)  – 
Net cash used in investing activities  (8,004)  –   (864,179)  (8,004)
                
Financing Activities                
Proceeds from the issuance of notes payable  0   1,820,000 
Common stock issued for cash, net  0   898,990 
Proceeds from the issuance of debt, net of discounts and debt issuance costs  1,011,500   – 
Repayment on notes payable  (156,504)  (698,816)  (1,587,500)  (156,504)
Net cash (used in) provided by financing activities  (156,504)  2,020,174 
Issuance of common stock and pre-funded warrants, net of issuance costs  5,735,499   – 
Proceeds from the issuance of Series F preferred stock  100   – 
Net cash provided by (used in) financing activities  5,159,599   (156,504)
                
Net change in cash  (3,219,268)  (428,610)  1,377,306   (3,219,268)
                
Cash – beginning of period  5,385,245   602,181 
Cash – end of period $2,165,977  $173,571 
Cash - beginning of period  220,854   5,385,245 
        
Cash - end of period $1,598,160  $2,165,977 
                
Supplemental disclosure of cash flow Information                
Cash paid for interest $141,806  $207,366  $18,489  $141,806 
Cash paid for taxes $325  $25  $294  $325 
                
Supplemental disclosure of non-cash investing and financing activities:                
Issuance of incentive shares with debt recorded as debt discount $122,426  $– 
Warrants issued with debt recorded as debt discount $586,038  $– 
Common stock issued under cashless warrant exercises $1,033  $– 
Common stock issued for accrued interest $235,563  $– 
Common stock issued for settlement of accounts payable $80,410  $– 
Conversion of debt to common stock and warrants $2,712,500  $452,002  $–  $2,712,500 

 

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

 

 6 

 

  

MOBIQUITY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 20222023

(UNAUDITED)

 

 

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

 

Mobiquity Technologies, Inc. (“Mobiquity,” “we,” “our” or “the Company”), and its operating subsidiaries, is a next generation location data intelligence company. The Company provides precise unique, at-scale location data and insights on consumer’s real-world behavior and trends for use in marketing and research. We provide one of the most accurate and scaled solutions for mobile data collection and analysis, utilizing multiple geo-location technologies. The Company is seeking to implement several new revenue streams from its data collection and analysis, including, but not limited to, Advertising, Data Licensing, Footfall Reporting, Attribution Reporting, Real Estate Planning, Financial Forecasting and Custom Research. We also are a developer of advertising and marketing technology focused on the creation, automation, and maintenance of an advertising technology operating system (or ATOS). The ATOS platform blends artificial intelligence (or AI) and machine learning (ML) based optimization technology for automatic ad serving that manages and runs digital advertising campaigns.

 

The parent (MobiquityMobiquity Technologies, Inc.) was incorporated in the State of New York and subsidiaries are organizedhas the following subsidiaries:

Mobiquity Networks, Inc.

Mobiquity Networks, Inc. is a wholly owned subsidiary of Mobiquity Technologies, Inc., commencing operations in January 2011 and incorporated in the State of New York. Mobiquity Networks started and developed as follows:a mobile advertising technology company focused on driving foot-traffic throughout its indoor network and has evolved and grown into a next generation data intelligence company. Mobiquity Networks, Inc. operates our data intelligence platform business.

Schedule Of Subsidiaries
Company NameState of Incorporation
Mobiquity Technologies, Inc.New York
Mobiquity Networks, Inc.New York
Advangelists, LLCDelaware

Advangelists, LLC

Advangelists LLC is a wholly owned subsidiary of Mobiquity Technologies, Inc., acquired through a merger transaction in December 2018, incorporated in the State of Delaware, and operates our ATOS platform business.

 

Liquidity, Going Concern and Management’s Plans

 

These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

 

As reflected in the accompanying condensed consolidated financial statements, for the six months ended June 30, 2022,2023, the Company had:is reporting the following:

 

·Net loss of $4,011,5213,825,743; and
·Net cash used in operations wasof $3,054,7602,918,114

 

Additionally, at June 30, 2022,2023, the Company had:is reporting the following:

 

·Accumulated deficit of $209,546,224214,332,965
·Stockholders’ equity of $3,204,2012,945,524, and
·Working capital of $1,031,208393,476.

 

We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company has cash on hand of $2,165,9771,598,160 aton June 30, 2022.

2023.

 

 

 7 

 

 

The Company has incurred significant losses since its inception in 1998 and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. There can be no assurance that profitable operations will ever be achieved, or if achieved, could be sustained on a continuing basis. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the six months ended June 30, 2022,2023, and our current capital structure including equity-based instruments and our obligations and debts.

 

Without sufficient revenues from operations, if the Company does not obtain additional capital, the Company will be required to reduce the scope of its business development activities or cease operations. The Company may explore obtaining additional capital financing and the Company is closely monitoring its cash balances, cash needs, and expense levels.

 

These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these condensed consolidated financial statements are issued. TheThese consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

 

Management’s strategic plans include the following:

 

·Execution of business plan focused on technology growth and improvement,
·Seek out equity and/or debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable.
·Continuing to explore and execute prospective partnering or distribution opportunities,
·Identifying unique market opportunities that represent potential positive short-term cash flow.

 

Coronavirus (“COVID-19”) Pandemic

 

During the three months and six monthsyear ended June 30,December 31, 2022, the Company’s financial results and operations were not materially adversely impacted by the COVID-19 pandemic. However, inThe Company is a data location company with a specialty to drive traffic to retail stores. In the prior two (2) years, the Company suffered from the Pandemiceffects of the pandemic due to lack of traffic to retail stores related to mandated stay-at-home restrictions and the Company drastically curtailed its operations. The extent to which the Company’s future financial results could be impacted by the COVID-19 pandemic depends on future developments that are highly uncertain and cannot be predicted at this time. The pandemic also had an effect on the Company’s ability to attain new customers or retain existing customers, and to collect on its outstanding accounts receivable, resulting in an increase of its allowance for doubtful accounts in fiscal 2022, and the six months ended June 30, 2023, of approximately $324,000 and $46,000, respectively. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities.

 

These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

 

During the three months and six months ended June 30, 2023, the Company’s financial results and operations were not otherwise materially adversely impacted by the COVID-19 pandemic.

 

 

 8 

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”)(U.S. GAAP) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”)(SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2022,2023, and the results of operations and cash flows for the periods presented. The results of operations for the three months and six months ended June 30, 2022,2023, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K/A (Amendment No. 1)10-K for the year ended December 31, 2021,2022, filed with the SEC on May 23, 2022.March 31, 2023.

 

Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

 

Principles of Consolidation

 

These consolidated financial statements have been prepared in accordance with U.S. GAAPaccounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

 

Business Segments and Concentrations

 

The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as a single reporting segment.

 

Customers in the United States accounted for 100% of our revenues. We do not have any property or equipment outside of the United States.

 

Use of Estimates

 

Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including stock-based compensation and deferred tax asset valuation allowance, and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.

  

9

Risks and Uncertainties

 

The Company operates in an industry that is subject to intense competition and changechanges in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks includingand the potential risk of overall business failure.

 

The Company has experienced, and in the future expects to continue to experience, variability in sales and net earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product.service offerings. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.

 

9

Fair Value of Financial Instruments

 

The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. ASC 820 provides a framework for measuringat fair value, and requires disclosures regarding fair value measurements. Fair valuewhich is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date,date. The valuation techniques are based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.

The Company uses a three-tier fair value hierarchy to classifyobservable and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observableunobservable inputs. Observable inputs when available, and to minimize the use ofreflect readily obtainable data from independent sources, while unobservable inputs when determiningreflect certain market assumptions. There are three levels of inputs that may be used to measure fair value.

The three tiers are defined as follows:value:

 

 ·Level 1 — Observable inputs that reflect1—Valuation based on unadjusted quoted market prices (unadjusted) for identical assets or liabilities in active markets;markets that the Company has the ability to access;
 ·Level 2 — Observable inputs other than2—Valuation based on observable quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities;liabilities in active markets; and
 ·Level 3 — Unobservable3—Valuation based on unobservable inputs that are supported by little or no market data,activity, which require the Company to develop its own assumptions.management’s best estimate of what market participants would use as fair value.

 

The determination of fairFair value estimates discussed herein are based upon certain market assumptions and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies appliedpertinent information available to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate.

Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values.management.

 

The Company’srespective carrying value of certain on-balance-sheet financial instruments including cash,approximated their fair value. These financial instruments include accounts receivable, accounts payable and accrued expenses, convertible notes payable and notes payable are carried at historical cost. Atcontract liabilities. On June 30, 20222023, and December 31, 2021, respectively,2022, the carrying amounts of these financial instruments approximated their fair values because ofdue to the short-term nature of these instruments. The fair value of the Company’s debt approximates its carrying value based on current financing rates available to the Company and its short-term nature.

 

The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2, or Level 3 instruments.

10

 

Cash and Cash Equivalents and ConcentrationConcentrations of Credit Risk

 

For purposes of presentation in the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.

 

AtOn June 30, 20222023, and December 31, 2021, respectively,2022, the Company did not have any cash equivalents.

 

The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC,Federal Deposit Insurance Company (FDIC), which is $250,000. AtAs of June 30, 20222023, and December 31, 2021,2022, the Company didhad not experienceexperienced any losses on cash balances in excess of the FDIC insured limits. Any loss incurred or a lack of access to funds could have a significant impact on the Company’s consolidated financial condition, results of operations, and cash flows. At June 30, 2022, and December 31, 2021,2023, the Company exceeded FDIC insured limits by approximately $1,915,977 and $5,103,2731,350,000, and did not exceed the limits at December 31, 2022.

For the six months ended June 30, 2023, and fiscal year 2022, sales of our products to two and three customers, respectively, generated approximately 76% and 52% of our revenues, respectively. Our contracts with our customers generally do not obligate them to a specified term and they can generally terminate their relationship with us at any time with a minimal amount of notice. The loss of one of these customers could have a material adverse effect on our consolidated results of operations and financial condition.

 

Accounts Receivable

 

Accounts receivable represent customer obligations under normal trade terms and are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral. TwoFour of our customers combined accounted for approximately 39%54% and 42% of outstanding accounts receivable.receivable at June 30, 2023 and December 31, 2022, respectively.

The Company had net accounts receivable of $101,666, $340,935, and $388,112 on June 30, 2023, December 31, 2022, and December 31, 2021, respectively.

10

 

Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts.doubtful accounts. The Company provides anits allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made.

 

AllowanceThe allowance for doubtful accounts was approximately $820,990 1,138,000 and $1,091,000at June 30, 20222023 and December 31, 2021.2022, respectively. This allowance relates to receivables generated in previous years for which collection is uncertain, based in part, as thea result of many customers have beenbeing adversely impacted by COVID-19.

 

Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations.

 

Impairment of Long-lived Assets

 

Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASCAccounting Standards Codification (ASC) 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.” Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include but are not limited to significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets and compares this to the carrying amounts of the assets.

 

If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.No impairments were recognized by the Company for the six months ended June 30, 2023, and the year ended December 31, 2022.

11

  

Property and Equipment

 

Property and equipment isare stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets.

 

Expenditures for repairrepairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in current results of operations.

 

Management reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Goodwill

 

The Company’s goodwill of $1,352,865represents the excess of the consideration transferred for acquired businessesthe acquisition of Advangelists, LLC in December 2018 over the fair value of the underlying identifiable net assets.assets acquired. Goodwill is not amortized but instead, it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge in an amount equal to the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit during the fiscal quarter in which the determination is made.

 

The Company performs its annual impairment tests of goodwill as of December 31st of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available, (ii) engage in business activities, and (iii) whether a segment manager regularly reviews the component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company hadhas one reporting unit as of June 30, 2023, and December 31, 2021.2022. No impairment of goodwill was recognized by the Company for the six months ended June 30, 2023 or 2022.

11

 

Intangible Assets

 

The Company acquired the majority of itsthe Company’s intangible assets consist of customer relationship and the ATOS platform technology obtained through its acquisition of Advangelists LLC. The Company amortizes its identifiable definite-lived intangible assets over aan estimated period of 5 years. See Note 3 for further details.

 

In 2020 and 2021, the Company identified triggering events due to the reduction in its projected revenue from adverse economic conditions caused by the COVID-19 pandemic and uncertainty for recovery given the volatility of the capital markets. The Company performed impairment assessments of its ATOS Platform intangible asset in December 2020 and determined that the carrying value of the asset exceeded its fair value by an estimate of $4,000,000Software Development Costs. A similar assessment was performed in December 2021 resulting in additional impairment of $3,600,000. Both charges were recognized in the fourth quarter of each fiscal year for a total loss on impairment of $7,600,000, which resulted in the asset being written down to a net book value of zero.

 

In accordance with ASC 985-20, Costs of Software to Be Sold, Leased, or Marketed, the Company records the cost of planning, designing, and establishing the technological feasibility of computer software intended for resale as research and development costs and charges those costs to operations when incurred and are included in general and administrative expenses on the condensed consolidated statements of operations. After technological feasibility has been established, the costs of producing a marketable product and product masters are capitalized and amortized on a straight-line basis over the estimated useful life of the software, which is five years, beginning at the date of general release to customers. The Company began capitalizing costs associated with the development of its Ad Tech Operating System for Publishers platform in January 2023 when technological feasibility was deemed to have been established. Total software development costs capitalized for the six months ended June 30, 2023, were $864,179. The platform was released to customers in May 2023. Amortization of $21,604 has been recognized on the software development costs as of June 30, 2023.

12

 

Derivative LiabilitiesFinancial Instruments

 

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, (“ASC 480”)(ASC 480), “Distinguishing Liabilities from Equity”Equity and FASB ASC Topic No. 815, (“ASC 815”) “(ASC 815) Derivatives and Hedging”Hedging.

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from U.S. GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance was adopted by the Company as of January 1, 2022.

Terms of financial instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required to be accounted for separately from the host contract under ASC 815 and ASU 2020-06 and recorded on the balance sheet at fair value. Derivative liabilities are adjustedremeasured to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in the results of operations as adjustments to fair value of derivatives.operations. The Company usesgenerally incorporates a binomial model to determine fair value.

Upon conversion of a notedebt instrument where thean embedded conversion option has been bifurcated and accounted for separately as a derivative liability, the Company records the resulting shares issued at fair value, relievesderecognizes all related notes, derivatives,debt principal, derivative liability, and debt discounts,discount, and recognizes a net gain or loss on debt extinguishment. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risk. As of June 30, 2022,2023, and December 31, 2021,2022, the Company had no derivative derivatives classified as liabilities.

 

Debt Issue CostIssuance Costs and Debt Discounts

 

Debt discounts, debt issuance costcosts paid to lenders or third parties, and other original issue discounts on debt, are recorded as debt discount or debt issuance costs and amortized to interest expense in the condensed consolidated statements of operations, over the lifeterm of the underlying debt instrument, using the effective interest method, with the unamortized portion reported net with related principal outstanding on the condensed consolidated balance sheet. For the six months ended June 30, 2023, the Company recorded $738,141 in interest expense associated with the amortization of debt discounts and debt issuance costs incurred on debt issued during the quarter. There are no unamortized debt discounts remaining at June 30, 2023 as a result of full debt settlement during the quarter ended June 30, 2023. See Note 4 regarding the accounting for debt discounts and debt issuance costs during the six months ended June 30, 2023. There was no amortization of debt discounts for the year ended December 31, 2022 or unamortized debt discounts outstanding at December 31, 2022.

12

 

Revenue Recognition

 

The Company’s revenues are generated from internet advertising, the Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). In accordance with ASC 606, revenue is recognized when promised services are transferred to a customer. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

 

Identify the contract with a customercustomer.

 

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

 

Identify the performance obligations in the contractcontract.

 

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services (performance obligations), the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. Currently, the Company does not have any contracts that contain multiple performance obligations.

 

13

Determine the transaction priceprice.

 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of June 30, 2022,2023, and 2021, respectively,December 31, 2022 contained a significant financing component.

 

Allocate the transaction price to performance obligations in the contractcontract.

 

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. Currently, the Company does not have any contracts that contain multiple performance obligations.

 

Recognize revenue when or as the Company satisfies a performance obligation.

 

The Company satisfies performance obligations at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring athe promised service to a customer. Under both managed services arrangements or self-service arrangements, the Company’s promised services under the contracts include identification, bidding and purchasing of advertisement opportunities. The Company also generally has discretion in establishing the pricing of the ads. Since the Company is controlling the promise to deliver the contracted services, the Company is considered the principal in all arrangements for revenue recognition purposes.

 

Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days.

 

13

Contract Liabilities

 

Contract liabilities represent deposits made by customers before the satisfaction of performance obligationobligations and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. As of June 30, 2023, and December 31, 2022, there were $189,790 and $193,598, respectively in contract liabilities outstanding that we expect to recognize as revenue within the following fiscal year.

 

14

Revenues

 

All revenues recognized waswere derived from internet advertising for all periodsthe six months ended June 30, 2022,2023, and June 30, 2021.the year ended December 31, 2022.

 

Advertising

 

Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expenseexpenses in the condensed consolidated statements of operations.

 

The Company recognizedincurred $0 and $159259 in marketing and advertisingsuch costs during the six months ended June 30, 2022,2023, and 2021, respectively.did not incur any advertising costs during the year ended December 31, 2022.

 

Stock-Based Compensation

 

The Company accounts for our stock-based compensation, including stock options and common stock warrants, under ASC 718 “Compensation – Stock Compensation”Compensation, using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the requisite service period for employee awards, which is usually the vesting period.period, and when the goods are obtained or services are received, for nonemployee awards. This guidance establishes standards for the accounting for transactions in which an entity exchanges itits equity instruments for goods or services. It also addressesapplies to transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

 

In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The Company usesoutstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the fair value method forholder and are classified as equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options.awards.

 

The fair value of stock-based compensation is generally determined using the Black-Scholes valuation model as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods..

  

When determining fair value of stock-based compensation, the Company considers the following assumptions in the Black-Scholes model:

 

·Exercise price,
·Expected dividends,
·Expected volatility,
·Risk-free interest rate; and
·Expected life of option

 

15

Stock Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date and records fair value as expense over the requisite service period or at the date of issuance if there is not a service period.

Income Taxes

 

The Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”Taxes (ASC 740). Under this method, deferred tax assets and liabilities are determined based on the differencetemporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that all or some portion or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as incomegain or loss in the period that includes the enactment date.

14

 

The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”.740. Using that guidance, tax positions initially need to be recognized in the condensed consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of June 30, 2022,2023, and December 31, 2021, respectively,2022, the Company had nodid not identify any uncertain tax positions that qualify for either recognition or disclosure in the condensed consolidated financial statements.

 

The Company recognizes interest and penalties, if any, related to recognized uncertain income tax positions, in other expense. No interest and penalties related to uncertain income tax positions were recorded for the six months ended June 30, 2022,2023, and 2021, respectively.

Basic and Diluted Earnings (Loss) per Share

Pursuant2022. Open tax years subject to ASC 260-10-45, basic earnings (loss) per common share is computed by dividing net income (loss)examination by the weighted average number of shares of common stock outstandingInternal Revenue Service generally remain open for three years from the periods presented.

Diluted earnings per share is computed by dividing net incomefiling date. Tax years subject to examination by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding duringstate jurisdictions generally remain open for up to four years from the period. Potentially dilutive common shares may consist of common stock issuable for stock options and warrants (usingfiling date. During the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutivequarter ended June 30, 2023, the Company recognized $180,000 in the future. In the event ofincome tax benefit as a net loss, diluted loss per share is the same as basic loss per share since the effectresult of the potential common stock equivalents upon conversion would be anti-dilutive.

16

The following potentially dilutive equity securities outstanding asnoncash settlement of June 30, 2022, and 2021 were as follows:an income tax obligation assumed through its acquisition of Advangelists, LLC.

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share      
  June 30, 2022  June 30, 2021 
Convertible notes payable and accrued interest  88,897   801,250 
Stock Options  1,159,908   301,845 
Warrants  4,676,300   472,886 
Total common stock equivalents  5,925,105   1,575,981 

 

Related Parties

 

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

 

Reclassifications

Certain reclassifications were made to the 2022 consolidated financial statements to conform to 2023 presentation, including presenting contract liabilities on its own financial statement line on the balance sheet.

Recent Issued Accounting Pronouncements

 

Changes to accounting principles are established by the FASB in the form of ASU’s to the FASB’s Codification. We consider the applicability and impact of all ASU’snew accounting pronouncements on our consolidated financial position, results of operations, stockholders’ equity,deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the Financial Accounting Standards Board (FASB) through the date these condensed consolidated financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective, that when adopted, will have a material impact on the condensed consolidated financial statements of the Company. 

 

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: On September 30, 2022, the FASB issued ASU 2022-03 (ASU 2022-03), which clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security. The ASU also requires specific disclosures related to such an equity security, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. ASU 2022-03 clarifies that a “contractual restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). The ASU also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities, ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of ASU 2022-03 on its consolidated financial statements and related disclosures.

15

Recently Adopted Accounting Pronouncements

Financial Instrument – Credit LossesLosses: : In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(“ASU 2016-13”) (ASU 2016-13). ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. In May 2019, the FASB issued ASU 2019-05, which provides transition relief for entities adopting ASU 2016-13. For entities that have adopted ASU 2016-13, the amendments in ASU 2019-05 are effective for fiscal years beginning after December 15, 2019, including interim periods therein. An entity may early adopt ASU No. 2019-05 in any interim period after its issuance if the entity has adopted ASU 2016-13. For all other entities, the effective date will be the same as the effective date of ASU 2016-13. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluatingadopted ASU 2016-13 on January 1, 2023, and the expectedadoption of the guidance did not have a significant impact of adopting ASU 2016-13 on its consolidated financial statements and disclosures.

17

 

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers: In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”)(ASU 2021-08). Under ASU 2021-08, an acquirer in a business combination must apply ASC 606 principles when recognizing and measuring acquired contract assets and contract liabilities. The provisions of ASU 2021-08 are applicable for the Company for fiscal years and interim periods beginning after December 15, 2022. The Company is currently evaluatingadopted ASU 2021-08 on January 1, 2023, and the impactadoption of ASU 2021-08the guidance did not have a significant impact on its consolidated financial statements and related disclosures.

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: On June 30, 2022, the FASB issued ASU 2022-03 (“ASU 2022-03”), which clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security. The ASU also requires specific disclosures related to such an equity security, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. ASU 2022-03 clarifies that a “contractual restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). The ASU also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities, ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of ASU 2022-03 on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncement

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year.

We adopted this pronouncement on January 1, 2022; however, the adoption of this standard did not have a material effect on the Company’s consolidated financial statements.

Reclassifications

Correction of Prior Period Information

During the review of the Company’s financial statements for the three and six month periods ended June 30, 2022, the Company identified errors in the accounting and presentation of expenses and losses recorded for certain debt conversions, recording of stock option compensation expense, and expense related to shares issued for services, relating to the three months ended March 31, 2022. These errors resulted in the recording of $39,271 in less general and administrative expenses, $233,526 in additional other expenses, and a reclassification of $450,865 from general and administrative expenses to other expense, resulting in an understatement of net loss of $194,255. If reported correctly, the Company would have recorded $2,038,453 in general and administrative expenses, ($2,486,802) in loss from operations, $831,888 in other expenses, net, and a net loss of ($2,634,299) for the three months ended March 31, 2022. To correct these errors, the Company recorded the corrections in the three month period ended June 30, 2022. If reported correctly for the three months ended June 30, 2022, then the Company would have reported $2,216,694 in general and administrative expenses, ($1,048,051) in loss from operations, $329,171 in other income (expenses), net, and a net loss of ($1,377,222). In accordance with the SEC’s Staff Accounting Bulletin Nos. 99 and 108 (“SAB 99” and ”SAB 108”), the Company evaluated this error and concluded that although the adjustment to certain areas of the statement of operations was quantitatively material, the cumulative effects were quantitatively and qualitatively immaterial and would not have materially impacted a reasonable investor’s opinion of the Company. This is further supported by the fact that the impact would not have been significant in comparison to prior periods and all errors are of a non-cash nature. Therefore, as permitted by SAB 108 and treated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, the Company corrected previously recorded results for the three and six months ended June 30, 2022, to account for the error in this current filing. As a result, the statement of operations for the six months ended June 30, 2022 reflects the corrected expenses, operating loss and net loss.

See also Note 3 for restatement of the three and six months ended June 30, 2021.

18

NOTE 3 – RESTATEMENT

On May 23, 2022, the Company filed an amended annual report on Form 10-K/A for the year ended December 31, 2021, as a result of the identification of certain errors by management primarily relating to the accounting for share-based payments in connection with raising equity, the sale of warrants, certain gains (losses) on debt extinguishment, as well as an adjustments to its deferred tax assets and related valuation allowance. Below is a reconciliation of the effects of such restatement on the Company's consolidated statement of operations for the three and six months ended June 30, 2021, and consolidated statement of cash flows for the six months ended June 30, 2021, including previously reported values to restated values. The values as previously reported were derived from the Company's 10-Q which presented the financial statements for the period ended June 30, 2021, filed with the SEC on August 4, 2021.

As a result of the above restatement, additional paid in capital at June 30, 2021 was decreased by $219,600 from $187,117,663 (previously reported) to $186,898,063  (as restated), and accumulated deficit at June 30, 2021 decreased from ($190,992,325) to ($190,774,685).

Consolidated Statements of Operations

(As Restated)

  Three Months Ended June 30, 2021  Six Months Ended June 30, 2021  
  As Previously Reported  Adjustment  As Restated  As Previously Reported  Adjustment  As Restated  
                    
Revenues $702,434  $0  $702,434  $1,224,307  $0  $1,224,307  
                          
Cost of revenue  811,519   0   811,519   1,748,799   0   1,748,799  
                          
Gross profit  (109,085)  0   (109,085)  (524,492)  0   (524,492) 
                          
Operating expenses                         
Selling, general and administrative  917,561   0   917,561   1,929,051   0   1,929,051  
Salaries  573,975   0   573,975   1,130,040   0   1,130,040  
Stock-based compensation  555,892   0   555,892   572,731   0   572,731  
Total operating expenses  2,047,428   0   2,047,428   3,631,822   0   3,631,822  
                          
Loss from operations  (2,156,513)  0   (2,156,513)  (4,156,314)  0   (4,156,314) 
                          
Other income (expense)                         
Interest expense  (215,162)  (200,150)  (415,312)  (403,177)  (200,150)  (603,327)1
Interest expense - amortization of debt discount  (110,000)  0   (110,000)  (110,000)  0   (110,000)2
Loss on sale of company stock  (419,750)  419,750   0   (419,750)  419,750   0 3
Forgiveness of SBA - PPP loan  265,842   0   265,842   265,842   0   265,842 4
Total other income (expense) - net  (479,070)  219,600   (259,470)  (667,085)  219,600   (447,485) 
                          
Net loss $(2,635,583) $219,600  $(2,415,983) $(4,823,399) $219,600  $(4,603,799) 
                          
Loss per share - basic and diluted $(0.88) $0.07  $(0.81) $(1.65) $0.08  $(1.58) 
                          
Weighted average number of shares - basic and diluted  2,984,332   2,984,332   2,984,332   2,922,280   2,922,280   2,922,280  

_____________________

1Previously reported the fair value associated with the issuance of shares of common stock in conjunction with the issuance of short-term convertible debt notes as “Loss on sale of company stock.” The value was reclassified to "Interest expense." No impact on net loss or loss per share.
2Financial statement line description was changed from “Original issue discount” to “Interest expense - amortization of debt discount” for financial statement presentation purposes. No impact on net loss or loss per share.
3The Company previously reported $219,600 in the consolidated financial statement line item “Loss on sale of company stock” for the excess of the fair value of shares of common stock issued upon the conversions over the face value of the convertible debt. Since the convertible debt notes were converted at original conversion terms no gain or loss should have been reflected. The $219,600 was reclassified as a reduction to “Additional paid-in capital” on the Company's consolidated balance sheet, which reduced the consolidated net loss.
4Previously reported “Forgiveness of SBA - PPP loan” as other comprehensive income. The value was reclassified to “Other income (expense)” within continuing operations. No impact on net loss or loss per share.

19

Consolidated Statement of Cash Flows

Six Months Ended June 30, 2021

  As Previously Reported  Adjustment  As Restated  
           
Cash flows from operating activities             
Net loss $(4,823,399) $219,600  $(4,603,799)4
Adjustments to reconcile net loss to net cash used in operating activities             
Depreciation  3,703   –   3,703  
Amortization of intangibles  900,367   –   900,367  
Common stock issued for services  119,800   –   119,800  
Stock-based compensation  572,731   –   572,731  
Stock issued with short-term convertible notes  –   310,150   310,150 5
Gain on forgiveness of debt  –   (265,842)  (265,842)1
Changes in operating assets and liabilities             
Accounts receivable  840,740   –   840,740  
Prepaid expenses and other assets  16,500   –   16,500  
Accounts payable and accrued expenses  (519,474)  176,340   (343,134)3
Accrued expenses and other current liabilities  (19,473)  19,473   – 3
Accrued interest  195,810   (195,810)  – 3
Net cash used in operating activities  (2,712,695)  263,911   (2,448,784) 
              
Cash flows from investing activities             
Common stock issued for cash, net  898,990   (898,990)  – 2
Original issue discount shares  268,150   (268,150)  – 5
Note conversion to common stock  671,602   (671,602)  – 6
Net cash provided by investing activities  1,838,742   (1,838,742)  –  
              
Cash flows from financing activities             
Common stock issued for cash, net  –   898,990   898,990 2
Proceeds from issuance of notes payable, net  1,310,000   510,000   1,820,000 7
SBA loan forgiveness  (265,842)  265,842   – 1
Repayments of notes payable  (598,816)  (100,000)  (698,816)7
Net cash provided by financing activities  445,342   1,574,832   2,020,174  
              
Net decrease in cash  (428,610)  –   (428,610) 
              
Cash and cash equivalents – beginning of period  602,182   –   602,182  
              
Cash and cash equivalents – end of period $173,571  $–  $173,571  
              
Supplemental disclosure of cash flow information             
Cash paid for interest $207,366  $–  $207,366  
Cash paid for taxes $25  $–  $25  
              
Supplemental disclosure of non-cash investing and financing activities             
Common stock issued for conversion of convertible notes $419,750  $(419,750) $419,750 6
Recording of debt discount upon issuance of convertible debt $110,000  $(110,000) $– 5

__________________________

1Previously reported “Forgiveness of SBA – PPP loan” as cash outflow from financing activities. The non-cash value was reclassified as a net loss reconciling item in cash flows from operating activities .
2Previously reported item as investing activity. The cash inflow was reclassified as a financing activity. No impact on overall cash flows.
3Previously reported as accounts payable, accrued expenses and other current liabilities and accrued interest. Reflected as one line item “accounts payable and accrued expenses” to be consistent with the consolidated balance sheet financial statement line items. No impact on overall cash flows.
4The Company previously reported $219,600 on the consolidated statement of operations financial statement line item “Loss on sale of company stock” for the excess of the fair value of shares of common stock issued upon the conversion of convertible notes payable over the face value of the convertible debt. Since the convertible debt notes were converted at original conversion terms no gain or loss should have been reflected. The $219,600 was reclassified as a reduction to “Additional paid-in capital” on the Company’s consolidated balance sheet which reduced the consolidated net loss of the Company.
5.Shares of common stock issued with notes payable and reflected as either interest expense or interest expense-amortization of debt discount on the consolidated statement of operations, previously reported as an investing activity and non-cash investing and financing activity and overstated by $68,000. The total non-cash value of $310,150 was reclassified as a net loss reconciling item in cash flows from operating activities
6.Previously reported as an investing activity and reflects the fair value of shares of common stock issued upon the conversion of convertible notes payable. The value has been reclassified as a non-cash financing activity and adjusted for the $219,600 adjustment to Additional paid-in capital that was made to the previously reported results for the three and six months ended June 30, 2021 (see note 4 above). Restated non-cash financing activity represents the carrying value of debt converted to equity.
7.Previously reported amounts did not include $510,000 of proceeds from the issuance of notes payable and $100,000 of payments made on convertible notes payable during the six months ended June 30, 2021.

20

 

NOTE 43 – INTANGIBLE ASSETS

 

The Company’s identifiable intangible assets, other than goodwill, consists of customer relationships and the ATOS Platform.Definite-Lived Intangible Asset

The ATOS platform:

·creates an automated marketplace of advertisers and publishers on digital media outlets to host online auctions to facilitate the sale of ad time slots (known as digital real estate) targeted at users while engaged on their connected TV, computer, or mobile device, and
·gives advertisers the capability to understand and interact with their audiences and engage them in a meaningful way by the using ads in both image and video formats (known as rich media) to increase their customer base and foot traffic to their physical locations.

The Company’s definite-lived intangible assets consist of capitalized software development costs and a customer relationship asset balances, including accumulated amortization,also acquired through the Advangelists, LLC acquisition. The intangible assets are as follows:being amortized over their estimated useful lives of five years. The Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are also reviewed for impairment or obsolescence when events or circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Schedule of intangible assets              
 Useful Lives June 30, 2022  December 31, 2021  Useful Lives June 30, 2023 December 31, 2022 
              
Customer relationships 5 years $3,003,676  $3,003,676 
ATOS Platform 5 years  2,400,000   2,400,000 
Customer relationship 5 years $3,003,676  $3,003,676 
Less accumulated amortization    (2,657,760)  (2,357,392)
Net carrying amount   $345,916  $646,284 
    5,403,676   5,403,676           
Software development costs 5 years  864,179   – 
Less accumulated amortization    (4,457,024)  (4,156,657)    (21,604)  – 
Net carrying value   $946,652  $1,247,019    $842,575  $– 

  

During the six months ended June 30, 2023 and 2022, the Company recognized $300,368 ofand $300,367 in amortization expense related to theother intangible assets, respectively, and $21,604 and $0 in amortization related to capitalized software development costs, respectively, which is included in general and administrative expenses on the accompanying condensed consolidated statements of operations.

 

Future amortization of intangible assets, for the years ending December 31, is as follows:

Schedule of future accumulated amortization schedule   
2022 (balance of 2022) $303,609 
2023  572,584 
2024  70,459 
Total $946,652 

NOTE 5 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Summary of notes payable and convertible notes payable:

Summary of notes payable and convertible notes payable:      
  June 30,
2022		  December 31,
2021		 
Dr. Salkind - related party (d) $0  $2,562,500 
Small Business Administration (a)  150,000   150,000 
Subscription Agreements (c)  100,000   250,000 
Business Capital Providers (b)  0   156,504 
Total Debt  250,000   3,119,004 
Current portion of debt  100,000   656,504 
Long-term portion of debt $150,000  $2,462,500 

__________________ 

(a)The Company received an Economic Injury Disaster Loan from the SBA which carries a thirty-year term, and a three-point seven five percent interest rate, maturity date is July of 2050. Total accrued and unpaid interest on the debt was $8,414 at June 30, 2022 and is included in accounts payable and accrued expenses on the accompanying balance sheet.
(b)Business Capital Providers, Inc. purchased certain future receivables from the Company at a discount under agreements dated July of 2021. All loans have been repaid in full as of June 30, 2022.

(c)Several private investors, who were unaffiliated shareholders of the Company and accredited investors as provided under Regulation D Rule 501 promulgated under the Securities Act of 1933, provided financing under convertible debt agreements during the period June 2021 through September 2021 pursuant to subscription agreements. During the six months ended June 30, 2022, one investor agreed to convert $150,000 of debt principal at a reduced conversion rate of $2.00 per share under an induced conversion arrangement that included an explicit time limit of two dates at the reduced rate. The conversion resulted in the issuance of 75,000 shares of common stock and recognition of $101,000 in inducement expense.
Schedule of future accumulated amortization    
2023 $355,846 
2024  249,324 
2025  172,836 
2026  172,836 
2027  172,836 
Thereafter  64,813 
Total $1,188,491 

 

 

 

 2116 

 

The remaining $100,000 in principal relates to three individual convertible notes bearing

NOTE 4 – DEBT

Small Business Administration Loan

In June 2020, the Company received an Economic Injury Disaster Loan of $150,000 from the Small Business Administration (SBA) which carries a thirty-year term, and interest at 10%3.7% per annum, and havingwith a maturity date in July of June 30, 2022.2050. The promissory notes contain an automatic conversion feature, effectively converting all outstandingloan is to be repaid in monthly installments, including principal and unpaid principal oninterest, of $731, beginning twelve months from the maturity date at a conversion rate of $4.00 per share.the loan. Total accrued and unpaid interest on the convertible notesdebt was $8,425$13,594 at June 30, 2022 and is included in accounts payable and accrued interest on the accompanying balance sheet (see Note 9).

(d)Gene Salkind, who is a director of the Company, and an affiliate of Dr. Salkind executed 15% Senior Secured Convertible Promissory Notes in September 2019. The convertible promissory notes have the following terms, as amended:

·The Salkind lenders may convert the notes at any time at a conversion rate of $4.00.

·The Company may convert the notes at any time that the trailing thirty (30) day volume weighted average price per share (as more particularly described in the Notes) of the Company’s common stock is above $4.00 per share.

Upon conversion of the debt principal, the Company is to issue warrants to the debt holders for the purchase of common shares of the Company. The number of shares granted under the warrants is equivalent to 50% of the total shares issued under the debt principal converted. The warrants are immediately exercisable at a price of $4.00 per share through September 2029.

The notes contained customary events of default, which, if uncured, entitle the holders to accelerate payment of the principal and all accrued and unpaid interest under their notes.

During the six months ended June 30, 2022, the debt holders converted all the remaining $2,052,500 of outstanding debt in two separate conversion transactions at a mutually and board approved reduced conversion price of $1.50 and $1.25 per share which also resulted in additional warrants being issued due to 50% warrant coverage based on the total shares issued. A total of 1,776,333 restricted common shares and warrants to purchase 888,166 restricted common shares at an exercise price of $4.00 per share through September 2029 were issued in connection with these conversions. The Company determined that these transactions resulted in debt extinguishment accounting under Accounting Standards Codification 470-50, Debt Modifications and Extinguishments. As a result, the Company recorded a total loss on debt extinguishment for the six months ended June 30, 2022 of $855,296, which represented the excess of the debt reacquisition price over its carrying value at the time of the conversions. Accrued and unpaid interest on the Salkind convertible notes of $238,750 remains outstanding at June 30,December 31, 2022 and is included in accounts payable and accrued expenses on the accompanying consolidated balance sheet which cansheet. The total principal outstanding has been presented as long-term liabilities as payments required to be convertedmade in 2023 will be applied to accrued interest. On January 5, 2023, the Company paid $163,885 to the Small Business Administration to pay off all outstanding principal and accrued interest on the Company’s SBA loan.

Investor Note Payable

On December 30, 2022, the Company and Walleye Opportunities Master Fund Ltd, a Cayman Islands company (the Investor), entered into a Securities Purchase Agreement (the Agreement) for the Investor to purchase from the Company (i) a senior secured 20% original issue discount (OID) nine-month promissory note in an aggregate gross principal amount of $1,437,500, less the 20% OID of $287,500, for a net subscription amount of $1,150,000 (the Investor Note), and (ii) a five year warrant to purchase 2,613,636 shares of the Company’s common stock at an exercise price of $0.44 per share, exercisable commencing July 1, 2023 and expiring December 30, 2027 (the Investor Warrant). Proceeds from the Agreement were received by the Company in January 2023. If at any time commencing July 1, 2023, the Company issues, sells, or announces for sale, any shares of its common stock (Subsequent Equity Sale) for a per share price less than the exercise price of the Investor Warrant in effect immediately prior to such Subsequent Equity Sale, the exercise price of the Investor Warrant shall be reduced to an amount equal to the issuance price of the Subsequent Equity Sale.

In conjunction with the Agreement, the Company issued 522,727 shares of common stock, or approximately 5.3% of the Company’s outstanding shares, to the Investor as an incentive on the transaction (Incentive Shares). Excluding the above referenced Investor Warrant, the shares of Common Stock exercisable pursuant to such Investor Warrant are not being considered beneficially owned by the Investor until the Investor Warrant is exercisable within 60 days. Total issuance fees of $138,500 associated with the closing of the Agreement were paid by the Company to Spartan Capital Securities LLC and the Investor’s counsel, resulting in net proceeds of $1,011,500. Approximately $163,000 of the loan proceeds were utilized to repay the outstanding principal and accrued interest under the SBA loan (see above).

The Investor Note will only become convertible into common stock upon the occurrence of an Event of Default under and as defined in the Investor Note on terms set forth in the Investor Note. This Investor Note matures and is payable on or before September 30, 2023, and it provides that the Investor may demand prepayment after March 31, 2023 and before the maturity date, provided that the purchasers of securities in a future public offering by the Company, as defined in the Agreement, who hold the purchased Company securities at the original conversion ratetime the prepayment demand, unanimously consent to the prepayment. The Company granted a security interest in all of $4.its assets to the Investor as collateral for its obligations under the Investor Note pursuant to a Security Agreement. In addition, the Company’s subsidiaries guaranteed the obligations of the Company under the Investor Note pursuant to a Subsidiary Guarantee and granted a first lien security interest in all of their assets to the Investor as additional collateral pursuant to the Security Agreement. All securities sold in the above-described transaction contain certain piggy-back registration rights after the completion of our February 2023 Offering (see Note 5). On June 30, 2023, the secured debt was paid in full through the proceeds of our June 2023 Offering. See Note 5.

The aforementioned Investor Warrant was deemed to be an equity-classified derivative instrument with a fair value of $1,526,363 at the date of closing on the Agreement, incorporating the use of the Black-Scholes valuation model, and the Incentive Shares were deemed to have a fair value of $318,863 based on the closing market price of the Company’s common stock on the day preceding the closing of the Agreement. Per accounting guidance under ASC 815, the Company recorded the fair values of the Investor Warrant and Incentive Shares based on the relative fair value allocation method, which allocates fair values as a percentage of total fair value of the debt, Investor Warrant, and Incentive Shares, in proportion to the net proceeds received (after deducting fees paid to lender) under the Investor Note of $1,150,000. As a result of applying the relative fair value allocation method, the Investor Warrant was assigned a relative fair value of $586,040 and the Incentive Shares were assigned a relative fair value of $122,426, at the date of closing on the Agreement. The fair values of the Investor Warrant, the Incentive Shares, the OID of $287,500, and the $138,500 in debt issuance costs paid, were recorded as debt discounts and debt issuance costs totaling $1,134,466. Amortization associated with the total debt discounts is being recognized using the effective interest method over the term of the Investor Note, which matures on September 30, 2023. For the three and six months ended June 30, 2023, $377,149 and $738,143, respectively, in amortization on the debt discounts was recognized as interest expense on the accompanying condensed consolidated statement of operations. The remaining unamortized debt discounts at June 30, 2023 of $396,323 were written off as loss on debt extinguishment upon full settlement of the Investor Note in conjunction with proceeds received from the June 2023 Offering. See Note 5.

17

 

NOTE 65 – STOCKHOLDERS’ EQUITY

 

The Company’s authorized capital stock consists of 105,000,000 shares, comprised of 100,000,000 shares of common stock, par value $0.0001, and 5,000,000 shares of preferred stock, $0.0001 par value.

Of the 5,000,000 shares of preferred stock authorized, the Board of Directors has designated the following:

·1,500,000 shares as Series AA Preferred Stock, none outstanding
·1,250,000 shares as Series AAA Preferred Stock, 31,413 shares outstanding
·1,500 shares as Series C Preferred Stock, none outstanding
·70,000 shares as Series E Preferred Stock, 61,688 shares outstanding
·One 1 share of Series F Preferred Stock, currently outstanding.

Rights Under Preferred Stock

The Company’s classes of preferred stock include the following provisions:

Optional Conversion Rights

·Series AA preferred stock – one share convertible into 50 shares of common stock
·Series AAA preferred stock – one share convertible into 100 shares of common stock
·Series C preferred stock – one share convertible into 100,000 shares of commons stock
·Series E preferred stock – one share at a rate of Stated Value, as defined, divided by $0.08, convertible commencing January 31, 2020

Redemption Rights

Series E preferred stock is redeemable at any time upon 30 days’ written notice by the Company and the holders, at a rate of 100% of the Stated Value, as defined.

Warrant Coverage

Series C preferred stock carries 100% warrant coverage upon preferred stock conversion, warrants exercisable through September 20, 2023, at an exercise price of $0.12.

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Series F Preferred Stock

Each Share of Series F Preferred Stock will not have rights as a security holder except for certain voting rights in connection with the Company’s Special Meeting of Stockholders held on July 21, 2023. In this regard, the Series F Preferred Stock will not have voting rights other than 70 million votes per share on the reverse stock split proposal, which proposal is contained in a proxy statement which has been submitted to shareholders. The Series F Preferred Stock share voted together with the outstanding shares of common stock of the Corporation as a single class exclusively with respect to the reverse stock split and was not entitled to vote on any other matter. The vote of the share of Series F Preferred Stock (or fraction thereof) was required to be cast in the same proportions as shares of common stock (excluding any shares of common stock that were not voted) were voted on the reverse stock split. The Series F Preferred Stock shall be redeemed (a) at any time if and when ordered by the Board of Directors in its sole discretion, or (b) automatically upon the effectiveness of the amendment to the Company’s Certificate of Incorporation implementing the reverse stock split. Dean Julia, the Chief Executive Officer, President and Treasurer, and a Director of the Company, has purchased the share of Series F Preferred Stock, which took effect upon the filing of an amendment to the Company’s Restated Certificate of Incorporation, creating the Series F Preferred Stock.

No further voting, dividend or liquidation preference rights exist as of June 30, 2023, on any class of preferred stock. 

February 2023 Public Offering

On February 13, 2023, the Company entered into an underwriting agreement (the Underwriting Agreement) with Spartan Capital Securities, LLC (the Underwriter) relating to a public offering of 3,777,634 shares of common stock and pre-funded warrants to purchase 4,286,883 shares of common stock (the Shares), for net proceeds of $3,207,500 (the February 2023 Offering). In conjunction with the February 2023 Offering, which closed on February 16, 2023, the investors also received other Warrants to purchase 12,096,776 shares of common stock (Series 2023 Warrants) on a cash basis or up to 6,048,389 shares on a cashless basis. The offered Shares were priced at $0.465 per combination of one share of common stock or one pre-funded warrant, accompanied by one Series 2023 Warrant.

Each pre-funded warrant is exercisable at any time, until fully exercised, to purchase one share of common stock at an exercise price of $0.0001 per share. Each Series 2023 Warrant is exercisable for five years to purchase 1.5 shares of common stock at a cash exercise price of $0.465 per warrant share. The Series 2023 Warrants contain an alternative cashless exercise provision permitting the holder to acquire 0.75 shares of common stock for every 1.5 warrant shares any time after the earlier of (i) 30 days following the initial exercise date of February 14, 2023, and (ii) the date on which the aggregate trading volume of the Company’s common stock, beginning on the initial exercise date of the Series 2023 Warrants, exceeds 36,290,322 shares. Additionally, the exercise price of both the pre-funded warrants and the Series 2023 Warrants are subject to customary adjustments for stock splits, stock dividends, reclassifications and the like.

Pursuant to the terms of the Underwriter agreement, and as partial consideration to the Underwriter, the Company issued a warrant for the purchase of 403,226 shares of common stock, exercisable from February 14, 2023, through February 14, 2028, at an initial exercise price of $0.5115 per share. The Company also granted the Underwriter a 45-day option to purchase up to an additional 1,209,678 shares and/or pre-funded warrants in lieu of shares and accompanying Series 2023 Warrants to purchase 1,814,517 shares at the public offering price less the underwriting discounts and commissions, to cover over-allotments, if any. No additional shares or pre-funded warrants were purchased by the Underwriter. The Company paid a cash fee to the Underwriter equal to 8% of the gross proceeds raised in the February 2023 Offering, plus a reimbursement of Underwriter fees totaling $242,500.

Between the closing of the February 2023 Offering and June 30, 2023, investors holding pre-funded warrants converted all their pre-funded warrants into 4,286,883 shares of common stock and elected the alternative cashless exercise provision for the Series 2023 Warrants, resulting in the issuance of 6,048,389 shares of common stock. As of June 30, 2023, all the aforementioned pre-funded warrants and 2023 Warrants were exercised.

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June 2023 Public Offering

On June 30, 2023, Mobiquity Technologies, Inc. closed on a public offering selling an aggregate of 5,625,000 shares of common stock (and 24,375,000 common stock equivalents in the form of pre-funded warrants to purchase 24,375,000 common shares) to investors pursuant to Securities Purchase Agreements at a public offering price of $0.10 per share (or $0.0999 per pre-funded warrant) (the June 2023 Offering), for total gross proceeds of $3,000,000. Placement agent fees and other offering costs totaled $472,001 and were recorded net of gross proceeds in the accompanying consolidated statement of stockholders’ equity during the quarter ended June 30, 2023. Each pre-funded warrant is exercisable at any time to purchase one share of common stock at an exercise price of $0.0001 per share. Additionally, the exercise price of pre-funded warrants are subject to customary adjustments for stock splits, stock dividends, reclassifications and the like. Spartan Capital Securities, LLC acted as the Company’s exclusive placement agent of the June 2023 Offering pursuant to a Placement Agent Agreement. The net proceeds to the Company from the sale of the shares and pre-funded warrants, after deducting the Placement Agent commissions and offering expenses payable by the Company, was approximately $2,528,000. The Company used $1,437,500 of the proceeds received from the June 2023 Offering to fully satisfy its Senior Secured 20% OID Promissory Note to Walleye Opportunities Master Fund Ltd. See Note 4. The Company plans to use the remaining funds for working capital. In July 2023, the Company also issued 7,175,000 shares of common stock upon conversion of 7,175,000 pre-funded warrants, bringing the number of outstanding common shares to 38,611,261.

Other 2023 Stock Transactions

In April 2023, the Board of Directors or the Compensation Committee of the Company’s Board of Directors approved the following transactions:

·Grant of 100,000 shares of restricted common stock to Gene Salkind, Chairman of the Board, for services previously rendered, based on a per share value of $0.167. Such shares are restricted from transfer until February 13, 2024.
·Grant of 50,000 shares of restricted common stock each to the Company’s CEO and another member of the Board of Directors for services as directors of the Company. Such shares are restricted from transfer until February 13, 2024.
·Grant of 30,000 shares of common stock to Mr. Salkind as payment for accrued and unpaid interest of approximately $5,000 based on a per share value of $0.167.
·Grant of 71,856 shares of restricted common stock to the Company’s legal counsel as payment for accrued and unpaid services valued at $12,000 and $0.167 per share. Such shares are restricted from transfer until February 13, 2024.
·Issuance of 1,562,133 shares of restricted common stock at a per share value of $0.17 as payment and full settlement of outstanding accounts payable with a total carrying amount of $265,563.

Shares prices used in the above transaction were based on the market price of the Company’s common stock on the consummation dates of the transactions.

Shares Issued for Services

 

During the six months ended June 30, 2022, and June 30, 2023, the Company issued 50,000 shares of common stock, at $1.69 to per share for $84,500 in exchange for services rendered. During the quarter endedsix months of June 30, 2021,2023, the Company issued 10,000478,326 shares of common stock at $7.50 to $9.73$0.17 per share for $119,80080,41081,825 in exchange for services rendered.

 

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Shares issued upon conversionIssued Upon Conversion of debt:Debt

 

During the six months ended June 30, 2022, Dr. Gene Salkind, his wife, and a trust converted an aggregate of $2,562,500 2,052,500of secured debt in exchange for 1,776,333 1,368,333shares of common stock as well as warrants to purchase 888,166 684,166shares of common stock at an exercise price of $4.00 per share through September 2029, see Note 5.2029. The Company recorded a loss on debt extinguishment of $491,915 related to the conversion.

 

During the six months ended June 30, 2022, a lenderThe Company also converted $150,000of debt into 75,000shares of common stock, at an excise pricehaving a fair value of $2.00 per share. The Company recorded an inducement expense$135,750, resulting in a gain on debt extinguishment of $101,00014,250, see Note 5..

20

 

NOTE 76 – STOCK OPTION PLANS AND WARRANTS

Stock Options

 

During Fiscal 2005, the Company established, and the stockholders approved, an Employee Benefit and Consulting Services Compensation Plan (the “2005 Plan”) for the granting of up to 5,000 non-statutory and incentive stock options and stock awards to directors, officers, consultants and key employees of the Company. On June 9, 2005, the Board of Directors amended the Plan to increase the number of stock options and awards to be granted under the Plan to 10,000 shares. During Fiscal 2009, the Company established a plan of long-term stock-based compensation incentives for selected Eligible Participants of the Company covering 10,000 shares. This plan was adopted by the Board of Directors and approved by stockholders in October 2009 and shall be known as the 2009 Employee Benefit and Consulting Services Compensation Plan (the “2009 Plan”). In September 2013, the Company’s stockholders approved an increase in the number of shares covered by the 2009 Plan to 25,000 shares. In February 2015, the Board approved, subject to stockholder approval within one year, an increase in the number of shares under the 2009 Plan to 50,000 shares; however, stockholder approval was not obtained within the requisite one year and the anticipated increase in the 2009 Plan was canceled. In the first quarter of 2016, the Board approved, and stockholders ratified a 2016 Employee Benefit and Consulting Services Compensation Plan covering 25,000 shares (the “2016 Plan”) and approvingapproved moving all options which exceeded the 2009 Plan limits to the 2016 Plan. In December 2018, the Board of Directors adopted and in February 2019.2019 the stockholders ratified the 2018 Employee Benefit and Consulting Services Compensation Plan covering 75,000 shares (the “2018 Plan”). On April 2, 2019, the Board approved the “2019 Plan” identical to the 2018 Plan, except that the 2019 Plan covers 150,000 shares. The 2019 Plan required stockholder approval by April 2, 2020, to be able to grant incentive stock options under the 2019 Plan. On October 13, 2021, the Board approved the “2021 Plan” identical to the 2018 Plan, except that the 2019 Plan covers 1,100,000 post-split shares. The 2021 Plan required stockholder approval by October 13, 2022, to be able to grant incentive stock options under the 2021 Plan. The 2005 Plan, 2009 Plan, 2016 Plan, 2018 Plan, 2019 Plan and 2021 plansPlan are collectively referred to as the “Plans.”

 

In March of 2022, Anne S. Provost was elected to the board of directors and was issued granted 25,000 options from the Company’s 2021 stock option planPlan with immediate vesting, withat an exercise price of $4.57,$4.57, and expiration of December 2031.

In April of 2022 and April 2023, Dean Julia was granted 12,500 options from the Company’s 2021 Plan with immediate vesting, at an exercise price of $1.55 and $0.22 and expiration of April 2031 and April 2032, respectively.

In March and April 2023, Nate Knight and Byron Booker were each granted 25,000 options from the Company’s 2021 Plan with immediate vesting, at an exercise price of $0.22, and expiration of March 2028 and April 2028, respectively.

 

All stock options under the Plans are granted at or above the fair market value of the common stock at the grant date. Employee and non-employee stock options vest over varying periods and generally expire either 5 or 10 years from the grant date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For option grants, the Company will take into consideration payments subject to the provisions of ASC 718 “Stock Compensation”. Previously, such assumptions were determined based on historical data.Stock Compensation. The weighted average assumptions made in calculating the fair values of options granted during the three months and six monthsquarters ended June 30, 2022,2023, and June 30, 202012022 are as follows:

Schedule of assumptions used    
  Six Months Ended
June 30
  2023 2022
Expected volatility 166.87% 79.95%
Expected dividend yield - –
Risk-free interest rate 3.54% 2.14%
Expected term (in years) 6.67 10

 

Schedule of assumptions used      
  Six Months Ended
June 30		 
  2022  2021 
Expected volatility  79.95%   0 
Expected dividend yield  0   0 
Risk-free interest rate  2.14%   0 
Expected life (in years)  10.00   – 

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Schedule of options outstanding            
  

Option

Shares

  Weighted
Average Exercise
Price		  Weighted
Average
Remaining
Contractual
Term		  Aggregate
Intrinsic
Value		 
Outstanding, January 1, 2022  1,135,909  $16.69   8.39  $0 
Granted  25,000  $4.57   9.45  $0 
Cancelled and expired  (1,001) $145.00   –  $0 
                 
Outstanding, June 30, 2022  1,159,908  $16.46   7.94  $0 
                 
Options exercisable, June 30, 2022  1,158,806  $16.32   7.93  $0 
Schedule of options outstanding                
  Share  Weighted
Average
Exercise
Price		  Weighted
Average
Remaining Contractual
Term		  Aggregate Intrinsic
Value		 
Outstanding, January 1, 2023  1,162,722  $16.22   7.44  $– 
Granted  62,500  $0.22   5.75   – 
Exercised  –   –   –   – 
Cancelled & expired  (48,375)  –   –   – 
Outstanding, June 30, 2023  1,176,847  $15.20   7.18  $– 
Options exercisable, June 30, 2023  1,176,847  $15.20   7.17  $– 

 

The weighted-average grant-date fair value of options granted during the six months ended June 30, 20222023, was $0.98.0.16.

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The aggregate intrinsic value of options outstanding and options exercisable aton June 30, 20222023, is calculated as the difference between the exercise price of the underlying options and the market price of the Company's common stock for the shares that had exercise prices that were lower than the $1.430.11 closing price of the Company's common stock on June 30, 2022.

The Company’s results2023. Stock-based compensation expense was $9,757 and $22,061 for the quartersthree and six months ended June 30, 2022,2023, respectively, and June 30, 2021, include employee share-based compensation expense totaling $509,338 and $555,892543,754, respectively. Such amounts have been included in for the Consolidated Statements of Operations within generalthree and administrative expenses. The Company’s results for the six months ended June 30, 2022, respectively, and June 30, 2021, include employee share-based compensation expense totaling $543,754 and $572,731 respectively. Such amounts have beenis included in the Consolidated Statements of Operations within general and administrative expenses on the accompanying condensed consolidated statements of operations.

 

As of June 30, 2022,2023, the unamortized compensation cost related to unvested stock option awards is $29,2501,644., with $468 expected to be recognized during the remainder of fiscal 2023, $940 in fiscal 2024 and $236 in fiscal 2025.

Warrants

 

During the six months ended June 30, 2022,2023, the Company issued a total of 7,50043,775,521 common stock warrants, to a consulting company andof which 888,1662,613,636 were issued forin connection with the conversion20% OID Promissory note (see Note 4). The warrants issued in connection with the 20% OID Promissory note are exercisable commencing July 1, 2023, through December 30, 2027. 16,786,885 were issued in connection with the public offering of secured convertible notes to a related partyFebruary 2023, including 4,286,883 of pre-funded warrants (see Note 5) forwith a total issuance offive-year contractual term, expiring 895,666February 14, 2028. On June 30, 2023, an additional 24,375,000 pre-funded warrants were issued with a five-year term in conjunction with the June 2023 Offering. During July 2023, all pre-funded warrants issued under the June 2023 Offering were exercised.

 

The weighted average assumptions made in calculating the fair value of warrants granted during the three and six months ended June 30, 2022,2023, and 20212022 are as follows: 

Schedule of warrant assumptions      
  Six Months Ended
June 30		 
  2022  2021 
Expected volatility  167.32 – 191.56%   144.81% 
Expected dividend yield  0   0 
Risk-free interest rate  1.62 – 3.27%   0.81% 
Expected life (in years)  4-5   5 

Schedule of warrant assumptions    
  

Six Months Ended

June 30,

  2023 2022
Expected volatility 172.63% 75.87%
Expected dividend yield – –
Risk-free interest rate 3.85% 2.03%
Expected term (in years) 5.00 6.25

  

Schedule of warrants outstanding                
  Share  Weighted
Average
Exercise
Price		  Weighted
Average
Remaining Contractual
Term		  Aggregate Intrinsic
Value		 
Outstanding, January 1, 2023  4,683,800  $13.01   4.73  $– 
Granted  43,775,521  $0.09   3.1043  $246,188 
Exercised*  (16,383,659) $0.47   –  $– 
Expired  –  $–   –  $– 
Outstanding, June 30, 2023  32,075,662  $2.02   4.83  $246,188 
Warrants exercisable, June 30, 2023  32,075,662  $2.02   4.83  $246,188 

 

*Includes 4,286,883 of pre-funded warrants with a purchase price of $0.47, paid upon grant of warrants in February 2023. Also includes 12,096,776 warrants exercised under a cashless exercise provision resulting in the issuance of 6,048,388 common shares.

 

 

 2422 

 

Schedule of warrants outstanding                
  

Warrant

Shares

  Weighted
Average
Exercise
Price		  Weighted
Average
Remaining Contractual
Term		  Aggregate Intrinsic
Value		 
Outstanding, January 1, 2022  3,800,202  $15.19   4.68  $0 
Granted  895,666  $3.99   9.12  $0 
Expired  (19,568) $22.73   –  $0 
Outstanding, June 30, 2022  4,676,300  $13.02   5.14  $0 
Warrants exercisable, June 30, 2022  4,676,300  $13.02   5.14  $0 

The weighted-average grant-date fair value of warrants granted during the six months ended June 30, 2022, and 2021 was $NOTE 7: 1.31EARNINGS (LOSS) PER SHARE and $6.33, respectively.

 

Pursuant to ASC 260, Earnings Per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the periods presented.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of common stock issuable for stock options and warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future. In the event of a net loss, diluted loss per share is the same as basic loss per share since the effect of the potential common stock equivalents upon conversion would be anti-dilutive.

The following potentially dilutive equity securities outstanding as of June 30, 2023, and December 31, 2022, are as follows: 

Schedule of anti dilutive securities      
  June 30, 2023 (Unaudited)  December 31, 2022 
Convertible notes payable and accrued interest  –   58,891 
Stock options  1,176,847   1,162,721 
Warrants  32,075,662   4,682,551 
Total common stock equivalents  33,252,509   5,904,163 

NOTE 8 – LITIGATION

 

InMichael Trepeta, a Current Report on Form 8-K filed byformer Co-CEO and director of the Company, on March 23, 2022, the Company reported the termination of the Employment Agreement of Donald (Trey) Barrett III as Chief Operations and Strategy Officer. On April 12, 2022, Mr. Barrett commenced an arbitrationfiled a lawsuit against the Company beforeand its subsidiary, Mobiquity Networks in April 2023 in the American Arbitration Association allegingNew York State Supreme Court, Nassau County. The claims stem from a Separation Agreement and Release that Mr. Trepeta and the Company entered six years ago in April 2017 which terminated Mr. Trepeta’ s employment agreement and discontinued his employment and directorship with the Company, among other things, by mutual agreement. Mr. Trepeta also gave the Company a release in the Separation Agreement and Release. Mr. Trepeta has claimed that the Company terminatedfraudulently induced him to enter into the Separation Agreement and Release; that the Company breached Mr. Barrett without causeTrepeta’ s employment agreement; and that the Company breached its covenant of good faith and fair dealing and its fiduciary duty. Mr. Trepeta is claiming not less than $2.5 Million in breachdamages. Based on the Company’s initial internal review of the Employment Agreement. On August 12, 2022situation, the Company believes the claims lack merit and Mr. Barrettit intends to vigorously defend same. Due to uncertainties inherent in litigation, the Company cannot predict the outcome of this matter at this time.

NOTE 9 –NASDAQ LISTING REQUIREMENTS

Our common stock and 2021 Warrants are listed on the NasdaqCM. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with the applicable listing standards.

On January 13, 2023, we received a letter from The Nasdaq Stock Market stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock was below $1.00 per share for 30 consecutive business days. Pursuant to Nasdaq’s Listing Rules, the Company has a 180-day grace period, until July 12, 2023, during which the Company may regain compliance if the bid price of its common stock closes at $1.00 per share or more for a minimum of ten consecutive business days.

If we do not regain compliance with the bid price requirement, we may be eligible for an additional 180-calendar day compliance period so long as we satisfy the criteria for initial listing on the NasdaqCM and the continued listing requirement for market value of publicly held shares and we provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. A reverse stock split requires the approval of our shareholders, and we cannot assure that we will receive the requisite shareholder vote to allow us to effectuate a stock split. In the event we are not eligible for the second grace period, the Nasdaq staff will provide written notice that our Common Stock is subject to delisting; however, we may request a hearing before the Nasdaq Hearings Panel, which request, if timely made, would stay any further suspension or delisting action by the Nasdaq pending the conclusion of the hearing process and expiration of any extension that may be granted by the Hearings Panel.

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On January 4, 2023, we received a deficiency notification from the Listing Qualifications Department of The NasdaqCM notifying the Company of its noncompliance with the NasdaqCM Listing Rule 5620(a) to hold an annual meeting of shareholders within no later than one year after the end of the Company’s fiscal year end. Under NasdaqCM Rules the Company had 45 calendar days to submit a plan to regain compliance and can grant up to 180 calendar days from the fiscal year end, or until June 29, 2023, to regain compliance. In May 2023, this deficiency was cured.

On December 14, 2022, we received a deficiency letter from the Listing Qualifications Department of The NasdaqCM notifying the Company of its noncompliance with the NasdaqCM Listing Rule 5550(b)(1) for the NasdaqCM, which requires that a listed company’s stockholders’ equity be at least $2.5 million. In accordance with NasdaqCM rules, the Company had 45 calendar days from the date of the notification to submit a plan to regain compliance with NasdaqCM Listing Rule 5550(b)(1). The Company submitted a compliance plan to resolve the deficiency and regain compliance and the Company was granted up to May 30, 2023, to evidence compliance. As the Company was not in compliance on that date, the Company received a notice of delisting and is currently appealing this notice with a hearing date scheduled for July 27, 2023.

The Company intends to regain compliance with each of the applicable continued listing requirements of The NasdaqCM prior to the end of the compliance periods set forth in the Hearings Panel decision or on appeal at one or more hearings. However, until Nasdaq has reached a settlement in which, among other things,final determination that the Company has regained compliance with all of the applicable continued listing requirements, there can be no assurances regarding the continued listing of the Company’s common stock and Mr. Barrett mutually deemed2021 Warrants on Nasdaq. If our common stock and 2021 Warrants cease to be listed for trading on the NasdaqCM, we would expect that our Common Stock and 2021 Warrants would be traded on one of the termination was not for-cause,three tiered marketplaces of the OTC Markets Group. If Nasdaq were to delist our common stock and 2021 Warrants, it would be more difficult for our stockholders to dispose of our common stock or 2021 Warrants and more difficult to obtain accurate price quotations on our common stock or 2021 Warrants. The delisting of the Company’s common stock and 2021 Warrants from Nasdaq would have a material adverse effect on the Company’s access to capital markets, and any limitation on market liquidity or reduction in the price of its common stock as a result of that delisting would adversely affect the Company’s ability to raise capital on terms acceptable to the Company, agreed to pay Mr. Barrett a sum which is not material to the business or financial condition of the Company, and Mr. Barrett’s non-competition restrictive covenant was canceled. The Company has recorded the liability in full settlement of the claim which is included in the accounts payable and accrued expenses.if at all.

 

NOTE 910 – SUBSEQUENT EVENTS

 

OnAs discussed in Note 5, in July 20, 2022,2023, the Company received $150,000 from the sale of the Company’s common stock by issuing 120,000 shares at $1.25 per share.

On August 10, 2022, the Company received $275,000 from the sale of the Company’s common stock by issuing 220,000 shares at $1.25 per share.

On July 1, 2022, the Companyalso issued 27,1077,175,000 shares of common stock for three convertible promissory notes totaling $100,000 plus accrued interestupon conversion of $8,425 at a conversion rate7,175,000 pre-funded warrants, bringing the number of $4.00 per share (see Note 5).

outstanding common shares to 38,611,261. 

 

 

 

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company.

 

The information contained in this Form 10-Q and documents incorporated herein by reference are intended to update the information contained in the Company's Form 10-K/A10-K for its fiscal year ended December 31, 20212022 which includes our audited financial statements for the year ended December 31, 20212022 and such information presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors" and other information contained in such Form 10-K/A10-K and other Company filings with the Securities and Exchange Commission ("SEC").

 

This statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including the matters set forth in this statement. The accompanying condensed consolidated financial statements as of June 30, 2022,2023, and 2021 and for the six months ended June 30, 2022 and June 30, 2021 includes the accounts of Mobiquity Technologies, Inc. (the “Company”) and its wholly owned subsidiaries.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, and actual results could be significantly different than those discussed in this Form 10-Q. Certain statements contained in Management's Discussion and Analysis, particularly in "Liquidity and Capital Resources," and elsewhere in this Form 10-Q are forward-looking statements. These statements discuss, among other things, expected growth, future revenues and future performance. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by us or on our behalf. The forward-looking statements are subject to risks and uncertainties including, without limitation, the following: (a) changes in levels of competition from current competitors and potential new competition, (b) possible loss of customers, and (c) the company's ability to attract and retain key personnel, (d) The Company's ability to manage other risks, uncertainties and factors inherent in the business and otherwise discussed in this 10-Q and in the Company's other filings with the SEC. The foregoing should not be construed as an exhaustive list of all factors that could cause actual results to differ materially from those expressed in forward-looking statements made by us. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company on the date thereof, and the Company assumes no obligation to update any forward-looking statements.

The following discussion and analysis of the consolidated results of operations and financial condition of the Company for the three months and six months ended June 30, 2022, and 2021, respectively, and should be read in conjunction with our consolidated financial statements and the notes thereto that are included elsewhere in this Quarterly Report on Form 10-Q.

 

This Quarterly Report includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain risk factors discussed in our Annual Report on Form 10-K/A (Amendment No. 1) filed10-K (filed with the Securities and Exchange Commission (the “SEC”) on May 23, 2022.June 30, 2023.

 

Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

 

Our Company

 

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Company Overview

Mobiquity Technologies, Inc. isWe are a next-generation marketing and advertising technology, data compliance and data intelligence company which operates through our three proprietary software platforms in the programmatic advertising industry.

The Programmatic Advertising Industry

Programmatic advertising refers to the automated buying and selling of digital ad space. In contrast to manual advertising, which relies on human interaction and negotiation between publishers and marketers, programmatic ad buying harnesses technology to purchase digital display space. This use of software and algorithms helps streamline ad buying processes, which is why programmatic has become one of the most indispensable digital marketing tools worldwide. According to Statista, in 2021, global programmatic ad spends reached an estimated 418.4 billion U.S. dollars, with spending set to surpass 493 billion by 2022. The United States remains the leading programmatic advertising market worldwide.

Our Mission

 

Our product solutions are comprisedmission is to help enterprises in the programmatic industry become more efficient and effective regarding the monetization of twoadvertising, audience segments and data compliance. We do this by offering three proprietary software platforms:solutions: Our ATOS platform for brands and agencies, our data intelligence platform for audience segments and targeting, and our publisher platform for privacy compliance and publisher monetization.

 

 ·Our advertising technology operating system (or ATOS) platform; and
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·Our data intelligence platform.

Our Opportunity

Due to the recent changes to Privacy Laws, such as GDPR and CCPA, along with Apple and Google’s removal of Identifiers, we believe Publishers are facing two significant issues: increasing costs due to privacy compliance laws and decreasing revenue, due to the lack of audience targeting. We believe there is a major paradigm shift occurring in the market, where user data and the targeting intelligence to use it must shift from middlemen directly to the content publishers. Publishers must own their first party data and manage their audiences’ segments in-house. We believe that irrespective of whether a publisher chooses to work with us or not, they need to find a solution that allows advertisers to buy directly from them.

Our Solutions

Programmatic Advertising Platform

 

Our ATOSadvertising technology operating system (or ATOS) platform is a single-vendor end-to-end solution that blends artificial intelligence (or AI) and machine learning (ML) based(or ML)-based optimization technology for automatic ad serving that automatically serves advertising and manages digital advertising inventorycampaigns. Our ATOS platform engages with approximately 10 billion advertisement opportunities per day.

As an automated programmatic ecosystem, ATOS increases speed and campaigns. performance, by providing dynamic technology that scales in real-time. It is this proprietary cloud-based architecture that keeps costs down and allows us to pass along savings to our customers. Also, by offering more of the features inherent in a digital advertising campaign and removing the need for third-party integration of those features, we believe that our ATOS platform can be substantially more time efficient and cost efficient than other Demand-Side Platforms (or DSPs). Our ATOS platform also decreases the effective cost basis for users by integrating all the necessary capabilities at no additional cost as compared to the costs to outsource these capabilities to one or more providers in a fragmented ecosystem. DSP and bidding technologies, AdCop™ Fraud Protection, rich media and ad serving, attribution, reporting dashboard and DMP are all included in our ATOS platform.

Data Intelligence Platform

Our data intelligence platform provides precise data and insights on consumer’s real-world behavior and trends for use in marketing and research. Our management believes, based on our experience in the industry, that we provide one of the most accurate and scaled solution for data collection and analysis, utilizing multiple internally developed proprietary technologies.

 

We operate our business through two wholly owned subsidiaries. Advangelists LLC operates our ATOS platform business, and Mobiquity Networks, Inc. operatesprovide our data intelligence platform business.to our customers on a managed services basis, and also offer a self-service alternative through our MobiExchange product, which is a software-as-a-service (or SaaS) fee model. MobiExchange is a data-focused technology solution that enables users to rapidly build actionable data and insights for its own use. MobiExchange’s easy-to-use, self-service tools allow anyone to reduce the complex technical and financial barriers typically associated with turning offline data, and other business data, into actionable digital products and services. MobiExchange provides out-of-the box private labeling, flexible branding, content management, user management, user communications, subscriptions, payment, invoices, reporting, gateways to third party platforms, and help desk, among other things.

Publisher Platform for Monetization and Compliance

Our content publisher platform is a single-vendor ad tech operating system that allows publishers to better monetize their opt-in user data and advertising inventory. The platform includes tools for: consent management, audience building, a direct advertising interface and inventory enhancement. Our publisher platform provides content publishers the functionality to use its user identifier data to create inventories of profiled data segments and to target audiences with advertising using that data, in a data privacy compliant manner.

Our Revenue Sources

We target publishers, brands, advertising agencies and other advertising technology companies as our audience for our three platform products. Our sales and marketing strategy is focused on providing a de-fragmented operating system that facilitates a considerably more efficient and effective way for advertisers and publishers to transact with each other. Our goal is to become the programmatic display advertising industry standard for small and medium sized advertisers. We generate revenue from our platforms through two verticals:

·The first is licensing one or more of our platforms as a white-label product for use by advertising agencies, demand-side platforms (or DSP’s), brands and publishers. Under the white-label scenario, the user licenses a platform from us and is responsible for running its own business operations and is billed a percentage of amounts spent on advertising run through the platform.
·The second revenue stream is a managed services model, in which, the user is billed a higher percentage of revenue run through a platform, but all services are managed by us.

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Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires management to make estimates and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience, and other assumptions as the basis for making judgments. We believe that the following critical accounting policies affect our more significant judgments and estimates in the preparation of our financial statements.

 

Use of Estimates

 

Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.

 

Risks and Uncertainties

 

The Company operates in an industry that is subject to intense competition and changechanges in consumer demand. The Company’s operations are subject to significant riskrisks and uncertainties including financial and operational risks including the potential risk of business failure.

 

The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.

 

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Fair Value of Financial Instruments

 

The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. ASC 820 provides a framework for measuringat fair value, and requires disclosures regarding fair value measurements. Fair valuewhich as is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date,date. The valuation techniques are based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.

The Company uses a three-tier fair value hierarchy to classifyobservable and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observableunobservable inputs. Observable inputs when available, and to minimize the use ofreflect readily obtainable data from independent sources, while unobservable inputs when determiningreflect certain market assumptions. There are three levels of inputs that may be used to measure fair value.

The three tiers are defined as follows:value: 

 

 ·Level 1 —Observable inputs that reflect1—Valuation based on unadjusted quoted market prices (unadjusted) for identical assets or liabilities in active markets;markets that the Company has the ability to access;
 ·Level 2—Observable inputs other thanValuation based on observable quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities;liabilities in active markets; and
 ·Level 3—UnobservableValuation based on unobservable inputs that are supported by little or no market data,activity, which require the Company to develop its own assumptions.management’s best estimate of what market participants would use as fair value.

 

The determination of fairFair value estimates discussed herein are based upon certain market assumptions and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies appliedpertinent information available to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate.

Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values.management.

 

The Company’srespective carrying value of certain on-balance-sheet financial instruments including cash,approximated their fair value. These financial instruments include accounts receivable, accounts payable and accrued expenses, and accounts payable and accrued expenses, are carried at historical cost. Atcontract liabilities. On June 30, 20222023, and December 31, 2021, respectively,2022, the carrying amounts of these financial instruments approximated their fair values because ofdue to the short-term nature of these instruments, or they are receivable or payable on demand. The fair value of the Company’s debt approximates its carrying value based on current financing rates available to the Company and its short-term nature.

The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2, or Level 3 instruments.

 

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (“fair value option”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding financial instruments.

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Accounts Receivable

 

Accounts receivable represent customer obligations under normal trade terms and are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral.

 

Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts.doubtful accounts. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made.

 

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Allowance for doubtful accounts was $820,990 at June 30, 2022 and December 31, 2021.

Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations.

Impairment of Long-lived Assets

Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 Impairment or Disposal of Long-Lived Assets. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include but are not limited to significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets and compares this to the carrying amounts of the assets.

If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASCAccounting Standards Codification (ASC) Topic 606,Revenue from Contracts with Customers (ASC 606) to align revenue recognition more closely with the delivery of the Company’s services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

 

Identify the contract with a customercustomer.

 

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

 

Identify the performance obligations in the contractcontract.

 

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

 

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Determine the transaction priceprice.

 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of June 30, 2022,2023, and 2021, respectively,December 31, 2022, contained a significant financing component.

 

Allocate the transaction price to performance obligations in the contractcontract.

 

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

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Recognize revenue when or as the Company satisfies a performance obligation.

 

The Company satisfies performance obligations either over timeovertime or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer.

 

For each revenue stream we onlyEach of the Company’s customer contracts is deemed to have a single performance obligation.

Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days.

 

Stock-Based Compensation

 

The Company accounts for our stock-based compensation under ASC 718 “Compensation – Stock Compensation”Compensation using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, which is usuallygenerally the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

 

The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options.

The fair value of stock-based compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date)options and is recognized over the vesting periods.other equity instruments granted to both employees and non-employees.

 

When determining fair value of stock-based compensation, the Company considers the following assumptions inincorporated into the Black-Scholes model:

 

·Exercise price,
·Expected dividends,
·Expected volatility,
·Risk-free interest rate; and
·Expected life of option

 

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Recent Issued Accounting StandardsPronouncements

 

Changes to accounting principles are established by the FASB in the form of ASU’s to the FASB’s Codification. We consider the applicability and impact of all ASU’snew accounting pronouncements on our consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the FASB in the form ofFinancial Accounting Standards Updates (“ASU”)Board (FASB) through the date these condensed consolidated financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective, accounting pronouncements,that when adopted, will have a material impact on the condensed consolidated financial statements of the Company.

 

In August 2020,Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: On September 30, 2022, the FASB issued ASU 2020-06, Accounting for Convertible Instruments2022-03 (ASU 2022-03), which clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security. The ASU also requires specific disclosures related to such an equity security, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulnessremaining duration of the information providedcorresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. ASU 2022-03 clarifies that a “contractual restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to users of financial statements. Among other changes, the new guidance removescontractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). The ASU also prohibits an entity from GAAP separation models for convertible debt that require the convertible debt to be separated intorecognizing a debt and equity component, unless the conversion feature is required to be bifurcated and accounted forcontractual sale restriction as a derivative or the debtseparate unit of account. For public business entities, ASU 2022-03 is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021,2023, and interim periods within those fiscal years, with early adoption permitted, but only atpermitted. The Company is currently evaluating the beginningimpact of the fiscal year.ASU 2022-03 on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

 

 

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WeFinancial Instrument – Credit Losses: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. In May 2019, the FASB issued ASU 2019-05, which provides transition relief for entities adopting ASU 2016-13. For entities that have adopted this pronouncementASU 2016-13, the amendments in ASU 2019-05 are effective for fiscal years beginning after December 15, 2019, including interim periods therein. An entity may adopt ASU No. 2019-05 in any interim period after its issuance if the entity has adopted ASU 2016-13. For all other entities, the effective date will be the same as the effective date of ASU 2016-13. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 on January 1, 2022; however,2023, and the adoption of this standardthe guidance did not have a material effectsignificant impact on the Company’sits condensed consolidated financial statements.statements and disclosures.

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers: In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). Under ASU 2021-08, an acquirer in a business combination must apply ASC 606 principles when recognizing and measuring acquired contract assets and contract liabilities. The provisions of ASU 2021-08 are applicable for the Company for fiscal years and interim periods beginning after December 15, 2022. The Company adopted ASU 2021-08 on January 1, 2023, and the adoption of the guidance did not have a significant impact on its condensed consolidated financial statements and disclosures.

 

Plan of Operation

 

Mobiquity intends to hire several new sales and sales support individuals to help generate additional revenue using the Advangelists platform and the Mobiquity Networks MobiExchange. Mobiquity’s sales team will focus on Advertising Agencies, Brands, and publishers to help increase both supply and demand across the Advangelists platform while providing unique data segments utilizing MobiExchange. Together the Advangelists platform and MobiExchange platform createscreate multiple revenue streams for Mobiquity. The first is licensing the Advangelists platform as a white-label product for use by Advertising Agencies, DSP’s, Publishers, and Brands. Under the White-Label scenario, the user licenses the technology and is responsible for running its own business operations and is billed a percentage of volume run through the platform. The second revenue stream is a managed services model in which the user is billed a higher percentage of revenue run through the platform, but all services are managed by the Mobiquity/Advangelists team. The third revenue model is a seat model, where the user is billed a percentage of revenue run through the platform and business operations are shared between the user and the Mobiquity/Advangelists team. Additional revenue can be generated by offering data segments and digital audiences through MobiExchange for use in omnichannel marketing programs that include but not limited to programmatic advertising email marketing and SMS. The goal of the sales team is to inform potential users of the benefits in efficiency and effectiveness of utilizing the end-to-end, fully integrated ATOS created by Advangelists and Mobiquity Networks.

 

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Results of Operations

 

Quarter Ended June 30, 2022,2023, versus Quarter Ended June 30, 20212022

 

The following table sets forth certain selected condensed statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

 

  Quarter Ended 
  June 30,
2022		  June 30,
2021		 
Revenues $1,920,954  $702,434 
Cost of Revenues  673,769   811,519 
Gross Profit (Loss)  1,247,185   (109,085)
General and Administrative Expenses  2,255,965   2,047,428 
Loss from operations  (1,008,780)  (2,156,513)
  Quarter Ended 
  June 30, 2023  June 30, 2022 
Revenues $131,515  $1,920,954 
Cost of revenues  104,089   673,769 
Gross profit  27,426   1,247,185 
General and administrative expenses  1,537,979   2,255,965 
Loss from operations $(1,510,553) $(1,008,780)

  

We generated revenues of $1,920,954$131,515 in the second quarter of 2022 as2023 compared to $702,434$1,920,954 in the same period for 2021,2022, a changedecrease in revenues of $1,218,520.$1,789,439. The nationwide economic shutdown duedecrease from the prior period can be directly attributed to COVID-19the lack of political revenue during the past twenty-fourfirst six months severely reduced operationsof 2023. We anticipate an increase in political revenue during that period and we are now seeing a turnaround starting in the second quarterhalf of 2022 with a decreasing impact from COVID-19. Over2023, to correspond to the last six months we haveupcoming primary elections. Additionally, the Company has developed several new features which we believe will help grow our revenue moving forward. Further we are anticipating revenues to continue to grow eachbeginning in the third quarter throughof 2023 and beyond. We anticipate releasing one or more new products and services in mid-2023 that will address many of the balance of 2022.changes that have affected the AdTech industry over the last year.

 

Cost of revenues was $673,769$104,089 or 35.1%79.1% of revenues in the secondfirst quarter of 20222023 as compared to $811,519$673,769 or 115.5%35.1% of revenues in the same fiscal period of fiscal 2021. Cost2022. Costs of revenues include audience building, targeting features and web services for storage of our data and web engineers who are building and maintaining our platforms. Our ability to capture and store data for sales does not translate to increased cost of sales.

 

31

Gross Profit (Loss)profit was $1,247,185$27,426 or 64.9%20.9% of revenues for the second quarter of 20222023 as compared to $(109,085)$1,247,185 in the same fiscal period of 20212022 or 15.5%64.9% of revenues. When the country begins a recovery from COVID-19 and the economy begins to turn around we anticipate revenues and profits to increase.

 

General and administrative expenses were $2,255,965$1,537,979 for the second quarter of fiscal 20222023 compared to $2,047,428$2,255,965 in the comparable period of the prior year, an increasea decrease of $208,537. Increased$717,986. Decreased operating costs primarily included cashrelated to a decrease in stock-based compensation expense for salaries of $75,904, commissionsapproximately $499,581, computer expense of $132,530approximately $122,526 and professional fees paid in stock valued at $84,500.of approximately $244,000.

   

The net loss from operations for the second quarter of fiscal 20222023 was $1,008,780$1,510,553 as compared to $2,156,513$1,008,780 for the comparable period of the prior year. While our loss from operations decreasedincreased by approximately $1,100,000 due to improved revenues$502,000 of the continuing operations over the comparable second quarter of 2021,2022, the continuing operating loss is attributable to the focused effort in creating the infrastructureproducts and services required to move forward with our Mobiquity and Advangelists network business and while the country emerges from the COVID-19 pandemic.

Our ability to be profitable in the future is dependent upon the successful introduction and usage of our data collection and analysis including Advertising, Data Licensing, Footfall Reporting, Attribution Reporting, Real Estate Planning, Financial Forecasting and Custom Research services.business.

 

Six Monthsmonths Ended June 30, 2022,2023, versus Six Monthsmonths Ended June 30, 20212022

 

The following table sets forth certain selected condensed statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

 

  Six Months Ended 
  June 30,
2022		  June 30,
2021		 
Revenues $2,463,123  $1,224,307 
Cost of Revenues  979,896   1,748,799 
Gross Profit (Loss)  1,483,227   (524,492)
General and Administrative Expenses  4,784,554   3,631,822 
Loss from operations  (3,301,327)  (4,156,314)
  Six months Ended 
  June 30, 2023  June 30, 2022 
Revenues $263,739  $2,463,123 
Cost of revenues  166,897   979,896 
Gross profit  96,842   1,483,227 
General and administrative expenses  2,963,726   4,784,554 
Loss from operations $(2,866,884) $(3,301,327)

31

 

We generated revenues of $2,463,123$263,739 in the first six months of 2022 as2023 compared to $1,224,307$2,463,123 in the same period for 2021,2022, a changedecrease in revenues of $1,238,816.$2,199,384. The nationwide economic impact of COVID-19 during the past twenty-four months severely reduced operations and we are now seeing a turnaround starting in the second quarter of 2022 with a decreasing impact from COVID-19. Over the last six months, we have developed several new features which we believe will help grow our revenue moving forward. Further, we are anticipating revenues to continue to grow each quarter through the balance of 2022.

Over the last six months theoperations. The Company has developed several new features which we believe will help grow our revenue moving forward.in 2023 and beyond. We released new ATOS4P product in May 2023, that will address many of the changes that have affected the AdTech industry over the last year.

 

Cost of revenues was $979,896$166,897 or 39.8%63.3% of revenues in the first six months of 20222023 as compared to $1,748,799$979,896 or 142.8%39.8% of revenues in the same fiscal period of fiscal 2021. Cost2022. Costs of revenues include audience building, targeting features and web services for storage of our data and web engineers who are building and maintaining our platforms. Our ability to capture and store data for sales does not translate to increased cost of sales.

 

Gross Profit (Loss)profit was $1,483,227$96,842 or 60.2%36.7% of revenues for the first six months of 20222023 as compared to $(524,492)$1,483,227 in the same fiscal period of 20212022 or 42.8%60.2% of revenues. Our improved gross profit is directly related to our improved revenues.

32

 

General and administrative expenses were $4,784,554$2,963,726 for the first six months of fiscal 20222023 compared to $3,631,822$4,784,554 in the comparable period of the prior year, an increasea decrease of $1,152,732. Increased$1,820,828. Decreased operating costs primarily included cashrelated to a decrease in stock-based compensation expense forof $521,693, computer expense of $492,614, professional fees of $603,811,$168,332, salaries of $174,083, computer support$461,789, and commissions of $638,193, non-cash operating costs include professional fees paid in stock valued at $84,500.$162,342.

   

The net loss from operations for the first six months of fiscal 20222023 was $3,301,327$2,866,884 as compared to $4,156,314$3,301,327 for the comparable period of the prior year. While ourOur loss from operations decreased by approximately $855,000$434,000 due to improved revenues over the comparable six monthscapitalization of 2021 thesoftware development costs. The continuing operating loss is attributable to the focused effort in creating the infrastructureproducts and services required to move forward with our Mobiquity and Advangelists network business and while the country emerges from the COVID-19 pandemic.

Our ability to be profitable in the future is dependent upon the successful introduction and usage of our data collection and analysis including Advertising, Data Licensing, Footfall Reporting, Attribution Reporting, Real Estate Planning, Financial Forecasting and Custom Research services.business.

  

Liquidity and Capital Resources

 

We have a history of operating losses, and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal yearsyear ended December 31, 2021,2022.

The Company had cash and 2020.cash equivalents of $1,598,160 at June 30, 2023. Cash used in operating activities for the six months ended June 30, 2023, was $2,918,114. This resulted primarily from a net loss of $3,825,743 offset by stock-based compensation of $22,061, amortization of intangibles of $321,972, amortization of debt discount of $738,141, decrease in accounts receivable of $192,811 and $858,574 decrease in accounts payable and accrued expenses, and decrease in prepaid expenses and other assets of $47,500. Cash used in investing activities results from an increase in capitalized software development costs of $864,179. Cash flow used in financing activities of $5,159,599 resulted primarily from cash paid on loans of $1,587,500, net proceeds from the issuance of debt $1,011,500, and the issuance of common stock and pre-funded warrants of $5,735,499.

 

The Company had cash and cash equivalents of $2,165,977 at June 30, 2022. Cash used in operating activities for the six months ended June 30, 2022, was $3,054,760. This resulted primarily from a net loss of $4,011,521 offset by stock-based compensation of $543,754, amortization of intangible assets of $300,367, common stock issued for services of $84,500, increase in accounts receivable of $214,480 and $318,919 decrease in accounts payable and accrued expenses. Non-cashexpenses, gain on settlement of liability $389,495, andloss on debt conversionextinguishment of $855,296, and an inducement expense of $101,000. Cash used in investing activities results from the purchase of property and equipment of $8,004. Cash flow used in financing activities of $156,504 resulted from cash paid on loans.long-term debt.

 

Our company commenced operations in 1998 and was initially funded by our three founders, each of whom has made demand loans to our company that have been repaid. Since 1999, we have relied on equity financing and borrowings from outside investors to supplement our cash flow from operations and expect this to continue in 20222023 and beyond until cash flow from our proximity marketing operations becomebecomes substantial.

 

Our Auditors Have Issued

32

Other Debt Transactions

In June 2020, the Company received an Economic Injury Disaster Loan of $150,000 from the Small Business Administration (SBA) which carries a Going Concern Opinionthirty-year term, and interest at 3.7% per annum, with a maturity date in July of 2050. The loan is to be repaid in monthly installments, including principal and interest, of $731, beginning twelve months from the date of the loan. Total accrued and unpaid interest on the debt was $13,594 at December 31, 2022 and is included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. The total principal outstanding has been presented as long-term liabilities as payments required to be made in 2023 will be applied to accrued interest. On January 5, 2023, the Company paid $163,885 to the Small Business Administration to pay off principal and accrued interest on the Company’s SBA loan.

On December 30, 2022, the Company and Walleye Opportunities Master Fund Ltd, a Cayman Islands company (the “Investor”), entered into a Securities Purchase Agreement (the “Agreement”) for the Investor to purchase from the Company (i) a senior secured 20% original issue discount (OID) nine-month promissory note in an aggregate gross principal amount of $1,437,500, less the 20% OID of $287,500, for a net subscription amount of $1,150,000 (the “Investor Note”), and (ii) a five year warrant to purchase 2,613,636 shares of the Company’s common stock at an exercise price of $0.44 per share, exercisable commencing July 1, 2023 and expiring December 30, 2027 (the “Investor Warrant”). Proceeds from the Agreement were received by the Company in January 2023.

In conjunction with the Agreement, the Company issued 522,727 shares of common stock, or approximately 5.3% of the Company’s outstanding shares, to the Investor as an incentive on the transaction (Incentive Shares). Excluding the above referenced Investor Warrant, the shares of Common Stock exercisable pursuant to such Investor Warrant are not being considered beneficially owned by the Investor until the Investor Warrant is exercisable within 60 days. Total issuance fees of $138,500 associated with the closing of the Agreement were paid by the Company to Spartan Capital Securities LLC and the Investor’s counsel. Approximately $163,000 of the loan proceeds were utilized to repay the outstanding principal and accrued interest under the SBA loan.

 

The Company’s independent registeredInvestor Note will only become convertible into common stock upon the occurrence of an Event of Default under and as defined in the Investor Note on terms set forth in the Investor Note. This Investor Note matures and is payable on or before September 30, 2023, and it provides that the Investor may demand prepayment after March 31, 2023 and before the maturity date, provided that the purchasers of securities in a future public accounting firm has expressed substantial doubtoffering by the Company, as defined in the Agreement, who hold the purchased Company securities at the time the prepayment demand, is made unanimously consent to the prepayment. The Company granted a security interest in all of its assets to the Investor as collateral for its obligations under the Investor Note pursuant to a Security Agreement. In addition, the Company’s abilitysubsidiaries guaranteed the obligations of the Company under the Investor Note pursuant to continuea Subsidiary Guarantee and granted a first lien security interest in all of their assets to the Investor as additional collateral pursuant to the Security Agreement. All securities sold in the above-described transaction contain certain piggy-back registration rights after the completion of our February 2023 offering (see Note 5). This secured loan was paid off on June 30, 2023, upon the closing of the June 2023 Offering described herein.

The aforementioned Investor Warrant was deemed to be an equity-classified derivative instrument with a fair value of $1,526,363 at the date of closing on the Agreement, incorporating the use of the Black-Scholes valuation model, and the Incentive Shares were deemed to have a fair value of $318,863 based on the closing market price of the Company’s common stock on the day preceding the closing of the Agreement. Per accounting guidance under ASC 815, the Company recorded the fair values of the Investor Warrant and Incentive Shares based on the relative fair value allocation method, which allocates fair values as a going concern aspercentage of December 31, 2021. The unaudited consolidated financial statementstotal fair value of the debt, Investor Warrant, and Incentive Shares, in this report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. As discussed in the notesproportion to the unauditednet proceeds received under the Investor Note of $1,150,000. As a result of applying the relative fair value allocation method, the Investor Warrant was assigned a relative fair value of $586,040 and the Incentive Shares were assigned a relative fair value of $122,426, at the date of closing on the Agreement. The fair values of the Investor Warrant, the Incentive Shares, the OID, and the $138,500 in debt issuance costs paid, were recorded as debt discounts totaling $1,134,466, and are presented net against the debt principal outstanding on the accompanying condensed consolidated financial statements, these conditions raise substantial doubtbalance sheet at June 30, 2023. Amortization associated with the total debt discounts is being recognized using the effective interest method over the term of the Investor Note, which matures on September 30, 2023. For the quarter ended June 30, 2023, $377,149 in amortization on the debt discounts was recognized as interest expense on the accompanying condensed consolidated statement of operations, and the remaining unamortized debt discounts of $396,323 were written off as loss on debt extinguishment upon full settlement of the Investor Note in conjunction with proceeds received from the Company’s ability to continue as a going concern. The Company’s plans in regard to these matters are also described in the notes to the Company’s unaudited consolidated financial statements. The unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

June 2023 Offering.

 

 

 33 

 

Bridge FinancingFebruary 2023 Public Offering

In September 2021,On February 13, 2023, the Company entered into securities purchase agreements 2021,an underwriting agreement (the Underwriting Agreement) with two accredited investors, Talos Victory Fund, LLC, and Blue Lake Partners LLC, pursuant to which the Company issued 10% promissory notes with a maturity date of September 20, 2022, in the aggregate principal amount of $1,125,000. On the closing date of this financing, the holders delivered the net amount of $910,000 of the purchase price to the Company in exchange for the notes (which was net of the original issue discount and other fees, and expenses relate to this financing). In addition, the Company issued warrants to purchase an aggregate of 56,250 shares of its common stock to these holders. Spartan Capital Securities, LLC and Revere Securities LLC acted as placement agents on this transaction.

Public Financing

On October 19, 2021, the Company filed(the Underwriter) relating to a Form S-1 Registration Statement (File no. 333-260364) with the Securities and Exchange Commission to raise over $10 million dollars in an underwritten public offering. The next day the Company filed an application to list ouroffering of 3,777,634 shares of common stock on the NASDAQ Capital Market under the symbol “MOBQ.” This offering was completed on December 13, 2021, and the Company retired the loans of, Talos Victory Fund, LLC and Blue Lake Partners LLC out of the gross proceeds it received of approximately $10.3 million.

Debt Financing

We have the following debt financing in place through June 30, 2022:

Gene Salkind, who is our Chairman of the Board and one of our directors, and his affiliate provided us an aggregate of $2,700,000 in convertible debt financing for convertible promissory notes and common stock purchase warrants. Dr. Salkind’s principal debt was reduced to $2,562,500 in December 2021. During the quarter ended March 31, 2022, Dr. Gene Salkind, his wife, and a trust converted an aggregate of $2,052,500 of secured debt to a total of 1,368,333 restricted common shares andpre-funded warrants to purchase 684,166 additional restricted4,286,883 shares of common stock (the Shares), for net proceeds of $3,207,500 (the February 2023 Offering). In conjunction with the February 2023 Offering, which closed on February 16, 2023, the investors also received other Warrants to purchase 12,096,776 shares of common stock (Series 2023 Warrants) on a cash basis or up to 6,048,389 shares on a cashless basis. The offered Shares were priced at $0.465 per combination of one share of common stock or one pre-funded warrant, accompanied by one Series 2023 Warrant.

Each pre-funded warrant is exercisable at any time, until fully exercised, to purchase one share of common stock at an exercise price of $4.00$0.0001 per shareshare. Each Series 2023 Warrant is exercisable for five years to purchase 1.5 shares of common stock at a cash exercise price of $0.465 per warrant share. The Series 2023 Warrants contain an alternative cashless exercise provision permitting the holder to acquire 0.75 shares of common stock for every 1.5 warrant shares any time after the earlier of (i) 30 days following the initial exercise date of February 14, 2023, and (ii) the date on which the aggregate trading volume of the Company’s common stock, beginning on the initial exercise date of the Series 2023 Warrants, exceeds 36,290,322 shares. Additionally, the exercise price of both the pre-funded warrants and the Series 2023 Warrants are subject to customary adjustments for stock splits, stock dividends, reclassifications and the like.

Pursuant to the terms of the Underwriter agreement, and as partial consideration to the Underwriter, the Company issued a warrant for the purchase of 403,226 shares of common stock, exercisable from February 14, 2023, through September 2029 leavingFebruary 14, 2028, at an initial exercise price of $0.5115 per share. The Company also granted the Underwriter a balance45-day option to purchase up to an additional 1,209,678 shares and/or pre-funded warrants in lieu of $510,000shares and accompanying Series 2023 Warrants to purchase 1,814,517 shares at the public offering price less the underwriting discounts and commissions, to cover over-allotments, if any. No additional shares or pre-funded warrants were purchased by the Underwriter. The Company paid a cash fee to the Underwriter equal to 8% of the gross proceeds raised in secured debt.the February 2023 Offering, plus a reimbursement of Underwriter fees totaling $242,500.

Between the closing of the February 2023 Offering and June 30, 2023, investors holding pre-funded warrants converted all their pre-funded warrants into 4,286,883 shares of common stock and elected the alternative cashless exercise provision for the Series 2023 Warrants, resulting in the issuance of 6,048,389 shares of common stock. As of June 30, 2023, all the aforementioned pre-funded warrants and 2023 Warrants were exercised.

34

June 2023 Public Offering

 

On June 28, 2022, Dr. Salkind and his wife converted their secured principal debt30, 2023, Mobiquity Technologies, Inc. closed on a public offering selling an aggregate of 5,625,000 shares of common stock (and 24,375,000 common stock equivalents in the amountform of $510,000 at a conversion price of $1.25 per share. A total of 408,000 restricted common shares were issued and per his loan agreement, the Company issuedpre-funded warrants to purchase 204,000 additional restricted24,375,000 common sharesshares) to investors pursuant to Securities Purchase Agreements at a public offering price of $0.10 per share (or $0.0999 per pre-funded warrant) (the June 2023 Offering), for total gross proceeds of $3,000,000. Placement agent fees and other offering costs totaled $472,001 and were recorded net of gross proceeds in the condensed consolidated statement of stockholders’ equity during the quarter ended June 30, 2023. Each pre-funded warrant is exercisable at any time to purchase one share of common stock at an exercise price of $4.00$0.0001 per share through September 2029. No commissions were paid in connection with this transaction which is exempt under Section 3 (a) (9)share. Additionally, the exercise price of pre-funded warrants are subject to customary adjustments for stock splits, stock dividends, reclassifications and the like. Spartan Capital Securities, LLC acted as the Company’s exclusive placement agent of the Securities ActJune 2023 Offering pursuant to a Placement Agent Agreement. The net proceeds to the Company from the sale of 1934, as amended. Reference is madethe shares and pre-funded warrants, after deducting the Placement Agent commissions and offering expenses payable by the Company, was approximately $2,528,000. The Company used $1,437,500 of the proceeds received from the June 2023 Offering to “note 4” which describes other debt and receivable financing, which is incorporated herein by reference.fully satisfy its Senior Secured 20% OID Promissory Note to Walleye Opportunities Master Fund Ltd. See Note 4. The Company plans to use the remaining funds for working capital. In July 2023, the Company also issued 7,175,000 shares of common stock upon conversion of 7,175,000 pre-funded warrants, bringing the number of outstanding common shares to 38,611,261.

 

Other 2023 Stock Transactions

ThreeIn April 2023, the Board of Directors or the Compensation Committee of the unsecured convertible promissory outstanding notes automatically convert on June 30, 2022, at $4.00 per common share,Company’s Board of Directors approved the note holders may request Management for a more favorable conversion price.following transactions:

 

·Grant of 100,000 shares of restricted common stock to Gene Salkind, Chairman of the Board, for services previously rendered, based on a per share value of $0.167. Such shares are restricted from transfer until February 13, 2024.
·Grant of 50,000 shares of restricted common stock each to the Company’s CEO and another member of the Board of Directors for services as directors of the Company. Such shares are restricted from transfer until February 13, 2024.
·Grant of 30,000 shares of common stock to Mr. Salkind as payment for accrued and unpaid interest of approximately $5,000 based on a per share value of $0.167.
·Grant of 71,856 shares of restricted common stock to the Company’s legal counsel as payment for accrued and unpaid services valued at $12,000 and $0.167 per share. Such shares are restricted from transfer until February 13, 2024.
·Issuance of 1,562,133 shares of restricted common stock at a per share value of $0.17 as payment and full settlement of outstanding accounts payable with a total carrying amount of $265,563.

In June 2020,The effects on the Company received a $150,000 Economic Injury Disaster Loan from the SBA which carries a 30-year term, payableCompany’s consolidated financial statements included an increase in monthly installmentsstockholders’ equity of principal plus interest at the annual rate of 3.75% maturity date is July of 2050. This loan is secured by all the assets of the Company. Payments are deferred for the first two years, and payments of principal and interest are made over the remaining loan term.

$282,573.

 

Off-Balance Sheet Arrangements

 

As of June 30, 2022,2023, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

34

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

EvaluationAs required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the disclosure controls and procedures

A control deficiency exists when as of December 31, 2022, and quarterly since that date. Based upon this evaluation, the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reportingChief Executive Officer and Chief Financial Officer have concluded that is less severe than a material weakness, yet important enough to merit the attention by those responsible for oversight of the company’s financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act). Our management has determined that,were not effective as of June 30, 2022,2023, due primarily to the Company’s disclosure controls are not effective, includinglack of segregation of duties in the following:finance and accounting department similar to other companies our size.

 

 ·35The Company lacks segregation of duties similar to other companies our size; and

 

·Given our restatement of the year ended December 31, 2021, financial statements, we lacked the necessary controls over financial reporting. We are in the process of hiring additional staff both internally and externally to the Finance department with sufficient GAAP and public company financial reporting experience

 

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

There were no changes in the Company's internal control over financial reporting during the most recently completed fiscal quarteryear, which includes the integration of the new staff, that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

 

We performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, the management believes that the financial statements included in this Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

 

Continuing Internal Controls Remediation Efforts

During fiscal 2022 the Company identified control gaps and deficiencies. The Company has worked to remediate the gaps, deficiencies, and material weaknesses in its internal controls. The Board of Directors and The Audit Committee, as a priority, initiated these remediation activities to ensure the Company has proper internal controls over financial reporting and corporate governance. These steps will continue in fiscal 2023. To demonstrate these controls are effective, the Company has instituted independent monitoring and testing of these aforementioned controls.

 

 

 

 3536 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

From time to time, we may be engagedMichael Trepeta, a former Co-CEO and director of the Company, filed a lawsuit against the Company and its subsidiary, Mobiquity Networks in various lawsuits and legal proceedingsApril 2023 in the ordinary courseNew York State Supreme Court, Nassau County. The claims stem from a Separation Agreement and Release that Mr. Trepeta and the Company entered into six years ago in April 2017 which terminated Mr. Trepeta’s employment agreement and discontinued his employment and directorship with the Company, among other things, by mutual agreement. Mr. Trepeta also gave the Company a release in the Separation Agreement and Release. Mr. Trepeta has claimed that the Company fraudulently induced him to enter into the Separation Agreement and Release; that the Company breached Mr. Trepeta’s employment agreement; and that the Company breached its covenant of our business. We are currentlygood faith and fair dealing and its fiduciary duty. Mr. Trepeta is claiming not awareless than $2.5 Million in damages. Based on the Company’s initial internal review of any legal proceedings the ultimatesituation, the Company believes the claims lack merit and it intends to vigorously defend same. Due to uncertainties inherent in litigation, the Company cannot predict the outcome of which, in our judgment based on information currently available, would have a material adverse effect on our business, financial condition or results of operations. See Note 9 in the footnotes to the consolidated financial statements herein for description of legal proceedings.this matter at this time.

 

ITEM 1A. RISK FACTORS

 

Incorporated by reference are the risk factors contained in our Form 10-K/A10-K for the fiscal year ended December 31, 2021.2022.

 

ITEM 2. CHANGES IN SECURITIES.

 

(a) From January 1, 2022, through June 30,For fiscal 2022, we had no sales or issuances of unregistered capital stock, except as referenced above and in the table below:

 

Date of Sale Title of Security Number Sold Consideration Received and Description of Underwriting or Other Discounts to Market
Price or Convertible
Security, Afforded to
Purchasers		 Exemption
from
Registration
Claimed		 If Option, Warrant or Convertible
Security, terms
of exercise or
conversion
Jan.Jan – June 2022 Common Stock 50,000 shares Services rendered 

Rule 506,

Section 4(2)

 Not applicable
           
Jan.Jan – MarchJune 2022 Common Stock 

1,443,333 shares


684,166 warrants

 

Note conversion of


$2,502,500 of

Secured debt and $150,000 of unsecured debt

 Section 3(a)(9) Secured debt converted at $1.25 and $1.50 per share and unsecured debt converted at $2.00 and $4.00 per share (1)(2)
           
AprilJan – June 2022 Common Stock 408,000 shares and 204,000 warrants 

Note conversion of

$510,000

Section 3(a)(9) Secured debt converted at $1.25 per share (2)

_________________________________

(1)The secured investor converted $2,502,500 of principal into 1,368,333 common shares and warrants to purchase 684,166 shares of common stock at an exercise price of $4.00 per share through September 2029.
(2)The secured investor converted $510,000 of principal into 408,000 common shares and warrants to purchase 204,000 shares of common stock at an exercise price of $4.00 per share through September 2029.

37

On December 30, 2022, the Company and Walleye Opportunities Master Fund Ltd, a Cayman Islands company (the Investor), entered into a Securities Purchase Agreement (the Agreement), which closed on January 4, 2023, for the Investor to purchase from the Company (i) a senior secured 20% OID nine-month promissory note in an aggregate original principal amount of $1,437,500 (the Investor Note), and (ii) a five year warrant to purchase 2,613,636 shares of the Company’s common stock at an exercise price of $0.44 per share which is not exercisable until July 1, 2023 (the Investor Warrant). A total of 522,727 shares of Common Stock, or approximately 7.5% of the Company’s outstanding shares of Common Stock (post-issuance), were issued to the Investor as an incentive on the transaction, excluding the above referenced Investor Warrant, the shares of Common Stock exercisable pursuant to such Investor Warrant not being considered beneficially owned by the Investor until the Investor Warrant is exercisable within 60 days. A fee of $103,500 plus warrants to purchase 26,136 shares of Common Stock, exercisable at $0.484 per share, were issued to Spartan Capital Securities LLC. These warrants were subsequently cancelled on February 7, 2023. Approximately $163,000 of the loan proceeds were utilized to retire a small business loan originally in the principal amount of $150,000. The Investor Note will only become convertible into Common Stock upon the occurrence of an Event of Default under and as defined in the Investor Note on terms set forth in the Investor Note. This Note matures and is payable on or before September 30, 2023, and it provides that the investor may demand prepayment after March 31, 2023, and before the maturity date, provided that the purchasers of securities in the offering covered by this prospectus who hold the purchased Company securities at the time the prepayment demand is made unanimously consent to the prepayment. We expect we will rely on proceeds from future fundings or cashflow from operations to repay the Note on the maturity date or earlier at our option, or if the investor demands prepayment which is consented to. If we are unable to raise additional funding after the recently completed offering or do not generate sufficient cashflow to repay the Note when due, we will be in default under the Note if we do not pay it. The Company granted a security interest in all of its assets to the Investor as collateral for its obligations under the Investor Note pursuant to a Security Agreement. In addition, the Company’s subsidiaries guaranteed the obligations of the Company under the Investor Note pursuant to a Subsidiary Guarantee and granted a first lien security interest in all of their assets to the Investor as additional collateral pursuant to the Security Agreement. All securities sold in the above-described transaction contain certain piggy-back registration rights after the completion of our February 2023 offering. We have completed various other financings as described under the Notes to Consolidated Financial Statements. Exemption from registration is claimed under Section 4(2) of the Securities Act of 1933, as amended.

b) From January 1, 2023, through June 30,2023, we had no sales or issuances of unregistered capital stock, except as referenced above and in the table below:

Date of SaleTitle of SecurityNumber SoldConsideration Received and Description of Underwriting or Other Discounts to Market
Price or Convertible
Security, Afforded to
Purchasers		Exemption
from
Registration
Claimed		If Option, Warrant or Convertible
Security, terms
of exercise or
conversion
Jan. – June 2023Common Stock10,335,272Warrant conversionSection 3(a)(9)Each warrant exercise price $0.465
Jan. – June 2023Common stock478,326 sharesServices renderedRule 506, Section 4(2)Not applicable
Jan – June 2023  Common Stock9,402,634 shares 36,726,400 warrants Shares sold for cashRule506;Section 4(2)Not applicable
Jan – June 2023 Common Stock522,727 shares   Original issue discount  Rule506;Section 4(2)Not applicable  
Jan – June 2023Common Stock1,385,663 sharesInterest conversionRule506;SectionNot applicable

_________________

(1)The secured investor converted $2,502,500 of principal into 1,368,333 common shares and warrants to purchase 684,166 shares of common stock at an exercise price of $4.00 per share through September 2029.
(2)The secured investor converted $510,000 of principal into 408,000 common shares and warrants to purchase 204,000 shares of common stock at an exercise price of $4.00 per share through September 2029.

 

In the six months ended June 30, 20222023, and 2021,2022, there were no repurchases by the Company of its Common Stock.

 

 

 3638 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None

 

ITEM 6. EXHIBITS.EXHIBITS

 

Exhibit  
Number Exhibit Title
1Placement Agent Agreement*****
2.1 Agreement and Plan of Merger dated November 20, 2018 between Mobiquity Technologies, Inc., Glen Eagles Acquisition LP, Avng Acquisition Sub, LLC, Advangelists, LLC, and Deepankar Katyal as Member Representative (the “Advangelists Merger Agreement”)(Incorporated (Incorporated by reference to Form 8-K dated December 11, 2018.)
2.2 First Amendment to the Advangelists Merger Agreement dated December 6, 2018(Incorporated (Incorporated by reference to Form 8-K dated December 11, 2018.)
2.3 Membership Interest Purchase Agreement dated as of April 30, 2019 between Mobiquity Technologies, Inc. and Glen Eagles Acquisition LP(Incorporated (Incorporated by reference to Form 8-K dated April 30, 2019.)
2.4 Membership Interest Purchase Agreement, effective as of May 8, 2019 between Mobiquity Technologies, Inc. and Gopher Protocol, Inc.(Incorporated (Incorporated by reference to Form 8-K dated May 10, 2019.)
2.5 Assignment and Assumption Agreement effective as of May 8, 2019 between Mobiquity Technologies, Inc. and Gopher Protocol, Inc.(Incorporated (Incorporated by reference to Form 8-K dated May 10, 2019.)
2.6 Stock Purchase Agreement, effective as of September 13, 2019, by and between Mobiquity Technologies, Inc. and GBT Technologies, Inc.(Incorporated (Incorporated by reference to Form 8-K dated September 13, 2019.)
2.7 Subscription Agreement, dated as of September 13, 2019, by and between Mobiquity Technologies, Inc. and Dr. Gene Salkind(Incorporated (Incorporated by reference to Form 8-K/A dated September 13, 2019.)
2.8 Subscription Agreement, dated as of September 13, 2019, by and between Mobiquity Technologies, Inc. and Marital Trust GST Subject U/W/O Leopold Salkind(Incorporated (Incorporated by reference to Form 8-K/A dated September 13, 2019.)
2.9 Securities Purchase Agreement dated September 20, 2021 by and between Mobiquity Technologies, Inc. and Talos Victory Fund, LLC(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
2.10 Securities Purchase Agreement dated September 20, 2021 by and between Mobiquity Technologies, Inc. and Blue Lake Partners LLC(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
2.11Securities Purchase Agreement dated December 30, 2022 with Walleye (Incorporated by reference to Form 8-K filed with the SEC on January 4, 2023)
3.1 Certificate of Incorporation filed March 26, 1998 (Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
(3.2Amendment to Certificate of Incorporation filed June 10, 1999 (Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
3.3Amendment to Certificate of Incorporation approved by stockholders in 2005(Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
3.23.4Amendment to Certificate of Incorporation dated September 11, 2008 (Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.5Amendment to Certificate of Incorporation dated October 7, 2009 (Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.6Amendment to Certificate of Incorporation dated May 18, 2012 (Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.7Amendment to Certificate of Incorporation dated September 10, 2013 (Incorporated by reference to Registrant’s Form 8-K filed on September 11, 2013.)

39

3.8 Amendment to Certificate of Incorporation filed December 22, 2015 (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2015.)
3.9Amendment to Certificate of Incorporation dated March 23, 2016 (Incorporated by reference to Form 8-K dated March 24, 2016.)
3.10Amendment to Certificate of Incorporation dated February 28, 2017 (Incorporated by reference to Form 8-K dated March 1, 2017.)
3.11Amendment to Certificate of Incorporation dated September 2018 (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.12Amendment to Certificate of Incorporation dated February 2019 (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.13Amendment to Certificate of Incorporation dated December 17, 2018 (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.14Amendment to Certificate of Incorporation dated December 4, 2018 (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.15Restated Certificate of Incorporation dated July 16, 2019 (Incorporated by reference to Form 8-K dated July 15, 2019.)
3.16Amendment to Certificate of Incorporation-Series dated September 23, 2019***
3.17Amendment to Certificate of Incorporation dated August 24, 2020***
3.18Amendment to Restated Certificate of Incorporation dated June 10, 199915, 2023(Incorporated*****
3.19Amended By-Laws (Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
3.3Amendment to Certificate of Incorporation approved by stockholders in 2005(Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
3.4Amendment to Certificate of Incorporation dated September 11, 2008(Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.5Amendment to Certificate of Incorporation dated October 7, 2009(Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.6Amendment to Certificate of Incorporation dated May 18, 2012(Incorporated by reference to the Registrant's Form 10-K for its fiscal year ended December 31, 2012.)
3.7Amendment to Certificate of Incorporation dated September 10, 2013(Incorporated by reference to Registrant’s Form 8-K filed on September 11, 2013.)
3.8Amendment to Certificate of Incorporation filed December 22, 2015(Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2015.)
3.9Amendment to Certificate of Incorporation dated March 23, 2016(Incorporated by reference to Form 8-K dated March 24, 2016.)
3.10Amendment to Certificate of Incorporation(Incorporated by reference to Form 8-K dated March 1, 2017.)
3.11Amendment to Certificate of Incorporation – September 2018(Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)

37

3.12Amendment to Certificate of Incorporation – February 2019(Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.13Amendment to Certificate of Incorporation – December 17, 2018(Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.14Amendment to Certificate of Incorporation – December 4, 2018(Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.)
3.15Restated Certificate of Incorporation(Incorporated by reference to Form 8-K dated July 15, 2019.)
3.16Certificate of Amendment to Certificate of Incorporation-Series E preferred Stock**
3.17Amended By-Laws(Incorporated by reference to Registrant's Registration Statement on Form 10-SB as filed with the Commission on February 10, 2005)
3.183.20 2014 Amendment to By-Laws(Incorporated (Incorporated by reference to Form 8-K filed with the SEC on December 24, 2014.)
3.193.21 November 2021 Amendment to By-Laws****
3.22Amendment No. 3 to Bylaws (Incorporated by reference to Form 8-K filed with the SEC on May 16, 2023.)
4.1 Amended and Restated $7,512,500 Promissory Note dated as of May 10, 2019 from Mobiquity Technologies, Inc. to Deepanker Katyal, as representative of the former members of Advangelists, LLC(Incorporated (Incorporated by reference to Form 8-K dated May 10, 2019.)
4.2 Second Amended and Restated Promissory Note, dated as of September 13, 2019, by and between Mobiquity Technologies, Inc. and Deepankar Katyal, as representative of the former owners of Advangelists, LLC(Incorporated (Incorporated by reference to Form 8-K dated September 13, 2019.)
4.3 Form of Common Stock Purchase Warrant(Incorporated (Incorporated by reference to Form 8-K dated September 13, 2019.)
4.4 Convertible Promissory Note in favor of Dr. Gene Salkind, dated as of September 13, 2019(Incorporated (Incorporated by reference to Form 8-K/A dated September 13, 2019.)
4.5 Amended and Restated Convertible Promissory Note in favor of Dr. Gene Salkind, dated as of December 31, 2019*2019***
4.6 Second Amended and Restated Convertible Promissory Note in favor of Dr. Gene Salkind, dated as of April 1, 2019*2019***
4.7 Convertible Promissory Note in favor of Marital Trust GST Subject U/W/O Leopold Salkind, dated as of September 13, 2019(Incorporated (Incorporated by reference to Form 8-K/A dated September 13, 2019.)
4.8 Amended and Restated Convertible Promissory Note in favor of Marital Trust GST Subject U/W/O Leopold Salkind, dated as of December 31, 2019***
4.9 Second Amended and Restated Convertible Promissory Note in favor of Marital Trust GST Subject U/W/O Leopold Salkind, dated as of April 1, 2019***
4.10 Form of Lender Warrant(Incorporated (Incorporated by reference to Form 8-K/A dated September 13, 2019.)
4.11 Promissory Note in favor of Talos Victory Fund, LLC dated September 20, 2021(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
4.12 Promissory Note in favor of Blue Lake Partners LLC dated September 20, 2021(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
4.13 Common Stock Purchase Warrant dated September 20, 2021 issued to Talos Victory Fund, LLC(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
4.14 Common Stock Purchase Warrant dated September 20, 2021 issued to Blue Lake Partners LLC(Incorporated (Incorporated by reference to Form 8-K dated September 20, 2021.)
4.15 Form of 2021 Representative’s Warrantwarrant***
4.16 Form of Warrant2021Warrant Agent Agreement by and between the Company and Continental Stock Transfer & Trust Company***
4.17 Form of 2021 Warrant(Annex (Annex C to the Form of Warrant Agent Agreement attached as Exhibit 4.16)***
4.18Form of Representative’s Warrant****
4.19Form of Series 2023 Warrant****
4.20Form of Pre-funded Warrant(February 2023)****
4.21Form of Investor Convertible Debt Subscription Agreement (5% Original Issue Discount)***
4.22Form of Investor Convertible Debt Subscription Agreement (10% Original Issue Discount)***
4.23Form of Investor Convertible Debt Subscription Agreement (10% Annual Interest)***
4.24Promissory Note dated December 30, 2022 issued to Walleye (Incorporated by reference to Form 8-K filed with the SEC on January 4, 2023)

40

4.25Amendment dated February 7, 2023 to Promissory Note dated December 30, 2022 issued to Walleye****
4.26Warrant dated December 30, 2022 issued to Walleye (Incorporated by reference to Form 8-K filed with the SEC on January 4, 2023)
4.27Form of Pre-funded Warrant for the Offering*****
4.28Form of Placement Agent Warrant*****
4.29Amendment dated February 13, 2023 to Promissory Note dated December 30, 2022 issued to Walleye*****
4.30Sales Purchase Agreement*****
10.1 Employment Agreement dated April 2, 2019 – Dean L. Julia(Incorporated (Incorporated by reference to Form 10-K/A filed with the SEC on April 26, 2019.)
10.2 Employment Agreement dated April 2, 2019 – Sean Trepeta(Incorporated (Incorporated by reference to Form 10-K/A filed with the SEC on April 26, 2019.)
10.3 Employment Agreement dated April 2, 2019 – Paul Bauersfeld(Incorporated (Incorporated by reference to Form 10-K/A filed with the SEC on April 26, 2019.)
10.4Employment Agreement dated December 7, 2018 – Deepanker Katyal(Incorporated by reference to Form 10-K/A filed with the SEC on April 26, 2019.)
10.5Amendment No. 1 to Employment Agreement, dated as of September 13, 2019, by and between Advangelists, LLC and Deepankar Katyal(Incorporated by reference to Form 8-K dated September 13, 2019.)
10.6Class B Preferred Stock Redemption Agreement, dated as of September 13, 2019, by and between Mobiquity Technologies, Inc. and Deepankar Katyal(Incorporated by reference to Form 8-K dated September 13, 2019.)

38

10.7Merchant Agreement dated April 29, 2021, 2021 by and between Mobiquity Technologies, Inc. and Business Capital Providers, Inc.**
10.8Merchant Agreement dated July 28, 2021 by and between Mobiquity Technologies, Inc. and Business Capital Providers, Inc.**
10.9Form of Investor Convertible Debt Subscription Agreement (5% Original Issue Discount)**
10.10Form of Investor Convertible Debt Subscription Agreement (10% Original Issue Discount)**
10.11Form of Investor Convertible Debt Subscription Agreement (10% Annual Interest)**
10.12 Employment Agreement dated January 4, 2022 – Deepanker Katyal(Incorporated (Incorporated by reference to Form 10-K filed with the SEC on March 29, 2022.)30, 2022)
10.1310.5 EmploymentSecurity Agreement dated January 4, 2022 – Don Walker (“Trey”) Barrett, III (incorporatedand Subsidiary Guaranteewith Walleye (Incorporated by reference to Form 8-K filed with the SEC on January 6, 2022).4, 2023)
10.6Form of Escrow Agreement for the Offering*****
21.1 Subsidiaries of the Issuer (Incorporated by reference to Form 10-K for the fiscal year ended December 31, 2018.))
31.1 Rule 13a-14(a) Certification in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (*)(*)
31.2 Rule 13a-14(a) Certification in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (*) (*)
32.1 Certification pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*) (*)
32.2 Certification pursuant to 1818. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*) (*)
99.1 2005 Employee Benefit and Consulting Services Compensation Plan(Incorporated (Incorporated by reference to Registrant’s Registration Statement on Form 10-SB/A filed with the Commission March 21, 2005.)
99.2 Amendment to 2005 Plan(Incorporated (Incorporated by reference to the Registrant's Form 10-QSB/A filed with the Commission on August 15, 2005.)
99.3 2009 Employee Benefit and Consulting Services Compensation Plan(Incorporated (Incorporated by reference to Form 10-K filed for the fiscal year ended December 31, 2009.)
99.4 2018 Employee Benefit and Consulting Services Compensation Plan(IncorporatedPlan. (Incorporated by reference to Definitive Proxy Statement filed with the SEC on January 11, 2019.)
99.5 2021 Employee Benefit and Consulting Compensation Plan***
99.62023 Equity Participation Plan (Incorporated by reference to Definitive Proxy Statement filed with the SEC on April 18, 2023.)
101.INS Inline XBRL Instance Document *
101.SCH Inline Document, XBRL Taxonomy Extension *
101.CAL Inline Calculation Linkbase, XBRL Taxonomy Extension Definition *
101.DEF Inline Linkbase, XBRL Taxonomy Extension Labels *
101.LAB Inline Linkbase, XBRL Taxonomy Extension *
101.PRE Inline Presentation Linkbase *

 

_______________

*Filed herewithherewith.

**To be filed by amendment
***Previously filed under Form S-1 Registration Statement, File No. 333-260364.333-260364
****Previously filed under Form S-1 Registration Statement File No.333-269293
*****Previously filed under Form S-1 Registration Statement File No. 333-272572

 

 

 3941 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 MOBIQUITY TECHNOLOGIES, INC.
   
Date: August 18, 2022July 25, 2023By:/s/ Dean L. Julia
  Dean L. Julia,
  Principal Executive Officer
   
   
Date: August 18, 2022July 25, 2023By:/s/ Sean McDonnell
  Sean McDonnell,
  Principal Financial Officer

 

 

 

 

 

 4042