Company: MFON
Filing Date: 2025-06-06
Form Type: 10-Q
Source: 0001641172-25-014006
Chunk: 99

Company: MOBIVITY HOLDINGS CORP.
Filing Date: 2025-06-06
Form: 10-Q
Item: Part I, Item 2
Chunk 99
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. Simple interest on
the unpaid principal balance of the Convertible Note will accrue at the rate of 15% per annum. and automatically convert into the same
equity securities issued for cash in the Qualified Financing, or at the option of the Investors, into the same equity securities issued
for cash in a Corporate Transaction, each as the Convertible Note. Interest on the Convertible Notes will be accreted and added to the
unpaid principal balance prior to conversion. The Convertible Notes are payable in one installment three years from the date of the Convertible
Note.

Acquisition of Certain Contracts by SMS Factory

On September 25, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with SMS Factory,
Inc., a Florida corporation (“SMS Factory”). Pursuant to the Asset Purchase Agreement, SMS Factory purchased all of the right,
title and interest in the Company’s SMS/MMS text messaging customer accounts, excluding certain Excluded Assets (as defined in the
Asset Purchase Agreement) utilized in the operation of the Company’s SMS/MMS text messaging platform business (the “Business
Assets”) effective as of September 25, 2024 (the “Closing Date”).

In consideration for the Business Assets, SMS Factory is expected to assume certain Performance Obligations and pay to the Company, for
a period of two years following the Closing Date, an Earn-Out Payment in an amount equal to two times the Gross Profit earned from each
Customer Account, including an upfront pre-payment of the Earn-Out Payment equal to $303,000. The Asset Purchase Agreement includes customary
representations, warranties and covenants by the parties.

24

Table of Contents

Results of Operations

Revenues

Revenues consist primarily of those generated by a
suite of products under the Recurrency platform. The Recurrency platform is comprised of POS Data Capture, Analytics, Offers and Promotions,
Predictive Offers, Personalized Receipt Promotions, Customized Mobile Messaging, Belly Loyalty, and other revenues.

Revenues for the three months ended March 31, 2025,
were $513,311 an increase of $214,077 compared to $299,234 for the same period in 2024.

This increase is primarily due to an increase of Connected
Rewards revenue.

Cost of Revenues

Cost of revenues consists primarily of cloud-based
software licensing fees, short code maintenance expenses, messaging-related expenses, and other expenses.

Cost of revenues for the three months ended