UNITED STATES

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 March 31, 2011

or



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

For the transition period
from                    to

Commission File Number: 001-34781





Motricity, Inc.

(Exact name of registrant as specified in its charter)







|                         |  |                                                         |  |                                       
|------------------------ |  | ------------------------------------------------------- |  | --------------------------------------
|Delaware                 |  | 3663                                                    |  | 20-1059798                            
|(State of incorporation) |  | (Primary Standard IndustrialClassification Code Number) |  | (I.R.S. EmployerIdentification Number)

601 108th Avenue Northeast

Suite 800

Bellevue, WA 98004

(425) 957-6200

(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)





Richard E.
Leigh, Jr.

601 108th Avenue Northeast

Suite 800

Bellevue, WA 98004

(425) 957-6200

(Name, address, including zip code, and telephone number, including area code, of agent for service)





Indicate by
check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 of 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.    x  Yes     ̈  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted 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 and post such
files).     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |  |  |                           |  |  
|----------------------- |  | - |  |  |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  |  |  | Accelerated filer         |  |  ̈
|Non-accelerated filer   |  | x |  |  |  | Smaller reporting company |  |  ̈

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

As of May 2, 2011 there were 46,387,583 shares of the registrants common stock, par value of $0.001 per share, outstanding.









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TABLE OF CONTENTS



|         |  |                                                                                                                                                       |  |      |    | 
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                                                                                       |  | Page |   
|         |  | PART IFINANCIAL INFORMATION                                                                                                                          |  |      | 2  | 
|         |  |                                                                                                                                                      
|Item 1.  |  | Condensed Consolidated Financial Statements (unaudited).                                                                                              |  |      | 2  | 
|         |  | Condensed Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010.                                                                     |  |      | 2  | 
|         |  | Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and
March 31, 2010.                                         |  |      | 3  | 
|         |  | Condensed Consolidated Statements of Changes in Stockholders Equity for the three months ended March 31, 
2011 and the year ended December 31, 2010. |  |      | 4  | 
|         |  | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and
March 31, 2010.                                         |  |      | 5  | 
|         |  | Notes to Condensed Consolidated Financial Statements.                                                                                                 |  |      | 8  | 
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.                                                                |  |      | 9  | 
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk.                                                                                           |  |      | 15 | 
|Item 4.  |  | Controls and Procedures.                                                                                                                              |  |      | 15 | 
|         |  |                                                                                                                                                      
|         |  | PART IIFINANCIAL INFORMATION                                                                                                                         |  |      | 17 | 
|         |  |                                                                                                                                                      
|Item 1.  |  | Legal Proceedings.                                                                                                                                    |  |      | 17 | 
|Item 1A. |  | Risk Factors.                                                                                                                                         |  |      | 17 | 
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                                          |  |      | 17 | 
|Item 3.  |  | Defaults Upon Senior Securities.                                                                                                                      |  |      | 17 | 
|Item 4.  |  | [Removed and Reserved].                                                                                                                               |  |      | 17 | 
|Item 5.  |  | Other Information.                                                                                                                                    |  |      | 17 | 
|Item 6.  |  | Exhibits.                                                                                                                                             |  |      | 18 | 
|         |  | Signatures                                                                                                                                            |  |      | 19 | 





1



---

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Motricity, Inc.

Condensed Consolidated Balance
Sheets

(in thousands, except share data)

(unaudited)



|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | - | ---------------- | - | -------- | -
|                                                                                                                                                                             |  | March 31,2011 |          |   | December 31,2010 |  
|Assets                                                                                                                                                                       |  |               |          |   |                  |   |          |  
|Current assets                                                                                                                                                               |  |               |          |   |                  |   |          |  
|Cash and cash equivalents                                                                                                                                                    |  | $             | 61,591   |   |                  | $ | 78,519   |  
|Restricted short-term investments                                                                                                                                            |  |               |         |   |                  |   | 335      |  
|Accounts receivable, net of allowance for doubtful accounts of $482 and $446, respectively                                                                                   |  |               | 38,244   |   |                  |   | 29,438   |  
|Prepaid expenses and other current assets                                                                                                                                    |  |               | 6,172    |   |                  |   | 6,698    |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total current assets                                                                                                                                                         |  |               | 106,007  |   |                  |   | 114,990  |  
|Property and equipment, net                                                                                                                                                  |  |               | 25,658   |   |                  |   | 24,339   |  
|Goodwill                                                                                                                                                                     |  |               | 74,658   |   |                  |   | 74,658   |  
|Intangible assets, net                                                                                                                                                       |  |               | 18,821   |   |                  |   | 17,693   |  
|Other assets                                                                                                                                                                 |  |               | 855      |   |                  |   | 134      |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total assets                                                                                                                                                                 |  | $             | 225,999  |   |                  | $ | 231,814  |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|                                                                                                                                                                             |  |              
|Liabilities, redeemable preferred stock and stockholders equity                                                                                                             |  |               |          |   |                  |   |          |  
|Current liabilities                                                                                                                                                          |  |               |          |   |                  |   |          |  
|Accounts payable                                                                                                                                                             |  | $             | 21,411   |   |                  | $ | 15,657   |  
|Accrued compensation                                                                                                                                                         |  |               | 5,887    |   |                  |   | 13,666   |  
|Accrued expenses                                                                                                                                                             |  |               | 632      |   |                  |   | 1,165    |  
|Deferred revenue, current portion                                                                                                                                            |  |               | 475      |   |                  |   | 746      |  
|Other current liabilities                                                                                                                                                    |  |               | 1,695    |   |                  |   | 981      |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total current liabilities                                                                                                                                                    |  |               | 30,100   |   |                  |   | 32,215   |  
|Deferred revenue, net of current portion                                                                                                                                     |  |               | 14       |   |                  |   | 131      |  
|Deferred tax liability                                                                                                                                                       |  |               | 5,770    |   |                  |   | 5,328    |  
|Other noncurrent liabilities                                                                                                                                                 |  |               | 695      |   |                  |   | 714      |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total liabilities                                                                                                                                                            |  |               | 36,579   |   |                  |   | 38,388   |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Redeemable preferred stock                                                                                                                                                   |  |               |         |   |                  |   | 49,862   |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Stockholders equity                                                                                                                                                         |  |               |          |   |                  |   |          |  
|Common stock, $0.001 par value; 625,000,000 shares authorized; 43,058,886 and 40,721,754 shares issued and outstanding at
March 31, 2011 and December 31, 2010, respectively |  |               | 43       |   |                  |   | 41       |  
|Additional paid-in capital                                                                                                                                                   |  |               | 519,375  |   |                  |   | 467,565  |  
|Accumulated deficit                                                                                                                                                          |  |               | (330,229 | ) |                  |   | (324,088 | )
|Accumulated other comprehensive income                                                                                                                                       |  |               | 231      |   |                  |   | 46       |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total stockholders equity                                                                                                                                                   |  |               | 189,420  |   |                  |   | 143,564  |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|Total liabilities, redeemable preferred stock and stockholders equity                                                                                                       |  | $             | 225,999  |   |                  | $ | 231,814  |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  
|                                                                                                                                                                             |  |               |          |   |                  |   |          |  

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



2



---

Motricity, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share data and per share amounts)

(unaudited)



|                                                                         |  |                             |            |   |      |   |           |  
|------------------------------------------------------------------------ |  | --------------------------- | ---------- | - | ---- | - | --------- | -
|                                                                         |  | Three Months EndedMarch
31, |           
|                                                                         |  | 2011                        |            |   | 2010 |  
|Revenue                                                                  |  |                             |            |   |      |   |           |  
|Managed services                                                         |  | $                           | 23,753     |   |      | $ | 20,881    |  
|Professional services                                                    |  |                             | 8,461      |   |      |   | 8,199     |  
|                                                                         |  |                             |            |   |      |   |           |  
|Total revenues                                                           |  |                             | 32,214     |   |      |   | 29,080    |  
|                                                                         |  |                             |            |   |      |   |           |  
|Operating expenses                                                       |  |                             |            |   |      |   |           |  
|Direct third-party expenses                                              |  |                             | 4,690      |   |      |   | 1,305     |  
|Datacenter and network operations, excluding depreciation                |  |                             | 7,013      |   |      |   | 8,034     |  
|Product development and sustainment, excluding depreciation              |  |                             | 6,465      |   |      |   | 8,182     |  
|Sales and marketing, excluding depreciation                              |  |                             | 4,187      |   |      |   | 3,655     |  
|General and administrative, excluding depreciation                       |  |                             | 6,663      |   |      |   | 5,264     |  
|Depreciation and amortization                                            |  |                             | 4,373      |   |      |   | 3,041     |  
|Acquisition transaction and integration costs                            |  |                             | 4,072      |   |      |   |          |  
|Restructuring                                                            |  |                             | 341        |   |      |   | 407       |  
|                                                                         |  |                             |            |   |      |   |           |  
|Total operating expenses                                                 |  |                             | 37,804     |   |      |   | 29,888    |  
|                                                                         |  |                             |            |   |      |   |           |  
|Operating loss                                                           |  |                             | (5,590     | ) |      |   | (808      | )
|                                                                         |  |                             |            |   |      |   |           |  
|Other income (expense), net                                              |  |                             |            |   |      |   |           |  
|Other expense                                                            |  |                             | (2         | ) |      |   | (258      | )
|Interest and investment income, net                                      |  |                             | 26         |   |      |   |          |  
|                                                                         |  |                             |            |   |      |   |           |  
|Other income (expense), net                                              |  |                             | 24         |   |      |   | (258      | )
|                                                                         |  |                             |            |   |      |   |           |  
|Loss, before income tax                                                  |  |                             | (5,566     | ) |      |   | (1,066    | )
|Provision for income taxes                                               |  |                             | 575        |   |      |   | 467       |  
|                                                                         |  |                             |            |   |      |   |           |  
|Net loss                                                                 |  |                             | (6,141     | ) |      |   | (1,533    | )
|Accretion of redeemable preferred stock                                  |  |                             |           |   |      |   | (6,228    | )
|Series D1 preferred stock dividends                                      |  |                             |           |   |      |   | (172      | )
|                                                                         |  |                             |            |   |      |   |           |  
|Net loss attributable to common stockholders                             |  | $                           | (6,141     | ) |      | $ | (7,933    | )
|                                                                         |  |                             |            |   |      |   |           |  
|Net loss per share attributable to common stockholdersbasic and diluted |  | $                           | (0.15      | ) |      | $ | (1.38     | )
|                                                                         |  |                             |            |   |      |   |           |  
|Weighted-average common shares outstandingbasic and diluted             |  |                             | 42,286,133 |   |      |   | 5,753,047 |  
|                                                                         |  |                            
|Depreciation and amortization by function                                |  |                             |            |   |      |   |           |  
|Datacenter and network operations                                        |  | $                           | 2,603      |   |      | $ | 1,992     |  
|Product development and sustainment                                      |  |                             | 1,074      |   |      |   | 428       |  
|Sales and marketing                                                      |  |                             | 574        |   |      |   | 524       |  
|General and administrative                                               |  |                             | 122        |   |      |   | 97        |  
|                                                                         |  |                             |            |   |      |   |           |  
|Total depreciation and amortization                                      |  | $                           | 4,373      |   |      | $ | 3,041     |  
|                                                                         |  |                             |            |   |      |   |           |  

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



3



---

Motricity, Inc.

Condensed Consolidated Statements of Changes in Stockholders Equity

(in thousands, except share data and per share amounts)

(unaudited)



|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|-------------------------------------------------------------------------- |  | --------------- | ---------- | - | ------------ | - | ------- | ------------------------ |  |  | ------------------ | - |  | ------------------------------------------ | ---- | - | ----- | - | ------- | - |  | - | -------- | - |  | - | --- | - |  | - | -------- | -
|                                                                           |  | Preferred Stock |            |   | Common Stock |   |         | AdditionalPaid-inCapital |  |  | AccumulatedDeficit |   |  | AccumulatedOtherComprehensiveIncome (Loss) |      |   | Total |  
|                                                                           |  | Shares          |            |   | Amount       |   |         | Shares                   |  |  | Amount             |   |  |                                            |      |  
|Balance as of December 31, 2009                                            |  |                 | 7,338,769  |   |              | $ | 17,393  |                          |  |  | 7,633,786          |   |  | $                                          | 115  |   |       | $ |        |   |  | $ | (306,443 | ) |  | $ | 114 |   |  | $ | (288,821 | )
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Other comprehensive loss:                                                  |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Net loss                                                                   |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   |        |   |  |   | (7,015   | ) |  |   |    |   |  |   | (7,015   | )
|Foreign currency translation adjustment                                    |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   |        |   |  |   |         |   |  |   | (68 | ) |  |   | (68      | )
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Other comprehensive loss                                                   |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   | (7,083   | )
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Conversion of preferred stock to common stock                              |  |                 | (7,338,769 | ) |              |   | (17,393 | )                        |  |  | 725                |   |  |                                            | 1    |   |       |   | 17,393  |   |  |   |         |   |  |   |    |   |  |   | 1        |  
|Conversion of redeemable preferred stock to common stock                   |  |                 |           |   |              |   |        |                          |  |  | 26,163,440         |   |  |                                            | 26   |   |       |   | 380,497 |   |  |   |         |   |  |   |    |   |  |   | 380,523  |  
|Sale of common stock, net of issuance costs of $7,318                      |  |                 |           |   |              |   |        |                          |  |  | 6,000,000          |   |  |                                            | 6    |   |       |   | 48,482  |   |  |   |         |   |  |   |    |   |  |   | 48,488   |  
|Conversion of redeemable preferred stock warrants to common stock warrants |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   | 1,463   |   |  |   |         |   |  |   |    |   |  |   | 1,463    |  
|Restricted stock activity                                                  |  |                 |           |   |              |   |        |                          |  |  | (12,728            | ) |  |                                            |     |   |       |   | (2,730  | ) |  |   |         |   |  |   |    |   |  |   | (2,730   | )
|Exercise of common stock options and warrants                              |  |                 |           |   |              |   |        |                          |  |  | 936,531            |   |  |                                            | 2    |   |       |   | 1,706   |   |  |   |         |   |  |   |    |   |  |   | 1,708    |  
|Reverse stock split                                                        |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            | (109 | ) |       |   | 109     |   |  |   |         |   |  |   |    |   |  |   |         |  
|Stock-based compensation expense                                           |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   | 22,976  |   |  |   |         |   |  |   |    |   |  |   | 22,976   |  
|Accretion of redeemable preferred stock                                    |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   | (1,463  | ) |  |   | (10,630  | ) |  |   |    |   |  |   | (12,093  | )
|Series H redeemable preferred stock dividend                               |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   | (868    | ) |  |   |         |   |  |   |    |   |  |   | (868     | )
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Balance as of December 31, 2010                                            |  |                 |           |   |              |   |        |                          |  |  | 40,721,754         |   |  |                                            | 41   |   |       |   | 467,565 |   |  |   | (324,088 | ) |  |   | 46  |   |  |   | 143,564  |  
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Other comprehensive loss:                                                  |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Net loss                                                                   |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   |        |   |  |   | (6,141   | ) |  |   |    |   |  |   | (6,141   | )
|Foreign currency translation adjustment                                    |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   |        |   |  |   |         |   |  |   | 185 |   |  |   | 185      |  
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Other comprehensive loss                                                   |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   | (5,956   | )
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Conversion of redeemable preferred stock to common stock                   |  |                 |           |   |              |   |        |                          |  |  | 2,348,181          |   |  |                                            | 2    |   |       |   | 49,861  |   |  |   |         |   |  |   |    |   |  |   | 49,863   |  
|Restricted stock activity                                                  |  |                 |           |   |              |   |        |                          |  |  | (26,072            | ) |  |                                            |     |   |       |   | (342    | ) |  |   |         |   |  |   |    |   |  |   | (342     | )
|Exercise of common stock options and warrants                              |  |                 |           |   |              |   |        |                          |  |  | 15,023             |   |  |                                            |     |   |       |   | 147     |   |  |   |         |   |  |   |    |   |  |   | 147      |  
|Stock-based compensation expense                                           |  |                 |           |   |              |   |        |                          |  |  |                   |   |  |                                            |     |   |       |   | 2,144   |   |  |   |         |   |  |   |    |   |  |   | 2,144    |  
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  
|Balance as of March 31, 2011                                               |  |                 |           |   |              | $ |        |                          |  |  | 43,058,886         |   |  | $                                          | 43   |   |       | $ | 519,375 |   |  | $ | (330,229 | ) |  | $ | 231 |   |  | $ | 189,420  |  
|                                                                           |  |                 |            |   |              |   |         |                          |  |  |                    |   |  |                                            |      |   |       |   |         |   |  |   |          |   |  |   |     |   |  |   |          |  

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



4



---

Motricity, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



|                                                                            |  |                             |         |   |      |   |         |  
|--------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                            |  | Three MonthsEnded
March 31, |        
|                                                                            |  | 2011                        |         |   | 2010 |  
|Cash flows from operating activities                                        |  |                             |         |   |      |   |         |  
|Net loss                                                                    |  | $                           | (6,141  | ) |      | $ | (1,533  | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                               |  |                             | 4,373   |   |      |   | 3,041   |  
|Stock-based compensation expense                                            |  |                             | 2,144   |   |      |   | 505     |  
|Deferred tax liability                                                      |  |                             | 442     |   |      |   | 467     |  
|Change in fair value of redeemable preferred stock warrants                 |  |                             |        |   |      |   | 260     |  
|Loss on disposition of assets held for sale                                 |  |                             |        |   |      |   | 407     |  
|Other non-cash adjustments                                                  |  |                             | 32      |   |      |   | 12      |  
|Changes in operating assets and liabilities                                 |  |                             |         |   |      |   |         |  
|Accounts receivable                                                         |  |                             | (8,842  | ) |      |   | 355     |  
|Prepaid expenses and other assets                                           |  |                             | (195    | ) |      |   | 269     |  
|Other long-term assets                                                      |  |                             |        |   |      |   | 1,107   |  
|Accounts payable and accrued expenses                                       |  |                             | (5,245  | ) |      |   | (6,046  | )
|Deferred revenue                                                            |  |                             | (388    | ) |      |   | (6,872  | )
|                                                                            |  |                             |         |   |      |   |         |  
|Net cash used in operating activities                                       |  |                             | (13,820 | ) |      |   | (8,028  | )
|                                                                            |  |                             |         |   |      |   |         |  
|Cash flows from investing activities                                        |  |                             |         |   |      |   |         |  
|Purchase of property and equipment                                          |  |                             | (1,533  | ) |      |   | (1,186  | )
|Capitalization of software development costs                                |  |                             | (2,193  | ) |      |   | (1,162  | )
|Proceeds of assets held for sale                                            |  |                             |        |   |      |   | 1,199   |  
|                                                                            |  |                             |         |   |      |   |         |  
|Net cash used in investing activities                                       |  |                             | (3,726  | ) |      |   | (1,149  | )
|                                                                            |  |                             |         |   |      |   |         |  
|Cash flows from financing activities                                        |  |                             |         |   |      |   |         |  
|Proceeds from exercise of common stock options                              |  |                             | 147     |   |      |   | 2       |  
|Decrease in restricted short-term investments                               |  |                             | 335     |   |      |   |        |  
|Prepaid offering costs                                                      |  |                             |        |   |      |   | (1,334  | )
|                                                                            |  |                             |         |   |      |   |         |  
|Net cash provided by (used in) financing activities                         |  |                             | 482     |   |      |   | (1,332  | )
|                                                                            |  |                             |         |   |      |   |         |  
|Effect of foreign currency                                                  |  |                             | 136     |   |      |   | (28     | )
|                                                                            |  |                             |         |   |      |   |         |  
|Net decrease in cash and cash equivalents                                   |  |                             | (16,928 | ) |      |   | (10,537 | )
|Cash and cash equivalents at beginning of period                            |  |                             | 78,519  |   |      |   | 35,945  |  
|                                                                            |  |                             |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                  |  | $                           | 61,591  |   |      | $ | 25,408  |  
|                                                                            |  |                             |         |   |      |   |         |  

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



5



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Motricity, Inc.

Notes to Condensed Consolidated Financial Statements

(amounts in thousands, except share data and per share amounts)

(unaudited)



|1. | Organization
|-- | ------------

Motricity,
Inc. (the Company) is a leading provider of mobile data solutions and services that enable wireless carriers to deliver high value mobile data services to their subscribers. We provide a comprehensive suite of hosted, managed service
offerings, including mobile web portal, storefront, messaging, and billing support and settlement, which enable wireless carriers to deliver customized, carrier-branded mobile data services to their wireless subscribers.

On April 23, 2010, our Board of Directors approved an amendment to our Amended and Restated Certificate of Incorporation to effect a
15-to-1 split of our common stock. The reverse stock split was effected on June 15, 2010 in connection with the completion of our initial public offering (the IPO). All information related to common stock, options and warrants to
purchase common stock and earnings per share included in the accompanying consolidated financial statements has been retroactively adjusted to give effect to the reverse stock split.

On June 23, 2010, we completed our offering of 6,000,000 shares of common stock in an initial public offering. 5,000,000 shares of
common stock were sold at a per share price of $10.00 and 1,000,000 shares of common stock were sold directly to entities affiliated with Mr. Carl C. Icahn for a per share price of $10.00 less discounts and commissions, resulting in net
proceeds of approximately $48,500. At the closing of the IPO, 303.9 million shares of redeemable preferred stock (Series A, B, C, D, E, F, G and I) were converted into 25.3 million shares of common stock and 7.3 million shares of
Series D1 preferred stock were converted into 0.7 million shares of common stock. Series H redeemable preferred stock was the only class of preferred stock outstanding as of December 31, 2010. On January 3, 2011, all outstanding and
accrued shares of Series H redeemable preferred stock were converted into 2,348,182 shares of common stock.



|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. These
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Motricity, Inc. annual report filed on Form 10-K for the year ended December 31,
2010.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results of the interim period,
they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements.

The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results to be expected for the full year or for any other period.

Self Insurance

Effective January 1, 2011, we self-insure for certain employee health and welfare-related benefit claims in the United States. We
estimate a liability for aggregate claims below stop-loss coverage limits based on claim estimates of the ultimate costs to be incurred to settle known and unknown claims as of the balance sheet date. The estimated liability is not discounted and is
based on a number of assumptions and factors including historical trends, actuarial assumptions, changes in covered employees and economic conditions. This liability could be affected if future occurrences and claims differ materially from these
assumptions and historical trends. As of March 31, 2011, an accrual of $332 related to estimated claims was included in other current liabilities.

Fair Value of Financial Instruments

As of March 31, 2011 and
December 31, 2010, we had $61,591 and $78,519 of cash and cash equivalents, respectively, and $0 and $335 of restricted short-term investments, respectively. As of March 31, 2011 and December 31, 2010, cash equivalents were comprised
of money market funds totaling $53,418 and $58,970, respectively. Restricted short-term investments were evaluated using quoted market prices (Level 1) to determine their fair value. In addition, the carrying amount of certain financial instruments,
including accounts receivable, accounts payable and accrued expenses approximates fair value due to their short maturities.



6



---

Motricity, Inc.

Notes to Condensed Consolidated Financial Statements

(amounts in thousands, except share data and per share amounts)

(unaudited)

Prior to our IPO in June 2010, the freestanding warrants that were related to our redeemable preferred stock were classified as liabilities and due to the lack of availability of observable market quotes
for these securities, the fair value was estimated based on a Black-Scholes valuation model which utilized inputs based on management estimates. Significant inputs to the valuation are unobservable in the active markets and are classified as Level
3. The increase in the Level 3 securities of $260 for the three months ended March 31, 2010 was due primarily to changes in the estimated fair value of the Companys stock. The change in the fair value was recorded within Other income
(expense). As a result of the conversion of the redeemable preferred stock in conjunction with the IPO, all freestanding warrants that were classified as liabilities have been exercised or converted into common stock warrants. As of March 31,
2011, we have no Level 3 securities. There were no transfers between levels in the fair value hierarchy during the three months ended March 31, 2011 or March 31, 2010.

Recent Accounting Pronouncements

There are no recently issued
accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.



|3. | Restructuring
|-- | -------------

In 2007,
we acquired InfoSpace Mobile. As a result of the subsequent integration activities, we elected to move our corporate headquarters from Durham, North Carolina to Bellevue, Washington and eliminate redundant functions and positions. We incurred
expenses to relocate certain employees and the functions of headquarters to the Bellevue location. The three months ended March 31, 2010 includes $407 of restructuring charges related to a loss on the sale of the Chief Executive Officers
home due to the relocation of our headquarters. See Note 6, Related Party Transactions for additional information regarding the purchase of the home in 2008.

In anticipation of the synergies associated with our acquisition of Adenyo, Inc, completed on April 14, 2011, we initiated our restructuring plan in Europe in February 2011. The condensed
consolidated statement of operations for the three months ended March 31, 2011 includes $341 of restructuring charges for involuntary termination benefits related to the elimination of redundant functions and positions. Involuntary termination
benefits that have been committed to but not yet paid, are included in Accrued compensation on the consolidated balance sheets. We expect to pay these benefits in the second quarter of 2011.



|4. | Redeemable Preferred Stock
|-- | --------------------------

As of December 31, 2010, there were 20,654,886 shares of Series H redeemable preferred stock outstanding. The Series H redeemable
preferred stock was convertible at the option of the holders thereof into common stock at a rate of approximately 0.112 shares of common stock for each share of Series H redeemable preferred stock. Although, if the average closing price
over a 90-day period was $21.99 per common share or higher, Series H redeemable preferred stock was convertible at our option into shares of our common stock at the then applicable conversion rate.

On December 29, 2010, we gave notice to the stockholders of the Series H redeemable preferred stock of our election to cause a
mandatory conversion, whereby all shares of Series H preferred stock would be converted to common stock on January 3, 2011. As the average closing price of our common stock was higher than $21.99 per common share during the 90-day period prior
to December 29, 2010, the mandatory conversion was allowed in accordance with the Restated Certificate of Incorporation of Motricity, Inc.

On January 3, 2011, all outstanding and accrued shares of Series H redeemable preferred stock were converted into 2,348,182 shares of common stock.



|5. | Net Loss Per Share Attributable to Common Stockholders
|-- | ------------------------------------------------------

Basic net loss per share attributable to common stockholders has been computed based on net loss and the weighted-average number of common shares outstanding during the applicable period.
We calculate potentially dilutive incremental shares issuable using the treasury stock method and the if-converted method, as applicable. The treasury stock method assumes that the proceeds received from the exercise of stock
options and warrants, as well as stock option and restricted stock expense yet to be recorded for unvested shares would be used to repurchase common shares in the market at the average stock price during the period. We have excluded options to
purchase common stock, restricted stock, preferred stock and warrants to purchase common and redeemable preferred stock, as the potentially issuable shares covered by these securities are antidilutive. In addition, redeemable preferred stock has
also been excluded from the three months ended March 31, 2010 because its conversion into common stock could



7



---

Motricity, Inc.

Notes to Condensed Consolidated Financial
Statements

(amounts in thousands, except share data and per share amounts)

(unaudited)

not be
determined without an initial public offering price or liquidation factor. The following table presents the antidilutive securities not included in net loss attributable to common stockholders:



|                                                                                      |  |                             |           |  |      |  |            | 
|------------------------------------------------------------------------------------- |  | --------------------------- | --------- |  | ---- |  | ---------- | 
|                                                                                      |  | Three Months EndedMarch 31, |          
|                                                                                      |  | 2011                        |           |  | 2010 | 
|Options to purchase common stock                                                      |  |                             | 2,254,754 |  |      |  | 1,178,706  | 
|Restricted stock                                                                      |  |                             | 872,409   |  |      |  | 1,984,998  | 
|Preferred stock                                                                       |  |                             |          |  |      |  | 10,876,759 | 
|Warrants to purchase common stock                                                     |  |                             | 2,143,846 |  |      |  | 2,973,911  | 
|Warrants to purchase redeemable preferred stock and common stock                      |  |                             |          |  |      |  | 292,198    | 
|Warrants to purchase redeemable preferred stock                                       |  |                             |          |  |      |  | 8,919,591  | 
|                                                                                      |  |                             |           |  |      |  |            | 
|Total securities excluded from net loss per share attributable to common stockholders |  |                             | 5,271,009 |  |      |  | 26,226,163 | 
|                                                                                      |  |                             |           |  |      |  |            | 



|6. | Related Party Transactions
|-- | --------------------------

During 2008, in connection with the relocation of our headquarters to Bellevue, Washington, we paid a relocation services company to
purchase, on our behalf, the Chief Executive Officers home in North Carolina for $1,983, plus administrative fees. As a result of market conditions, we recorded restructuring charges of $342 in 2008 and $203 in 2009 related to the home. In
March 2010, the home was sold for net proceeds of $1,199, and a loss on the sale of $407 was recorded as restructuring expense.



|7. | Subsequent Events
|-- | -----------------

Acquisition of
Adenyo, Inc.

On April 14, 2011, we acquired substantially all of the assets of Adenyo Inc. (Adenyo)
and its subsidiaries and assumed certain of Adenyos liabilities (including those of its subsidiaries) (the Acquisition), pursuant to an Arrangement Agreement (the Arrangement Agreement), dated as of March 12, 2011,
by and among Adenyo Inc., 7761520 Canada Inc., Motricity Inc. and the other parties thereto. The assets include, without limitation, Adenyos interest in a subsidiary, equipment, software, accounts receivable, licenses, intellectual property,
customer and supplier lists, and contractual rights. Adenyo is a mobile marketing, advertising and analytics solutions provider with operations in the United States, Canada and France. This acquisition will expand our market opportunity and
strengthen our position as the leading mobile internet platform for the monetization of content and data. With Adenyos mobile advertising, marketing and analytics technology, we will be well positioned to capitalize on the exponential growth
in our industry.

We paid approximately $49.1 million in cash and issued 3,277,002 shares of common stock, with a fair market
value of $43.4 million, as consideration for the Acquisition. The cash consideration includes $1.0 million placed in escrow, a portion of which may be refundable based on the completion of the working capital calculation 90 days from the closing of
the Acquisition. In addition to these amounts paid, Adenyo will be entitled to receive up to an additional $50 million pursuant to a contingent earn-out. The earn-out consideration will be payable in cash, shares of the Companys common stock,
or a mix of both, at our discretion, and any shares will be valued based on a 10-day average closing price prior to their issuance. The amount of contingent earn-out consideration that will be payable will be determined by whether Adenyo meets
certain non-GAAP based revenue and EBITDA (as such terms are defined in, and calculated pursuant to the Arrangement Agreement) targets, during the first full twelve calendar months following the closing of the Acquisition. We are currently
evaluating the purchase price allocation following the consummation of the transaction. It is not practicable to disclose the preliminary purchase price allocation or unaudited pro forma combined financial information given the short period of time
between the acquisition date and the issuance of these consolidated financial statements.

Extension of Credit Facility

On April 11, 2011 we extended our existing revolving credit facility to mature on August 13, 2011 and
revised certain financial covenants.



8



---

Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations

Forward-Looking Statements

The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere herein and with our annual report filed on Form 10-K for the year ended
December 31, 2010. Unless otherwise noted, all dollar amounts are in thousands.

This Quarterly Report on Form 10-Q, including
this Managements Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, regarding future events and
our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934 (the Exchange Act). All statements other than statements of historical facts are statements that
could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as
expects, anticipates, targets, goals, projects, intends, plans, believes, seeks, estimates, continues,
endeavors, strives, may, variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial
performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are
subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

The Company, through its senior management, may from time to time make forward looking statements about matters described herein or other
matters concerning the Company. You should consider our forward-looking statements in light of the risks and uncertainties that could cause the Companys actual results to differ materially from those which are managements current
expectations or forecasts. See Risk Factors in our annual report filed on Form 10-K for the year ended December 31, 2010, for further discussion.

The Company disclaims any intent or obligation to revise or update any forward-looking statements for any reason.

Overview

We are a leading provider of mobile data solutions and
services that enable wireless carriers to deliver high value mobile data services to their subscribers. We provide a comprehensive suite of hosted, managed service offerings, including mobile web portal, storefront, messaging, and billing support
and settlement, which enables wireless carriers to deliver customized, carrier-branded mobile data services to their wireless subscribers. Our mCore service delivery platform provides the tools for mobile subscribers to easily locate and access
personally relevant and location-based content and services, engage in social networking and download content and applications. We also leverage our data-rich insights into subscriber behavior and our user interface expertise to provide a highly
personalized subscriber experience and targeted mobile marketing solutions. Our mCore platform provides mobile subscribers with access to over 30 million unique pieces of third-party content or applications that we optimize for delivery to over
2,000 different mobile phone models, ranging from entry level feature phones to smartphones. Since 2005, Motricity has generated over $2.5 billion in gross revenue for our carrier customers through the sale of content and applications and powered
over 50 billion page views through access to the mobile Internet. We have access to over 200 million mobile subscribers through our U.S. wireless carrier customers.

The majority of our revenue consists of managed services revenue, charged on a monthly basis to our wireless carrier and other customers under contracts with initial terms ranging from one to three years
in duration. Managed services revenue consists of fees we charge to manage, host and support our solutions and to provide other related services to our customers, and includes both fixed fees and variable, activity-based charges. In addition, we
charge professional service fees to customize, implement, and enhance our solutions.

On April 14, 2011, we acquired
substantially all of the assets of Adenyo Inc. (Adenyo) and its subsidiaries and assumed certain of Adenyos liabilities (including those of its subsidiaries) (the Acquisition), pursuant to an Arrangement Agreement (the
Arrangement Agreement), dated as of March 12, 2011, by and among Adenyo Inc., 7761520 Canada Inc., Motricity Inc. and the other parties thereto. The assets include, without limitation, Adenyos interest in a subsidiary,
equipment, software, accounts receivable, licenses, intellectual property, customer and supplier lists, and contractual rights. Adenyo is a mobile marketing, advertising and analytics solutions provider with operations in the United States,
Canada and France. This acquisition will expand our market opportunity and strengthen our position as the leading mobile internet platform for the monetization of content and data. With Adenyos mobile advertising, marketing and analytics
technology, we will be well positioned to capitalize on the exponential growth in our industry.



9



---

We paid approximately $49.1 million in cash and issued 3,277,002 shares of common stock,
with a fair market value of $43.4 million, as consideration for the Acquisition. The cash consideration includes $1.0 million placed in escrow, a portion of which may be refundable based on the completion of the working capital calculation 90 days
from the closing of the Acquisition. In addition to these amounts paid, Adenyo will be entitled to receive up to an additional $50 million pursuant to a contingent earn-out. The earn-out consideration will be payable in cash, shares of the
Companys common stock, or a mix of both, in our discretion, and any shares will be valued based on a 10-day average closing price prior to their issuance. The amount of contingent earn-out consideration that will be payable will be determined
by whether Adenyo meets certain non-GAAP based revenue and EBITDA (as such terms are defined in, and calculated pursuant to the Arrangement Agreement) targets, during the first full twelve calendar months following the closing of the Acquisition.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our financial statements and related disclosures requires us
to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates and assumptions on historical experience and other factors that we
believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions and in certain cases the difference may be
material. Our critical accounting policies are available in Item 8 of the Annual Report on Form 10-K for the period ended December 31, 2010. There have not been any significant changes with respect to these policies during the period
covered by this Quarterly Report on Form 10-Q.

Results of Operations

Total revenues



|                      |  |                             |        |  |      |   |        |          |  |   |          |  |  |  |      | 
|--------------------- |  | --------------------------- | ------ |  | ---- | - | ------ | -------- |  | - | -------- |  |  |  | ---- | 
|                      |  | Three Months EndedMarch 31, |        |  |      |  
|                      |  | 2011                        |        |  | 2010 |   |        | $ Change |  |   | % Change | 
|                      |  | (Dollars in thousands)      |       
|Managed services      |  | $                           | 23,753 |  |      | $ | 20,881 |          |  | $ | 2,872    |  |  |  | 13.8 | 
|Professional services |  |                             | 8,461  |  |      |   | 8,199  |          |  |   | 262      |  |  |  | 3.2  | 
|                      |  |                             |        |  |      |   |        |          |  |   |          |  |  |  |      | 
|Total revenues        |  | $                           | 32,214 |  |      | $ | 29,080 |          |  | $ | 3,134    |  |  |  | 10.8 | 
|                      |  |                             |        |  |      |   |        |          |  |   |          |  |  |  |      | 

Total revenues for the three months ended March 31, 2011 increased $3.1 million, or 10.8%, compared to
the corresponding 2010 period. Managed services revenue accounted for 74% and 72% of our revenues for the three month periods ended March 31, 2011 and 2010, respectively, while professional services accounted for 26% and 28%, respectively.
Professional services revenue for the three month period ended March 31, 2011 reflects the large solution customization and implementation projects for XL and Celcom, whereas professional services revenue for the same period in 2010 primarily
reflected services provided to Verizon Wireless. Our professional services revenue can vary significantly from period to period due to the timing of large customization and implementation projects. Managed services revenue increased $2.9 million, or
13.8% for the three month period primarily due to services provided to AT&T and Sprint. Variable user- and transaction-based fees made up approximately 57% and 52% of our managed services revenue for the three months ended March 31, 2011
and 2010, respectively. The increase in variable user- and transaction-based fees in the 2011 period is primarily related to activity-based arrangements with AT&T, Verizon Wireless and XL.

We generated 73% of our revenues in the U.S. for the three month period ended March 31, 2011, as compared to 96% for the three month
period ended March 31, 2010. For the three month period ended March 31, 2011, revenue from our two largest customers, AT&T and Verizon Wireless, represented 43% and 18% of total revenues, respectively. For the three month period ended
March 31, 2010, revenue from our two largest customers, AT&T and Verizon Wireless, represented 40% and 39% of total revenues, respectively.



10



---

Operating expenses



|                                              |  |                             |        |  |      |   |        |          |  |   |          |   |  |  |       |  
|--------------------------------------------- |  | --------------------------- | ------ |  | ---- | - | ------ | -------- |  | - | -------- | - |  |  | ----- | -
|                                              |  | Three Months EndedMarch 31, |        |  |      |   |        |          | 
|                                              |  | 2011                        |        |  | 2010 |   |        | $ Change |  |   | % Change |  
|                                              |  | (Dollars in thousands)      |       
|Direct third-party expenses                   |  | $                           | 4,690  |  |      | $ | 1,305  |          |  | $ | 3,385    |   |  |  | 259.4 |  
|Datacenter and network operations*            |  |                             | 7,013  |  |      |   | 8,034  |          |  |   | (1,021   | ) |  |  | (12.7 | )
|Product development and sustainment*          |  |                             | 6,465  |  |      |   | 8,182  |          |  |   | (1,717   | ) |  |  | (21.0 | )
|Sales and marketing*                          |  |                             | 4,187  |  |      |   | 3,655  |          |  |   | 532      |   |  |  | 14.6  |  
|General and administrative*                   |  |                             | 6,663  |  |      |   | 5,264  |          |  |   | 1,399    |   |  |  | 26.6  |  
|Depreciation and amortization                 |  |                             | 4,373  |  |      |   | 3,041  |          |  |   | 1,332    |   |  |  | 43.8  |  
|Acquisition transaction and integration costs |  |                             | 4,072  |  |      |   |       |          |  |   | 4,072    |   |  |  |      |  
|Restructuring                                 |  |                             | 341    |  |      |   | 407    |          |  |   | (66      | ) |  |  | (16.2 | )
|                                              |  |                             |        |  |      |   |        |          |  |   |          |   |  |  |       |  
|Total operating expenses                      |  | $                           | 37,804 |  |      | $ | 29,888 |          |  | $ | 7,916    |   |  |  | 26.5  |  
|                                              |  |                             |        |  |      |   |        |          |  |   |          |   |  |  |       |  



|* | excluding depreciation
|- | ----------------------

Our
operating expenses were $37.8 million for the three months ended March 31, 2011 compared to $29.9 million for the three months ended March 31, 2010. The increase of $7.9 million, or 26.5%, was primarily due to $4.1 million of acquisition
transaction and integration costs and $3.4 million of increased direct third-party expenses.

Direct third party expenses

Direct third party expenses increased $3.4 million for the three months ended March 31, 2011 compared to the
corresponding 2010 period. The increase is primarily due to higher usage based fees for customer specific third-party software as user volume increases, in addition to third party computer hardware and software purchased in conjunction with the XL
and Celcom custom implementation projects.

Datacenter and network operations, excluding depreciation

Datacenter and network operations expense, excluding depreciation, decreased $1.0 million, or 12.7%, for the three months ended
March 31, 2011 compared to the corresponding 2010 period. This change was primarily due to the decrease of hardware and software maintenance agreements, bandwidth and personnel expenses related to the closure of our North Carolina data center
in the first three months of 2011 following the shut-down of the Fuel software solution platform late in 2010.

Product
development and sustainment, excluding depreciation

Product development and sustainment expense, excluding depreciation,
decreased $1.7 million, or 21.0%, for the three months ended March 31, 2011 compared to the corresponding 2010 period. This decrease reflects increased capitalization of software development costs based on achieving technological feasibility on
certain new solutions under development.

Sales and marketing, excluding depreciation

Sales and marketing expense, excluding depreciation, increased $0.5 million, or 14.6%, for the three months ended March 31, 2011
compared to the corresponding 2010 period. The increases are due to higher personnel and advertising expenses, primarily for our international expansion efforts.

General and administrative, excluding depreciation

General and
administrative expense, excluding depreciation, increased $1.4 million, or 26.6%, for the three months ended March 31, 2011 compared to the corresponding 2010 period. The increase is primarily due to $1.5 million of increased stock-based
compensation expense primarily attributable to the vesting of restricted stock grants.

Depreciation and amortization

Depreciation and amortization expense increased $1.3 million, or 43.8%, for the three months ended March 31, 2011
compared to the corresponding 2010 period. The increase is primarily due to software being placed in service, the development costs of which were capitalized in previous periods and are now being amortized.



11



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Acquisition transaction and integration costs

Acquisition transaction and integration costs incurred during the first three months of 2011 related to the Adenyo acquisition which was
completed on April 14, 2011.

Restructuring

During the three months ended March 31, 2011, we incurred $0.3 million of restructuring charges for involuntary termination benefits
related to the elimination of redundant functions and positions in anticipation of the synergies associated with the acquisition of Adenyo. In the three months ended March 31, 2010, we incurred a $0.4 million expense upon disposition of the
remaining asset held for sale related to the relocation of the Companys headquarters in 2008.

Other income (expense), net



|                                    |  |                             |    |   |      |   |      |          |  |   |          |  |  |  |        |  
|----------------------------------- |  | --------------------------- | -- | - | ---- | - | ---- | -------- |  | - | -------- |  |  |  | ------ | -
|                                    |  | Three Months EndedMarch 31, |    |   |      |  
|                                    |  | 2011                        |    |   | 2010 |   |      | $ Change |  |   | % Change | 
|                                    |  | (Dollars in thousands)      |   
|Other income (expense)              |  | $                           | (2 | ) |      | $ | (258 | )        |  | $ | 256      |  |  |  | (99.2  | )
|Interest and investment income, net |  |                             | 26 |   |      |   |     |          |  |   | 26       |  |  |  |       |  
|                                    |  |                             |    |   |      |   |      |          |  |   |          |  |  |  |        |  
|Total revenues                      |  | $                           | 24 |   |      | $ | (258 | )        |  | $ | 282      |  |  |  | (109.3 | )
|                                    |  |                             |    |   |      |   |      |          |  |   |          |  |  |  |        |  

Other income (expense) relates primarily to the impact of foreign currency on our operations.

Provision for income taxes



|                           |  |                             |     |  |      |   |     |          |  |   |          |  |  |  |      | 
|-------------------------- |  | --------------------------- | --- |  | ---- | - | --- | -------- |  | - | -------- |  |  |  | ---- | 
|                           |  | Three Months EndedMarch 31, |     |  |      |  
|                           |  | 2011                        |     |  | 2010 |   |     | $ Change |  |   | % Change | 
|                           |  | (Dollars in thousands)      |    
|Provision for income taxes |  | $                           | 575 |  |      | $ | 467 |          |  | $ | 108      |  |  |  | 23.1 | 

Income tax expense
for the three months ended March 31, 2011 primarily consists of a deferred U.S. tax provision for the difference between book and tax treatment of goodwill associated with the acquisition of InfoSpace Mobile and foreign income taxes. Income tax
expense for the three months ended March 31, 2010 primarily consists of a deferred U.S. tax provision for the difference between book and tax treatment of goodwill associated with the acquisition of InfoSpace Mobile. We maintain a full
valuation allowance against our net deferred tax assets which precludes us from recognizing a tax benefit for our current operating losses. Our lack of profitability historically is a key factor in concluding there is insufficient evidence of our
ability to realize any future benefits from our deferred tax assets.

Net loss



|         |  |                             |        |   |      |   |        |          |  |   |          |   |  |  |        |  
|-------- |  | --------------------------- | ------ | - | ---- | - | ------ | -------- |  | - | -------- | - |  |  | ------ | -
|         |  | Three Months EndedMarch 31, |        |   |      |  
|         |  | 2011                        |        |   | 2010 |   |        | $ Change |  |   | % Change |  
|         |  | (Dollars in thousands)      |       
|Net loss |  | $                           | (6,141 | ) |      | $ | (1,533 | )        |  | $ | (4,608   | ) |  |  | (300.6 | )

Net loss for the three
months ended March 31, 2011was $6.1 million, compared to a $1.5 million net loss for the three months ended March 31, 2010. The $4.6 million change in net income reflects a $3.1 million increase in revenue that was more than offset by $7.9
million of increased operating expenses. The increase of $7.9 million of operating expense includes $4.1 million of acquisition transaction and integration costs and $3.4 million of increased direct third-party expenses.

Non-GAAP Financial Measures

We monitor our performance as a business using adjusted EBITDA and Adjusted Net Income, non-GAAP financial measures. We define Adjusted EBITDA as net loss before provision for income taxes, depreciation
and amortization, restructuring expenses, acquisition transaction and integration costs, interest income and other income (expense), net and stock-based compensation expense. We define Adjusted Net Income as net loss before amortization of purchased
intangibles, restructuring expenses, stock-based compensation expense, acquisition transaction and integration costs, non-cash tax expense and fair value adjustment of warrants in other income. Adjusted EBITDA and Adjusted Net Income are not
measures of liquidity calculated in accordance with U.S. GAAP,



12



---

and should be viewed as a supplement to, not a substitute for, our results of operations presented on the basis of U.S. GAAP. Adjusted EBITDA and Adjusted Net Income do not purport to represent
cash flow provided by, or used in, operating activities as defined by U. S. GAAP. Our statement of cash flows presents our cash flow activity in accordance with U.S. GAAP. Furthermore, Adjusted EBITDA and Adjusted Net Income are not necessarily
comparable to similarly-titled measures reported by other companies.

A reconciliation of Adjusted EBITDA to net loss for each
of the quarterly periods is as follows:



|                                              |  |                |        |   |         |   |        |  
|--------------------------------------------- |  | -------------- | ------ | - | ------- | - | ------ | -
|                                              |  | Q1 2011        |        |   | Q1 2010 |  
|                                              |  | (in thousands) |       
|Net loss                                      |  | $              | (6,141 | ) |         | $ | (1,533 | )
|Other income (expense), net                   |  |                | (24    | ) |         |   | 258    |  
|Provision for income taxes                    |  |                | 575    |   |         |   | 467    |  
|Depreciation and amortization                 |  |                | 4,373  |   |         |   | 3,041  |  
|Restructuring and asset impairments           |  |                | 341    |   |         |   | 407    |  
|Acquisition transaction and integration costs |  |                | 4,072  |   |         |   |       |  
|Stock-based compensation                      |  |                | 2,144  |   |         |   | 505    |  
|                                              |  |                |        |   |         |   |        |  
|Adjusted EBITDA                               |  | $              | 5,340  |   |         | $ | 3,145  |  
|                                              |  |                |        |   |         |   |        |  

A reconciliation of Adjusted Net Income to net loss for each of the quarterly periods is as follows:



|                                              |  |                |        |   |         |   |        |  
|--------------------------------------------- |  | -------------- | ------ | - | ------- | - | ------ | -
|                                              |  | Q1 2011        |        |   | Q1 2010 |  
|                                              |  | (in thousands) |       
|Net loss                                      |  | $              | (6,141 | ) |         | $ | (1,533 | )
|Amortization of purchased intangibles         |  |                | 429    |   |         |   | 396    |  
|Stock-based compensation                      |  |                | 2,144  |   |         |   | 505    |  
|Restructuring and asset impairments           |  |                | 341    |   |         |   | 407    |  
|Acquisition transaction and integration costs |  |                | 4,072  |   |         |   |       |  
|Non-cash tax expense                          |  |                | 442    |   |         |   | 467    |  
|Fair value adjustment of warrants             |  |                |       |   |         |   | 260    |  
|                                              |  |                |        |   |         |   |        |  
|Adjusted Net Income                           |  | $              | 1,287  |   |         |   | 502    |  
|                                              |  |                |        |   |         |   |        |  

We believe Adjusted EBITDA and Adjusted Net Income are used by and are useful to investors and other users
of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:



| |  |  | EBITDA is widely used by investors to measure a companys operating performance without regard to items such as interest expense, taxes,
depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | investors commonly use Adjusted EBITDA and Adjusted Net Income to eliminate the effect of restructuring and stock-based compensation expenses, which
vary widely from company to company and impair comparability.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We use Adjusted EBITDA and Adjusted Net
Income:



| |  |  | as measures of operating performance to assist in comparing performance from period to period on a consistent basis;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | as measures for planning and forecasting overall expectations and for evaluating actual results against such expectations;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | as primary measures to review and assess the operating performance of our company and management team in connection with our executive compensation
plan incentive payments; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in communications with the board of directors, stockholders, analysts and investors concerning our financial performance.
| | - |  | -------------------------------------------------------------------------------------------------------------------------



13



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Liquidity and Capital Resources

General

Our principal needs for liquidity have been to fund operating losses, working capital requirements, capital expenditures, acquisitions and for debt service. Our principal sources of liquidity as of
March 31, 2011 consisted of cash and cash equivalents of $61.6 million and $14.4 million of availability under our $25.0 million revolving credit facility. We expect that working capital requirements, capital expenditures and acquisitions will
continue to be our principal needs for liquidity over the near term. Working capital requirements are expected to increase as a result of our anticipated growth, both organically and through future acquisitions. The main portion of our capital
expenditures has been, and is expected to continue to be, for datacenter facilities and equipment and software development. We believe that our future cash flow from operations, available cash and cash equivalents and available borrowings under our
revolving credit facility will be sufficient to meet our liquidity needs for at least the next 12 months, although such sources of liquidity may not be sufficient to fund any significant acquisitions we might want to pursue.

On April 14, 2011, we acquired substantially all of the assets of Adenyo and its subsidiaries and assumed certain of Adenyos
liabilities (including those of its subsidiaries). We paid approximately $49.1 million in cash and issued 3,277,002 shares of common stock, with a fair market value of $43.4 million, as consideration for the Acquisition. The cash consideration
includes $1.0 million placed in escrow, a portion of which may be refundable based on the completion of the working capital calculation 90 days from the closing of the Acquisition. In addition to these amounts paid, Adenyo will be entitled to
receive up to an additional $50 million pursuant to a contingent earn-out. The earn-out consideration will be payable in cash, shares of the Companys common stock, or a mix of both, in our discretion. The amount of contingent earn-out
consideration that will be payable will be determined by whether Adenyo meets certain non-GAAP based revenue and EBITDA (as such terms are defined in, and calculated pursuant to the Arrangement Agreement) targets, during the first full twelve
calendar months following the closing of the Acquisition.

We extended our existing revolving credit facility to mature on
August 13, 2011 and adjusted the borrowing availability to a minimum of $15 million. We anticipate that to the extent we require additional liquidity, we will seek to increase borrowing availability under our existing credit facility, pursue a
new, expanded bank borrowing facility, explore additional debt or equity financing options or pursue a combination of some or all of these alternatives prior to the expiration of the current credit facility.

Growth through acquisitions is part of our overall strategy and we regularly review potential acquisition candidates, and as appropriate
from time to time, engage in discussions with these businesses. If additional strategic acquisitions are consummated, we may incur additional debt or sell additional equity to finance such transactions.

Cash Flows

As of March 31, 2011 and December 31, 2010, we had cash and cash equivalents of $61.6 million and $78.5 million, respectively. The decrease reflects $13.8 million used in operating activities
and $3.7 million used in investing activities, partially offset by $0.5 million provided by financing activities.

Operating Activities

In the first three months of 2011, operating activities used $13.8 million of cash primarily related to the changes in our operating assets and liabilities as accounts receivable increased by $8.8
million, primarily resulting from the timing of our project billings, and accounts payable and accrued expenses decreased $5.2 million. The $6.1 million net loss included two primary non-cash items; $4.4 million of depreciation and amortization and
$2.1 million of stock-based compensation.

In the first three months of 2010, operating activities used $8.0 million primarily
as a result of payments reducing accounts payable and accrued expenses by $6.0 million, a $6.9 million reduction in deferred revenue and the net loss of $1.5 million. These uses of cash were partially offset by a $1.7 million reduction in current
and long-term assets, and non-cash items included in our operating results, including $3.0 million of depreciation and amortization, $0.5 million of stock-based compensation expense, a $0.5 million increase in deferred tax liability and a $0.4
million loss on disposition of assets held for sale.

Investing Activities

Net cash used in investing activities was $6.8 million for the three months ended March 31, 2011, as compared to $1.1 million of net
cash provided by investing activities for the three months ended March 31, 2010. Investing activities have involved primarily capital expenditures. In the first three months of 2011, our cash capital expenditures related to the purchase of
property and equipment and capitalization of software development costs totaled $6.8 million, as compared to $2.3 million in the first three months of 2010. During the first quarter of 2011, we had capital expenditures of $4.6 million, relating
primarily to our new data center in Dehli, India, of which $3.1 million was included within accounts payable. Typically, our capital expenditures are for routine purchases of computer equipment to maintain and upgrade our technology infrastructure
and for development of software to provide services to our customers. We anticipate future capital expenditures will be for maintenance, support and enhancements of existing technology and continued investments in new technologies. Our software
development investments consist primarily of development, testing and deployment of new solutions and new functionality to existing solutions. Additionally, in the first three months of 2010, we realized $1.2 million of cash associated with the sale
of assets held for sale.



14



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Financing Activities

Net cash provided by financing activities was $0.5 million in the first three months of 2011, primarily due to lapse of restrictions on
$0.3 million of cash used to make the final lease payments on office space in North Carolina and $0.2 million from stock option exercises. Net cash used in financing activities for the first three months of 2010 was $1.3 million primarily due to the
prepayment of our initial public offering costs that were realized in June 2010.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or other financing activities with special-purpose entities.

Credit Facility

We are
party to a credit facility with Silicon Valley Bank pursuant to which we can borrow up to $25 million in secured loans. The availability under the credit facility is subject to a borrowing base calculated based on qualifying accounts receivable from
US-based customers. The interest rate on any borrowings is based on the lenders prime rate plus a margin ranging between 50 to 150 basis points depending on our trailing EBITDA. The minimum interest rate is 5.50%. The credit facility
restricts, among other things, our ability to incur indebtedness, create or permit liens on our assets, declare or pay dividends and certain other restricted payments, consolidate, merge or recapitalize, acquire or sell assets, make certain
investments, loans or other advances, and enter into transactions with affiliates. The credit facility requires us to maintain a tangible net worth of $14 million. The credit facility terminates in August 2011. As of March 31, 2011
and December 31, 2010, there were no outstanding amounts under the credit facility. As of March 31, 2011, we had borrowing capability of approximately $14.4 million. As of March 31, 2011, the Company is in compliance with the terms of
the credit facility.

New Accounting Pronouncements

There are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Risk

At March 31, 2011, we had cash and cash equivalents of $61.6 million. These amounts are held primarily in cash and money market funds. We do not enter into investments for trading or speculative
purposes. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

We are exposed to interest rate risk to the extent we incur borrowings under our credit facility. Any borrowings under our revolving
credit facility will bear interest at floating rates based on the lenders prime rate plus a margin ranging between 50 to 150 basis points depending on our trailing EBITDA, with a minimum interest rate of 5.50%. For variable rate debt, interest
rate changes generally do not affect the fair value of the debt instrument, but do impact future earnings and cash flows, assuming other factors are held constant. We do not expect to incur significant borrowings under our credit facility in 2011,
and therefore we do not believe that a 10% increase in interest rates would have a significant impact on our operating results, future earnings, or liquidity.

Effects of Inflation

Inflation generally affects us by increasing
costs of labor, supplies and equipment. We do not believe that inflation has had any material effect on our business, financial condition or results of operations in the last three fiscal years. Although we do not expect that inflation or changing
prices will materially affect our business in the foreseeable future, if our costs were to become subject to significant inflationary pressures, we might not be able to offset these higher costs fully through price increases. Our inability or
failure to do so could harm our business, operating results and financial condition.

Item 4. Controls and
Procedures

Evaluation of disclosure controls and procedures. Our management evaluated, with the participation of
our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Disclosure controls and procedures are controls and
other procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SECs
rules and forms, and that the information is accumulated and



15



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communicated to our management, including our certifying officers, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and our Chief
Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in internal
control over financial reporting. There was no change in our internal control over financial reporting that occurred during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.



16



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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company is involved in litigation relating to claims arising out
of the normal course of business, none of which are material to the Companys financial results or condition.

Item 1A. Risk Factors

There are no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the period ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds

On June 23, 2010, we completed our offering of 6,000,000 shares of common stock in an initial public offering. In the offering,
5,000,000 shares of common stock were sold at a per share price of $9.30 ($10.00 per share to the public) and 1,000,000 shares of common stock were sold directly to entities affiliated with Mr. Carl C. Icahn for a per share price of $9.30,
resulting in net proceeds of approximately $48.5 million, after deducting underwriting discounts and commissions of approximately $3.5 million and expenses of approximately $3.8 million. None of these payments were direct or indirect payments to any
of the Companys directors or officers or their associates or to persons owning 10 percent or more of the Companys common stock.

On April 14, 2011, we acquired substantially all of the assets of Adenyo and its subsidiaries and assumed certain of Adenyos liabilities (including those of its subsidiaries). We paid
approximately $49.1 million in cash, representing all of the proceeds from the June initial public offering, and issued 3,277,002 shares of common stock, with a fair market value of $43.4 million, as consideration for the Acquisition.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.



17



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Item 6. Exhibits



|            |  |                                                                                                                                                                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                       
|2.1         |  | Arrangement Agreement, dated as of March 12, 2011, by and among Adenyo Inc., 7761520 Canada Inc., Motricity, Inc. and the other parties thereto (incorporated by reference
to Exhibit 2.1 to Motricity, Inc. Current Report on Form 8-K, filed on March 18, 2011).
|            | 
|10.1        |  | Amendment to Loan and Security Agreement between Motricity, Inc. and Silicon Valley Bank, dated April 11, 2011(incorporated by reference to Exhibit 10.1 to Motricity, Inc. Current
Report on Form 8-K, filed on April 15, 2011).                                 
|            | 
|10.2        |  | Second Amendment to Letter Agreement, dated as of April 19, 2011, by and between James R. Smith, Jr. and Motricity, Inc. (incorporated by reference to Exhibit 10.1 to Motricity,
Inc. Current Report on Form 8-K, filed on April 22, 2011).                      
|            | 
|10.3        |  | Amendment Number 10 to Agreement Number 750-67761-2004 Between Cellco Partnership D/B/A Verizon Wireless and Motricity, Inc. *                                                                                                                                    
|            | 
|10.4        |  | 2011 Corporate Incentive Plan                                                                                                                                                                                                                                     
|            | 
|31.1        |  | Certification of Ryan K. Wuerch pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                        
|            | 
|31.2        |  | Certification of Allyn P. Hebner pursuant to 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Chief Executive Officer.                                                                                                                   
|            | 
|32.2        |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Chief Financial Officer.                                                                                                                   



|* | Confidential treatment has been requested for certain provisions of this Exhibit pursuant to Exchange Act Rule 24b-2. These provisions have been omitted from the filing
and submitted separately to the Securities and Exchange Commission.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



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SIGNATURES

Pursuant to the requirements 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.



|                  |  |                 |  |                                       
|----------------- |  | --------------- |  | --------------------------------------
|                  |  | MOTRICITY, INC.
|                  |  |                
|Date: May 4, 2011 |  | By:             |  | /s/ Ryan K. Wuerch                    
|                  |  |                 |  | Ryan K. Wuerch Chief
Executive Officer
|                  |  |                
|Date: May 4, 2011 |  | By:             |  | /s/ Allyn P. Hebner                   
|                  |  |                 |  | Allyn P. Hebner                       
|                  |  |                 |  | Chief Financial Officer               



19



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                       
|2.1         |  | Arrangement Agreement, dated as of March 12, 2011, by and among Adenyo Inc., 7761520 Canada Inc., Motricity, Inc. and the other parties thereto (incorporated by
reference to Exhibit 2.1 to Motricity, Inc. Current Report on Form 8-K, filed on March 18, 2011).
|            | 
|10.1        |  | Amendment to Loan and Security Agreement between Motricity, Inc. and Silicon Valley Bank, dated April 11, 2011(incorporated by reference to Exhibit 10.1 to Motricity, Inc.
Current Report on Form 8-K, filed on April 15, 2011).                                 
|            | 
|10.2        |  | Second Amendment to Letter Agreement, dated as of April 19, 2011, by and between James R. Smith, Jr. and Motricity, Inc. (incorporated by reference to Exhibit 10.1 to Motricity,
Inc. Current Report on Form 8-K, filed on April 22, 2011).                      
|            | 
|10.3        |  | Amendment Number 10 to Agreement Number 750-67761-2004 Between Cellco Partnership D/B/A Verizon Wireless and Motricity, Inc.*                                                                                                                                     
|            | 
|10.4        |  | 2011 Corporate Incentive Plan                                                                                                                                                                                                                                     
|            | 
|31.1        |  | Certification of Ryan K. Wuerch pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                        
|            | 
|31.2        |  | Certification of Allyn P. Hebner pursuant to 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Chief Executive Officer.                                                                                                                   
|            | 
|32.2        |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Chief Financial Officer.                                                                                                                   



|* | Confidential treatment has been requested for certain provisions of this Exhibit pursuant to Exchange Act Rule 24b-2. These provisions have been omitted from the filing
and submitted separately to the Securities and Exchange Commission.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20