| ☑ | QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934 |
|----------|---------------------------------------------------------------------------------------|

| ☐ | TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|----------|--------------------------------------------------------------------------------------------------|

| Delaware                                                                               | 95-4439334                                    |
|----------------------------------------------------------------------------------------|-----------------------------------------------|
| (State or other jurisdiction of incorporationor organization) | (I.R.S. Employer IdentificationNo.) |

| 5400Trinity Road, Suite 208Raleigh,North Carolina            | 27607           |
|--------------------------------------------------------------|-----------------|
| (Address of principal executive offices) | (Zip Code) |

| Large acceleratedfiler                       | ☐ | Acceleratedfiler         | ☐ |
|----------------------------------------------|----------|--------------------------|----------|
| Non-acceleratedfiler                         | ☐ | Smaller reportingcompany | ☑ |
| (Do not check if asmaller reporting company) |

|                                 |                                                                                                                      | Page No. |
|--------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------|
| PARTI – FINANCIAL INFORMATION |
|                                 |                                                                                                                      |          |
| Item1.                               | FinancialStatements                                                                                                       |          |
|                                 |                                                                                                                      |          |
|                                 | CondensedConsolidated Balance Sheets as of September 30, 2016 (unaudited)and December 31, 2015                            | 3             |
|                                 |                                                                                                                      |          |
|                                 | CondensedConsolidated Statements of Operations (unaudited) for the three andnine months ended September 30, 2016 and 2015 | 4             |
|                                 |                                                                                                                      |          |
|                                 | CondensedConsolidated Statements of Cash Flows (unaudited) for the ninemonths ended September 30, 2016 and 2015           | 5             |
|                                 |                                                                                                                      |          |
|                                 | CondensedConsolidated Statement of Stockholders' Deficit for the periodended September 30, 2016 (unaudited)          | 6             |
|                                 |                                                                                                                      |          |
|                                 | Notes to CondensedConsolidated Financial Statements (unaudited)                                                      | 7             |
|                                 |                                                                                                                      |          |
| Item2.                               | Management’sDiscussion and Analysis of Financial Condition and Results ofOperations                                | 11            |
|                                 |                                                                                                                      |          |
| Item3.                               | Quantitative andQualitative Disclosures About Market Risk                                                                 | 15            |
|                                 |                                                                                                                      |          |
| Item4.                               | Controls andProcedures                                                                                                    | 15            |
|                                 |
| PARTII – OTHER INFORMATION    |
|                                 |                                                                                                                      |          |
| Item2.                               | Unregistered Salesof Equity Security and Use of Proceeds                                                                  | 16            |
|                                 |                                                                                                                      |          |
| Item6.                               | Exhibits                                                                                                                  | 16            |
|                                 |                                                                                                                      |          |
|                                 | Signatures                                                                                                                | 17            |
|                                 |                                                                                                                      |          |

|                                                                                                                                                                                                                     |  September 30,     |  December 31,      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|------------------------------|
|  ASSETS                                                                                                                                                                                                             |  2016              |   2015        |
| CurrentAssets                                                                                                                                                                                                            |               |               |
| Cashand Cash Equivalents                                                                                                                                                                                                 |  $392,759          |  $580,220          |
| RestrictedCash                                                                                                                                                                                                           |   73,143      |   124,988     |
| TradeAccounts Receivable, Net of Allowance for Doubtful Accounts of$33,300 and $16,050, Respectively                                                                                                                |   231,855     |   183,350     |
| PrepaidExpenses and Other Current Assets                                                                                                                                                                                 |   66,253      |   69,552      |
| TotalCurrent Assets                                                                                                                                                                                                      |   764,010     |   958,110     |
|                                                                                                                                                                                                                     |          |          |
| Property& Equipment, Net                                                                                                                                                                                             |   114,099     |   98,963      |
| CapitalizedSoftware, Net                                                                                                                                                                                                 |   301,143     |   390,518     |
| IntangibleAssets, Net                                                                                                                                                                                                    |   41,973      |   55,099      |
| OtherAssets                                                                                                                                                                                                              |   -           |   6,264       |
| TotalOther Assets                                                                                                                                                                                                        |   457,215     |   550,844     |
| TotalAssets                                                                                                                                                                                                              |  $1,221,225        |  $1,508,954        |
|                                                                                                                                                                                                                     |          |          |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                             |          |          |
| CurrentLiabilities                                                                                                                                                                                                       |          |          |
| TradeAccounts Payable                                                                                                                                                                                                    |  $59,350           |  $45,717           |
| AccruedExpenses                                                                                                                                                                                                          |   136,653     |   247,858     |
| AccruedInterest                                                                                                                                                                                                          |   436,228     |   350,613     |
| CapitalLease Obligations                                                                                                                                                                                                 |   36,203           |   30,877      |
| DeferredRevenue                                                                                                                                                                                                          |   1,361,565   |   1,007,970   |
| BankLoan                                                                                                                                                                                                                 |   -           |   5,000,000   |
| ConvertibleNotes Payable, Related Parties, Net of Discount                                                                                                                                                               |   -           |   33,363,488  |
| ConvertibleNotes Payable, Net of Discount                                                                                                                                                                                |   -           |   680,640     |
| TotalCurrent Liabilities                                                                                                                                                                                                 |   2,029,999        |   40,727,163  |
|                                                                                                                                                                                                                     |          |          |
| Long-TermLiabilities                                                                                                                                                                                                     |          |          |
| BankLoan                                                                                                                                                                                                                 |   5,000,000   |   -           |
| ConvertibleNotes Payable, Related Parties, Net of Discount                                                                                                                                                               |   37,829,008  |   -           |
| ConvertibleNotes Payable, Net of Discount                                                                                                                                                                                |   680,640     |   -           |
| CapitalLease Obligations and Other Notes Payable                                                                                                                                                                         |   73,356           |   83,761      |
| DeferredRent                                                                                                                                                                                                             |   45,599      |   53,592      |
| TotalLong-Term Liabilities                                                                                                                                                                                               |   43,628,603       |   137,353     |
| TotalLiabilities                                                                                                                                                                                                         |   45,658,602  |   40,864,516  |
|                                                                                                                                                                                                                     |          |          |
| Commitmentsand Contingencies (Note 3)                                                                                                                                                                                    |          |          |
| Stockholders'Deficit                                                                                                                                                                                                     |          |          |
| PreferredStock, $0.001 Par Value, 5,000,000 Shares Authorized, No SharesIssued and Outstanding at September 30, 2016 and December 31,2015                                                                                |   -           |   -           |
| CommonStock, $0.001 Par Value, 100,000,000 and 45,000,000 SharesAuthorized At September 30, 2016 and December 31, 2015,Respectively; 19,827,542 Shares Issued and Outstanding at September30, 2016 and December 31, 2015 |   19,828      |   19,828      |
| AdditionalPaid-in Capital                                                                                                                                                                                                |   98,142,126  |   97,545,601  |
| AccumulatedDeficit                                                                                                                                                                                                       |   (142,599,331)    |   (136,920,991)    |
| TotalStockholders' Deficit                                                                                                                                                                                               |   (44,437,377)     |   (39,355,562)     |
| TotalLiabilities and Stockholders' Deficit                                                                                                                                                                               |  $1,221,225        |  $1,508,954        |
|                                                                                                                                                                                                                     |          |          |
|  Theaccompanying notes are an integral part of these condensedconsolidated financial statements.                                                                                                               |

|                                                                                             |  Three Months Ended  |  Nine Months Ended  |
|--------------------------------------------------------------------------------------------------|--------------------------------|-------------------------------|
|                                                                                             |  September 30,       |  September 30,      |  September 30,  |  September 30,  |
|                                                                                             |  2016                |  2015               |  2016  |  2015  |
| REVENUES:                                                                                        |                 |                |     |     |
| Subscriptionand Support                                                                          |  $415,166            |  $463,291           |  $1,380,465  |  $1,237,024  |
| ProfessionalServices and Other                                                                   |   -             |   31,080       |   4,154  |   91,080  |
| TotalRevenue                                                                                     |   415,166       |   494,371      |   1,384,619  |   1,328,104  |
| COSTOF REVENUES:                                                                                 |            |           |      |      |
| Subscriptionand Support                                                                          |   138,175       |   125,600      |   346,544  |   259,298  |
| ProfessionalServices and Other                                                                   |   11,418        |   46,697       |   67,660  |   70,242  |
| TotalCost of Revenue                                                                             |   149,593       |   172,297      |   414,204  |   329,540  |
|                                                                                             |            |           |      |      |
| GROSSPROFIT                                                                                      |   265,573       |   322,074      |   970,415  |   998,564  |
| OPERATINGEXPENSES:                                                                               |            |           |      |      |
| Salesand Marketing                                                                               |   288,129       |   307,857      |   849,303  |   867,153  |
| Researchand Development                                                                          |   446,490       |   356,098      |   1,253,889  |   1,029,923  |
| Generaland Administrative                                                                        |   257,615       |   299,029      |   1,009,976  |   897,247  |
| TotalOperating Expenses                                                                          |   992,234       |   962,984      |   3,113,168  |   2,794,323  |
| LOSSFROM OPERATIONS                                                                              |  (726,661)           |  (640,910)          |  (2,142,753)  |  (1,795,759)  |
|                                                                                             |            |           |      |      |
| OTHER INCOME (EXPENSE):                                                                     |            |           |      |
| OtherIncome                                                                                      |   153,918       |   594          |   165,486  |   2,084  |
| InterestExpense, Net                                                                             |  (997,730)           |  (1,331,602)        |  (3,701,073)  |  (3,910,355)  |
|              TotalOther Expense |  (843,812)           |  (1,331,008)        |  (3,535,587)  |  (3,908,271)  |
|                                                                                             |            |           |      |      |
| NETLOSS                                                                                          |  $(1,570,473)        |  $(1,971,918)       |  $(5,678,340)  |  $(5,704,030)  |
|                                                                                             |            |           |      |      |
| NET LOSS PER COMMON SHARE:                                                                  |            |           |      |
| Basicand Fully Diluted                                                                           |  $(0.08)             |  $(0.10)            |  $(0.29)  |  $(0.29)  |
| WEIGHTED-AVERAGE NUMBER OF SHARES USED IN COMPUTING NETLOSS PER COMMON SHARE:                    |
| Basicand Fully Diluted                                                                           |   19,827,542    |   19,827,542   |   19,827,542  |   19,827,542  |

|                                                                           |  NineMonths Ended      |
|--------------------------------------------------------------------------------|-----------------------------|
|                                                                           |  September 30,    |  September 30,  |
|                                                                           |  2016             |  2015  |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                          |              |     |
| NetLoss                                                                        |  $(5,678,340)          |  $(5,704,030) |
| Adjustmentsto Reconcile Net Loss to Net Cash Used in OperatingActivities:      |         |      |
|      Depreciationand Amortization                     |   123,324    |   121,685  |
|      BadDebt Expense (Gain on Reversal of Bad Debt)   |   33,300     |   (10,500) |
|      Amortizationof Debt Discount                     |   1,248,736  |   1,750,296  |
|  Share Based Compensation                                                 |   63,309     |   63,925  |
|  Impairment of Long Lived Assets                                          |   8,356      |  -  |
| Changesin Assets and Liabilities:                                              |         |      |
|      AccountsReceivable                               |   (81,805)        |   (644,305) |
|      PrepaidExpenses and Other Assets                 |   9,563      |   4,235  |
|      AccountsPayable                                  |   13,633     |   (42,827) |
|      DeferredRevenue                                  |   353,595    |   600,870  |
|      Accruedand Other Expenses                        |   (33,583)        |   (147,659) |
| NetCash Used in Operating Activities                                           |   (3,939,912)     |   (4,008,310) |
|                                                                           |         |      |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                          |         |      |
| Paymentsto Acquire Property, Plant and Equipment                               |   (26,483)        |   (10,340) |
| NetCash Used in Investing Activities                                           |   (26,483)        |   (10,340) |
|                                                                           |         |      |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                          |         |      |
| RestrictedCash Used to Pay Interest Expense                                    |     166,610  |   146,083  |
| Depositof Cash to Restricted Account                                           |   (114,765)       |   (97,388) |
| Proceedsfrom Issuance of Long Term Debt                                        |   3,750,000  |   3,750,000  |
| Repaymentsof Debt Borrowings                                                   |   (22,911)        |   (21,057) |
| NetCash Provided by Financing Activities                                       |   3,778,934  |   3,777,638  |
|                                                                           |         |      |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           |   (187,461)       |   (241,012) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                 |   580,220    |   320,286  |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                       |  $392,759         |  $79,274  |
|                                                                           |         |      |
| SupplementalDisclosures of Cash Flow Information:                              |         |      |
| CashPaid During the Period for Interest                                        |  $2,397,504       |  $2,289,464  |
|                                                                           |         |      |
| Non-CashInvesting and Financing Activities                                     |         |      |
| TheCompany Recorded Debt Discount Associated with BeneficialConversion Feature |  $533,216         |  $-  |
| FinancedPurchase of a Vehicle                                                  |    $18,365   |    $ - |

|                                                                                  |    Common Stock   |  Additional      |            |           |
|----------------------------------------------------------------------------------|--------------------------------------------|----------------------------|---------------------------|--------------------------|
|                                                                             |                             |  $0.001          |  Paid-In        |  Accumulated   |     |
|                                                                             |  Shares                          |  Par Value  |  Capital        |  Deficit       |  Totals  |
| BALANCES, DECEMBER 31, 2015                                                      |   19,827,542                |  $19,828         |  $97,545,601    |  $(136,920,991)     |  $(39,355,562) |
|                                                                             |                        |        |       |      |      |
| Equity-BasedCompensation                                                         |                        |   -         |   63,309   |   -       |   63,309  |
| BeneficialConversion Feature Recorded as a Result of Issuance of ConvertibleDebt |                        |   -         |   533,216  |   -       |   533,216  |
| NetLoss                                                                          |                        |   -         |  -              |   (5,678,340)  |   (5,678,340) |
| BALANCES, SEPTEMBER 30, 2016                                                     |   19,827,542                |  $19,828         |  $98,142,126    |  $(142,599,331)     |  $(44,437,377) |
|                                                                             |                        |        |       |      |      |

| Debt Description                                                                              |  September 30,     |  December 31,      |           |                                                                  |
|-----------------------------------------------------------------------------------------------|------------------------------|------------------------------|----------------|---------------------------------------------------------------------------------|
|                                                                                          |   2016        |  2015              | Maturity       |  Rate                                                                 |
|                                                                                          |               |               |           |                                                                  |
| ComericaBank Loan and Security Agreement                                                 |  $5,000,000        |  $5,000,000        | June2018       |   3.85%                                                               |
| Capitallease obligations - Noteholder lease                                                   |   75,526      |   92,270      | August2019     |   8.00%                                                               |
| Capitallease obligations - office furniture                                                   |   16,201      |   22,368      | August2018     |   9.80%                                                               |
| Capitallease obligations - vehicle                                                            |  17,832                 |  -            | July2021  |           5.59%     |
| Convertiblenotes - related parties, net of discount of $1,295,223 and$2,010,743, respectively |   37,829,008  |   33,363,488  | November2018   |   8.00%                                                               |
| Convertiblenotes, net of discount of $50,129                                                  |   680,640     |   680,640     | November2018   |   8.00%                                                               |
| Totaldebt                                                                                     |   43,619,207  |   39,158,766  |           |                                                             |
|                                                                                          |          |          |           |                                                             |
| Less:  currentportion of long-term debt                                             |          |          |           |                                                             |
| Capitallease obligations                                                                      |   36,203           |   30,877      |           |                                                             |
| ComericaBank LSA                                                                              |   -           |   5,000,000   |           |                                                             |
| Convertiblenotes - related parties, net of discount of $2,010,743                             |   -           |   33,363,488  |           |                                                             |
| Convertiblenotes, net of discount of $50,129                                                  |   -           |   680,640     |           |                                                             |
| Totalcurrent portion of long-term debt                                                        |   36,203           |   39,075,005  |           |                                                             |
|                                                                                          |          |          |           |                                                             |
| Debt- long-term                                                                               |  $43,583,004            |  $83,761           |           |                                                             |

| Convertible Notes Type:                 |  Balance          |
|-----------------------------------------|-----------------------------|
|                                    |              |
|  2007NPA notes, net of discount    |  $29,547,833      |
|  2014NPA notes, net of discount    |   8,961,815  |
| Totalconvertible notes, net of discount |  $38,509,648      |

| Year:                                                                                            |            |
|--------------------------------------------------------------------------------------------------|---------------------------|
| 2016                                                                                             |  $10,692        |
| 2017                                                                                             |   43,477   |
| 2018                                                                                             |   38,407   |
| 2019                                                                                             |   23,631   |
|                 2020       |   4,219    |
|                 Thereafter |   2,461    |
| Total                                                                        |   122,887  |
| Lessamount representing interest                                                                 |   (13,328)      |
| Capitallease obligations                                                                         |  $109,559       |

| Year: |            |
|-------|---------------------------|
| 2016  |  $41,381             |
| 2017  |   167,786  |
| 2018  |   172,418  |
| 2019  |   44,082   |
| Total |  $425,667            |

|                                      |  Numberof Shares  |  WeightedAverageExercise Price  |  WeightedAverageRemaining Contractual Term  |  AggregateIntrinsicValue  |
|-------------------------------------------|----------------------------------|-------------------------------------------|------------------------------------------------------------|-------------------------------------|
|                                      |                   |                            |                                             |                      |
| Outstanding,December 31, 2015             |   361,349         |  $1.44                          |                                             |                      |
| Cancelled                                 |   (122,983)            |   1.55                     |                                             |                      |
| Issued                                    |   468,860         |   1.50                     |                                             |                      |
| Outstanding,September 30, 2016            |   707,226         |   1.46                     |   5.27                                      |  $13,113                  |
| Vestedand exercisable, September 30, 2016 |   206,230         |  $1.36                          |   2.38                                      |  $13,113                  |

|                      |  Three Months Ended September 30,  |  Increase (Decrease)  |
|---------------------------|----------------------------------------------|---------------------------------|
|                      |  2016                              |  2015                 |  $  |  %  |
| Revenue                   |   415,166                     |   494,371        |   (79,205) |  (16)% |
| Costof Revenue            |   149,593                     |   172,297        |   (22,704) |  (13)% |
| GrossProfit               |   265,573                     |   322,074        |   (56,501) |  (18)% |
| Salesand Marketing        |   288,129                     |   307,857        |   (19,728) |  (6)% |
| Researchand Development   |   446,490                     |   356,098        |   90,392  |   25% |
| Generaland Administrative |   257,615                     |   299,029        |   (41,414) |  (14)% |
|                      |                          |             |      |      |
|  InterestExpense     |   997,730                     |   1,331,602      |   (333,872) |  (25)% |

|                      |  Nine months Ended September 30,  |  Increase (Decrease)  |
|---------------------------|---------------------------------------------|---------------------------------|
|                      |  2016                             |  2015                 |  $  |  %  |
| Revenue                   |   1,384,619                  |   1,328,104      |   56,515  |   4% |
| Costof Revenue            |   414,204                    |   329,540        |   84,664  |   26% |
| GrossProfit               |   970,415                    |   998,564        |   (28,149) |  (3)% |
| Salesand Marketing        |   849,303                    |   867,153        |   (17,850) |  (2)% |
| Researchand Development   |   1,253,889                  |   1,029,923      |   223,966  |   22% |
| Generaland Administrative |   1,009,976                  |   897,247        |   112,729  |   13% |
|                      |                         |             |      |      |
|  InterestExpense     |   3,701,073                  |   3,910,355      |   (209,282) |  (5)% |

| Exhibit No.  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |
| 10.1         | LetterAgreement dated as of August 1, 2016 between MobileSmith, Inc. andRandy Tomlin (Incorporatedherein by reference to the Current Report onForm 8-K filed on August 10, 2016)+                                                                                                                                                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.1    | Certification ofPrincipal Executive Officer Pursuant to Rule 13a-14(a)(Filedherewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |
| 31.2    | Certification ofPrincipal Financial and Accounting Officer Pursuant to Rule13a-14(a) (Filedherewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |
| 32.1         | Certification ofPrincipal Executive Officer Pursuant to 18 U.S.C. Section 1350(Furnishedherewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|         |
| 32.2    | Certification ofPrincipal Financial and Accounting Officer Pursuant to 18 U.S.C.Section 1350 (Furnishedherewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         |
| 101.1   | The followingmaterials from the Company’s Quarterly Report on Form 10-Qfor the quarter ended September 30, 2016, formatted in XBRL(eXtensible Business Reporting Language): (i) the CondensedConsolidated Balance Sheets, (ii) the Condensed ConsolidatedStatements of Operations, (iii) the Condensed ConsolidatedStatements of Cash Flows, (iv) the Condensed Consolidated Statementof Stockholders’ Deficit and (v) related notes to thesecondensed consolidated financial statements, tagged as blocks oftext and in detail  (Filedherewith). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    | + ManagementAgreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|           | MOBILESMITH,INC. |                                                  |
|----------------|------------------|-------------------------------------------------------|
|           |             |                                                  |   |
| November9,2016 | By:    | /s/ Amir Elbaz                                   |   |
|           |             | AmirElbaz                                             |   |
|           |             | Executive Chairman(Principal Executive Officer)  |   |

|           |            |                                                               |                     |
|----------------|-----------------|--------------------------------------------------------------------|--------------------------|
| November9,2016 | By:   | /s/ Gleb Mikhailov                                            |                     |
|           |            | GlebMikhailov                                                 |                     |
|           |            | Chief FinancialOfficer (Principal Financial and AccountingOfficer) |      |