Mobiquity Technologies(MOBQ) - 2024 Q1 - Quarterly Report

Financial Performance - Revenues for Q1 2024 were $263,282, an increase of 99$132,224 in Q1 2023, attributed to a rise in political revenue[184]. - Cost of revenues in Q1 2024 was $211,269, representing 80$62,808 or 48% of revenues in Q1 2023[185]. - Gross profit for Q1 2024 was $52,013, accounting for 20$69,416 or 52% of revenues in Q1 2023[186]. - Total operating expenses decreased to $1,101,111 in Q1 2024 from$1,425,747 in Q1 2023, a reduction of $324,636[186]. - Loss from operations for Q1 2024 was$1,049,098, an improvement from a loss of $1,356,331 in Q1 2023, reflecting a decrease of approximately$307,000[187]. - Cash on hand as of March 31, 2024, was $73,068, with cash used in operating activities amounting to$601,762[189]. - Cash used in operating activities for Q1 2023 was $1,606,449, with cash on hand at that time being$2,182,330[190]. Revenue Generation and Business Model - The company generates revenue through two main verticals: licensing platforms as white-label products and a managed services model, with the latter involving a higher percentage of revenue billed[155]. - The company aims to become the programmatic display advertising industry standard for small and medium-sized advertisers[155]. - Mobiquity plans to hire new sales and support staff to enhance revenue generation through its Advangelists platform and MobiExchange[182]. Debt and Financing Activities - In March 2024, the Company issued a promissory note of $126,500 with a 14$17,710 payable in five payments from September 15, 2024, to January 15, 2025[196]. - In April 2024, the Company issued a promissory note of $96,000 with a 15$14,400 in interest, payable in ten payments starting May 30, 2024, through March 31, 2025[197]. - The Company entered into a 2023 Merchant Agreement for $200,000, to be repaid through daily payments of 10$272,000 is paid, with a debt discount of $72,000 amortized over 170 days[199]. - The 2024 Merchant Agreement was established for$150,000, with repayments structured similarly to the 2023 agreement, and a debt discount of $62,850 amortized over 170 days[200]. - In April 2024, the Company entered a new Merchant Agreement for$250,000, with total repayments expected to reach approximately $342,250, and shares issued equal to 5$3,207,500 from a public offering in February 2023, selling 251,842 shares of common stock and pre-funded warrants[202]. - The June 2023 Offering generated gross proceeds of $3,000,000 from the sale of 375,000 shares of common stock and 1,625,000 pre-funded warrants, with net proceeds of approximately$2,528,000 after fees[206]. - In October 2023, the Company received a $300,000 loan with a 15$0.70 per share[208]. - The Series G Preferred Stock issuance in November 2023 raised $1,503,495, with each share convertible into ten shares of common stock at$0.50 per share[209]. Internal Controls and Compliance - Revenue recognition follows ASC Topic 606, ensuring alignment with service delivery and enhancing financial disclosures[170]. - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2024, due to a lack of segregation of duties in the finance and accounting department[216]. - The Company has identified control gaps and deficiencies and continues to remediate these issues as a priority, with independent monitoring and testing of controls ongoing[220]. - Management has decided to defer the allocation of additional talent for full implementation of planned remediations until late fiscal 2024[220]. - The Company believes that its financial statements present fairly its financial position, results of operations, and cash flows for the period presented[219]. - Changes in the Company's internal control over financial reporting during the fiscal year included the integration of new staff, which may materially affect internal controls[218]. - The Company maintains disclosure controls designed to ensure timely and accurate reporting of required information[217]. Market and Industry Context - The global programmatic ad spend reached an estimated $558 billion in 2023, projected to surpass$700 billion by 2026[147]. - The company operates in a highly competitive industry, facing risks such as economic downturns and variability in sales and earnings[159][160]. - The data intelligence platform provides precise data and insights on consumer behavior, utilizing multiple proprietary technologies for accurate data collection and analysis[152]. - The publisher platform allows content publishers to monetize user data and advertising inventory while ensuring data privacy compliance[154]. - The company’s advertising technology integrates various capabilities, reducing costs and improving efficiency compared to fragmented ecosystems[151]. - The company emphasizes the importance of first-party data ownership for publishers in light of recent privacy law changes[149]. Historical Performance and Concerns - The Company has a history of operating losses, raising substantial doubt about its ability to continue as a going concern[188]. - The Company adopted ASU 2016-13 on January 1, 2023, which did not significantly impact its consolidated financial statements[180]. - In January 2024, the Company issued 100,000 shares of common stock to settle vendor liabilities amounting to approximately $50,000[213]. - In March 2024, the Company issued 18,000 shares of common stock for vendor liabilities totaling$12,000, with share prices ranging from $0.50 to$1.00[213]. - Between January and March 2024, the Company raised $400,001 in cash from accredited investors through common stock subscription agreements, resulting in the issuance of 1,123,334 shares at prices between$0.30 and $0.60[214]. - As of March 31, 2024, the Company reported no off-balance-sheet arrangements[215].