10-Q: Mobiquity Technologies Reports Q3 2025 Losses Amid Strategic Shift

Mobiquity Technologies, Inc. reported a significant net loss and revenue decline for Q3 2025, attributing the results to a strategic shift towards new AI and gaming ad-tech initiatives.

Summary

• Net loss for the nine months ended September 30, 2025, was $6,685,887, compared to $3,071,366 for the same period in 2024.
• Net loss for the three months ended September 30, 2025, was $2,221,051, compared to $1,131,316 for the same period in 2024.
• Revenues for the three months ended September 30, 2025, decreased to $117,074 from $566,044 in 2024, a 79.3% decline.
• Revenues for the nine months ended September 30, 2025, decreased to $160,795 from $1,096,218 in 2024, an 85.3% decline.
• The company attributes the revenue decline to the absence of political advertising revenue from 2024 and a strategic shift towards long-term growth initiatives like the Context Networks alliance and CMOne AI Platform.
• Operating expenses increased significantly: $2,039,999 for Q3 2025 vs. $1,314,839 for Q3 2024, and $6,157,017 for the nine months ended September 30, 2025, vs. $3,520,726 for the same period in 2024.
• Cash on hand was $361,894 at September 30, 2025, down from $1,159,933 at December 31, 2024.
• Net cash used in operations for the nine months ended September 30, 2025, was $4,127,980.
• The company has an accumulated deficit of $232,319,408 and a working capital deficit of $2,569,531 at September 30, 2025.
• Management has concluded that factors raise substantial doubt about the company's ability to continue as a going concern.
• Launched CMOne, an AI-driven marketing platform, in August 2025.
• Expanded strategic alliance with Context Networks, focusing on casino and gaming advertising, with initial monetization anticipated in Q4 2025.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by substantial net losses, declining revenue, negative cash flow from operations, a significant accumulated deficit, and a working capital deficit. The auditor's going concern warning and internal control deficiencies further highlight the precarious situation. While strategic initiatives are underway, their near-term revenue impact is limited, and the company's survival depends on securing additional capital.

Positives

• Strategic alliance with Context Networks for gaming industry advertising, targeting a large market of approximately 4,700 global casinos and 2.9 million slot machines.
• Launch of CMOne, an AI-driven marketing platform, expected to support a shift toward recurring and subscription-based revenue models.
• Successful denial of former Co-CEO Michael Trepeta's appeal in a $2.5 million lawsuit.
• Gross profit margin improved to 75% in Q3 2025 from 59% in Q3 2024, and to 62% for the nine months ended September 30, 2025, from 43% in 2024, despite revenue decline.

Negatives

• Significant net loss of $2,221,051 for Q3 2025, more than double the $1,131,316 loss in Q3 2024.
• Nine-month net loss of $6,685,887, more than double the $3,071,366 loss in the prior year.
• Substantial revenue decline: 79.3% for Q3 2025 ($117,074 vs. $566,044) and 85.3% for the nine months ended September 30, 2025 ($160,795 vs. $1,096,218).
• Cash on hand decreased significantly to $361,894 at September 30, 2025, from $1,159,933 at December 31, 2024.
• Net cash used in operations increased to $4,127,980 for the nine months ended September 30, 2025, from $1,798,860 in the prior year.
• Accumulated deficit of $232,319,408 and a working capital deficit of $2,569,531 at September 30, 2025.
• Auditor included an explanatory paragraph relating to the company's ability to continue as a going concern.
• Lack of segregation of duties in the finance and accounting department, indicating ineffective disclosure controls and procedures.
• High weighted average interest rate on short-term borrowings: 45% at September 30, 2025.
• Reliance on a few customers for a significant portion of revenue (92% from two customers in Q3 2025, 80% from two customers for nine months ended September 30, 2025).

Risks

• Going Concern Risk: The company has incurred significant losses since inception, has not achieved profitable operations, and requires additional capital to meet financial obligations, raising substantial doubt about its ability to continue as a going concern.
• Liquidity Risk: Limited cash on hand ($361,894 at September 30, 2025) and significant net cash used in operations ($4,127,980 for nine months ended September 30, 2025).
• Revenue Concentration: High dependence on a few customers; the loss of one could have a material adverse effect on results of operations and financial condition.
• Intense Competition: Operates in an industry subject to intense competition and changes in consumer demand.
• Operational Risks: Subject to significant financial and operational risks, including the potential risk of overall business failure.
• Market Volatility: Variability in sales and net earnings due to the cyclical nature of the industry, general economic conditions, and the volatility of prices in connection with service offerings.
• Uncertainty of New Initiatives: Realization of commercial scale for the Context Networks alliance and CMOne AI Platform remains subject to execution, partner integration, and market adoption.
• Execution Risk: Future investment in product development, customer acquisition, and platform enhancements for CMOne may impact near-term operating results.
• Capital Raise Uncertainty: There is no assurance that lenders and investors will continue to advance capital to the company or that new business operations will be profitable.
• Internal Control Deficiencies: Lack of segregation of duties in the finance and accounting department, leading to ineffective disclosure controls and procedures.
• Debt Default Risk: Promissory notes include clauses where, upon an event of default, all outstanding amounts become due and payable at 150% of the outstanding principal amount plus accrued and unpaid interest.
• Dilution Risk: Ongoing issuance of common stock for services, debt conversion, and original issue discounts could dilute existing shareholders.
• Litigation Risk: While the appeal was denied, the initial lawsuit by Michael Trepeta claimed not less than $2.5 million in damages, indicating potential legal exposure.

Future Outlook

The company anticipates initial monetization from its strategic alliance with Context Networks and the CMOne AI Platform beginning in Q4 2025, with growth expected to accelerate quarter-over-quarter. Management believes the Context Networks partnership will significantly and favorably impact results in fiscal 2025 and beyond, positioning the company as a potential leader in gaming and broader programmatic advertising. CMOne is expected to support a shift toward recurring and subscription-based revenue models. The NRT Technology commercial agreement is projected to expand access to casino properties and digital endpoints, creating new non-gaming advertising revenue streams. The company plans continued investment in product development, sales enablement, and customer onboarding for CMOne.

Management Comments

• "We believe this strategic alliance with Context Networks places the Company in a favorable position within a growing vertical."
• "During this transition period, we expect limited near-term revenue as we invest in additional product deployment, market adoption, and strategic relationships. This short-term revenue gap reflects a deliberate focus on building scalable, recurring and sustainable revenue streams."
• "We anticipate initial monetization beginning in the fourth quarter of 2025, with growth expected to accelerate on a quarter-over-quarter basis as these initiatives gain traction."
• "Our ability to capture and store data for sales does not translate to increased cost of revenues."
• "The continuing operating loss is attributable to the focused effort in creating the products and services required to move forward with our business."
• "Our mission is to help enterprises in the programmatic industry become more efficient and effective regarding the monetization of advertising, audience segments and data compliance."
• "We believe that by combining Contexts innovation in gaming-specific advertising with Mobiquitys programmatic expertise, we are creating a first-of-its-kind platform that: Brings programmatic precision into the gaming industry with unmatched targeting and real-time delivery; Establishes a scalable marketplace that connects advertisers and publishers seamlessly across gaming and digital environments; Sets the stage for expansion beyond gaming into broader programmatic opportunities, positioning us as a future leader in the space."
• "This strategic alliance isnt just about disrupting the gaming industry, its about building a tech-driven platform that could rival current industry leaders in its reach and impact."
• "CMOne is in the early stages of commercial deployment, and its ability to scale revenue, achieve broad market adoption, or deliver sustained operating improvements remains subject to execution, competitive, and economic risks."

Industry Context

The programmatic advertising industry is experiencing significant growth, with global ad spend estimated at $595 billion in 2024 and projected to exceed $800 billion by 2028, with the United States being the leading market. Mobiquity Technologies is strategically positioning itself at the convergence of four high-growth sectors: Casino/Slots Gaming, AI & Big Data, AdTech, and Retail Media. The company's alliance with Context Networks aims to introduce programmatic advertising into the gaming industry, specifically targeting in-venue screens like slot machines and digital signage, which represents a novel approach. This initiative, bolstered by a commercial agreement with NRT Technology (a global gaming payments provider), could significantly expand Mobiquity's reach into a vast network of casino properties and digital endpoints, creating new non-gaming advertising revenue streams and potentially disrupting traditional advertising models in the gaming sector.

Comparison to Industry Standards

• Context Networks' internal estimates suggest the annual gross revenue potential from programmatic advertising across 1,000 slot machines could exceed $20 million for all participants, depending on factors such as play time rates and ad inventory pricing, providing a specific benchmark for their new gaming initiative.
• The company believes its ATOS platform offers superior time and cost efficiency compared to other Demand-Side Platforms (DSPs) by integrating all necessary capabilities without requiring third-party integrations.
• Management asserts that its data intelligence platform provides one of the most accurate and scalable solutions for data collection and analysis in the industry.
• The strategic alliance with Context Networks is described as building a 'tech-driven platform that could rival current industry leaders in its reach and impact,' indicating an ambition to compete with established players in the broader programmatic advertising space.

Corporate Governance

Legal Proceedings

• Michael Trepeta, a former Co-CEO and director, filed a lawsuit in April 2023 against the company and its subsidiary, Mobiquity Networks, claiming not less than $2.5 million in damages for fraudulent inducement, breach of employment agreement, breach of good faith and fair dealing, and fiduciary duty.
• The company's motion to dismiss Mr. Trepeta's action was granted in December 2023.
• Mr. Trepeta filed a notice of appeal, which was subsequently denied in the third quarter of 2025.

Related Party Transactions

• Dr. Salkind, Board Chairman, loaned the Company $100,000 of non-interest bearing short-term debt financing on September 15, 2025, with a maturity date of December 31, 2025. This unsecured loan included an original issue discount of 25,000 shares of restricted common stock, valued at $31,250.
• During Q1 2025, the company entered into a Loan Agreement with its corporate attorney, replacing $24,000 in trade payables with a demand promissory note, which included $6,000 in Original Issue Discount (OID). This loan was converted into 17,143 shares of common stock in February 2025.
• In June and July 2024, Dr. Salkind and his son provided loans totaling $260,000, which were converted into 523,000 shares of common stock in December 2024.

Stakeholder Impact

• Shareholders face significant dilution risk due to ongoing issuance of common stock for debt conversion, original issue discounts, and services. There is potential for further value erosion given the company's going concern warning and financial distress.
• Employees and consultants whose compensation includes stock-based awards (options, warrants, restricted stock) may see the value of these awards impacted by share price volatility and the company's precarious financial health.
• Creditors, particularly those holding promissory notes, are exposed to high risk, as evidenced by high weighted average interest rates on short-term borrowings (45%) and default clauses that could make outstanding amounts due at 150% of principal plus interest.
• Customers, especially the few key customers accounting for a large portion of revenue, represent a concentration risk. The company's strategic shift and 'limited near-term revenue' during this transition period could potentially impact service focus or delivery for existing clients.
• Management is directly impacted by the going concern risk and the critical need to secure financing and successfully execute strategic plans. Their compensation, which includes stock-based elements, is also tied to the company's performance and share price.

Next Steps

• Execute business plan focused on technology development and improvement.
• Seek out equity and/or debt financing to obtain the capital required to meet financial obligations.
• Continue to explore and execute prospective partnering, distribution, and acquisition opportunities.
• Identify unique market opportunities that represent potential positive short-term cash flow.
• Commercialize the partnership with Context Networks, focused on the casino and gaming advertising ecosystem, with initial monetization anticipated in Q4 2025.
• Achieve scaled market adoption of the CMOne AI-driven marketing platform.
• Expand commercial and support capabilities to drive ecosystem adoption, including onboarding media supply partners, strengthening demand relationships, and enhancing platform interoperability.
• Continue investment in product development, sales enablement, and customer onboarding workflows to support broader commercial deployment of CMOne.
• Remediate internal control gaps, deficiencies, and material weaknesses, including further implementation of detective controls and independent monitoring and testing.
• Repay various promissory notes and merchant agreements according to their maturity schedules.

Key Dates

Recommendation

The company is in a highly precarious financial position, evidenced by substantial and increasing net losses, a dramatic decline in revenue, negative cash flow from operations, and a significant accumulated deficit. The explicit "going concern" warning from management and auditors, coupled with ineffective internal controls, signals severe operational and financial instability. While strategic initiatives in AI and gaming ad-tech are highlighted, their commercial success and ability to generate sustainable revenue are uncertain and not expected to impact near-term results positively. The high reliance on debt financing at exorbitant interest rates (45% weighted average) and continuous equity dilution further exacerbate the risk for investors. The immediate financial health and operational challenges far outweigh any potential long-term upside from new ventures, making the stock a high-risk investment with significant downside potential.

Keywords

Programmatic Advertising, AdTech, AI Platform, Gaming Industry, Casino Advertising, CMOne, Context Networks, Digital Marketing, Data Intelligence, SEC 10-Q, Financial Results, Going Concern, Liquidity, Software Development