Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this Management's Discussion and Analysis of Financial Condition and Results of Operations to "us," "we," "our," and similar terms refer to the Company.

The information contained in this Form 10-Q and documents incorporated herein by reference are intended to update the information contained in the Company's Form 10-K for its fiscal year ended December 31, 2024 which includes our audited financial statements for the years ended December 31, 2024 and 2023 and such information presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors" and other information contained in such Form 10-K and other Company filings with the Securities and Exchange Commission ("SEC").

This statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including the matters set forth in this statement. The accompanying consolidated financial statements include the accounts of Mobiquity Technologies, Inc. (the "Company") and its wholly owned subsidiaries.

This Quarterly Report includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as "anticipate," "estimate," "plan," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain risk factors discussed in our Annual Report on Form 10-K (filed with the Securities and Exchange Commission (the "SEC") on April 7, 2025.

Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Our Company

We are a next-generation advertising technology, data compliance and intelligence company which operates through our three proprietary software platforms in the programmatic advertising industry.

The Programmatic Advertising Industry

Programmatic advertising refers to the automated buying and selling of digital ad space. In contrast to manual advertising, which relies on human interaction and negotiation between publishers and marketers, programmatic ad buying harnesses technology to purchase digital display space. This use of software and algorithms helps streamline ad buying processes, which is why programmatic has become one of the most indispensable digital marketing tools worldwide. In 2024, global programmatic ad spend reached an estimated 595 billion U.S. dollars, with spending set to surpass $800 billion by 2028. The United States remains the leading programmatic advertising market worldwide.

Our Mission

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 do this by offering three proprietary solutions: Our ATOS platform for brands and agencies, our data intelligence platform for audience segments and targeting, and our publisher platform for privacy compliance and publisher monetization.

Our Opportunity

In February 2025, the Company completed a expansion of its strategic alliance with Context Networks, Inc. (Context), a private company offering a programmatic advertising platform that leverages private blockchain technology to deliver advertising solutions for the gaming industry. By combining Context's innovation in gaming-specific advertising with Mobiquity's expertise in geo-targeted advertising, we're creating a first-of-its-kind platform delivering ads to slot machines in real-time Slot machine advertising technology now live with River City Amusements, beginning of a broader rollout, introducing an omni-channel ad ecosystem within casino environments (table games, card rooms, digital signage, hospitality, and the like).

Our Solutions

Programmatic Advertising Platform

Our advertising technology operating system (or ATOS) platform is a single-vendor end-to-end solution that blends artificial intelligence (or AI) and machine learning (or ML)-based optimization technology that automatically serves advertising and manages digital advertising campaigns. Our ATOS platform engages with approximately 10 billion advertisement opportunities per day.

As an automated programmatic ecosystem, ATOS increases speed and performance, by providing dynamic technology that scales in real-time. It is this proprietary cloud-based architecture that keeps costs down and allows us to pass along savings to our customers. Also, by offering more of the features inherent in a digital advertising campaign and removing the need for third-party integration of those features, we believe that our ATOS platform can be substantially more time efficient and cost efficient than other Demand-Side Platforms (or DSPs). Our ATOS platform also decreases the effective cost basis for users by integrating all the necessary capabilities at no additional cost as compared to the costs to outsource these capabilities to one or more providers in a fragmented ecosystem. DSP and bidding technologies, AdCop™ Fraud Protection, rich media and ad serving, attribution, reporting dashboard and DMP are all included in our ATOS platform.

Data Intelligence Platform

Our data intelligence platform provides precise data and insights on consumer's real-world behavior and trends for use in marketing and research. Our management believes, based on our experience in the industry, that we provide one of the most accurate and scalable solutions for data collection and analysis, utilizing multiple internally developed proprietary technologies.

We provide our data intelligence platform to our customers on a managed services basis and also offer a self-service alternative through our MobiExchange product, which is a software-as-a-service (or SaaS) fee model. MobiExchange is a data-focused technology solution that enables users to rapidly build actionable data and insights for its own use. MobiExchange's easy-to-use, self-service tools allow anyone to reduce the complex technical and financial barriers typically associated with turning offline data, and other business data, into actionable digital products and services. MobiExchange provides out-of-the box private labeling, flexible branding, content management, user management, user communications, subscriptions, payment, invoices, reporting, gateways to third party platforms, and help desk, among other things.

Publisher Platform for Monetization and Compliance

Our content publisher platform is a single-vendor ad tech operating system that allows publishers to better monetize their opt-in user data and advertising inventory. The platform includes tools for: consent management, audience building, a direct advertising interface and inventory enhancement. Our publisher platform provides content publishers the functionality to use its user identifier data to create inventories of profiled data segments and to target audiences with advertising using that data, in a data privacy compliant manner.

Our Revenue Sources

We target publishers, brands, advertising agencies and other advertising technology companies as our audience for our three platform products. We generate revenue from our platforms through two verticals:

	·	The first is licensing one or more of our platforms as a white-label product for use by advertising agencies, demand-side platforms (or DSP's), brands and publishers. Under the white-label scenario, the user licenses a platform from us and is responsible for running its own business operations and is billed a percentage of amounts spent on advertising run through the platform.
	·	The second revenue stream is a managed services model, in which, the user is billed a higher percentage of revenue run through a platform, but all services are managed by us.

Our Strategic Alliance with Context Networks

On November 12, 2024, we announced the expansion of our strategic partnership with Context Networks and the rollout of their advanced ad tech solution for casinos, seamlessly integrating digital ads into slot machines to enhance player engagement. This innovative approach not only transforms the in-casino experience but also extends advertising across mobile and CTV platforms, reconnecting with players after they leave. With plans for a broader rollout, we believe this technology is poised to set a new standard in multi-platform advertising within the gaming industry. Furthermore, management believes that the aforementioned strategic partnership will have a significant favorable impact on our results of operations in fiscal 2025 and beyond.

We believe that by combining Context's innovation in gaming-specific advertising with Mobiquity's 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 isn't just about disrupting the gaming industry, it's about building a tech-driven platform that could rival current industry leaders in its reach and impact. Context Networks' addressable market includes approximately 4,700 global casinos and 2.9 million slot machines, with a potential audience exceeding 1.6 billion global gamblers, including an estimated 57 million in North America. Based on Context Networks' internal estimates, 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. No assurance can be given as to the amount of revenue that we will receive annually from this strategic alliance.

In February 2025, the Company issued 127,230 shares of its restricted common stock in exchange for 274,725 shares of Context's restricted common stock. The value of the shares issued was based on the Company's market value of its common stock at the effective date of the exchange, $3.93 per share. This agreement establishes minority ownership stakes in each other, reinforcing their shared vision for innovation in casino advertising technology and the growing market for targeted, data-driven direct marketing and advertising solutions in gaming environments.

As a result of our relationship with Context, we are now focused on developing a gateway into Casinos, Gaming, Big Data, AI and AdTech through our relationship with Context Networks and partnerships like River City Amusements. We are in the process of delivering next-generation advertising experiences inside real-world venues across the U.S.

In August 2025, the Company launched CMOne, an AI-powered marketing platform, used in conjunction with its current platform, providing small and medium-sized businesses with enterprise-grade marketing capabilities to compete more effectively in their respective markets.

1. Strong Footprint in Casinos and Gaming Venues

We are powering digital advertising directly on gaming machines and digital signage within casinos, taverns, and amusement venues.

	1.	In partnership with Context Networks and River City Amusements, we have helped to launch in-venue advertising across Wisconsin taverns and restaurants.
	2.	These ad units are integrated into slot machines and gaming displays, delivering dynamic and monetizable content while players are engaged. This direct access to in-venue screens gives us a unique channel for brand exposure in an industry with very little traditional advertising.

2. Big Data-Driven Targeting

Our platforms are built to gather, segment, and apply audience data to optimize campaign delivery. Whether it's geo-targeting customers by ZIP code or tracking user behavior across campaigns, we help advertisers fine-tune messages with measurable return on investment. This allows:

	1.	Local businesses to run highly relevant, localized promotions,
	2.	National brands to tap into high-traffic, high-engagement entertainment environments, and
	3.	Campaign performance tracking across venues

3. Expanding Retail Media Footprint

The initial Wisconsin deployment with River City Amusements spans 38 venues with over 150 digital screens. That number is expected to grow to over 70 venues with more than 340 screens-and counting. This expansion is expected to transform underutilized digital screens in restaurants, bars, and amusement centers into revenue-generating ad inventory, representing a new wave of retail media-offering programmatic-style efficiency in real-world environments.

4. AdTech Infrastructure for the Real World

We provide a full-stack advertising solution consisting of the following:

	1.	Dynamic creative delivery based on context (location, time of day, event triggers),
	2.	Cross-channel extensions including mobile and connected TV (CTV), and
	3.	Measurement and analytics to optimize campaign performance.

Unlike typical digital advertising, which depends solely online, we bring the power of digital targeting and measurement into physical spaces where consumers spend time and money.

5. A Convergence of High-Growth Sectors

We are at the intersection of four fast-moving industries:

Sector	Mobiquity's Strategic Role
Casino/Slots Gaming	First to deploy ad units directly on gaming machines
AI & Big Data	Uses consumer behavior insights to enhance targeting and delivery
AdTech	Provides a tech stack for campaign delivery, measurement, and scale
Retail Media	Converts real-world entertainment venues into monetized ad space

We are helping to transform how advertising reaches consumers in high-engagement environments like casinos, bars, and gaming venues. With a rapidly expanding footprint and a data-driven advertising model, we have access to multiple growth markets through a single public company.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of financial statements requires management to make estimates and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience, and other assumptions as the basis for making judgments. We believe that the following critical accounting policies affect our more significant judgments and estimates in the preparation of our financial statements.

Use of Estimates

Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported periods. Actual results could differ from those estimates, and those estimates may be material.

Risks and Uncertainties

The Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company's operations are subject to significant risks and uncertainties including financial and operational risks including the potential risk of business failure.

The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company's distribution of the product. These factors, among others, make it difficult to project the Company's operating results on a consistent basis.

Fair Value of Financial Instruments

The Company accounts for financial instruments at fair value, which is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value:

	·	Level 1-Valuation based on unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access;
	·	Level 2-Valuation based on observable quoted prices for similar assets and liabilities in active markets; and
	·	Level 3-Valuation based on unobservable inputs that are supported by little or no market activity, which require management's best estimate of what market participants would use as fair value.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include accounts receivable, accounts payable and accrued expenses, and contract liabilities. On June 30, 2025, the carrying amounts of these financial instruments approximated their fair values due to the short-term nature of these instruments, or they are receivable or payable on demand. The fair value of the Company's debt approximates its carrying value based on current financing rates available to the Company and its short-term nature.

The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2, or Level 3 instruments.

Accounts Receivable

Accounts receivable represents customer obligations under normal trade terms and are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral.

Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for credit losses. The Company provides an allowance for credit losses based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made.

Impairment of Long-lived Assets

Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 Impairment or Disposal of Long-Lived Assets. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include but are not limited to significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets and compares this to the carrying amounts of the assets.

If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606) to align revenue recognition more closely with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

Identify the contract with a customer.

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

Identify the performance obligations in the contract.

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

Determine the transaction price.

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company's contracts as of June 30, 2025, contained a significant financing component or variable consideration terms.

Allocate the transaction price to performance obligations in the contract.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.

Recognize revenue when or as the Company satisfies a performance obligation.

The Company satisfies performance obligations either overtime or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer.

Each of the Company's customer contracts is deemed to have a single performance obligation. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days.

Stock-Based Compensation

The Company accounts for our stock-based compensation under ASC 718 Compensation - Stock Compensation using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, which is generally the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments.

The Company uses the Black-Scholes model for measuring the fair value of options and other equity instruments granted to both employees and non-employees.

When determining fair value of stock-based compensation, the Company considers the following assumptions incorporated into the Black-Scholes model:

	·	Exercise price,
	·	Expected dividends,
	·	Expected volatility,
	·	Risk-free interest rate; and
	·	Expected life of option

Recent Issued Accounting Pronouncements

We consider the applicability and impact of all new accounting pronouncements on our consolidated financial position, results of operations, stockholders' deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the Financial Accounting Standards Board (FASB) through the date their consolidated financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective, that when adopted, will have a material impact on the consolidated financial statements of the Company.

Plan of Operation

Mobiquity intends to expand its sales and support team to drive revenue growth across multiple strategic initiatives, with a particular focus on capitalizing on its evolving relationship with Context Networks and the broader opportunity in the casino and gaming vertical. Through this strategic alliance, Mobiquity gains access to a highly specialized, under-monetized supply of digital real estate within casinos, which can now be activated via our advertising technology stack. This includes integration with supply-side platforms (SSPs) and Mobiquity's new Publisher Platform, which is designed to onboard publishers across web, mobile, application, and Connected TV (CTV) environments.

The expanded sales team will target advertising agencies, brands, publishers, and SSP operators to grow both the demand and supply sides of Mobiquity's ATOS platform, while also leveraging the Company's proprietary data and artificial intelligence capabilities delivered through MobiExchange. MobiExchange enables audience targeting using custom data segments for omnichannel marketing programs, including programmatic display, CTV, email, and SMS. As a core AI-driven intelligence layer, it enhances both precision targeting and campaign optimization.

The Publisher Platform, newly introduced by Mobiquity, opens another growth vector. Sales efforts will focus on bringing on board digital content owners-such as unique and non-traditional website and app publishers, CTV providers, and SSP partners-who can monetize their inventory through seamless access to ATOS and MobiExchange. With the integration of Context Networks' patented ad technology and Mobiquity's advanced platform capabilities, the Company is positioned to capture growing demand for AI-enhanced, performance-driven advertising across both traditional and emerging digital channels.

Results of Operations

Quarter Ended June 30, 2025, Compared to Quarter Ended June 30, 2024

The following table sets forth certain selected statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

		Quarter Ended
		June 30, 2025				June 30, 2024
Revenues		$	31,108			$	266,892
Cost of revenues			170				184,125
Gross profit			30,938				82,767
Total operating expenses			1,990,416				1,104,776
Loss from operations		$	(1,959,478	)		$	(1,022,009	)

We generated revenues of $31,108 for the three months ended June 30, 2025, compared to $266,892 during the same period in 2024, representing a decrease of $235,784. The decrease is primarily attributable to the absence of political advertising revenue that was realized during the 2024 period, as well as a strategic shift in the Company's focus toward initiatives expected to generate long-term growth. In particular, the Company has been preparing for the anticipated launch of its strategic alliance with Context Networks, which is expected to commence in the third quarter of 2025.

Context Networks operates a proprietary programmatic advertising platform designed for the gaming industry. Its patented technology utilizes artificial intelligence and private blockchain infrastructure to enable secure, data-driven advertising across a variety of digital surfaces within casinos and gaming environments.

We believe this strategic alliance with Context Networks places the Company in a favorable position within a growing vertical. As described above under Our Strategic Alliance with Context Networks, Context Networks' addressable market includes approximately 4,700 global casinos and 2.9 million slot machines, with a potential audience exceeding 1.6 billion global gamblers, including an estimated 57 million in North America, and based on Context Networks' internal estimates, the annual gross revenue potential from programmatic advertising across 1,000 slot machines could exceed $20 million, depending on factors such as play time rates and ad inventory pricing.

In August 2025, the Company launched CMOne, an AI-powered marketing platform, used in conjunction with its current platform, providing small and medium-sized businesses with enterprise-grade marketing capabilities to compete more effectively in their respective markets.

In addition to the Context strategic alliance and launch of CMOne, the Company has also developed several new features and enhancements to its advertising platform, which we believe will contribute to increased revenue opportunities. 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 Q3 2025, with growth expected to accelerate on a quarter-over-quarter basis as these initiatives gain traction.

The cost of revenues was $170 or 0.5% of revenues in the second quarter of 2025 as compared to $184,125 or 69% of revenues in for the same period of 2024. Cost of revenues include audience building, targeting features and web services for storage of our data and web engineers who are building and maintaining our platforms. Our ability to capture and store data for sales does not translate to increased cost of revenues.

Gross profit was $30,938, or 99% of revenues for the second quarter of 2025 as compared to $82,767 in the same period of 2024 or 31% of revenues.

Operating expenses were $1,990,416 for the second quarter of 2025 compared to $1,104,776 in the prior year, an increase of $885,640. The increase in operating costs was primarily related to a non-cash increase in professional fees of approximately $675,000, amortization of $118,000 and salaries of $174,000, offset by reductions in computer support and technology of approximately $95,000 and license fees of $18,000.

The loss from operations for the second quarter of 2025 was $1,959,478 as compared to $1,022,009 for the prior year. Our loss from operations increased by approximately $937,469, driven primarily by the increase in operating expenses discussed above. The continuing operating loss is attributable to the focused effort in creating the products and services required to move forward with our business.

Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024

The following table sets forth certain selected statement of operations data for the periods indicated in dollars. In addition, we note that the period-to-period comparison may not be indicative of future performance.

		Six Months Ended
		June 30, 2025				June 30, 2024
Revenues		$	43,721			$	530,174
Cost of revenues			31,638				395,394
Gross profit			12,083				134,780
Total operating expenses			4,117,015				2,205,887
Loss from operations		$	(4,104,932)			$	(2,071,107	)

We generated revenues of $43,721 for the six months ended June 30, 2025, compared to $530,174 during the same period in 2024, representing a decrease of $486,453. The decrease is primarily attributable to the absence of political advertising revenue that was realized during the 2024 period, as well as a strategic shift in the Company's focus toward initiatives expected to generate long-term growth. In particular, the Company has been preparing for the anticipated launch of its strategic alliance with Context Networks, which is expected to commence in the third quarter of 2025.

Context Networks operates a proprietary programmatic advertising platform designed for the gaming industry. Its patented technology utilizes artificial intelligence and private blockchain infrastructure to enable secure, data-driven advertising across a variety of digital surfaces within casinos and gaming environments.

We believe this strategic alliance with Context Networks places the Company in a favorable position within a growing vertical. As described above under Our Strategic Alliance with Context Networks, Context Networks' addressable market includes approximately 4,700 global casinos and 2.9 million slot machines, with a potential audience exceeding 1.6 billion global gamblers, including an estimated 57 million in North America, and based on Context Networks' internal estimates, the annual gross revenue potential from programmatic advertising across 1,000 slot machines could exceed $20 million, depending on factors such as play time rates and ad inventory pricing.

In August 2025, the Company launched CMOne, an AI-powered marketing platform, used in conjunction with its current platform, providing small and medium-sized businesses with enterprise-grade marketing capabilities to compete more effectively in their respective markets.

In addition to the Context strategic alliance and launch of CMOne, the Company has also developed several new features and enhancements to its advertising platform, which we believe will contribute to increased revenue opportunities. 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 Q3 2025, with growth expected to accelerate on a quarter-over-quarter basis as these initiatives gain traction.

The cost of revenues was $31,638 or 72% of revenues in the first six months of 2025 as compared to $395,394 or 75% of revenues in for the same period of 2024. Cost of revenues include audience building, targeting features and web services for storage of our data and web engineers who are building and maintaining our platforms. Our ability to capture and store data for sales does not translate to increased cost of revenues.

Gross profit was $12,083, or 28% of revenues for the first six months of 2025 as compared to $134,780 in the same period of 2024 or 25% of revenues.

Operating expenses were $4,117,015 for the first six months of 2025 compared to $2,205,887 in the prior year, an increase of $2,178,071. The increase in operating costs was primarily related to a non-cash increase in professional fees of approximately $1,828,000, amortization of $197,000, and salaries of $346,000 with reductions in computer support of approximately $149,000 and license fees of $38,000.

The loss from operations for the first six months of 2025 was $4,371,875 as compared to $1,911,128 for the prior year. Our loss from operations increased by approximately $2,034,000, driven primarily by the increase in operating expenses discussed above. The continuing operating loss is attributable to the focused effort in creating the products and services required to move forward with our business.

Liquidity and Capital Resources

We have a history of operating losses, and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal year ended December 31, 2024.

The Company had cash of $184,081 at June 30, 2025. Cash used in operating activities for the six months ended June 30, 2025, was $2,573,161. This resulted primarily from a net loss of $4,464,836 offset by amortization of intangibles of $360,232, amortization of debt discount of $321,271, expense related common stock and warrants issued for services of $1,114,633, and a decrease in prepaid expenses and other assets of $87,501. Cash flow provided by financing activities of $1,597,623 resulted primarily from net cash received from common stock issuances of $1,790,000, net proceeds from the issuance of debt $267,994, offset by repayments on notes payable of $459,871.

The Company had cash of $23,892 at June 30, 2024. Cash used in operating activities for the six months ended June 30, 2024, was $1,336,280. This resulted primarily from a net loss of $1,787,407 offset by stock-based compensation of $1,175, amortization of intangibles of $162,904, amortization of debt discount of $147,294, increase in accounts receivable of $186,482 and $222,524 increase in accounts payable and accrued expenses, and increase in prepaid expenses and other assets of $96,652. Cash used in investing activities results from an increase in capitalized software development costs of $974,375. Cash flow provided by financing activities of $1,806,275 resulted primarily from net cash received from common stock issuances of $1,462,000, net proceeds from the issuance of debt $876,923, offset by repayments on notes payable of $532,642.

Our company commenced operations in 1998 and was initially funded by our three founders, each of whom has made demand loans to our company that have been repaid. Since 1999, we have relied on equity financing and borrowings from outside investors to supplement our cash flow from operations and expect this to continue in 2024 and beyond until cash flow from our proximity marketing operations becomes substantial.

Debt and Equity Transactions

For a description of debt and equity transactions for the fiscal year ended December 31, 2024, and the six months ended June 30, 2025, reference is made to the Notes to the Consolidated Financial Statements described elsewhere herein.

Off-Balance Sheet Arrangements

As of June 30, 2025, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.