Thank you, operator. I like to welcome everyone to Mobivity's second quarter 2019 earnings call.

Hosting the call today are Dennis Becker, Founder, Chairman and Chief Executive Officer; Charles Mathews, Chief Financial Officer. Before I turn the call over to management, I'd like to call everyone's attention to the company's Safe Harbor policy.

Please note that certain statements made on this call will be forward-looking statements, which are subject to considerable risks and uncertainties. We caution you that such statements reflect the management's best judgments based on factors currently known and that actual events or results could differ materially.

Please refer to the documents filed by the company from time-to-time with the SEC and in particular its most recently filed quarterly report on the Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ from those contained in the forward-looking statements.

Any forward-looking statements made during this call are being made as of today. If this call is replayed or reviewed after today, the information presented during this call may not contain current or accurate information.

Except as required by law, the company assumes no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if the new information becomes available in the future. Today's call may include non-GAAP financial measures, which require a reconciliation to the most directly comparable financial measures, which are calculated and presented in accordance with GAAP and can be found in today's press release, which is also available at mobivity.com.

I like to remind everyone that the company adopted the new revenue recognition accounting standard otherwise referred to as ASC 606, as of January 2018 on a modified retrospective basis. This means the results reporting period beginning on or after January 1, 2018, are presented under the new revenue recognition standards or prior period amounts before January 1, 2018 are not adjusted.

With all that said, I would like now to turn the call over to Dennis Becker. Dennis, the floor is yours.

Thanks, Brett. And thanks everyone for joining us on our call today.

The second quarter further demonstrated the accelerating progress we are seeing as we achieved more than 75% year-over-year top line revenue growth. Our recurring revenue model continues to gain momentum and build a much more consistent revenue curve, compared to last year.

Increases in deployed locations, coupled with expanding licensing fees, propelled our top line recurring revenue forward as the market for our technology grew substantially. The second quarter also included several key milestones that we believe are catalytic events in our pursuit of redefining how brick and mortar brands engage consumers in an increasingly digital world.

From Pepsi’s formal announcement of Mobivity’s role in their digital lab initiatives at this year’s National Restaurant Association in May, to commencing role out of what could be the largest digital offer management solution of its kind for our largest customer. Our ability to proliferate our solutions in thousands of more locations and drive higher annual recurring licensing fees grew much stronger and our addressable market continues to expand.

Our solutions now facilitate hundreds of millions of profitable marketing engagement to millions of consumers for world-class plans such as Subway, Baskin-Robbins, Red Lobster and many more. Companies of every size and industry are transforming how they do business in the digital age.

IDC projects world-wide spending of technologies and services that will enable digital transformation to reach $1.8 trillion by 2022 and our largest target vertical, the restaurant industry is no exception. During the past few months, there has been a flurry of profound moves by restaurant operators as the digital arms raised rapidly heats up.

Technology to engage consumers and operate marketing programs as exponentially higher efficiencies is important as ever and brands are quickly shifting billions of dollars of marketing budget to investment in technologies and services like ours. This is driving premium valuation for the data driven organizations that provide these valuable services and Mobivity is one of the emerging leaders in this space.

Just a few months ago, McDonald's made their largest acquisition in 20 years with the purchase of data driven personalization start-up dynamic yield for $300 million. More recently Starbucks announced to spin-out of their customer engagement technology through a start-up dedicated to created solutions or brands to better engage customers through data and digital channel.

McDonald’s and Starbucks spend a growing listing of QSR brands purchasing or investing large stakes in technologies to automate operations and simplify ordering for customers. Last December, Pizza Hut U.S.

division acquired QuikOrder, an online ordering platform expected to improve the digital ordering capabilities. And more than a year ago, Pizza Huts parent company Yum!

Brands invested $200 million into Grubhub. The bottom line here is that the market is raising up to the material financial impact that these technologies can drive and are now hearing solutions like ours as strategic imperative.

In other words, brands are increasingly viewing technology as a means of survival. Take of our largest customers for example.

In just three short years, this brand has deployed consumer engagement program both in-store and through mobile messaging channels that has generated hundreds of millions of dollars in incremental revenue. Our return to platform has invested billions of purchase transaction and applied artificial intelligence to leverage that data into optimizing offers and promotions program that outperform licensing marketing channels by multiple.

As a result, our annual recurring licensing fees with this brand has grown tremendously over the past three years and we embarked on further expansion of our services during the second quarter. And this isn’t an isolated-phenomena as our other clients are seeing incredible results from our Recurrency platform, especially in contracts related to marketing channel which is an important point.

Our customers alone operate billions of dollars in marketing spend on legacy marketing channel. As we continue to exponentially outperform legacy marketing channels, we assume these legacy budgets shift.

For perspective, our largest customer operation in annual marketing budget of nearly $500 million. If we could grow to just 3% of this brands marketing budget that would equate to $15 million in annual revenues from just one consumer loan.

Most brands budget is still spent on TVs, radio, and print advertising, but we're seeing those budgets starting to accelerate towards technology like ours. Part of the reason for the shift is that we have collected, analyzed, and are now sharing data to show the return on different marketing spending, and brands are realizing that direct-to-consumers digital marketing is simply more effective and profitable.

Additionally, the whole ecosystem of supply chain partners to the restaurants and retail space are following too. In May of this year, Pepsi announced the launch of the PepsiCo food service digital labs, a first of its kind fleet of capabilities built to connect foodservice operators with the company's services, insights and solutions best suited for their specific digital and online needs.

Powered by extensive proprietary and syndicated research into restaurant and food ordering interactions, as part of the consumers digital journey, Pepsi's Digital labs is the first offering of its kind from a food-service manufacturer. Pepsi highlighted Mobivity in their main announcement and we’re extremely excited to be a key partner in supporting Pepsi’s pursuit of bringing digital technologies to their hundreds of thousands of customers.

We’re looking forward to providing updates as Pepsi ramps up their sales and marketing teams over the coming months. I’m also very excited to report two key management hires in Jeff Michaels and Sue Marmion.

As our EVP of Operations, Sue is a Dynamic Executive expert at assessing organizational needs to develop high impact initiatives that improve operational efficiencies, support growth aspirations, and consistently improve sub-optimal trend. All critical leadership assets in anticipation after selling the volume of customer on-boarding and employment while anticipating with our Pepsi partnership.

Previously in her career, Sue was with JM Family Enterprises, a Toyota Company for 25 years, where she ascended the Vice President and Divisional Information Officer for the Toyota division. With $15 billion in annual revenues JM Family Enterprises is a diversified automotive company whose subsidiaries include Southeast Toyota Distributors, the world's largest independent distributor of Toyota vehicle.

World Omni Financial Group, JM&A Group, and JM Lexus. She was responsible for all technology development, maintenance and project delivery in support of the Toyota distributorship, it's dealer franchise partners, and the integrated OEM manufacturing and distribution supply chain and manage the process.

Most recently, she served as Senior Vice President of Delivery Services for 3c Interactive. A mobile marketing company, whose Chairman is Former Apple’s CEO, John Sculley.

She is a value driven thought leader with strong business acumen, and proven expertise in product operations, portfolio management, client management, business process and sharing and continuous improvement. On the sales front, we brought on Jeff Michaels as our new VP of Sales in May.

With more than 17 years of sales leadership experience, Jeff has been building and leading both inside and enterprise sales organizations from start-up to multinational, multibillion-dollar company. His experience includes working across a variety of industries, nine years of which was spent growing retailers and brands in-store and online sales through predictive data, analytics, and personalization software.

Jeff is off to a quick start having already added [indiscernible] to our pipeline, including an opportunity with one of the world's largest grocery chain offering more than 10,000 stores in 20 countries. Additionally, Jeff and his team are closing in on one of our largest deals today with the largest QSR brand.

In his 90 days to helm, Jeff is quickly accelerating a direct sales pipeline to augment our selling products partners set the steps against [indiscernible]. Finally, I’d like to briefly describe an exciting project that we embarked on during the second quarter that will further expand the Recurring license fee profile of our Recurrency platform.

Our product has historically generated licensing fees by executing SMS, text messaging, and our repeat marketing campaigns for our customers. Our data and analytics capabilities then help optimize those campaigns in AI, machine learning, and other techniques to improve campaign performance and ROI over time.

In the second quarter, we launched a project for our largest customer, we will look adding the ability to generate neat sustainable codes that can be delivered across all marketing channels, not just SMS text messaging where we see self-advertising. Our customers will now be able to produce a neat sustainable code across all marketing channels, including email, friends, and smartphone applications.

With this capability, our customers will now depend on our Recurrency platform to support and optimize marketing programs across all of their marketing channels. And vastly expand the data we are ingesting across the marketplace.

More importantly this new capability is an official license fees that can be upsold through existing customers, as well as increase our licensee pricing overall. In fact, our development of this capability was driven by our largest customer citing five-year license for the feature early this year.

In summary, the second quarter was an exciting period with those from macro market trends, shifting customer budgets in the formal launch of our partnership with Pepsi, have all combined for an increasing momentum at both our leadership position and the rapidly expanding digital marketing space, as well as our recurring revenue model. I will now turn the call over to Charles for more detailed view of our financial results and then I will come back for a few summary comments.

Charles?

Thanks, Dennis. Our revenue for the second quarter of 2019 increased 58% to $2.4 million, compared to $1.4 million in the second quarter of 2018.

More importantly on a non-GAAP basis, which excludes the adjustment for ASC 606 and better describe the recurring revenue. Revenues increased $2.7 million in the second quarter of 2019, compared to $1.6 million in 2018, an increase of 72%.

We ended the second quarter of 2019 with $155,000 in cash, but we recently raised $5.7 million as part of a raise of up to $7 million. The $5.7 million consisted of conversion of $2.5 million of debt and was structured as a one common unregistered share and one-half two-year warrant $1.25.

Each unit was priced at a dollar. With our recurring revenue run rate filing and our history over the past few years of receiving lowers prepayments from our existing customer contract during the third quarter, we anticipate this recent financing will satisfy our capital needs for the foreseeable future.

Total operating expenses for the second quarter were $3.3 million, compared to $2.1 million in the prior year quarter. Operating expenses, generally increased, due to a non-cash item ASC 606 adjustment, as well as non-recurring legal and software development costs.

Gross operating expenses were relatively flat, compared to the last year, excluding these non-cash and one-time expenses. General and administrative costs were up in Q2 2019, compared to Q2 2018 by $811,000, due to $645,000 in non-cash and non-recurring charges, including $350,000 in stock-based compensation, 170,000-related to legal expenses and 125,000 related to our new offer management software deployed in the quarter.

Sales and marketing cost were essentially flat, up only $10,000 year-over-year as we anticipate leveraging partners sales resources such as Pepsi, scaled customer acquisition versus increasing our sales and marketing investments. Engineering research and development costs increased 339,000 from Q2 2018 to Q2 2019, primarily from non-recurring deployment costs related to the launching of our large-scale offer management platform where our largest customer as Dennis described earlier.

Although our net loss for the third quarter increased on a GAAP basis, when backing out non-recurring and non-cash charges, our net loss was relatively flat with a loss of only $1.2 million, compared to an adjusted net loss of $1.1 million in 2018. On a GAAP basis, net loss for the second quarter of 2019 was $2.6 million or $0.06 per share, compared to a net loss in 2018 of $1.5 million or $0.04 per share.

I will now turn the call back over to Dennis for his closing remarks. Dennis?

Thanks, Charles. When great company of world-class partners such as Pepsi, Google, Samsung, Fiorina, and others have selected our company to pursue the $1.8 trillion digital transformation market, iconic brand such as Subway continue to expand their investments in our technology and services.

With annual recurring licensing fees now exceeding $1,000 per location and growing, and literally millions of locations in our target market. We stand firm in our belief that we can build Mobivity to a $100 million annual run rate and beyond.

Special thanks to our amazing team here at morbidity for achieving another growth quarter towards our ambitious goal.

Hi, Charles, hi Dennis. Congratulations.

Hope you can hear me. So, Charles you made a very interesting comment, and I thought I would like a little bit more color on the comment, you said as things stand today, we should be able to meet our operating needs for the foreseeable future, give me a little bit more meat on the bone there, that means we're not going to be racing any capital, I mean just give me a thought process there?

Yes. Typically, in the third quarter we get a substantial prepayment from one of our largest clients and that plus the recent capital raise should get us off into the foreseeable future.

Okay. Thank you.

That’s my only question.

No, I think we’re good. I appreciate everyone's time and joining us on the call today.