Unless the context requires otherwise, references to the "Company," "Alfi,"
"we," "us" and "our" refer to Alfi, Inc., a Delaware corporation and its wholly
owned subsidiary, Alfi (N.I.), Ltd, formed in Belfast, Northern Ireland on
September 18, 2018. Unless otherwise noted, the share and per share information
in this Quarterly Report reflect a forward stock split of the Common Stock
privately held before the IPO at a percentage of 1.260023 effective on March 15,
2021.

Cautionary Statement Regarding Forward-Looking Statements



This Quarterly Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Exchange Act of 1934, as amended (the "Exchange Act"),
Forward-looking statements generally relate to future events or our future
financial or operating performance. Forward-looking statements in this Quarterly
Report include statements regarding our business and technology development, our
strategy, future operations, anticipated financial position, estimated revenues
and losses, projected costs, prospects, plans and objectives of management. In
some cases, you can identify forward-looking statements because they contain
words such as "may," "should," "expects," "plans," "anticipates," "could,"
"intends," "target," "projects," "contemplates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these words or other
similar terms or expressions that concern our expectations, strategy, plans or
intentions. These forward-looking statements are not guarantees of future
performance; they reflect our current views with respect to future events and
are based on assumptions and are subject to known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from expectations or results
projected or implied by forward-looking statements.

We discuss many of these risks in other filings we make from time to time with
the SEC. Also, these forward-looking statements represent our estimates and
assumptions only as of the date of this Quarterly Report, which are inherently
subject to change and involve risks and uncertainties. Unless required by
federal securities laws, we assume no obligation to update any of these
forward-looking statements, or to update the reasons actual results could differ
materially from those anticipated, to reflect circumstances or events that occur
after the statements are made. Given these uncertainties, investors should not
place undue reliance on these forward-looking statements.

Investors should read this Quarterly Report, and the documents that we reference
in this Quarterly Report and have filed with the SEC, with the understanding
that our actual future results may be materially different from what we expect.
We qualify all of our forward-looking statements by these cautionary statements.

Overview


We seek to provide solutions that bring transparency and accountability to the
DOOH advertising marketplace. Alfi uses artificial intelligence and big data
analytics to measure and disseminate audience presence and audience
demographics. Our computer vision technology is powered by proprietary
artificial intelligence, to determine the relevant demographic and geospecific
information of the audience in front of an Alfi-enabled device, such as a tablet
or kiosk.  Alfi can then deliver in real-time, the advertisements to that
particular viewer based on the viewer's demographic profile and/or geolocation.
 Alfi is designed to deliver the right marketing content, to the right person at
the right time in a responsible and ethical manner.  By delivering the
advertisements most relevant to the audience in front of the device, we connect
our advertising customers to the viewers they seek to target.  The result is
higher click through rates ("CTRs"), higher QR code scans and higher cost per
thousand rates ("CPMs").

Alfi seeks to solve the problems facing advertisers in the DOOH marketplace, as
its proprietary technology is designed to measure the audience when an
advertisement is displayed.  Our data rich reporting functionality is able to
inform the advertiser exactly when someone viewed each ad, as well as the
general demographic and geospecific characteristics of the viewing audience.
Alfi gives large and small businesses access to data-driven insights by
expanding their advertising capabilities, by providing analytical sophistication
and by delivering it all over multiple devices.  In addition to the traditional
Content Management System model that delivers adverts on a scheduled loop,
Alfi's technology is able to first analyze the audience and determine the most
relevant content to be displayed.

Alfi has created an enterprise grade, multimedia computer vision and machine
learning platform, capable of generating powerful advertising recommendations
and insights.  Multiple technologies work together with viewer privacy and
data-rich reporting as our primary objectives.  Alfi is able to use a facial
fingerprinting process to make demographic determinations. As such, Alfi makes
no attempt to identify the individual in front of the screen.  Brand owners do
not need to know someone's name or invade their privacy to gain a deeper
understanding of the consumers who view their content.  By providing age, gender
and geolocation information, we

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believe brand owners should have the pertinent data they need for meaningful insight. From an analytics perspective, these data points are intended to provide meaningful reporting instead of arbitrary calculations based on estimates of ad engagement.

Alfi seeks to solve the problem of providing real time, accurate and rich
reporting on customer demographics, usage, interactivity and engagement while
never storing any personally identifiable information.  No viewer is ever
required, or requested by us, to enter any information about themselves on any
Alfi-enabled device.

Our initial focus is to place our Alfi-enabled devices in malls, airports rideshares and taxis. We also have begun offering our software solution to other DOOH media operators as a SaaS product.



Currently, we intend to charge customers solely based on a CPM, or ads
delivered, model. As we continue to prove Alfi in the marketplace, we expect to
charge customers based on a combination of CPM and CTR, and we expect we will
generate higher CPM rates than typical DOOH advertising platforms because we
have the ability to only deliver ads to the customer's desired demographic.

In

addition, we also intend to provide the aggregated data to the brands so they can make more informed advertising decisions.

Recent Developments

Initial Public Offering


On May 3, 2021, the Company's registration statement on Form S-1 (File No.
333-251959) was declared effective by the SEC and the Company completed its IPO
on May 6, 2021. In connection with the IPO, the Company issued and sold
4,291,045 shares of Common Stock and warrants to purchase 4,291,045 shares of
Common Stock (including 559,701 shares of Common Stock and warrants to purchase
559,701 shares of Common Stock pursuant to the full exercise of the
underwriters' overallotment option), at the combined public offering price of
$4.15 for aggregate gross proceeds of approximately $17.8 million, before
deducting underwriting discounts and commissions and other estimated offering
expenses payable by Alfi. The warrants were exercisable immediately upon
issuance and at any time up to the date that is five years from the date of
issuance and have an exercise price of $4.57 per share. Pursuant to the
underwriting agreement for the IPO, the Company also issued to the underwriters
warrants to purchase up to an aggregate of 186,567 shares of Common Stock
("Underwriter's Warrants"). The Underwriter's Warrants may be exercised
beginning on May 3, 2022 until May 3, 2026. The initial exercise price of each
Underwriter's Warrant is S5.19 per share. As of June 10, 2021 (the Original
Filing date of the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2021), no warrants had been exercised and there were 4,477,612
warrants outstanding.

Impact of COVID-19



On January 30, 2020, the World Health Organization ("WHO") announced a global
health emergency caused by a new strain of the coronavirus and advised of the
risks to the international community as the virus spread globally. In March
2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid
increase in exposure globally. The spread of COVID-19 coronavirus has caused
public health officials to recommend precautions to mitigate the spread of the
virus, especially as to travel and congregating in large numbers. In addition,
certain states and municipalities have enacted quarantining regulations which
severely limit the ability of people to move and travel.

COVID-19 has adversely affected the Company's financial condition and results of
operations. The impact of the COVID-19 outbreak on businesses and the economy in
the United States is expected to continue to be significant. The extent to which
the COVID-19 outbreak will continue to impact businesses and the economy is
highly uncertain. Accordingly, the Company cannot predict the extent to which
its financial condition and results of operation will be affected.

In addition, the Company is uncertain of the full effect the pandemic will have
on it for the longer term since the scope and duration of the pandemic is
unknown, and evolving factors such as the level and timing of the distribution
of efficacious vaccines across the world and the extent of any resurgences of
the virus or emergence of new variants of the virus, such as the Delta variant
and the Omicron variant, will impact the stability of economic recovery and
growth. The Company may experience long-term disruptions to its operations
resulting from changes in government policy or guidance; quarantines of
employees, customers and suppliers in areas affected by the pandemic; and
closures of businesses or manufacturing facilities critical to its business.

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Results of Operations

Revenues

In general, Alfi earns revenue from rideshares or SaaS contracts with operating companies who maintain their own network and lease the Alfi platform.

Operating Expenses


Compensation and benefits expenses include compensation expenses related to our
executive, finance, and administrative personnel (including salaries,
commissions, bonuses, stock-based compensation, payroll taxes, and contract
labor costs). Other general and administrative expenses include communications
and technology costs, professional fees, selling and marketing fees, legal fees,
and rent and occupancy expense.

Three-Month Period Ended March 31, 2021, compared to Three-Month Period Ended
March 31, 2020

                                               Three months      Three months
                                              ended Mar 31,     ended Mar 31,
                                                   2021              2020            $Change       % Change
Revenues                                      $       17,450    $            -    $      17,450         N/M

Operating expenses
Compensation and benefits                            883,211           169,769          713,442       420.2 %
Other general and administrative                   1,251,859           430,589          821,270       190.7 %
Depreciation and amortization                        247,315             9,563          237,752         N/M
Total operating expenses                           2,382,385           609,921        1,772,464       290.6 %

Operating loss                                   (2,364,935)         (609,921)      (1,755,014)       287.7 %

Other income (expense)
Other income                                          13,018            10,358            2,660        25.7 %
Interest expense                                   (356,914)          (16,392)        (340,522)         N/M
Total other expense                                (343,896)           (6,034)        (337,862)         N/M

Net loss before provision for income taxes (2,708,831) (615,955) (2,092,876) 339.8 % Provision for income taxes

                                 -                 -                -         N/M
Net loss                                      $  (2,708,831)    $    (615,955)    $ (2,092,876)       339.8 %


Revenues

For the three months ended March 31, 2021 and 2020, net revenues were $17,450
and $-0-, respectively. The increase of $17,450 was due to Alfi's first SaaS
contract revenue generated from a retailer that is paying Alfi for the cost of
the initial pilot for the company.

Operating Expenses



For the three months ended March 31, 2021 and 2020, total operating expenses
were $2,382,385 and $609,921, respectively, an increase of $1,772,464.
Compensation and benefits expense increased as independent contractors became
full time employees effective March 1, 2021. Other general and administrative
expenses increased due to higher costs related to the Company's growth and
launch of its technology platform and preparation for listing as a public
company. The increase in other general and administrative expenses reflected
higher recruiting fees, marketing expense, rent, software development costs, and
taxes and license fees incurred during the three-month period ended March 31,
2021. Depreciation and amortization charges increased as the three months ended
March 31, 2021 included additional depreciation charges for tablets acquired
during 2020.

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Operating Loss

For the three months ended March 31, 2021, the operating loss increased from
$609,921 to $2,364,935, an increase of $1,755,014 compared with the three months
ended March 31, 2020. The increase was primarily due to higher operating
expenses related to the Company's growth and launch of its technology platform
and preparation for listing as a public company.

Other Income (Expense)


Other income of $13,018 and $10,358 for the three-month periods ended March 31,
2021, and March 31, 2020, respectively, included realized and collected foreign
tax credits associated with its wholly owned subsidiary Alfi (N.I.) Ltd of
$15,960 and $9,152, respectively. Interest expense of $356,914 and $16,392 for
the three-month periods ended March 31, 2021 and 2020, respectively, rose
primarily due to additional interest expense incurred for related-party
financing provided during the three months ended March 31, 2021.

Net Loss



For the three months ended March 31, 2021, the net loss increased from $615,955
to $2,708,831, an increase of $2,092,876 compared with the three-month period
ended March 31, 2020. The increase was primarily due to higher operating
expenses related to the Company's growth and launch of its technology platform
and preparation for listing as a public company.

Liquidity and Capital Resources


As of the date of this Quarterly Report, the Company has not yet generated
substantial revenue from customers and business activity has mainly consisted of
cash outflows associated with its business development activities. These
conditions indicate that there is substantial doubt about the Company's ability
to continue as a going concern within one year from the issuance date of the
consolidated financial statements.

The Company's primary source of operating funds since inception through April
2021 was cash proceeds from the private placements of preferred equity and debt
securities. In May 2021, the Company completed its IPO yielding net proceeds to
the Company of approximately $15.7 million from sale of Common Stock and
warrants. The capital raised included funding for working capital to launch and
expand operations in accordance with its business model.

The Company intends to raise additional capital through private placements of
debt and equity securities, but there can be no assurance that these funds will
be available on terms acceptable to the Company or will be sufficient to enable
the Company to fully complete its development activities or sustain operations.
If the Company is unable to raise sufficient additional funds, it will have to
develop and implement a plan to further extend payables, reduce overhead, or
scale back its current business plan until sufficient additional capital is
raised to support further operations. There is no assurance that such a plan
will be successful.

Off-Balance Sheet Arrangements


We did not have, during the period presented, and we do not currently have, any
relationships with any organizations or financial partnerships, such as
structured finance or special purpose entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes.

Critical Accounting Policies and Significant Accounting Estimates



Our management's discussion and analysis of our financial condition and results
of operations are based on our financial statements, which have been prepared in
accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the financial statements as well as the reported
expenses during the reporting periods.

The accounting estimates that require our most significant, difficult, and
subjective judgments have an impact on revenue recognition, financial
instruments and the determination of share-based compensation and the useful
lives of long-lived assets. We evaluate our estimates and judgments on an
ongoing basis. Actual results may differ materially from these estimates under
different assumptions or conditions.

We believe that the assumptions and estimates associated with the evaluation of
revenue recognition criteria, including the determination of revenue recognition
as net versus gross in our revenue arrangements, useful lives of long-lived
assets and stock-based compensation expense have the greatest potential impact
on our consolidated financial statements. Therefore, we consider these to be

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our critical accounting policies and estimates. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ materially from these estimates.

Our significant accounting policies are more fully described in our consolidated financial statements (Note 2) included in this Quarterly Report.

Recently Issued Accounting Standards

Our analysis of recently issued accounting standards are more fully described in our consolidated financial statements (Note 2) included in this Quarterly Report.

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