FORM 10‑Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 000-53316 SOBR SAFE, INC. (Exact name of registrant as specified in its charter) 10-Q 1 sobr_10q.htm FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Re ...

Financial Performance - The company reported a significant fluctuation in quarterly and annual operating results, which may not fully reflect the underlying performance of the business[22]. - The company has a limited operating history, and its quarterly and annual operating results may fluctuate significantly[22]. - The company may face challenges in meeting future capital needs, which could impact technology and product development efforts[22]. - The company may face increased costs or disruptions in the supply of raw materials, impacting financial performance[22]. Technology and Product Development - The company is focused on the development and commercialization of alcohol monitoring and detection devices, relying on its SOBRsafe™ technology[22]. - The company relies on third-party intellectual property licenses for its patent-pending technology, which may expose it to legal and financial risks[22]. Manufacturing and Supply Chain Risks - There is a dependency on third-party manufacturers for key components, which could lead to lost revenue if production is delayed[22]. - The company has limited experience in large-scale manufacturing, which may adversely affect growth[22]. - The company is dependent on third-party manufacturers for key components, and any disruptions could negatively impact revenue[22]. International Expansion Risks - The company faces risks associated with international expansion, including unexpected events and regulatory compliance[22]. - The company is subject to risks associated with international expansion, including compliance with regulations and potential cost increases[22]. Competition and Market Challenges - The company faces competition that could hinder its ability to operate profitably in the market[22]. Stock and Share Structure - A reverse stock split of 1-for-3 was effective on April 28, 2023, adjusting all common stock share amounts accordingly[27]. - The company maintains 100,000,000 authorized shares of common stock despite the reverse stock splits[28]. - The number of authorized shares of common stock remains at 100,000,000 despite the reverse stock splits[28].

Core Insights - SOBR Safe, Inc. and Orbiit have formed a strategic partnership to enhance alcohol recovery through AI and wearable technology, aiming to provide a non-judgmental and data-driven approach to sobriety management [1][2][3] Company Overview - SOBR Safe, Inc. specializes in next-generation alcohol detection technology, particularly through its transdermal alcohol detection wristband, SOBRsure, which offers continuous monitoring without the need for invasive testing [1][7] - Orbiit is an AI-driven platform designed to support alcohol recovery, providing personalized interventions and engagement through a sophisticated chatbot and SMS messaging [10][8] Market Context - In 2023, over 28 million people in the U.S. were reported to suffer from Alcohol Use Disorder (AUD), with only 15.6% receiving treatment, highlighting a significant gap in accessible recovery solutions [2] - The partnership addresses the critical demand for innovative recovery options by combining SOBRsafe's wearable technology with Orbiit's AI capabilities [2][5] Partnership Details - The Orbiit Recovery Program is a six-month initiative priced at $3,995, which includes the SOBRsure band and access to Orbiit's AI platform, enhancing user engagement and recovery outcomes [5] - The integration of wearables with real-time monitoring and AI support is expected to improve accountability and motivation for individuals on their sobriety journey [4][8] Technological Innovation - SOBRsafe's technology allows for passive, touch-based alcohol detection, providing immediate feedback on alcohol presence through skin emissions, which is a significant advancement over traditional methods [7][8] - The partnership aims to set a new standard in alcohol recovery solutions by merging AI and wearable technology, potentially transforming the landscape of addiction recovery [6][1]

Financial Performance - Revenue for the three months ended September 30, 2024, was $46,129, compared to $36,274 for the same period in 2023, indicating a growth of approximately 27.5%[11] - Gross profit for the nine months ended September 30, 2024, was $66,381, up from $54,908 in the same period of 2023, reflecting an increase of about 20.9%[11] - The net loss for the three months ended September 30, 2024, was $1,841,210, compared to a net loss of $2,197,380 for the same period in 2023, showing an improvement of about 16.3%[11] - The net loss for the nine months ended September 30, 2024, was $6,424,505, compared to a net loss of $7,673,030 for the same period in 2023, representing a decrease of approximately 16.3%[16] - Revenues for the nine-month period ended September 30, 2024, increased by $26,567, or 22%, to $148,310 compared to $121,743 for the same period in 2023, driven by sales from the SOBRsureTM device and SaaS subscriptions[152] Expenses and Costs - Operating expenses for the three months ended September 30, 2024, totaled $1,878,005, down from $2,083,122 in the same period of 2023, a decrease of approximately 9.8%[11] - Research and development expenses for the three months ended September 30, 2024, were $194,466, compared to $214,374 for the same period in 2023, a decrease of approximately 9.3%[11] - General and administrative expenses increased to $1,499,296 for the three-month period ended September 30, 2024, from $1,358,749 in the prior year, primarily due to higher legal and marketing expenses[141] - Stock-based compensation expense decreased to $184,243 for the three months ended September 30, 2024, compared to $509,999 in the same period of 2023, due to previously issued awards becoming fully vested or forfeited[143] - Stock-based compensation expense decreased from $1,836,674 for the nine months ended September 30, 2023, to $584,551 for the same period in 2024, due to previously issued awards becoming fully vested or forfeited[155] Assets and Liabilities - As of September 30, 2024, total assets decreased to $3,349,452 from $6,147,039 as of December 31, 2023, representing a decline of approximately 45.5%[9] - Cash and cash equivalents decreased significantly to $304,537 as of September 30, 2024, from $2,790,147 as of December 31, 2023, a decline of approximately 89.0%[10] - Total current liabilities decreased to $1,194,337 as of September 30, 2024, from $1,522,842 as of December 31, 2023, a reduction of about 21.5%[10] - The accumulated deficit increased to $(96,057,720) as of September 30, 2024, from $(87,765,981) as of December 31, 2023, indicating a worsening of approximately 9.3%[10] - Total current assets decreased by $2,441,174 from $3,371,470 as of December 31, 2023, to $930,296 as of September 30, 2024, primarily due to cash usage to support negative cash flow from operations[165] Stock and Financing Activities - The company executed a 1-for-110 reverse stock split effective October 2, 2024, impacting all common stock share amounts and related prices[8] - The company raised gross proceeds of $8.2 million through a private placement on October 7, 2024, issuing 2,024,691 units at a purchase price of $4.05 per unit[136] - The company eliminated a March 2025 debt obligation by converting $3,556,233 of debt into 52,145 shares of common stock at $68.20 per share[133] - The exercise price for Common Stock Purchase Warrants was permanently reduced to $29.70 per share in June 2024, resulting in gross proceeds of $2,786,174[94] - The total principal balance of the Company's convertible and non-convertible notes payable as of September 30, 2024, is $26,683[80][81] Legal and Compliance Matters - The company is involved in various pending legal actions, but management believes these will not have a material adverse effect on its financial position or results of operations[181] - A lawsuit filed against the company for breach of contract amounts to $11,164, with a default judgment taken against it[179] - A settlement agreement was reached with a former employee regarding claims of breach of contract and unlawful termination, with expectations for dismissal by year-end[180] Market and Product Development - The company integrated proprietary software with patent-pending touch-based alcohol detection products, SOBRcheckTM and SOBRsureTM, focusing on non-invasive alcohol detection and biometric identity verification[18] - The company anticipates continued evolution of its products and software to meet diverse customer requirements across various markets[129] - The company executed customer agreements for the SOBRsure™ device, which began commercial production in Q3 2023[140] Cash Flow and Financial Health - The company reported a net cash used in operating activities of $4,911,028 for the nine months ended September 30, 2024, compared to $4,705,018 for the same period in 2023[17] - Cash on hand as of September 30, 2024, was $304,537, with a current normalized operating cash flow burn rate of approximately $550,000 per month[163] - The company has cash balances of approximately $300,000 and negative working capital of approximately $265,000, which do not provide adequate capital for operating activities for the next twelve months[59]

Core Insights - SOBR Safe, Inc. has launched SOBRsure™, a wristband device that detects alcohol through advanced transdermal technology, aimed at supporting sobriety and recovery [1][3][7] Product Features - SOBRsure offers real-time detection of alcohol, continuous monitoring, and instant alerts to authorized users via a user-friendly app [5][7] - The wristband is designed to be sleek and discreet, resembling a fitness tracker, and is sweat-proof and water-resistant [5][6] - It includes GPS tracking capabilities and provides historical reporting options for users to demonstrate alcohol compliance [5][6] Market Application - SOBRsure is targeted at individuals seeking to abstain from alcohol, as well as high-risk industries such as transportation, construction, and manufacturing to enhance workplace safety [4][6] - The device serves as an accountability tool for families and employers, providing peace of mind while supporting individuals on their sobriety journey [3][4] Pricing and Availability - SOBRsure is available for purchase at a retail price of $249, with subscription options starting at $39.99 per month for BASIC and $59.99 for PLUS, which includes historical reporting [5][6]

Financial Performance - For the three months ended June 30, 2024, revenues were $54,191, compared to $37,601 for the same period in 2023, indicating a year-over-year increase of approximately 44.05%[11] - The net loss for the six months ended June 30, 2024, was $4,583,295, compared to a net loss of $5,475,650 for the same period in 2023, reflecting an improvement of about 16.25%[11] - Operating expenses for the three months ended June 30, 2024, totaled $1,890,270, a decrease from $2,720,320 in the same period of 2023, showing a reduction of approximately 30.54%[11] - The company reported a gross profit of $13,035 for the three months ended June 30, 2024, compared to $21,025 for the same period in 2023, indicating a decline of about 38.06%[11] - The company reported a net loss of $4,583,295 for the six months ended June 30, 2024, compared to a net loss of $5,475,650 for the same period in 2023[18] - The company generated a net loss of $2,077,374 for the three months ended June 30, 2024, a decrease of $796,584 compared to a net loss of $2,873,958 in the prior year[113] - For the six months ended June 30, 2024, revenues increased to $102,181 from $85,469 in the same period of 2023, driven by increased sales of the SOBRsure™ device[115] Assets and Liabilities - As of June 30, 2024, total assets decreased to $5,122,244 from $6,147,039 as of December 31, 2023, representing a decline of approximately 16.67%[7] - Total liabilities decreased to $1,431,746 as of June 30, 2024, from $4,164,502 as of December 31, 2023, representing a significant reduction of approximately 65.60%[10] - Cash and cash equivalents decreased to $2,166,404 as of June 30, 2024, down from $2,790,147 as of December 31, 2023, a decrease of approximately 22.36%[7] - Total current assets decreased by $787,779, from $3,371,470 as of December 31, 2023, to $2,583,691 as of June 30, 2024[124] - The total stockholders' equity increased to $3,690,498 as of June 30, 2024, from $1,982,537 as of December 31, 2023, representing an increase of approximately 86.06%[10] Cash Flow and Liquidity - The company reported a decrease in cash flows used in operating activities, totaling $(3,049,161) for the six months ended June 30, 2024[18] - The company has cash balances of approximately $2.16 million and positive working capital of approximately $1.3 million, which are deemed inadequate for operating activities for the next twelve months[50] - Cash on hand as of June 30, 2024, was $2,166,404, with a current normalized operating cash flow burn rate of approximately $475,000 per month[123] Stock and Equity - The company had 34,764,593 shares of common stock outstanding as of August 12, 2024, compared to 18,582,241 shares as of December 31, 2023, indicating an increase of approximately 87.00%[6] - The company issued common stock upon the conversion of convertible debt amounting to $2,217,609 during the six months ended June 30, 2024[15] - Total paid-in capital as of June 30, 2024, was $97,998,359, reflecting ongoing capital raising efforts[16] - The company issued 5,702,163 shares of common stock upon exercise of warrants during the six months ended June 30, 2024[67] Research and Development - Research and development expenses for the six months ended June 30, 2024, were $410,461, compared to $374,093 for the same period in 2023, reflecting an increase of about 9.70%[11] - Research and development expenses increased to $308,427 for the three months ended June 30, 2024, compared to $193,175 in the same period of 2023, due to improvements in the SOBRsafe™ software platform[110] Operating Expenses - Total operating expenses for the six months ended June 30, 2024, were $3,622,264, down from $5,185,101 in the prior year, reflecting a decrease in general and administrative expenses[114] - General and administrative expenses decreased by $672,838, from $3,484,333 in the six months ended June 30, 2023, to $2,811,495 in 2024[117] Legal and Compliance - The company has accrued $11,164 plus approximately $21,000 in interest related to a legal proceeding as of June 30, 2024[91] - The company received a decision from the Nasdaq Hearings Panel to grant continued listing on Nasdaq, with a deadline of October 23, 2024, to regain compliance with minimum bid price requirements[93] Risks and Challenges - The company has incurred recurring losses from operations and has limited cash liquidity, indicating a need for additional capital resources in the near future[47] - The company relies on a limited number of component and contract suppliers, which poses a risk of production delays or increased costs if shortages or quality issues arise[43] Miscellaneous - The company has integrated proprietary software with patent-pending alcohol detection products, targeting the North American market[19] - The company has not recorded any deferred tax assets or liabilities at June 30, 2024, as these have been offset by a 100% valuation allowance[40] - The company did not have financial instruments requiring valuation from observable or unobservable inputs to determine fair value on a recurring basis as of June 30, 2024[26]

Group 1 - SOBR Safe (NASDAQ:SOBR) stock is experiencing a significant increase after signing agreements with Hired Power and The Firm for initial purchases of its SOBRsure device [1][3] - Hired Power operates in the treatment sector, collaborating with numerous treatment centers and professionals, while The Firm focuses on addiction recovery [2] - The trading volume of SOBR stock has surged, with over 226 million shares traded, compared to the daily average of 4.3 million shares, and the stock price has risen by 82.6% as of Tuesday morning [3]

Financial Performance - Total revenues for Q1 2024 were $47,990, compared to $47,868 in Q1 2023, reflecting a slight increase of 0.25%[18] - Gross profit for Q1 2024 was $23,209, up from $17,804 in Q1 2023, representing a significant increase of 30.5%[18] - The net loss for Q1 2024 was $2,505,916, compared to a net loss of $2,601,687 in Q1 2023, indicating an improvement of about 3.7%[18] - Basic and diluted loss per common share for Q1 2024 was $0.21, compared to $0.15 in Q1 2023[18] - For the three months ended March 31, 2024, the net loss was $2,505,921 compared to a net loss of $2,601,692 for the same period in 2023, indicating a decrease in losses of approximately 3.7%[22] Operating Expenses - Total operating expenses decreased to $1,731,994 in Q1 2024 from $2,464,781 in Q1 2023, a reduction of approximately 29.8%[18] - Stock-based compensation expense for the three months ended March 31, 2024, was $214,398, a decrease of approximately 69% from $698,913 in the same period of 2023[22] - Research and development expenses decreased by 43.6% from $180,918 in Q1 2023 to $102,034 in Q1 2024, attributed to the completion of the SOBRcheckTM device development[145] Assets and Liabilities - Total current assets decreased to $1,858,082 as of March 31, 2024, from $3,371,470 as of December 31, 2023, a decline of approximately 44.8%[13] - Total liabilities increased to $3,576,499 as of March 31, 2024, from $4,164,502 as of December 31, 2023, reflecting a decrease of about 14.1%[14] - Cash reserves decreased to $1,336,250 as of March 31, 2024, down from $2,790,147 as of December 31, 2023, a decline of approximately 52.0%[13] - Total current liabilities increased by 121% from $1,552,842 as of December 31, 2023, to $3,399,765 as of March 31, 2024, primarily due to the classification of convertible debt[153] Equity and Capital - The total stockholders' equity (deficit) decreased to $938,936 as of March 31, 2024, from $1,982,537 as of December 31, 2023, a decline of approximately 52.7%[14] - Total stockholders' equity as of March 31, 2024, was $938,936, a decrease from $7,827,426 as of March 31, 2023, reflecting a significant decline of approximately 88%[20] - The total additional paid-in capital as of March 31, 2024, was $92,823,937, reflecting an increase from $88,071,861 as of March 31, 2023[20] Cash Flow - The company reported a net cash used in operating activities of $1,453,897 for the three months ended March 31, 2024, compared to $1,589,453 for the same period in 2023, showing a reduction of about 8.5%[22] - Cash at the end of the period was $1,336,250, down from $8,290,003 at the end of the same period in 2023, representing a decrease of approximately 83%[22] - The Company has approximately $1.3 million in cash balances and negative working capital of approximately $1.5 million as of March 31, 2024, which may not be sufficient for operating activities in the next twelve months[73] Debt and Financing - The Company entered into a 2023 Debt Offering, receiving $3 million and issuing convertible notes with a principal amount of $3,529,412, due March 10, 2025[90] - The Company converted $804,695 of convertible notes into 1,297,895 shares of common stock at $0.62 per share, recognizing a conversion expense of $585,875[95] - The Company has two convertible notes payable totaling $9,183 with a 12% interest rate, currently in default[96] - The Company has two non-convertible notes payable totaling $17,500 with interest rates ranging from 9% to 10%, also currently in default[97] Business Operations - The company integrated proprietary software with patented alcohol detection products, targeting markets primarily in North America[23] - Management believes the introduction of the SOBRsureTM product in Q3-2023 will positively impact revenue generation and cash flows from sales[72] - The SOBRsafe™ technology is being explored for integration with existing telematics systems and licensing by non-competitive third parties[134] - The company aims to collect user data through its device portfolio, potentially creating a monetizable asset for statistical analytics[135] Future Outlook - The company expects to continue generating significant losses for the foreseeable future, dependent on accessing additional capital[140] - Management expressed substantial doubt about the company's ability to continue as a going concern due to inadequate operating capital and recurring losses[151]

Financial Performance - The company has generated limited revenue since the first quarter of 2022, with initial revenues from the SOBRsure™ device starting in October 2023[26]. - As of December 31, 2023, the company reported an accumulated deficit of $87,765,981, indicating ongoing financial challenges[49]. - Revenue for the year ended December 31, 2023, was $157,292, a significant increase from $35,322 in 2022, representing a growth of 345%[165]. - Gross profit for 2023 was $62,350, with a gross margin of 39.6%, compared to a gross profit of $16,007 and a margin of 45.3% in 2022[168]. - The net loss decreased to $10,214,721 in 2023 from $12,354,930 in 2022, reflecting a reduction of $2,140,209[166]. - General and administrative expenses rose to $6,350,723 in 2023, up from $6,024,001 in 2022, primarily due to increased payroll and benefits[169]. - The cost of goods sold for 2023 was $94,942, compared to $19,315 in 2022[165]. - Stock-based compensation expense decreased to $2,245,871 in 2023 from $3,008,395 in 2022, attributed to reduced issuance of stock options and restricted stock units[170]. - Research and development expenses fell by $380,751 to $1,016,302 in 2023, down from $1,397,053 in 2022, due to the finalization of the SOBRsureTM wearable device[171]. - Interest expense decreased significantly by $2,652,746 to $804,261 in 2023 from $3,457,007 in 2022, mainly due to a one-time debt default penalty in the prior year[176]. - Cash on hand as of December 31, 2023, was $2,790,147, with a normalized monthly operating cash flow burn rate of approximately $425,000[177]. - Total current assets decreased to $3,371,470 in 2023 from $9,025,717 in 2022, a reduction of $5,654,247, primarily due to cash usage to support negative cash flow from operations[179]. - Net cash used in operating activities was $5,928,076 in 2023, compared to $6,156,172 in 2022, with a net loss of $10,214,721 offset by non-cash items[181]. - Net cash provided by financing activities dropped to $139,226 in 2023 from $13,852,901 in 2022, reflecting a significant decrease in capital raised[183]. - Total liabilities increased to $4,164,502 in 2023 from $2,821,684 in 2022, an increase of $1,342,818[179]. Business Operations - The company has engaged six channel partners to enhance sales and marketing efforts, serving six business customers with SOBRsafe™ devices and services[36]. - The SOBRcheck™ revenue model includes a one-time purchase price per device and a recurring monthly SaaS fee per user[30]. - The wearable band SOBRsure™ became available for sale in late September 2023, with initial revenues generated in October 2023[26]. - The company is focused on developing and commercializing alcohol detection devices based on its SOBRsafe™ technology, which is critical for its business plan[52]. - The company has entered the behavioral health and judicially-mandated market, differentiating itself from competitors focused on breathalyzers and ankle monitors[32]. - The company’s technology allows for non-invasive alcohol detection, which may not be subject to government regulation in targeted markets[39]. - The introduction of the SOBR Safe™ technology aims to penetrate markets like fleet management and alcohol rehabilitation, but market acceptance is essential for success[60]. - Supply chain stability is crucial, as delays or unavailability of critical components could negatively impact customer contracts and revenue[61]. - The company relies on third-party manufacturers for production, and any failure to meet quality and timeliness requirements could harm business growth[64]. - The ability to expand sales and marketing efforts is vital for increasing the customer base and achieving broader market acceptance[76]. - The company must maintain strong product performance and reliability to achieve profitability objectives and avoid customer dissatisfaction[78]. Compliance and Regulatory Issues - As of December 31, 2023, the company's stockholders' equity was below the Nasdaq minimum requirement of $2,500,000[95]. - The company's common stock traded below $1.00 per share for over 30 consecutive business days, receiving a deficiency letter from Nasdaq on November 15, 2023[93]. - The company has been provided an initial period of 180 calendar days until May 13, 2024, to regain compliance with the Bid Price Requirement[93]. - If compliance is not regained by the Compliance Date, the company may be eligible for an additional 180 calendar day compliance period[94]. Corporate Governance - The company has identified material weaknesses in internal controls, including insufficient segregation of duties and lack of documentation[86]. - Enhancements to internal controls were necessary during fiscal 2023 to eliminate identified weaknesses[86]. - The company may face significant influence from major stockholders, with Gary Graham and Cord Carpenter owning approximately 12.4% and 5.0% of outstanding common stock, respectively[88]. - The company relies on a combination of patent, copyright, and trade secret laws to protect its proprietary rights, with one "use" patent and two provisional patents pending[81]. - The company may become involved in costly lawsuits to protect or enforce its patents, which could divert resources from normal operations[82]. - The company has a diverse board with 2 female and 3 male directors, complying with Nasdaq Listing Rule 5605(f)[215]. - Sandy Shoemaker serves as the Chairperson of the Audit Committee and is recognized as an audit committee financial expert[218]. - The company executed eight unanimous written consents during the year ended December 31, 2023[216]. - The Compensation Committee consists of independent directors Steve Beabout and Ford Fay, ensuring compliance with Nasdaq rules[219]. - The company has a designated Nominating and Corporate Governance Committee, also led by independent directors[217]. Leadership and Staffing - David Gandini has been the CEO since October 18, 2021, and previously led IPS Denver, which generated revenues of $46 million[202]. - Christopher Whitaker became CFO in January 2024, having served as VP of Finance since February 2022, with a background in managing financial operations for multinational corporations[204]. - The company employs 14 full-time employees as of March 29, 2024, primarily operating from its corporate offices in Colorado[40]. - The company anticipates hiring an expert in licensing and integration in 2024 to support global expansion efforts[144]. - The company has a Chief Financial Officer with an annual base salary of $175,000 and incentive stock options to acquire 66,667 shares at an exercise price of $7.755[133]. Financing Activities - The company is currently evaluating opportunities to increase stockholders' equity, including capital financing and debt conversion inducement options[95]. - The company raised $3,000,000 from a Debt Offering on March 9, 2023, issuing Convertible Notes and Warrants, with net proceeds of approximately $2,500,000 after costs[120]. - The company completed a PIPE Offering on September 30, 2022, raising approximately $6 million, issuing 1,925,677 Non Pre-Funded Units and 2,128,378 Pre-Funded Units[121]. - The company issued 1,750,225 Armistice Warrants on September 30, 2022, as a result of entering into the PIPE Offering[122]. - The company issued 150,000 shares of common stock for Restricted Stock Units that vested during 2023, exempt from registration under Section 4(a)(2) of the Securities Act of 1933[116]. - On May 10, 2023, noteholders converted $341,999 into 150,000 shares of common stock at a conversion price of $2.28 per share[117]. - The company has never issued dividends to common stockholders and does not expect to pay any in the foreseeable future[135]. - The company entered into a six-month agreement with a consultant on January 1, 2023, issuing 225,000 shares of restricted common stock and 225,000 warrants[120].

Financial Performance - Revenues for the three months ended September 30, 2023, were $36,274, a significant increase of 273.5% compared to $9,734 for the same period in 2022[19]. - Gross profit for the nine months ended September 30, 2023, was $54,908, up from $6,684 in the same period of 2022, indicating a substantial growth[19]. - The net loss attributable to common stockholders for the nine months ended September 30, 2023, was $7,673,017, compared to a loss of $17,358,181 for the same period in 2022[19]. - The net loss for the three months ended September 30, 2023, decreased to $2,197,380 from $3,098,690 in the same period of 2022, a reduction of $901,310[156]. - For the nine months ended September 30, 2023, revenues increased to $121,743 from $12,734 in the same period of 2022, an increase of $109,009[166]. - The gross profit for the nine months ended September 30, 2023, was $54,908, with a gross margin of 45%, compared to a gross profit of $6,684 and a gross margin of 52% in the prior year[167]. Cash and Liquidity - Cash decreased from $8,578,997 as of December 31, 2022, to $4,124,569 as of September 30, 2023, a decline of approximately 52.1%[14]. - Cash at the end of the period on September 30, 2023, was $4,124,569, a decrease from $7,248,677 at the end of the same period in 2022, representing a decline of approximately 43.5%[24]. - Management reported cash balances of approximately $4,125,000 and positive working capital of $3,687,000 as of September 30, 2023, which may not be adequate for operating activities for the next twelve months[152]. - Cash on hand as of September 30, 2023, was $4,124,569, with a current normalized monthly operating cash flow burn rate of approximately $500,000[177]. Assets and Liabilities - Total assets decreased from $11,912,037 as of December 31, 2022, to $7,626,782 as of September 30, 2023, representing a decline of approximately 36.3%[14]. - Total current liabilities decreased from $2,821,684 as of December 31, 2022, to $1,030,610 as of September 30, 2023, a reduction of approximately 63.5%[17]. - Total liabilities increased by $690,068 from December 31, 2022, to September 30, 2023, with total liabilities amounting to $3,511,751[179]. - The accumulated deficit increased from $78,327,845 as of December 31, 2022, to $85,224,294 as of September 30, 2023, indicating a worsening financial position[15]. Stock and Equity - The company had 18,544,570 common shares outstanding as of September 30, 2023, compared to 16,984,570 shares as of December 31, 2022, representing an increase of approximately 9.2%[15]. - The total stockholders' equity deficit was $(63,229,547) as of June 30, 2022[20]. - The company issued 7,917 shares of common stock for debt, raising $47,500[20]. - The company issued 1,925,677 shares of common stock in financing transactions, resulting in costs of $5,130,773[20]. Operating Expenses - Total operating expenses for the nine months ended September 30, 2023, were $7,628,223, compared to $7,219,278 for the same period in 2022, reflecting an increase of approximately 5.7%[19]. - Selling, general, and administrative expenses for the nine months ended September 30, 2023, increased to $4,843,082 from $3,953,961, an increase of $889,121[168]. - Stock-based compensation expense for the nine months ended September 30, 2023, was $1,836,674, a decrease of $436,152 from $2,272,826 in the same period of 2022[169]. Debt and Financing - The company raised $3,000,001 from notes payable to non-related parties during the nine months ended September 30, 2023[24]. - The company issued convertible notes payable with warrants totaling $3,219,725 as part of the 2023 Debt Offering[97]. - The Company raised $3,000,001 from the 2023 Debt Offering, issuing Convertible Notes with a principal amount of $3,529,412 and Warrants for 386,998 shares at a conversion price of $2.28[98]. - The Company recorded a loss on debt extinguishment of $10,257 due to the repayment of convertible notes in March and April 2023[103]. Research and Development - Research and development expenses decreased by $404,024 from $992,491 for the nine months ended September 30, 2022, to $588,467 for the nine months ended September 30, 2023, due to the finalization of the SOBRsure™ device development[170]. - Research and development costs were incurred to bring about significant improvements in product functionality and design[60]. Market and Operations - The company’s principal markets are currently in North America, focusing on integrating proprietary software with patented alcohol detection products[26]. - The company anticipates needing additional capital for accelerated customer acquisition, advanced purchasing of materials, and global expansion[153]. - The company has generated significant losses from operations since inception and expects to continue doing so for the foreseeable future[151]. Legal and Compliance - The company accrued $11,164 plus approximately $20,000 in interest related to a lawsuit as of September 30, 2023[134]. - In June 2023, the company reached a settlement with a former employee for $60,000, which was paid in July 2023[135]. - There were no material subsequent events requiring recognition or disclosure as of November 8, 2023[136].