SOBR Safe(SOBR) - 2024 Q2 - Quarterly Report

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$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$2,166,404 as of June 30, 2024, down from $2,790,147 as of December 31, 2023, a decrease of approximately 22.36$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$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$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]