Workflow
SOBR Safe(SOBR) - 2024 Q3 - Quarterly Report
SOBRSOBR Safe(SOBR)2024-11-14 01:00

Financial Performance - Revenue for the three months ended September 30, 2024, was 46,129,comparedto46,129, 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,upfrom66,381, 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,comparedtoanetlossof1,841,210, 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,comparedtoanetlossof6,424,505, 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,or2226,567, or 22%, to 148,310 compared to 121,743forthesameperiodin2023,drivenbysalesfromtheSOBRsureTMdeviceandSaaSsubscriptions[152]ExpensesandCosts−OperatingexpensesforthethreemonthsendedSeptember30,2024,totaled121,743 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 2,083,122inthesameperiodof2023,adecreaseofapproximately9.82,083,122 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 214,374forthesameperiodin2023,adecreaseofapproximately9.3214,374 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 1,358,749intheprioryear,primarilyduetohigherlegalandmarketingexpenses[141]−Stock−basedcompensationexpensedecreasedto1,358,749 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 509,999inthesameperiodof2023,duetopreviouslyissuedawardsbecomingfullyvestedorforfeited[143]−Stock−basedcompensationexpensedecreasedfrom509,999 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 584,551forthesameperiodin2024,duetopreviouslyissuedawardsbecomingfullyvestedorforfeited[155]AssetsandLiabilities−AsofSeptember30,2024,totalassetsdecreasedto584,551 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 6,147,039asofDecember31,2023,representingadeclineofapproximately45.56,147,039 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 2,790,147asofDecember31,2023,adeclineofapproximately89.02,790,147 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 1,522,842asofDecember31,2023,areductionofabout21.51,522,842 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)asofDecember31,2023,indicatingaworseningofapproximately9.3(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 3,371,470asofDecember31,2023,to3,371,470 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 8.2millionthroughaprivateplacementonOctober7,2024,issuing2,024,691unitsatapurchasepriceof8.2 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 3,556,233ofdebtinto52,145sharesofcommonstockat3,556,233 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 29.70pershareinJune2024,resultingingrossproceedsof29.70 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]LegalandComplianceMatters−Thecompanyisinvolvedinvariouspendinglegalactions,butmanagementbelievesthesewillnothaveamaterialadverseeffectonitsfinancialpositionorresultsofoperations[181]−Alawsuitfiledagainstthecompanyforbreachofcontractamountsto26,683[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 4,911,028fortheninemonthsendedSeptember30,2024,comparedto4,911,028 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,withacurrentnormalizedoperatingcashflowburnrateofapproximately304,537, with a current normalized operating cash flow burn rate of approximately 550,000 per month[163] - The company has cash balances of approximately 300,000andnegativeworkingcapitalofapproximately300,000 and negative working capital of approximately 265,000, which do not provide adequate capital for operating activities for the next twelve months[59]