Phunware(PHUN) - 2023 Q4 - Annual Report

Financial Performance - Adjusted gross profit for the year ended December 31, 2023, is $2,133,000, a decrease from$3,719,000 in 2022, with adjusted gross margin dropping to 44.1% from 57.0%[268]. - Gross profit for 2023 is reported at $1,686,000, down from$3,509,000 in 2022, reflecting fluctuations in revenue and associated costs[271]. - Net revenues for the year ended December 31, 2023, decreased by $1.7 million, or 25.9$4.8 million compared to $6.5 million in 2022, primarily due to decreased PhunToken sales[288]. - Gross profit for the year ended December 31, 2023, decreased by$1.8 million, or 52.0%, to $1.7 million, attributed to the decline in PhunToken revenue[289]. - Total operating expenses increased by$19.8 million, or 72.0%, to $47.4 million for the year ended December 31, 2023, driven by a$25.8 million impairment of goodwill[290]. - The company recorded an impairment of goodwill of $25.8 million for the year ended December 31, 2023[294]. - Other income for 2023 was$3.8 million, primarily due to a $5.3 million gain on the sale of digital asset holdings, offset by interest expenses[295]. - Net cash used in operating activities was$18.4 million for the year ended December 31, 2023, resulting from a net loss of $41.9 million[309]. - The company expects to continue generating operating losses and negative cash flows in the foreseeable future, despite recent financing events[304]. Backlog and Revenue - As of December 31, 2023, backlog is$2,750,000, down from $3,824,000 in 2022, while deferred revenue decreased to$1,909,000 from $2,805,000, resulting in total backlog and deferred revenue of$4,659,000 compared to $6,629,000 in 2022[261]. - Approximately 40$22.6 million in gross proceeds[302]. - The company has a common stock purchase agreement with Lincoln Park Capital Fund, allowing for the sale of up to $30 million in shares over 24 months[301]. - The company raised net proceeds of approximately$10.5 million from various sales of common stock in 2023, offset by $5.0 million in payments on the 2022 Promissory Note[312]. - The company acquired$8.1 million of cash from financing activities in 2022, primarily from $11.8 million in proceeds from the 2022 Promissory Note and$4.3 million from the sale of common stock[313]. Discontinued Operations - The company committed to a plan to discontinue and wind down the operations of Lyte on November 1, 2023, which meets the criteria for classification as a discontinued operation[327]. Operational Expenses - Operating expenses are expected to increase as the company grows, particularly in sales and marketing, general and administrative, and research and development[280][282][283]. - Rent expense under operating leases for continued operations totaled $0.8 million and$0.9 million for the years ended December 31, 2023 and 2022, respectively[315]. Contractual Obligations - The company’s contractual obligations as of December 31, 2023, totaled $751,000, with payments due in various time frames[316].