SOBR Safe(SOBR) - 2023 Q3 - Quarterly Report

Financial Performance - Revenues for the three months ended September 30, 2023, were $36,274, a significant increase of 273.5$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$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$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].