MultiSensor AI(MSAI) - 2024 Q2 - Quarterly Report

Revenue Performance - Revenue for the three months ended June 30, 2024, was $2,125,000, compared to $1,337,000 for the same period in 2023, representing a 59% increase[20]. - For the six months ended June 30, 2024, total revenue was $4,400, up 90% from $2,317 in the prior year[55]. - Revenue for the three months ended June 30, 2024, was approximately $2.1 million, an increase of $0.8 million, or 59%, from approximately $1.3 million for the same period in 2023[139]. Net Loss and Financial Health - Net loss for the six months ended June 30, 2024, was $10,316,000, compared to a net loss of $3,560,000 for the same period in 2023, indicating a significant increase in losses[20]. - The company has a history of net losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[13]. - The company incurred losses due to negative net working capital and increased investment in technology innovation and commercial capabilities compared to the prior year periods[161]. - The company has substantial doubt about its ability to continue as a going concern for the next twelve months due to the need to raise additional capital and ongoing operating losses[163]. Operating Expenses - Operating loss for the three months ended June 30, 2024, was $(4,847,000), compared to $(3,161,000) for the same period in 2023, reflecting a worsening operational performance[20]. - Selling, general and administrative expenses increased from $2,246,000 for the three months ended June 30, 2023, to $2,810,000 for the same period in 2024, a rise of about 25%[20]. - Total operating expenses for the three months ended June 30, 2024, were approximately $6.4 million, an increase of $3.9 million, or 152%, from approximately $2.6 million for the same period in 2023[142]. Cash and Liquidity - Cash and cash equivalents decreased from $1,155,000 as of December 31, 2023, to $234,000 as of June 30, 2024, a decline of approximately 80%[17]. - The company reported a net cash used in operating activities of $189 for the second quarter of 2024, compared to a net cash used of $298 in the same period of 2023[25]. - Net cash provided by operating activities for the six months ended June 30, 2024, was $189 thousand, a significant improvement from a net cash used of $298 thousand in the same period of 2023[178][179]. Shareholder Equity and Stock Issuance - As of June 30, 2024, the total shareholders' equity was $1,552, down from $6,907 as of June 30, 2023, reflecting a decrease in retained earnings[22]. - The company issued 182,348 shares of common stock during the second quarter of 2024, raising $500 in capital[25]. - The company completed a public offering of 6,250,000 shares at a price of $1.60 per share, generating gross proceeds of $10 million before expenses[106]. Assets and Liabilities - Total current assets decreased from $12,513,000 as of December 31, 2023, to $8,996,000 as of June 30, 2024, a decline of approximately 28%[17]. - Total liabilities decreased from $16,640,000 as of December 31, 2023, to $14,858,000 as of June 30, 2024, a reduction of about 11%[17]. - As of June 30, 2024, the company's stockholders' equity was approximately $26.2 million, meeting the Nasdaq listing requirement of $2.5 million[176]. Research and Development - The company expects to incur substantial research and development costs to develop and commercialize new products, which may significantly affect profitability[13]. Internal Controls and Governance - The company identified material weaknesses in internal controls over financial reporting, primarily due to insufficient personnel with appropriate accounting knowledge[192]. - Management is implementing a remediation plan to address material weaknesses, including hiring additional accounting personnel and improving internal controls[193][194]. - The company has made corporate governance changes, including the appointment of a representative from the Purchaser to the board of directors, to improve operational and financial performance[169]. Market and Future Outlook - The company anticipates that its actual results may differ materially from forward-looking statements due to various risks and uncertainties[110]. - The company may issue equity or equity-linked securities to current or potential customers to further business relationships, which could lead to significant dilution for existing stockholders[162].