MultiSensor AI(MSAI) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for the three months ended September 30, 2024, was $1,602,000, compared to $1,499,000 for the same period in 2023, representing a growth of 6.9%[21] - The net loss for the three months ended September 30, 2024, was $8,195,000, compared to a net loss of $1,875,000 for the same period in 2023, indicating a significant increase in losses[21] - Operating expenses for the three months ended September 30, 2024, totaled $7,706,000, up from $3,159,000 in the same period of 2023, reflecting a rise of 144%[21] - The net loss for the nine months ended September 30, 2024, is reported at $18,510,000, compared to a net loss of $5,435,000 for the same period in 2023[25] - The company reported a net cash used in operating activities of $12,510,000 for the nine months ended September 30, 2024[25] - The company's EBITDA for the nine months ended September 30, 2024, was $(17,920), reflecting a significant increase in losses compared to $(4,708) for the same period in 2023[132] - Adjusted EBITDA for the three months ended September 30, 2024, was $(5,029), compared to $(1,801) for the same period in 2023, indicating worsening operational performance[133] Assets and Liabilities - Cash and cash equivalents increased to $8,633,000 as of September 30, 2024, from $1,155,000 as of December 31, 2023, showing a substantial improvement in liquidity[18] - Total current assets rose to $14,315,000 as of September 30, 2024, compared to $12,513,000 as of December 31, 2023, marking an increase of 14.4%[18] - Total assets increased to $18,892,000 as of September 30, 2024, from $16,372,000 as of December 31, 2023, representing a growth of 15.4%[18] - Total current liabilities decreased to $3,075,000 as of September 30, 2024, from $10,757,000 as of December 31, 2023, indicating a reduction of 71.5%[18] - As of September 30, 2024, the total shareholders' equity stands at $15,613,000, reflecting a deficit of $51,641,000[23] Revenue and Customer Concentration - For the nine months ended September 30, 2024, total revenue reached $6,002 million, up 57.3% from $3,816 million in the prior year[41] - Two customers accounted for 22% and 13% of total net revenue, representing $357 million and $207 million, respectively, for the three months ended September 30, 2024[36] Inventory and Impairments - The company incurred inventory impairment of $2,038,000 for the three months ended September 30, 2024, compared to no impairment in the same period of 2023[21] - Inventory impairment for the nine months ended September 30, 2024, was $2,272 million, a 64% increase from $1,386 million in 2023[121] Financing and Capital Structure - The company raised $22,227,000 from the issuance of common stock in July 2024[25] - The conversion of shareholder promissory notes and accrued interests into common stock amounted to $18,503,000[25] - The company completed a public offering of 6,250,000 shares at a price of $1.60 per share, generating gross proceeds of $11,500 before expenses[66] - The 2024 Private Placement raised gross proceeds of $15,000 from the sale of 2,772,561 shares and pre-funded warrants, with expenses totaling $2,418[68] Tax and Legal Matters - The Company recorded an income tax benefit of $395 million for the three months ended September 30, 2024, compared to $8 million for the same period in 2023[85] - The effective income tax rates for the nine months ended September 30, 2024, and 2023 were (1.86)% and 0.19%, respectively, indicating a significant change in tax position[89] - The Company experienced an ownership change on July 1, 2024, which subjects tax attributes to an annual limitation, impacting the utilization of net operating losses[88] - The company is not currently involved in any legal proceedings that would materially affect its financial condition[165] Internal Controls and Governance - The company has identified material weaknesses in internal controls over financial reporting, specifically due to insufficient personnel with appropriate accounting knowledge[160] - Management plans to hire additional accounting personnel and improve internal controls, with ongoing investments in accounting systems[161] - The remediation measures for internal control weaknesses are ongoing and expected to incur future costs, but their success cannot be predicted at this time[162] - The company is classified as an emerging growth company and a smaller reporting company, allowing it to take advantage of reduced disclosure obligations[153][155] Operational Overview - MultiSensor AI Holdings, Inc. provides predictive maintenance and process control solutions utilizing AI-powered software and various sensing technologies[27] - The company operates across multiple industries, including distribution & logistics, manufacturing, utilities, and oil & gas[27]