SOBR Safe(SOBR) - 2025 Q3 - Quarterly Report

Financial Performance - Revenues for the three months ended September 30, 2025, increased to $108,893 from $46,129 in the same period of 2024, marking a growth of 135.8%[16] - Gross profit for the nine months ended September 30, 2025, was $148,715, up from $66,381 in 2024, reflecting a year-over-year increase of 123.8%[16] - The net loss attributable to common stockholders for the nine months ended September 30, 2025, was $6,111,908, compared to $8,291,739 in 2024, indicating a reduction in losses of approximately 26.3%[16] - The company reported a basic and diluted loss per common share of $1.44 for the three months ended September 30, 2025, compared to $58.26 in the same period of 2024[16] - The net loss for the three months ended September 30, 2025, increased to $2,186,628 from $1,841,210 in the prior year, reflecting higher operating losses despite increased interest income[176] - For the nine months ended September 30, 2025, revenues increased by 102.1% to $299,738, driven by a 195.1% increase in SOBRsure device sales and a 412.5% increase in subscriptions[178] - Gross profit for the nine months ended September 30, 2025, was $148,715, with a gross margin of 49.6%, impacted by product replacement costs[180] Cash Flow and Assets - Cash and cash equivalents decreased to $4,711,664 as of September 30, 2025, down from $8,384,042 at the end of 2024, a decline of 43.8%[13] - The company reported a net cash used in operating activities of $5,330,526 for the nine months ended September 30, 2025, compared to $4,911,028 for the same period in 2024, indicating an 8.5% increase in cash outflow[23] - Cash at the end of the period was $4,711,664, down from $8,384,042 at the beginning of the period, reflecting a net change in cash of $(3,672,378)[24] - Total current assets decreased by $3,653,114, from $8,872,074 in December 2024 to $5,218,960 in September 2025[191] Expenses - Operating expenses for the three months ended September 30, 2025, rose to $2,262,993 compared to $1,878,005 in 2024, an increase of 20.4%[16] - General and administrative expenses rose by 41.2% to $2,117,641 for the three months ended September 30, 2025, primarily due to increased payroll and marketing costs[168] - General and administrative expenses for the nine months ended September 30, 2025, increased by 33.5% to $5,756,138, largely due to new marketing programs and increased payroll costs[181] - Research and development expenses decreased by $335,226, or 55.4%, from $604,927 in 2024 to $269,701 in 2025[183] Equity and Liabilities - Total stockholders' equity decreased to $5,967,725 as of September 30, 2025, from $9,802,321 at the end of 2024, a decline of approximately 39.0%[14] - Total current liabilities decreased slightly to $1,222,562 from $1,276,889, a reduction of about 4.3%[13] - Total accrued expenses as of September 30, 2025, amount to $360,012, down from $498,128 as of December 31, 2024[90] Market and Product Development - The company plans to release its second generation SOBRsure™ device in the fourth quarter of 2024, aiming to improve revenue and cash flow[77] - The company’s SOBRsafe technology aims to provide non-invasive alcohol monitoring and detection, with applications in various sectors including workplace safety and individual consumer use[148] - The company anticipates additional revenue generation with the release of its second-generation SOBRsure device and a comprehensive marketing plan[190] Marketing and Sales Strategy - The company has retained six channel partners to enhance sales and marketing efforts for SOBRsafe technology solutions[162] - A comprehensive marketing campaign was launched in March 2025, coinciding with Alcohol Awareness Month, to boost brand recognition and sales efforts[164] - The company plans to generate sales through direct sales to enterprise businesses, agreements with channel partners, and licensing and integration agreements[155] Legal and Compliance - The company has accrued a principal balance of $11,164 plus approximately $22,209 in interest related to a legal proceeding as of September 30, 2025[138] - The company successfully exited the one-year monitoring period by the Nasdaq Listing Qualification staff as of October 31, 2025, eliminating compliance limitations[163] Stock and Financing Activities - The company raised approximately $2,500,000 in net proceeds from the 2023 Debt Offering, which included 15% Original Issue Discount Convertible Notes[95] - The company issued 579,219 shares of common stock upon exercise of warrants during the nine months ended September 30, 2025[106] - The exercise price for Common Stock Purchase Warrants was permanently reduced to $682 per share as part of the Inducement Letters[115] - The company entered into a Warrant Inducement, resulting in the exercise of 9,382 shares at a reduced price of $297 per share, generating gross proceeds of $2,786,174 and net proceeds of $2,425,418 after costs[116]