sobr_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______________ to _______________.

Commission file number: 000-53316

SOBR SAFE, INC.

(Exact name of registrant as specified in its charter)

Delaware		26-0731818
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

6400 S. Fiddlers Green Circle, Suite 1400 Greenwood Village, Colorado		80111
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (844) 762-7723

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value		SOBR		The Nasdaq Market (Nasdaq)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 8, 2023, there were 18,544,570 shares of common stock, $0.00001 par value, issued and outstanding.

SOBR SAFE, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1	Condensed Consolidated Financial Statements	4

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	35

ITEM 4	Controls and Procedures	35

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	37

ITEM 1A	Risk Factors	37

ITEM 2	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	37

ITEM 3	Defaults Upon Senior Securities	37

ITEM 4	Mine Safety Disclosures	37

ITEM 5	Other Information	37

ITEM 6	Exhibits	38

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 Condensed Consolidated Financial Statements

The condensed consolidated balance sheets as of September 30, 2023, and December 31, 2022, the condensed consolidated statements of operations for the three and nine months ended September 30, 2023, and 2022, the condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2023, and 2022, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023, and 2022, follow. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

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SOBR SAFE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2023			2022
ASSETS	(Unaudited)			(Audited)

Current assets
Cash	$	4,124,569		$	8,578,997
Accounts receivable, net		25,734			30,322
Inventory		267,214			215,493
Prepaid expenses		297,639			200,905
Other current assets		2,675			-
Total current assets		4,717,831			9,025,717
Operating lease right-of-use assets, net		295,993			-
Intellectual technology, net		2,569,795			2,858,893
Other assets		43,163			27,427
Total Assets	$	7,626,782		$	11,912,037

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	249,019		$	142,965
Accrued expenses		405,453			392,282
Accrued interest payable		94,858			469,691
Related party payables		-			1,887
Operating lease liabilities, current portion		93,775			-
Notes payable - related parties, net		11,810			866,262
Notes payable - non-related parties, net		175,695			948,597
Total current liabilities		1,030,610			2,821,684
Operating lease liabilities - less current portion		229,204			-
Notes payable - non-related parties, net - less current portion		2,160,855			-
Accrued interest payable		91,082			-
Total Liabilities		3,511,751			2,821,684

Stockholders' Equity
Preferred stock, $0.00001 par value; 16,300,000 shares authorized, no shares issued or outstanding at September 30, 2023 and December 31, 2022		-			-
Series A Convertible Preferred stock, $0.00001 par value; 3,000,000 shares authorized, no shares issued or outstanding at September 30, 2023 and December 31, 2022		-			-
Series A-1 Convertible Preferred stock, $0.00001 par value; 2,700,000 shares authorized, no shares issued or outstanding at September 30, 2023 and December 31, 2022		-			-
Series B Convertible Preferred stock, $0.00001 par value; 3,000,000 shares authorized, none and 3,000,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		-			30
Common stock, $0.00001 par value; 100,000,000 shares authorized, 18,544,570 and 16,984,570 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		185			170
Treasury stock, at cost; 12,329 shares at September 30, 2023 and December 31, 2022		(38,015	)		(38,015	)
Additional paid-in capital		89,430,821			87,509,666
Accumulated deficit		(85,224,294	)		(78,327,845	)
Total SOBR Safe, Inc. stockholders' equity		4,168,697			9,144,006
Noncontrolling interest		(53,666	)		(53,653	)
Total Stockholders' Equity		4,115,031			9,090,353

Total Liabilities and Stockholders' Equity	$	7,626,782		$	11,912,037

The accompanying notes are an integral part of the condensed consolidated financial statements.

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SOBR SAFE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	36,274		$	9,734		$	121,743		$	12,734
Cost of goods and services		20,195			4,950			66,835			6,050
Gross profit		16,079			4,784			54,908			6,684

Operating expenses:
Selling, general, and administrative		1,358,749			1,732,382			4,843,082			3,953,961
Stock-based compensation expense		509,999			594,763			1,836,674			2,272,826
Research and development		214,374			459,847			588,467			992,491
Total operating expenses		2,083,122			2,786,992			7,628,223			7,219,278

Loss from operations		(2,067,043	)		(2,782,208	)		(7,213,315	)		(7,212,594	)

Other income (expense):
Other income, net		48,677			1,292			179,734			217,722
Gain (loss) on debt extinguishment, net		-			-			(26,125	)		245,105
Gain on fair value adjustment – derivatives, net		-			-			-			1,040,000
Interest expense		(179,014	)		(317,774	)		(613,324	)		(3,146,987	)
Total other expense, net		(130,337	)		(316,482	)		(459,715	)		(1,644,160	)

Loss before provision for income taxes		(2,197,380	)		(3,098,690	)		(7,673,030	)		(8,856,754	)

Provision for income taxes		-			-			-			-

Net loss		(2,197,380	)		(3,098,690	)		(7,673,030	)		(8,856,754	)
Net loss attributable to noncontrolling interest		4			4			13			13
Net loss attributable to SOBR Safe, Inc.		(2,197,376	)		(3,098,686	)		(7,673,017	)		(8,856,741	)
Deemed dividends related to warrant down round provisions		-			(8,501,440	)		-			(8,501,440	)
Net loss attributable to common stockholders	$	(2,197,376	)	$	(11,600,126	)	$	(7,673,017	)	$	(17,358,181	)

Basic and diluted loss per common share	$	(0.12	)	$	(1.06	)	$	(0.43	)	$	(1.82	)

Weighted average number of common shares outstanding		18,544,570			10,973,759			18,004,790			9,516,637

The accompanying notes are an integral part of the condensed consolidated financial statements.

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SOBR SAFE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

Stockholders’

Common Stock

Preferred Stock

Treasury Stock

Equity

Total

Amount

Additional

(Deficit)

Stockholders’

($0.00001

Amount

Paid-in

Accumulated

SOBR Safe,

Noncontrolling

Equity

Shares

Par)

Shares

Par)

Shares

(at cost)

Capital

Deficit

Inc.

Interest

(Deficit)

SEC Form 10-Q filed by SOBR Safe Inc.