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 June 30, 2024

☐	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 LLC (Nasdaq Capital Market)

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 ☒

As of August 12, 2024, there were 34,764,593 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	25

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	34

ITEM 4	Controls and Procedures	34

	PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	35

ITEM 1A	Risk Factors	35

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	35

ITEM 3	Defaults Upon Senior Securities	35

ITEM 4	Mine Safety Disclosures	35

ITEM 5	Other Information	35

ITEM 6	Exhibits	36

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 June 30, 2024, and December 31, 2023, the condensed consolidated statements of operations for the three and six months ended June 30, 2024, and 2023, the condensed consolidated statements of changes in stockholders’ equity for the three and six months ended June 30, 2024, and 2023, and the condensed consolidated statements of cash flows for the six months ended June 30, 2024, and 2023, 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.

Table of Contents

SOBR SAFE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2024			2023
ASSETS	(Unaudited)			(Audited)

Current assets
Cash	$	2,166,404		$	2,790,147
Accounts receivable, net		34,786			25,280
Inventory		281,938			342,782
Prepaid expenses		94,561			213,261
Other current assets		6,002			-
Total current assets		2,583,691			3,371,470

Intellectual technology, net		2,280,697			2,473,429
Operating lease right-of-use assets, net		230,429			274,713
Other assets		27,427			27,427
Total Assets	$	5,122,244		$	6,147,039

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	519,753		$	525,665
Accrued expenses		518,728			726,940
Accrued interest payable		101,241			96,988
Operating lease liabilities, current portion		104,029			97,108
Notes payable – related parties		11,810			11,810
Notes payable – non-related parties, net		26,683			64,331
Total current liabilities		1,282,244			1,522,842

Operating lease liabilities - less current portion		149,502			203,295
Notes payable - non-related parties - less current portion, net		-			2,305,898
Accrued interest payable		-			132,467
Total Liabilities		1,431,746			4,164,502
Stockholders' Equity
Common stock, $0.00001 par value; 100,000,000 shares authorized, 34,764,593 and 18,582,241 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		347			186
Treasury stock, at cost; 12,329 shares as of June 30, 2024 and December 31, 2023		(38,015	)		(38,015	)
Additional paid-in capital		97,998,359			89,840,017
Accumulated deficit		(94,216,514	)		(87,765,981	)
Total SOBR Safe, Inc. stockholders' equity		3,744,177			2,036,207
Noncontrolling interest		(53,679	)		(53,670	)
Total Stockholders' Equity		3,690,498			1,982,537

Total Liabilities and Stockholders' Equity	$	5,122,244		$	6,147,039

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 June 30,						For The Six Months Ended June 30,
	2024			2023			2024			2023
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	54,191		$	37,601		$	102,181		$	85,469
Cost of goods and services		41,156			16,576			65,937			46,640
Gross profit		13,035			21,025			36,244			38,829

Operating expenses:
General and administrative		1,395,933			1,899,383			2,811,495			3,484,333
Stock-based compensation expense		185,910			627,762			400,308			1,326,675
Research and development		308,427			193,175			410,461			374,093
Total operating expenses		1,890,270			2,720,320			3,622,264			5,185,101

Loss from operations		(1,877,235	)		(2,699,295	)		(3,586,020	)		(5,146,272	)

Other income (expense):
Other income, net		13,157			60,587			34,412			131,057
Gain (loss) on debt extinguishment, net		-			(26,125	)		-			(26,125	)
Notes payable – conversion expense		-			-			(585,875	)		-
Interest expense		(213,296	)		(209,125	)		(445,812	)		(434,310	)
Total other income (expense), net		(200,139	)		(174,663	)		(997,275	)		(329,378	)

Loss before provision for income taxes		(2,077,374	)		(2,873,958	)		(4,583,295	)		(5,475,650	)

Provision for income taxes		-			-			-			-

Net loss		(2,077,374	)		(2,873,958	)		(4,583,295	)		(5,475,650	)
Net loss attributable to noncontrolling interest		4			4			9			9
Net loss attributable to SOBR Safe, Inc.	$	(2,077,370	)	$	(2,873,954	)	$	(4,583,286	)	$	(5,475,641	)

Deemed dividends related to Convertible Debt Warrants down round provision		-			-			(23,270	)		-
Deemed dividends related to PIPE Warrants down round provision		(4,336	)		-			(46,875	)		-
Deemed dividends related to Original Warrants and New Warrants down round provision		-			-			(1,455,805	)		-
Warrant Inducement transactional costs		(341,297	)		-			(341,297	)		-

Net loss attributable to common stockholders	$	(2,423,003	)	$	(2,873,954	)	$	(6,450,533	)	$	(5,475,641	)

Basic and diluted loss per common share	$	(0.10	)	$	(0.16	)	$	(0.30	)	$	(0.31	)

Weighted average number of common shares outstanding		23,429,766			18,361,768			21,253,818			17,730,426

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

(Unaudited)

																							Stockholders’
	Common Stock				Preferred Stock						Treasury Stock												Equity
			Amount					Amount									Additional						(Deficit)						Total
			($0.00001					($0.00001						Amount			Paid-in			Accumulated			SOBR Safe,			Noncontrolling			Stockholders’
	Shares		Par)		Shares			Par)			Shares			(at cost)			Capital			Deficit			Inc.			Interest			Equity

Balances at January 1, 2023		16,984,570	$	170		3,000,000		$	30			(12,329	)	$	(38,015	)	$	87,509,666		$	(78,327,845	)	$	9,144,006		$	(53,653	)	$	9,090,353
Cumulative effect of adopting ASU 2020-06		-		-		-			-			-			-			(909,214	)		776,568			(132,646	)		-			(132,646	)
Common stock issued for services		225,000		2		-			-			-			-			211,498			-			211,500			-			211,500
Warrants issued for services		-		-		-			-			-			-			162,481			-			162,481			-			162,481
Paid-in capital – fair value of stock options and restricted stock units		-		-		-			-			-			-			698,913			-			698,913			-			698,913
Paid in capital - relative fair value of stock warrants granted, net of issuance costs		-		-		-			-			-			-			398,517			-			398,517			-			398,517
Net loss		-		-		-			-			-			-			-			(2,601,687	)		(2,601,687	)		(5	)		(2,601,692	)
Balances at March 31, 2023		17,209,570	$	172		3,000,000		$	30			(12,329	)	$	(38,015	)	$	88,071,861		$	(80,152,964	)	$	7,881,084		$	(53,658	)	$	7,827,426
Conversion of preferred stock to common stock		1,000,000	$	10		(3,000,000	)	$	(30	)		-		$	-		$	20		$	-		$	-		$	-		$	-
Common stock issued for restricted stock units vested		185,000		2		-

SEC Form 10-Q filed by SOBR Safe Inc.