SOBR Safe, Inc. (NASDAQ:SOBR) is a hardware and software company that integrates proprietary software with its patented touch-based alcohol detection products, SOBRcheck™ and SOBRsure™. The company's mission is to save lives, positively impact behavioral outcomes and individual wellness, increase workplace safety and productivity, and create significant economic benefits through its non-invasive alcohol detection solutions.

Business Overview

SOBR Safe's SOBRcheck™ device is a patent-pending, touch-based identity verification and alcohol detection solution. Users place two fingers on the device sensors, with one sensor comparing biometric data points from the finger to confirm identity, while the other senses alcohol released through the pores of the fingertip. The touch-based device connects to the SOBRsafe™ software solution to collect, present, and communicate data to subscribed parties. The SOBRcheck™ device has been in commercial production since the first quarter of 2022, and the company has executed customer agreements since that time.

The company's SOBRsure™ device is a patent-pending, fitness-style wearable band with an alcohol detection solution intended for discrete, low-profile, and voluntary use, providing real-time alcohol monitoring and GPS tracking. The wearable band includes a sensor that senses alcohol released through the pores of the skin. The wearable band connects to a mobile device via Bluetooth communication, where the SOBRsafe™ mobile application collects and transmits data to the SOBRsafe™ software solution. The SOBRsure™ device provides passive, real-time alcohol insights to administrators, clinicians, parents, and more, and also includes device removal and service interruption notifications. The SOBRsure™ device became available for sale in late September 2023.

SOBR Safe's SOBRsafe™ technology can also be deployed across numerous additional devices for various uses. The company is currently exploring possible integrations with existing telematics systems and licensing by non-competitive third parties. The opportunity to collect data points over time could enable the development of business and insurance liability benchmarking, through artificial intelligence (AI), powerful guidance for perpetual safety improvement, and associated cost savings capture.

Financials

For the fiscal year ended December 31, 2023, SOBR Safe reported annual revenue of $157,292, an annual net loss of $10,214,704, annual operating cash flow of -$5,928,076, and annual free cash flow of -$5,928,076. The company's quarterly revenue for the three months ended March 31, 2024, was $47,990, with a gross profit of $23,209 and a gross margin of 48.4%. The company's net loss for the three-month period ended March 31, 2024, was $2,505,921.

Sales Strategy

SOBR Safe's products continue to gain awareness and recognition through trade shows, media exposure, social media, and product demonstrations. To generate sales, the company has a three-part strategy: 1) direct sales to businesses and consumers, 2) enter into agreements with channel partners, and 3) enter into licensing and integration agreements. The company currently employs four highly experienced sales professionals facilitating direct sales and channel partner relationships. Licensing and integration opportunities with non-competitive third parties continue in preliminary stages, and the company anticipates hiring an expert in licensing and integrations in 2024 to formulate and execute an expansion plan.

Risks and Challenges

The company's outsourced manufacturers can adequately support an increase in sales for the foreseeable future. However, SOBR Safe expects that it will need to continue to evolve its products and software to meet diverse customer requirements across varied markets. Since inception, the company has generated significant losses from operations and anticipates that it will continue to generate significant losses for the foreseeable future. The company's success is dependent on its ability to access additional capital, which may be required to offset negative cash flows from operations, accelerate customer acquisition, advance purchasing of materials, acquire new technology, or potentially acquire a key asset.

Recent Developments

During the first quarter of 2024, SOBR Safe entered into inducement offer letter agreements with holders of its Convertible Notes issued in March 2023. The inducement offer provided an opportunity for the note holders to reduce the company's debt payment obligation at the future maturity date in March 2025. As a result, on March 5, 2024, the note holders elected to convert a total of $804,695, including $772,896 in original Note principal and $31,799 in accrued interest, into 1,297,895 shares of the company's common stock at a reduced conversion price of $0.62 per share.

Liquidity

SOBR Safe's liquidity position remains a concern, with cash on hand of $1,336,250 and a negative working capital of approximately $1,500,000 as of March 31, 2024. However, the company believes that actions being taken to generate product and services revenues, as well as its plans to access capital sources and implement expense reduction tactics, provide the opportunity for the company to continue as a going concern.

Outlook

The company's introduction of the SOBRsure™ product in the third quarter of 2023 and a defined focus on the multi-vertical Behavioral Health space have positioned SOBR Safe to generate a positive improvement in revenue generation and positive cash flows from sales. Management believes that the company's ability to reduce monthly expenses, if needed, and its plans to access capital sources provide the opportunity for SOBR Safe to continue as a going concern.

Conclusion

In conclusion, SOBR Safe, Inc. is a promising company with innovative alcohol detection technology that has the potential to positively impact various industries, from workplace safety to individual wellness. While the company has faced significant losses and liquidity challenges, its recent product launches, sales strategy, and cost-cutting measures suggest that SOBR Safe may be poised for growth in the coming years, provided it can successfully navigate the capital markets and execute on its business plan.