SOBR Safe, Inc. SEC 10-K Report

SOBR Safe, Inc., a company specializing in non-invasive alcohol detection and identity verification technologies, has released its annual 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces. This summary highlights the key aspects of the report, offering insights into SOBR Safe's progress and future outlook.

Financial Highlights

• Revenue: $212,736, reflecting an increase from the previous year's $157,292 due to the commercial production of SOBRsure and SOBRcheck devices.
• Gross Profit: $19,168, with a gross margin of 9.0%, impacted by the disposal of first-generation SOBRsure devices and damaged SOBRcheck devices.
• Loss from operations: $(7,675,831), showing an improvement from the previous year's loss of $(9,600,546) due to decreased operating expenses.
• Net loss: $(8,609,156), a reduction from the prior year's $(10,214,721), attributed to lower stock-based compensation and interest expenses.

Business Highlights

• Corporate Overview: SOBR Safe, Inc., formerly known as TransBiotec, Inc., focuses on non-invasive technologies for alcohol detection and identity verification. The company operates under a single segment, offering products through channel partners, sales agents, and digital marketing channels.
• Product Portfolio: The company's SOBRsafe software platform integrates with hardware devices like SOBRcheck and SOBRsure, providing solutions for behavioral health, judicial applications, commercial environments, and individual consumer use.
• SOBRcheck Device: This patent-pending, touch-based device verifies identity and detects alcohol through perspiration. It connects to the SOBRsafe software to communicate data to subscribed parties.
• SOBRsure Device: A wearable band offering real-time alcohol monitoring and GPS tracking. It connects via Bluetooth to a mobile device, transmitting data to the SOBRsafe software solution.
• Data Monetization Potential: SOBR Safe aims to leverage its device portfolio to build a substantial repository of user data, potentially monetizable for statistical analytics and insurance liability benchmarking.
• Sales Strategy: The company employs a three-part sales strategy: direct sales to enterprises and consumers, agreements with channel partners, and licensing and integration agreements.
• Marketing Initiatives: SOBR Safe's marketing plan includes e-commerce solutions, SEO, digital and traditional media campaigns, brand ambassadors, and advocacy group alignments.
• Intellectual Property: The company holds several patents and pending applications related to its alcohol monitoring and detection systems, with plans to expand its patent portfolio.
• Government Regulation: SOBR Safe's technology uses a 'Pass/Fail' methodology for alcohol detection, which the company believes exempts it from government regulation in its target markets.
• Human Capital: As of December 31, 2024, SOBR Safe employs 14 full-time employees, focusing on diversity, equity, and inclusion to enhance its workforce culture.
• Workplace Safety: The company prioritizes a safe and healthy working environment, implementing changes based on workforce feedback to improve processes.
• Recent Developments: In 2024, SOBR Safe launched its second-generation SOBRsure device and entered into various financial transactions to strengthen its capital position.
• Business Outlook: SOBR Safe anticipates increased sales with the release of its second-generation SOBRsure device and plans to continue evolving its products to meet diverse customer needs.

Strategic Initiatives

• Strategic Initiatives: The company has focused on strategic initiatives to enhance its product offerings and market presence. This includes the commercial production of its second-generation SOBRsure device and the continued development of its SOBRsafe software. The company is also exploring licensing and integration opportunities with non-competitive third parties to expand its technology's reach. Additionally, the company has entered into agreements with channel partners to facilitate direct sales to enterprise businesses and consumers.
• Capital Management: The company has engaged in several capital management activities to strengthen its financial position. It completed a private placement transaction with institutional investors, raising gross proceeds of $8.2 million. The company also executed a 1-for-110 reverse stock split to regain compliance with Nasdaq listing requirements. Furthermore, the company converted outstanding convertible debt into equity, reducing its debt obligations. The company has not issued any dividends and does not expect to pay dividends in the foreseeable future, opting to retain earnings for business use.
• Future Outlook: The company anticipates that its outsourced manufacturers can support increased sales and expects to evolve its products and software to meet diverse customer requirements. Management believes that the current cash balances and working capital are adequate to support operations for the next twelve months. The company plans to generate additional revenue with the release of its second-generation SOBRsure device and through a comprehensive marketing plan. The company also aims to continue its strategy of accessing additional capital to offset negative cash flows, accelerate customer acquisition, and support sales expansion.

Challenges and Risks

• Market Risks: Fluctuations in quarterly and annual operating results due to factors such as demand variability, competition, and media coverage can impact stock value and financial performance.
• Operational Risks: The company has limited experience in large-scale manufacturing and relies on third-party manufacturers, which could lead to supply chain disruptions and increased costs.
• Regulatory Risks: Compliance with various regulations and potential changes in tax laws could increase operational costs and impact financial results.
• Emerging Risks: Expansion into international markets introduces risks such as managing foreign operations, compliance with local laws, and currency fluctuations.
• Financial Risks: The company has experienced recurring net losses and may require additional capital to sustain operations, which could lead to dilution of existing stockholders.
• Intellectual Property Risks: Reliance on third-party intellectual property licenses and potential litigation to protect patents could be costly and time-consuming.
• Security Risks: Cyber-attacks and data breaches could lead to financial losses and reputational damage.
• Management's Discussion and Analysis: Management acknowledges the challenges of maintaining profitability and the need for additional capital to support growth. The company is focused on expanding its sales and marketing efforts to increase its customer base and achieve broader market acceptance. Management is also exploring potential partnerships with insurance providers to leverage SOBRsafe technology for economic benefits.
• Market Risk Disclosures: The company is exposed to market risks such as fluctuations in stock price due to external economic conditions and internal operational performance. Additionally, the company faces risks related to foreign currency exchange rates, which could impact financial results as it expands internationally.

SEC Filing: SOBR Safe, Inc. [ SOBR ] - 10-K - Apr. 15, 2025