Publicly-traded SOBRsafe™ (NASDAQ: SOBR) is worthy of consideration. Not only because there's a valuation disconnect worth seizing but because, more importantly, its cutting-edge alcohol-detection platform is creating a pathway for SOBR to grow faster than expected. And that could close a current window of investment opportunity. Here's another interesting part of the proposition. Despite SOBR providing several updates showing accelerating penetration into several potentially lucrative markets, its share price has weakened over the past two weeks. Still, with news supporting its growth thesis, that's not necessarily bad news since it exposes a value proposition that may be too good to ignore.
And seizing on it sooner than later is warranted. That bullish sentiment is justified. SOBR has brought to market an alcohol-detection platform that can save lives by preventing accidents before they can occur. Not only that, with its SOBRcheck™ platform offering multiple benefits over conventional detection systems, this non-invasive and highly accurate SOBRsafe™ platform could become one of the most impactful advancements in combating alcohol abuse and misuse in workplaces, legal systems, and commercial enterprises.
It's quickly penetrating the oil and gas services and logistics landscape. They amplified its implementation momentum last week, announcing that oil and gas customer TerraTech Services has completed the rollout of SOBRcheck™ to all of its sixteen facilities across eleven states for both fleet and workplace applications. Notably, this deal with TerraTech puts SOBR in business with one of the world's largest oilfield services and logistics providers. (Note: TerraTech closed one minor facility since the previously announced count of seventeen)
Video Link: https://www.youtube.com/embed/EVgTiqFJ2OQ
A Big Step Into A Massive Market
According to its update, with the integration of SOBRcheck™ into TerraTech's core safety protocols, each of its approximately 300 service center employees scan up to four times a day to continually verify alcohol-free fitness for duty. It's important to note that these are more than just snapshots in time for later review. Each scan provides data transmitted in real-time to onsite TerraTech supervisors and aggregated in SOBRsafe's proprietary reporting software for TerraTech corporate oversight. That difference is a critical distinction from other alcohol detection and screening platforms. It's also a significant advantage.
TerraTech management sounds excited about the implementations. "SOBRcheck™ is impressive technology, and I couldn't wait to get it installed everywhere," said TerraTech Health, Safety and Environment Manager Jerry Smith. "Because of the nature of our industry and the high potential for catastrophic incidents, to add that extra layer of protection with SOBRcheck was a no-brainer. We were quick to react and implement it because of the value that's there."
SOBR management commented as well. SOBRsafe Chief Revenue Officer Michael Watson said, "The oil and gas industry has the highest rate of binge drinking of any industry in the U.S., and the safety consequences are devastating," He added, "The industry needs a preventative alcohol safety solution, and we believe that through our partnership with TerraTech, we have developed the industry's leading model for ensuring alcohol-free workplaces and fleets. We look forward to expanding our technology within oil and gas in the coming months."
There are plenty of reasons to support the mutual excitement about the integrations.
Industry Accolades For SOBRcheck Being Better
Foremost is that it's a better and more accurate option to check and continuously monitor for alcohol use. That opinion goes beyond SOBR clients. SOBRcheck™ was awarded the Occupational Health & Safety 2022 New Product of the Year for Safety Monitoring Devices and has received the Child Safety Network Safe Family Seal of Approval. And that respect has done more than turn attention toward SOBR products; it's expedited marketing of its revolutionary alcohol detection wristband for teen drivers, now available for pre-order at SOBRstore.com. Both options provide advanced safety management technology that hygienically detects and instantaneously reports the presence of alcohol as emitted through the pores of a fingertip - no breath, blood, or urine sample is required, just the touch of a finger.
As important from an investor's perspective, each can be a significant value driver. While SOBRcheck™ is used to manage employees, patients, and people at the point of check-in, which benefits thousands of companies, SOBRsure™ can be a game-changer in the teen drivers market. And it's timely to the opportunity. According to the National Highway Traffic Safety Administration, car crashes are a leading cause of teen death, and about a quarter of fatal crashes involve an underage drinking driver. SOBRsafe seeks to help eliminate teen drunk driving with SOBRsure™ - a sleek, fitness-style wristband that features continuous alcohol monitoring, GPS location tracking, band removal alerts, and a phone-based app for parents.
Tapping into that market is just the tip of the revenue-generating iceberg. Statistics show that the annual cost of alcohol abuse in the U.S. is $249 billion, with nearly half of all industrial accidents with alcohol-related injuries. Startling to know, 1-in-10 commercial drivers in the U.S. test positive for alcohol (the highest rate worldwide). SOBRsafe has drawn the battle lines with a powerful preventive tool, specifically with its proprietary, touch-based identity verification, alcohol detection, and cloud-based reporting system. Moreover, it's a technology that is transferable across innumerable form factors, including stationary access control, personal wearable, and telematics integration.
Best of all, SOBR platforms, SOBRcheck™ and SOBRsure™, are user-friendly solutions that best traditional alcohol detection methods in accuracy, convenience, and dignity. Additionally, unlike competing platforms and devices, SOBRcheck™ seamlessly integrates with client infrastructures, providing real-time cloud-based reports through privacy-compliant measures to assess and report alcohol consumption during testing and continuously throughout the desired measurement period.
A 21st-Century Alcohol Detection Solution With Broad Applications
In no uncertain terms, SOBRcheck™ differences are advantages. And as seen through the expanded adoption by current clients, they could accelerate widespread user adoption by besting the deficiencies associated with decades-old screening technologies. Remember, conventional detection methods require frequent calibration, are prone to inaccuracies, and present false positives triggered by common substances such as mouthwash or cologne. These methods also rely on intrusive detection techniques that can make the systems impractical to implement and demeaning to workers. Furthermore, most of these platforms rely on a single measurement, which can lead to false assurances of one's continued sobriety beyond that point.
SOBRsafe understands the current limitations and developed an alternative to transform how workers and employers monitor inappropriate alcohol consumption. Moreover, SOBRsafe's SOBRcheck™ is a better option, surpassing traditional methods in accuracy, convenience, and cost-effectiveness while offering the greater potential to prevent accidents, injuries, and fatalities from alcohol misuse. Differences are advantages.
Foremost, SOBRcheck™ doesn't rely on blood, saliva, or breath samples to measure for alcohol. SOBRcheck™ measures vapors in the skin with a simple finger touch, detecting alcohol presence with impressive 93% accuracy, surpassing the mid-80% accuracy of traditional devices. Additionally, the platform is hygienic, user-friendly and requires no special training for employees or individuals being monitored. These features make it accessible for any individual or company to use.
That's more than a valuable distinction; it also puts over 243,000 fleet companies in the United States alone into play. There's little argument against any company not needing what SOBR can offer: comprehensive reports that can continually monitor alcohol use during work hours, help companies take immediate action against policy violators and provide evidence of a 100% alcohol-free period, and provide a means to benefit from lower insurance premiums. That cost alone is worth the price of admission, noting insurance cost is considerable for large-scale fleet, production, and transportation companies.
The Focus Is To Curb Workplace Alcohol Use
Keep this in mind. Studies show that over 50% of workplace accidents are alcohol-related. These accidents do more than cause a company's insurance premiums to skyrocket; those directly involved and their families can suffer life-changing injuries or hardships.
That doesn't need to be the case. SOBR offers the perfect platform to support businesses in maintaining a 100% alcohol-free workplace, which can positively impact cost savings and potential catastrophe. In addition to that, SOBR technology has the potential to improve employee productivity, reduce the risk of injury or death in the workplace, and enable proactive treatment rather than termination. Realizing the power of these distinct advantages, SOBR is focused on raising awareness of the many benefits its next-generation platform can offer potential clients and their employees.
SOBRsafe CEO Dave Gandini recently interviewed with veteran broadcaster Jane King, a former CNN, and Bloomberg Television correspondent, the current CEO of LilaMax Media, and a consultant to the Wall Street Journal. In the interview, Gandini makes a strong case for the nationwide adoption of SOBR technology by emphasizing how their platform can make a difference in public and private sector safety by allowing for preventative measures rather than punitive ones. He specifically discussed how their technologies can benefit three targeted market segments: fleet and facility, rehabilitation, and justice agencies. And with the groundwork laid in 2021 and 2022, this year can is set up to be SOBR's best after conducting approximately 2,000 demonstrations of their groundbreaking SOBRcheck™ technology in the last year alone.
Moreover, their presence at alcohol and drug-related conferences over the past year has allowed for over 10,000 introductions, which SOBR expects will significantly strengthen their sales pipeline. Given the scale of many fleets, facilities, and departments in the industries targeted by SOBRsafe, know that the value of a single customer can be significant. Once implemented, SOBR's platform can generate hundreds of thousands, if not millions, in revenues over time from these clients. Best of all, investors don't need to wait. This potential has already materialized through signed deals with major industry players.
SOBR Is Scoring Accretive Rev-Gen Deals
Among these agreements, SOBRsafe has signed deals with prominent companies such as Continental Services, Michigan's largest food management company, and TerraTech, a major player in the oil and gas services industry. The company has also inked a deal with Alternatives, Inc., achieving its goal of entering the corrections and re-entry client markets. Moreover, each client has expanded original terms to implement SOBR's technologies in additional company locations, highlighting that existing deals can get more significant over time. Other factors contribute to the bullish thesis for 2023.
Those include strategic moves to enhance efficiency and quality while reducing fixed costs. The company recently announced a deal outsourcing manufacturing and customer support, signing deals with BGM Electronic Services and Helm, respectively. BGM will manage SOBRsafe's design, engineering, manufacturing, and testing. Another benefit of that relationship could provide SOBR introductions to BGM clients such as GM (NYSE: GM), Ford (NYSE: F), and Stellantis (NASDAQ: STLA). Helm, whose clients include sector giants Domino's (NYSE: DMZ), Merrell, and BMW, will also benefit SOBR by serving as a partner company managing the packaging, fulfillment, onboarding, and customer service details. Those deals should expedite revenues falling faster to the bottom line.
Why is SOBR attracting attention? Because it's earned it. From a product and platform perspective, its technology is simply best-in-class. Unlike traditional methods that involve blood samples or forceful blowing into a tube for an extended period, SOBRcheck™ utilizes finger-touch technology that analyzes the natural humidity and vapor from the skin to generate a result within 10 seconds and with an accuracy of 93%. That's impressive, considering that devices like the Breathalyzer can take up to 30 seconds of forcefully blowing into a tube and then presenting results with low to mid 80% accuracy. Other traditional technologies fare no better. But remember this when appraising the SOBR value proposition. The device is only part of SOBR's overall monetization strategy; SaaS services are another value driver.
SOBR is already monetizing the value of its SaaS capabilities through signed agreements, including a deal with a Top 100 Property & Casualty insurance company to test SOBR's technology with its fleet customers. Should the results align with expectations, this respected but unnamed carrier may explore incorporating SOBRsafe technology as a safety solution and incentive for customer discounts. Although specific revenue projections were not provided, A-Rated carriers typically possess a significant customer base.
Additional contributions from these SaaS services appear likely, given recent momentum-generating deals with the companies mentioned that endorse SOBRcheck™ adoption.
Building Its Customer Base, Enhancing Its Sales Force, And Rolling Out SOBRsure
There's another value driver to be considered. Specifically, SOBR is making significant strides to transform its ambition into dollars. Since 2022, the company has tripled its in-house sales team, specifically recruiting specialists to serve the justice, commercial fleet, and captive insurance sectors. Moreover, SOBR has implemented a "force multiplier" distributor strategy, leveraging groups' trust-based relationships with potential alcohol detection buyers. This approach aims to expedite sales of SOBRcheck™ to early adopters and innovators, all at no fixed cost to SOBRsafe. By the end of the year, these efforts led to signing contracts with 14 distributors, aligning them with 83 sales professionals and a potential user base of up to 20,000 customers.
Of course, leveraging resources to expand market presence can be immediately accretive to growth. And so can marketing other products, including its SOBRsure™ wristband, a wearable alcohol detection and monitoring device that has earned considerable attention in the fleet, rehabilitation, and justice sectors. A clear indication of that interest was shown in an announcement in July last year, in which SOBR shared that an innovative in-home alcohol treatment provider placed a pre-order for 1,150 white-label bands. In another update, SOBR announced that a specialized, member-based rideshare company has committed to equipping its highly vetted drivers with SOBRsure™ upon its commercial launch. This opens up possibilities within the expansive market for school-bus drivers and related services that depend on the sobriety of its employees to keep customers, which can include millions of children, safe. And not only in the United States.
SOBR's commitment to preventing alcohol abuse in the workplace has landed them deals with businesses outside the United States. SOBR recently announced a software as a service (SaaS) agreement with the Fox Group, based in British Columbia, Canada, and with operations in the United States. The Fox Group is a leader in North American commercial driver education, counting Provincial Driver Training Institute (PDTI), North Shore Driving School (North Shore), and Fox Professional Driver Training Centers (FoxPro) among its portfolio holdings. SOBR said The Fox Group will initially install the SOBRcheck™ alcohol detection technology in select Canadian locations, potentially expanding that implementation to cover its training organization of over 3,500 employees and all student drivers. The Fox Group noted it's further evaluating SOBRsafe's technology for uniform installation across all portfolio holdings and recommendations to its customers, meaning that this initial agreement could earn them several others.
Another deal has SOBRsafe entering into an agreement with global distributor Alco Prevention Canada. Founded in 1989, Alco is a leading provider of preventative alcohol detection solutions, selling to more than 5,000 customers across 45 countries. The deal immediately contributes to new revenue streams inherent to Alco purchasing SOBRcheck™ inventory, executing a defined plan, and dedicating resources to launch SOBRsafe's touch-based technology in Canada. Alco said it performed nearly 100 tests on the device, proving it was easy to operate and highly accurate. Impressed by its potential, they expect substantial demand for SOBRcheck™ technology worldwide. There's still more to support the bullish proposition.
SOBRsafe also announced signing a software-as-a-service agreement with a prominent Native American tribe, a self-governing nation serving thousands of members in the United States. Terms call for initially implementing the SOBRcheck™ technology to ensure its transit fleet is 100% alcohol-free. Like its others, this deal can get bigger faster, noting that it could open pathways to additional implementations across other critical, safety-sensitive functions and potentially expedite SOBR earning further business from among the 574 tribal nations in the United States.
A Valuation Disconnect Worthy Of Quick Consideration
Combining its deals made, the ones expected, the intrinsic value, and the blue sky inherent, SOBR is indeed a case study in valuation disconnects. Even single parts of the SOBR asset portfolio can justify and support higher share prices. But appraising in that way isn't a fair representation. SOBR is not a wait-and-see proposition- it's marketing its technology now, tapping into vast revenue-generating opportunities in the products and SaaS markets. And from the updates provided, the momentum behind the already appreciable growth since 2022 is strengthening.
In other words, SOBRsafe presents quite a value. So good, in fact, that it may be the closest thing to what's typically called a ground-floor investment opportunity. With technology, cash to accelerate growth, a product launch targeting a massive teen drivers market in its crosshairs, and faster-than-expected market penetration into the transportation sector, that assessment is indeed justified. And so is the presumption that the next update from SOBR could be transformative. Reaching into new opportunities, including those from a $35 billion wearable market, usually has that effect.
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