SOBRsafe, Inc.'s (NASDAQ: SOBR) milestone-filled 2022 is viewed as more than an accomplishment; it's also recognized as setting the stage for a transformative 2023. That's no exaggeration. In fact, after raising $19.5 million last year despite challenging market conditions, SOBR is better positioned than ever to turn its ambition and game-changing alcohol detection technology into significant revenues. Again, not an overly bullish presumption.
Especially considering that SOBRsafe continues to fortify the groundwork laid to leverage a sales pipeline from the over 10,000 introductions made during alcohol and drug-related conferences last year, where SOBR conducted roughly 2,000 SOBRcheck™ demonstrations that they believe will yield significant new business from the over 600 qualified customer leads. Keep in mind that a single customer can be worth more than hundreds or thousands in revenues; it can sometimes deliver millions. And that may be the case with deals already signed.
Those include signed agreements with Continental Services, Michigan's largest food management company, Terra Tech, a major oil and gas services provider, and Alternatives, Inc., its first justice market customer, facilitating entry into corrections and re-entry client markets. The better news about these deals is that they each open doors to significantly larger agreements. That's being proved by each already expanding original terms to place SOBR technology at additional company locations. Those aren't the only value drivers.
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Putting Manufacturing Processes In Place To Expedite Growth
Supporting the expected surge in new business, SOBR announced a deal outsourcing manufacturing and customer support to minimize fixed costs and maximize quality and scalability to help revenues fall faster to its bottom line. For that, they signed a deal with BGM Electronic Services and Helm, respectively. BGM will manage SOBRsafe's design, engineering, manufacturing, and testing, with SOBR getting a potential boost in popularity from possible introductions to BGM clients, including GM (NYSE: GM), Ford (NYSE: F), and Stellantis (NASDAQ: STLA). Helm can offer similar benefits as an exceptional partner company managing the packaging, fulfillment, onboarding, and customer service details. Its clients include sector giants Domino's (NYSE: DMZ), Merrell, and BMW.
Agreements between smallcaps and companies of that size generally don't come easy. But helping establish those connections is the value inherent to the company's SOBRcheck™ and its embedded technology, awarded the Occupational Health & Safety 2022 New Product of the Year - Safety Monitoring Devices and the Child Safety Network Safe Family Seal of Approval. Those accolades aren't surprising.
The SOBRcheck™ platform is unlike and far more robust than traditional alcohol-detection methods. It requires no blood sample or forcefully blowing into a tube for up to 30 seconds. Instead, it uses finger-touch technology that analyzes the natural humidity and vapor of the skin and generates 93% accuracy within 10 seconds. That bests more traditional and current detection technology that provides low to mid 80% accuracy. That's the device side of the equation. Its SaaS services are equally impressive.
SOBR is positioning to monetize that value, signing SaaS agreements in the fleet and facility spaces. In addition to its deal with Continental Services, which is expected to yield significant savings on insurance premiums, SOBR signed an agreement with a Top 100 Property & Casualty insurance company to test the technology with fleet customers. If results post as expected, this unnamed but A-Rated carrier may consider embedding SOBRsafe as a safety solution for customer discounts. While no numbers were provided to model for revenues, A-Rated carriers typically have a substantial customer base. That count, coupled with the push by the NTSB and other public and private sector agencies and companies wanting to limit liability and create safe working environments, could generate more than substantial revenues; they may hit the books much faster than expected.
That's already happening. As mentioned, SOBRsafe entered a SaaS deal with oil and gas services provider Terra Tech. But here's the better part that wasn't said. Terra Tech initially installed the technology in two of Terra Tech's 17 locations. Today, signs point toward that deal expanding to all locations, possibly by April's end. And better news, from a business perspective, is with statistics showing oil and gas industry workers experience the highest rate of binge drinking, the deal with Terra Tech could be the first of many in the space, especially with validation from its first deal justifying the implementation of SOBRcheck™ or its SaaS product into significantly more industry companies.
Scaling Into Its Growing Market Opportunities
As crucial as targeting significant market opportunities is the ability to meet that demand with the right products and services. SOBR checks those boxes. In 2022, SOBRsafe tripled its in-house sales staff, adding specialists in justice, commercial fleet, and captive insurance. Additionally, SOBR deployed its "force multiplier" distributor strategy, leveraging groups' trust-based relationships with alcohol detection buyers. The intent is to accelerate SOBRcheck™ sales to early adopters and innovators at no fixed cost to SOBRsafe. By the end of Q4, that strategy resulted in SOBR signing deals with 10 distributors, aligning them with 30 U.S. sales professionals, approximately 525 established customers, and up to 52,000 potential users.
All of that added strength is immediately accretive to growth. Moving forward into Q2, SOBR is ideally positioned to accelerate growth in key markets, including for SOBRsure™, its wearable alcohol detection and monitoring device. The early indication is that demand for it, like SOBRcheck™, will be robust.
Evidence of that is a deal announced last July whereby an innovative in-home, comprehensive alcohol treatment program submitted a pre-order for 1,150 white-label bands. In addition, a specialized, member-based rideshare company committed to equipping its rigorously vetted drivers with SOBRsure™ upon the band's commercial launch. From there, opportunities could be in play from a massive school-bus driver and services market where sober driving is paramount to those companies' missions to keep children safe. Seizing that opportunity can be a revenue game changer.
And because SOBRsure™ is a continuous monitoring device providing real-time data to management, tapping into that potential is far from a long-shot opportunity. Remember, besides a locking device, which is costly and sometimes installation prohibitive, nothing provides as much utility to stop drunk drivers from taking the road or operating workplace machinery. So, using an analogy from SOBR, 2022 was a productive pre-season scale-up. And its work completed and relationships made have prepared the company for a breakout regular season in 2023.
And that's underway, with an equipped sales force, two products, and a SaaS services offering that is strong enough to accelerate sales appreciably this year.
International Expansion, Enhanced Distribution, And Unique Markets
And not only in the United States. SOBR has also announced signing 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. It plans to expand that implementation to cover its entire training organization of over 3,500 employees and all student drivers. This initial agreement could lead to significant others. The Fox Group noted it's further evaluating SOBRsafe's technology for uniform installation across all portfolio holdings and for recommendation to its customers.
SOBRsafe also signed a deal 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 ground-breaking 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 more fueling the bullish proposition.
Last month, SOBRsafe 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.
Ready To Rally In 2023, Deservedly So
Simply put, SOBR is primed for growth in multiple markets with alcohol detection and monitoring devices and services that will forever change the detection and treatment landscapes. And while plenty of intrinsic firepower already justifies a significantly higher share price, when factoring in the inherent opportunities, those prices can increase toward the exponential level.
Yes, it's a bullish assumption. However, it's a sentiment supported by real growth, excellent management, and industry-best products and services that target billions of revenue dollars in diversified markets. Thus, while current prices may not be an appropriate appraisal of SOBR, they at least expose an investment opportunity validated by milestones reached that are better positioned than ever to become catalysts. More simply proposed, an opportunity worth seizing.
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