Traders News Source Senior Editor, Mark Roberts Interviews David J. Gandini, Chairman & CEO SOBR Safe Inc. (NASDAQ: SOBR)
Chairman & CEO
Dave is a serial entrepreneur and has spent his career identifying and seizing opportunities in telecommunications, technology, software and automated packaging. In his role at SOBR Safe, he is responsible for capital creation, new business acquisition, business strategy & development and partnership revenue generation.
Dave most recently served as President of IPS Denver, a bank card personalization and packaging entity, where he transformed the company into the leader in the US secured gift market space – growing the company from concept to $46 million in revenue. IPS was acquired by a public company in 2014. Prior to his engagement at IPS, Dave was the COO at First World Communications, a major US internet and Data Center provider, and participated in its successful IPO in 2000, raising over $250 million. Previously, Dave founded Pace Network Services, providing carrier SS7 signaling to US long distance providers and facilitated a successful exit to ICG Communications. He also co-founded Detroit-based Digital Signal in the fiber optic long haul market sector, where he executed a successful exit to SP Telecom.
Dave is a father of three boys, and resides with his wife in Denver, Colorado. He graduated from Michigan State University with a degree in Telecommunications. He was a scholarship NCAA Division I Hockey player, and was a member of the US Junior National Team and a US Junior All-American.
Thank you for giving us your time to answer our questions.
Could you give us a brief overview of your company, its segments, and its potential revenue streams?
Based in Denver, Colorado, we have the world’s first touch-based, preventative alcohol detection technology and reporting software platform. It is faster, more accurate and more hygienic than existing solutions, and it is connected to a powerful data aggregation backend missing from current devices like breathalyzers. Our technology is form factor agnostic, and we have launched – and are in revenue – with two initial devices:
- SOBRcheck™ – stationary screening for facility entrance, or vehicle release/return (an OH&S 2022 New Product of the Year). A user simply places two fingers on our ergonomically-designed device, and in under 10 seconds a biometric reader confirms their identity and our proprietary combination of alcohol sensor and normalizing algorithm detect the absence or presence of alcohol. Results are delivered instantaneously and remotely to administrators – empowering them to take the prescribed action against an established alcohol policy.
- SOBRsure™ – mobile, continuous monitoring for outpatient rehab and driver safety. Patients, and Commercial and (in Q1 2023) teen drivers, place this unobtrusive, fitness-style wearable band on their wrist during outpatient treatment, their delivery route or a night out with the family car. Via an app, the band reports in real-time GPS location, and alerts on the presence of alcohol and band removal/removal location. In the case of rehab, it connects directly with a telehealth professional to accelerate intervention and reduce recidivism.
As referenced, our core market segments are the judicial/probationary system, alcohol rehabilitation and fleet & workplace.
Ours is a SaaS revenue model. With SOBRcheck we do not charge for the device and receive a per employee monthly fee (fleet & workplace) or a per scan or flat monthly fee for judicial/probationary. With SOBRsure, we charge an initial device purchase fee and then a monthly user fee.
What is your perspective on the sobriety testing market(s) you are in now and into 2023?
age of breathalyzer tech; poor throughput, hygiene, reporting
2 MM participants in probation-mandated alcohol testing
of patients relapse, causing soaring insurance costs
2.5 MM seek alcohol treatment each year in US
|Fleet & Workplace||47%
injuries alcohol-related, escalating insurance costs
estimated annual revenue opportunity in US alone
Do you expect your SaaS subscription business to outweigh your actual device sales?
We do. We are fundamentally a SaaS company, and in fact do not charge for the SOBRcheck, recouping all costs via the MRR. We expect revenue from band sales to be meaningful, but to be eclipsed by SaaS subscription revenue in most cases. We anticipate ~80% average gross margins, and for commercial/agency agreements we’ll be signing evergreen 60-month contracts.
Can you talk about how the recent NTSB recommendation that all new cars be equipped with a SOBRcheck type device could impact SOBR now and in the near term?
The most important phrase mentioned in that language was “passive detection”, i.e. not actively administered by another person on a 1-to-1 basis. We are the only company to have one, let alone two, passive detection products in the market, and we are already helping ensure driver safety by placing SOBRcheck in vehicle hubs and SOBRsure on driver wrists. We believe we have a practical solution to the identified need now, not in development for many years out. As mentioned previously, our technology is form factor agnostic – we also possess the potential to Bluetooth into a truck’s telematics system to couple an alcohol finger reader with the other driver behavior data currently being reported to dispatch.
We believe that the NTSB recommendation highlights an overarching need for passive detection and monitoring in all safety-sensitive applications, and only SOBRsafe has the current capabilities to meet this need.
Has SOBR been contacted by any suitors in a potential buyout scenario?
That is not yet on our radar – we uplisted to Nasdaq and were initially capitalized in May; it has only been since then, through laser focus, that we have achieved this market traction and exposure. That interest certainly could come, but for the foreseeable future we are heads-down on business plan execution.
How foolproof are the devices SOBR has coming out? Can they be fooled or hacked?
In terms of the technology, we are 97% accurate in detecting the presence of alcohol. Any device can be gamed with enough time and ingenuity, but we protect against that to the greatest degree possible. Our band is aware of the temperature and humidity of the wearer – if the band is removed or those sensors blocked with a thin piece of plastic, for example, that indicates a potential violation and sends an immediate alert – and you can’t just put it on someone else because the alarm has already been tripped. For our stationary device, because the alcohol result is tied to biometric ID, you can’t have someone else scan for you. And the sensor is sensitive enough to “sniff” through dirt and grime or most things a user might apply to muddy the reading. And if they place something like an impermeable film over their fingertip, it would alert again and again on a failed scan so that employee will be questioned in any event.
Can you tell us about the company’s IP portfolio and any patents it may hold?
We currently have two broad, robust patents filed, one for each device. We update these filings routinely so that their specifics cannot be accessed. We believe we have created a very defensible IP moat.
Are the company’s devices available now? When will they be available to anyone who wants them?
Yes, and effective immediately.
What near term catalyst at SOBR could be the biggest benefit to shareholders?
Sticking with publicly available information of course,
- In rehab, the rollout of our North-Star Care partnership, and
- In justice, potentially replacing breathalyzers in the hundreds of community corrections facilities nationwide now that we have a template for implantation with Alternatives, Inc.
Thank you Dave,
The Traders News Team