What changed in SOBR Safe, Inc.'s 10-K — 2022 vs 2023
vs
Paragraph-level year-over-year comparison of SOBR Safe, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.
+264 added−309 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)
Top changes in SOBR Safe, Inc.'s 2023 10-K
264 paragraphs added · 309 removed · 175 edited across 1 sections
- Item 1A. Risk Factors+264 / −309 · 175 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
175 edited+89 added−134 removed150 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
175 edited+89 added−134 removed150 unchanged
2022 filing
2023 filing
Biggest changeDescription 3.1 (1) Articles of Incorporation of Imagine Media, Ltd. 3.2 (2) Articles of Amendment to Articles of Incorporation to TransBiotec, Inc. 3.3 (3) Certificate of Amendment to Certificate of Incorporation filed with the State of Delaware on May 25, 2017 3.4 (6) Amended and Restated Bylaws of SOBR Safe, Inc. 3.5 (10) Certificate of Amendment to Certificate of Incorporation of TransBiotec, Inc. changing name to SOBR Safe, Inc., effecting 1-for-33.26 reverse stock split and decreasing authorized common stock to 100M shares 4.1 (17) Form of Representative’s Warrant between SOBR Safe, Inc. and Aegis Capital Corp. 4.2 (17) Warrant Agency Agreement between SOBR Safe, Inc. and Equiniti Trust Company dated May 17, 2022 4.3 (17) Form of Unit Warrant, issued May 18, 2022 10.1 (4) Asset Purchase Agreement dated May 6, 2019 between IDTEC, LLC and TransBiotec, Inc. 10.2 (5) Common Stock Purchase Agreement with Charles Bennington dated August 23, 2019 10.3 (5) Share Exchange Agreement with Michael Lanphere dated August 23, 2019 10.4 (5) Share Exchange Agreement with Vernon Justus dated August 23, 2019 10.5 (5) Debt Conversion and Common Stock Purchase Agreement with Michael Lanphere dated August 23, 2019 10.6 (5) Debt Conversion and Common Stock Purchase Agreement with Devadatt Mishal dated August 23, 2019 10.7 (6) TransBiotec, Inc. 2019 Equity Incentive Plan 10.8 (6) Employment Agreement with Kevin Moore dated October 25, 2019 10.9 (8) Amended Employment Agreement with Kevin Moore dated November 26, 2019 10.10 (6) Employment Agreement with David Gandini dated October 25, 2019 10.11 (7) Series A-1 Preferred Stock Purchase Agreement by and between TransBiotec, Inc. and SOBR SAFE, LLC dated December 12, 2019 (with Series A-1 Preferred Stock Certificate of Designation attached) 46 Table of Contents 10.12 (9) Amendment No. 1 to Asset Purchase Agreement dated March 23, 2020 by and between IDTEC, LLC and TransBiotec, Inc. 10.13 (10) Form of Convertible Promissory Note Issued to IDTEC, LLC at Close of Asset Purchase Transaction 10.14 (10) Waiver Under Asset Purchase Agreement and Post-Closing Covenant Agreement dated June 5, 2020 by and between IDTEC, LLC and TransBiotec, Inc. 10.15 (10) Warrant to Purchase Common Stock dated June 5, 2020 issued to IDTEC, LLC 10.16 (11) Advisory Agreement with Steven Beabout dated October 9, 2020 10.17 (12) 18% Original Issue Discount Convertible Debenture issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. dated September 27, 2021 10.18 (12) Warrant to Purchase Common Stock issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. dated September 27, 2021 10.19 (12) Securities Purchase Agreement by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated September 27, 2021 10.20 (12) Registration Rights Agreement by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated September 27, 2021 10.21 (13) “Form of” Secured Convertible Debenture issued by SOBR Safe, Inc. in $2M Regulation D Offering 10.22 (13) “Form of” Warrant issued by SOBR Safe, Inc. in Regulation D Offering 10.23 (14) Transition Agreement by and between SOBR Safe, Inc. and Kevin Moore dated October 30, 2021 10.24 (15) Executive Employment Agreement with Scott Bennett dated August 17, 2021 10.25 (15) Executive Employment Agreement with Michael Watson dated October 11, 2021 10.26 (16) Executive Employment Agreement with Gerard Wenzel dated January 1, 2022 10.27 (18) Form of Share Exchange Agreement with David Gandini and Gary Graham for Series B Preferred Stock 10.28 (21) Common Stock Purchase Warrant issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd dated March 30, 2022 10.29 (19) Waiver by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated March 30, 2022 10.30 (20) Securities Purchase Agreement by and between SOBR Safe, Inc. and Aegis Capital Corp. dated September 28, 2022 10.31 (20) Registration Rights Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022. 10.32 (20) Form of Pre-Funded Warrant Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022 10.33 (26) Form of Warrant Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022 10.34 (22) Executive Employment Agreement with David Gandini dated January 30 th , 2023 10.35 (23) Purchase Agreement between SOBR Safe, Inc. and Purchasers dated March 7, 2023 10.36 (23) Registration Rights Agreement between SOBR Safe, Inc. and Purchasers dated March 7, 2023 10.37 (23) Form of Senior Convertible Note between SOBR Safe, Inc. and Holders dated March 9, 2023 10.38 (23) Common Stock Purchase Warrant between SOBR Safe, Inc. and Holders dated March 9, 2023 47 Table of Contents 10.39 (24) Amended And Restated Common Stock Purchase Warrant dated September 30, 2022 issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. amending the original warrant dated March 30, 2022 10.40 (24) Amended And Restated Common Stock Purchase Warrant dated September 30, 2022 issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. amending the original warrant dated September 27, 2021 10.41 (25) Consulting Agreement by and between SOBR Safe, Inc. and Winterstone Group, LLC dated January 21, 2022 10.42 (25) Services Agreement by and between SOBR Safe, Inc. and TraDigital Marketing Group, LLC dated January 18, 2022 10.43 (25) Confirming Agreement by and between SOBR Safe, Inc. and Winterstone Group, LLC dated May 16, 2022 10.44 (25) Confirming Agreement by and between SOBR Safe, Inc. and TraDigital Marketing Group, LLC dated May 16, 2022 21.1* List of Subsidiaries 31.1* Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith) 31.2* Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer (filed herewith) 32.1* Section 1350 Certification of Chief Executive Officer (filed herewith). 32.2* Section 1350 Certification of Chief Accounting Officer (filed herewith). 101.INS ** Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH ** Inline XBRL Taxonomy Extension Schema Document 101.CAL ** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF ** Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB ** Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE ** Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) *Filed herewith. **XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 48 Table of Contents (1) Incorporated by reference from our Registration Statement on Form SB-2, filed with the Commission on January 31, 2008 (2) Incorporated by reference from our Registration Statement on Form S-1, filed with the Commission on November 6, 2012 (3) Incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Commission on February 6, 2019 (4) Incorporated by reference from our Current Report on Form 8-K, filed with the Commission on May 14, 2019.
Biggest changeS-1 3.2 11/06/2012 3.3 Certificate of Amendment to Certificate of Incorporation filed with the State of Delaware on May 25, 2017 10-K 3.3 02/06/2019 3.4 Amended and Restated Bylaws of SOBR Safe, Inc. 8-K 3.1 11/19/2019 3.5 Certificate of Amendment to Certificate of Incorporation of TransBiotec, Inc. changing name to SOBR Safe, Inc., effecting 1-for-33.26 reverse stock split and decreasing authorized common stock to 100M shares 8-K 3.1 06/11/2020 4.1 Form of Representative’s Warrant between SOBR Safe, Inc. and Aegis Capital Corp. 8-K 4.1 05/19/2022 4.2 Warrant Agency Agreement between SOBR Safe, Inc. and Equiniti Trust Company dated May 17, 2022 8-K 4.2 05/19/2022 4.3 Form of Unit Warrant, issued May 18, 2022 8-K 4.3 05/19/2022 10.1 TransBiotec, Inc. 2019 Equity Incentive Plan 8-K 10.1 11/19/2019 10.2* Employment Agreement with David Gandini dated October 25, 2019 8-K 10.3 11/19/2019 10.3 Amendment No. 1 to Asset Purchase Agreement dated March 23, 2020 by and between IDTEC, LLC and TransBiotec, Inc. 10-Q 10.12 05/26/2020 10.4 Form of Convertible Promissory Note Issued to IDTEC, LLC at Close of Asset Purchase Transaction 8-K 10.3 06/11/2020 10.5 Waiver Under Asset Purchase Agreement and Post-Closing Covenant Agreement dated June 5, 2020 by and between IDTEC, LLC and TransBiotec, Inc. 8-K 10.4 06/11/2020 10.6 Warrant to Purchase Common Stock dated June 5, 2020 issued to IDTEC, LLC 8-K 10.5 06/11/2020 10.7* Advisory Agreement with Steven Beabout dated October 9, 2020 10-K 10.16 03/31/2021 10.8 18% Original Issue Discount Convertible Debenture issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. dated September 27, 2021 8-K 10.1 10/01/2021 10.9 Warrant to Purchase Common Stock issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. dated September 27, 2021 8-K 10.2 10/01/2021 10.10 Securities Purchase Agreement by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated September 27, 2021 8-K 10.3 10/01/2021 10.11 Registration Rights Agreement by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated September 27, 2021 8-K 10.4 10/01/2021 10.12 Form of” Secured Convertible Debenture issued by SOBR Safe, Inc. in $2M Regulation D Offering S-1/A 10.21 12/01/2021 10.13 Form of” Warrant issued by SOBR Safe, Inc. in Regulation D Offering S-1/A 10.22 12/01/2021 10.14* Executive Employment Agreement with Scott Bennett dated August 17, 2021 S-1/A 10.24 01/19/2022 50 Table of Contents 10.15* Executive Employment Agreement with Michael Watson dated October 11, 2021 S-1/A 10.25 01/19/2022 10.16* Executive Employment Agreement with Gerard Wenzel dated January 1, 2022 8-K 10.1 01/19/2022 10.17 Form of Share Exchange Agreement with David Gandini and Gary Graham for Series B Preferred Stock S-1/A 10.28 03/17/2022 10.18 Common Stock Purchase Warrant issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd dated March 30, 2022 S-1 10.30 09/16/2022 10.19 Waiver by and between SOBR Safe, Inc. and Armistice Capital Master Fund Ltd. dated March 30, 2022 8-K 10.1 04/01/2022 10.20 Securities Purchase Agreement by and between SOBR Safe, Inc. and Aegis Capital Corp. dated September 28, 2022 8-K 10.1 10/03/2022 10.21 Registration Rights Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022. 8-K 10.2 10/03/2022 10.22 Form of Pre-Funded Warrant Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022 8-K 10.3 10/03/2022 10.23 Form of Warrant Agreement by and between SOBR Safe, Inc. and Purchasers dated September 30, 2022 8-K/A 10.4 10/14/2022 10.24* Executive Employment Agreement with David Gandini dated January 30 th , 2023 8-K 10.1 02/03/2023 10.25 Purchase Agreement between SOBR Safe, Inc. and Purchasers dated March 7, 2023 8-K 10.1 03/13/2023 10.26 Registration Rights Agreement between SOBR Safe, Inc. and Purchasers dated March 7, 2023 8-K 10.2 03/13/2023 10.27 Form of Senior Convertible Note between SOBR Safe, Inc. and Holders dated March 9, 2023 8-K 10.3 03/13/2023 10.28 Common Stock Purchase Warrant between SOBR Safe, Inc. and Holders dated March 9, 2023 8-K 10.4 03/13/2023 10.29 Amended And Restated Common Stock Purchase Warrant dated September 30, 2022 issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. amending the original warrant dated March 30, 2022 S-1 10.35 10/14/2022 10.30 Amended And Restated Common Stock Purchase Warrant dated September 30, 2022 issued by SOBR Safe, Inc. to Armistice Capital Master Fund Ltd. amending the original warrant dated September 27, 2021 S-1 10.36 10/14/2022 10.31* Consulting Agreement by and between SOBR Safe, Inc. and Winterstone Group, LLC dated January 21, 2022 8-K 10.1 07/27/2022 10.32 Services Agreement by and between SOBR Safe, Inc. and TraDigital Marketing Group, LLC dated January 18, 2022 8-K 10.2 07/27/2022 10.33 Confirming Agreement by and between SOBR Safe, Inc. and Winterstone Group, LLC dated May 16, 2022 8-K 10.3 07/27/2022 10.34 Confirming Agreement by and between SOBR Safe, Inc. and TraDigital Marketing Group, LLC dated May 16, 2022 8-K 10.4 07/27/2022 21.1 List of Subsidiaries 10-K 21.1 03/31/2023 23.1 Consent of Independent Registered Public Accounting Firm X 23.2 Consent of Independent Registered Public Accounting Firm X 31.1 Principal Executive Officer Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
We believe that we will continue to incur substantial operating expenses in the foreseeable future as we continue to invest to develop and expand and technology and product offerings and attract new customers. These efforts may prove more expensive than we anticipate, and we may not succeed in obtaining the net revenue and operating margins necessary to offset these expenses.
We believe that we will continue to incur substantial operating expenses in the foreseeable future as we continue to invest to develop and expand technology and product offerings and attract new customers. These efforts may prove more expensive than we anticipate, and we may not succeed in obtaining the net revenue and operating margins necessary to offset these expenses.
The issuance of these securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.
The issuance of these securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.
In making this assessment, management takes into consideration any circumstances of which the Company is aware regarding a customer’s inability to meet its financial obligations to the Company, and any potential prevailing economic conditions and their impact on the Company’s customers. Valuation of Inventory Inventory is comprised primarily component parts and finished products.
In making this assessment, management takes into consideration any circumstances of which the Company is aware regarding a customer’s inability to meet its financial obligations to the Company, and any potential prevailing economic conditions and their impact on the Company’s customers. Valuation of Inventory Inventory is comprised primarily of component parts and finished products.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: · the level of adoption and demand for our products in our key industries like probation management, fleet & facility, alcohol rehabilitation and young drivers; · positive or negative coverage in the media, or changes in commercial perception, of our products or competing products, including our brand reputation; · the degree of competition in our industry and any change in the competitive landscape, including consolidation among competitors or future partners; · any safety, reliability or effectiveness concerns that arise regarding our products; · unanticipated pricing pressures in connection with the sale of our products; · the effectiveness of our sales and marketing efforts, including our ability to deploy a sufficient number of qualified representatives to sell and market our products; · the timing of customer orders for our products and the number of available selling days in any quarterly period, which can be impacted by holidays, the mix of products sold and the geographic mix of where products are sold; · unanticipated delays in product development or product launches; · the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers; · our ability to raise additional capital on acceptable terms, or at all, if needed to support the commercialization of our products; · our ability to achieve and maintain compliance with all regulatory requirements applicable to our products and services; · our ability to obtain, maintain and enforce our intellectual property rights; · our ability and our third-party suppliers’ ability to supply the components of our products in a timely manner, in accordance with our specifications, and in compliance with applicable regulatory requirements; and · introduction of new products or technologies that compete with our products. 9 Table of Contents The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: · the level of adoption and demand for our products in our key industries like probation management, fleet & facility, alcohol rehabilitation and young drivers; · positive or negative coverage in the media, or changes in commercial perception, of our products or competing products, including our brand reputation; · the degree of competition in our industry and any change in the competitive landscape, including consolidation among competitors or future partners; · any safety, reliability or effectiveness concerns that arise regarding our products; · unanticipated pricing pressures in connection with the sale of our products; · the effectiveness of our sales and marketing efforts, including our ability to deploy a sufficient number of qualified representatives to sell and market our products; · the timing of customer orders for our products and the number of available selling days in any quarterly period, which can be impacted by holidays, the mix of products sold and the geographic mix of where products are sold; · unanticipated delays in product development or product launches; · the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers; · our ability to raise additional capital on acceptable terms, or at all, if needed to support the commercialization of our products; · our ability to achieve and maintain compliance with all regulatory requirements applicable to our products and services; · our ability to obtain, maintain and enforce our intellectual property rights; · our ability and our third-party suppliers’ ability to supply the components of our products in a timely manner, in accordance with our specifications, and in compliance with applicable regulatory requirements; and · introduction of new products or technologies that compete with our products. 10 Table of Contents The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
Bennett performs services for us that are customary and usual for a EVP of business operations of a company, in exchange for: (i) a base salary of $175,000, (ii) incentive stock options under our 2019 Equity Incentive Plan to acquire up to 33,334 shares of our common stock at $9.21 per share (110% of fair market value on the date of grant), and repriced effective November 4, 2022, to an exercise price of $2.39 per share which options vest in equal quarterly installments overs a two year period, and (iii) 16,667 Restricted Stock Units under our 2019 Equity Incentive Stock Plan, which vested in November 2022.
Bennett performs services for us that are customary and usual for a EVP of business operations of a company, in exchange for: (i) a base salary of $175,000, (ii) incentive stock options under our 2019 Equity Incentive Plan to acquire up to 33,334 shares of our common stock at $9.21 per share (110% of fair market value on the date of grant), and repriced effective November 4, 2023, to an exercise price of $2.39 per share which options vest in equal quarterly installments overs a two year period, and (iii) 16,667 Restricted Stock Units under our 2019 Equity Incentive Stock Plan, which vested in November 2022.
If we continue to fail to maintain an effective system of internal controls we may be unable to produce reliable, timely financial reports or prevent fraud, which could have a material adverse effect on our business, including subjecting us to sanctions or investigation by regulatory authorities, such as the Securities and Exchange Commission.
If we fail to maintain an effective system of internal controls we may be unable to produce reliable, timely financial reports or prevent fraud, which could have a material adverse effect on our business, including subjecting us to sanctions or investigation by regulatory authorities, such as the Securities and Exchange Commission.
On March 1, 2022, we entered in to Share Exchange Agreements with David Gandini, one of our officers and directors, and Gary Graham, our largest shareholder, to exchange 333,334 and 666,667 shares of our common stock into 1,000,000 shares and 2,000,000 shares of our Series B Preferred Stock, respectively.
On March 1, 2022, we entered into Share Exchange Agreements with David Gandini, one of our officers and directors, and Gary Graham, our largest shareholder, to exchange 333,334 and 666,667 shares of our common stock into 1,000,000 shares and 2,000,000 shares of our Series B Preferred Stock, respectively.
The Company determines revenue recognition through five steps outlined in ASC 606 which include (1) the identification of the contract or contracts with a customer, (2) identification of individual or combined performance obligations contained in the contract, (3) determination of the transaction price detailed within the contract, (4) allocation of the transaction price to the specific performance obligations, and (5) finally, recognition of revenue as the Company’s performance obligations are satisfied according to the terms of the contract. 23 Table of Contents Allowance for Doubtful Accounts Customer accounts are monitored for potential credit losses based upon management’s assessment of expected collectability and the allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance.
The Company determines revenue recognition through five steps outlined in ASC 606 which include (1) the identification of the contract or contracts with a customer, (2) identification of individual or combined performance obligations contained in the contract, (3) determination of the transaction price detailed within the contract, (4) allocation of the transaction price to the specific performance obligations, and (5) finally, recognition of revenue as the Company’s performance obligations are satisfied according to the terms of the contract. 25 Table of Contents Allowance for Doubtful Accounts Customer accounts are monitored for potential credit losses based upon management’s assessment of expected collectability and the allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance.
While we will continue to explore these potential opportunities, there can be no assurances that we will be successful in raising sufficient capital on terms acceptable to us, or at all, or that we will be successful in licensing our future products. 8 Table of Contents Our business plan, which is focused on the development and commercialization of alcohol detection devices, is dependent upon our SOBRSafe™ technology.
While we will continue to explore these potential opportunities, there can be no assurances that we will be successful in raising sufficient capital on terms acceptable to us, or at all, or that we will be successful in licensing our future products. 9 Table of Contents Our business plan, which is focused on the development and commercialization of alcohol detection devices, is dependent upon our SOBRSafe™ technology.
She also has extensive experience in working with employee-owned companies. Ms. Shoemaker has numerous professional affiliations including, but limited to, American Institute of Certified Public Accountants (AICPA), the Colorado Society of Certified Public Accountants (CSCPA), and the National Center for Employee Ownership (NCEO). Ms. Shoemaker received her B.S. in Accounting, graduating cum laude, from Southwest Missouri State University.
She also has extensive experience working with employee-owned companies. Ms. Shoemaker has numerous professional affiliations including, but not limited to, American Institute of Certified Public Accountants (AICPA), the Colorado Society of Certified Public Accountants (CSCPA), and the National Center for Employee Ownership (NCEO). Ms. Shoemaker received her B.S. in Accounting, graduating cum laude, from Missouri State University.
Gandini founded Pace Network Services providing carrier SS7 signaling to U.S. long distance providers and facilitated a successful exit to ICG Communications on the heels of co-founding Detroit based Digital Signal in the fiber optic long haul market sector where me managed a successful exit to SP Telecom. 31 Table of Contents Mr.
Gandini founded Pace Network Services providing carrier SS7 signaling to U.S. long distance providers and facilitated a successful exit to ICG Communications on the heels of co-founding Detroit based Digital Signal in the fiber optic long haul market sector where me managed a successful exit to SP Telecom. 34 Table of Contents Mr.
Our management assesses the effectiveness of our internal control over financial reporting on a quarterly basis, with the most recent assessment being conducted as of December 31, 2022. In making these assessments, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework issued in 2013.
Our management assesses the effectiveness of our internal control over financial reporting on a quarterly basis, with the most recent assessment being conducted as of December 31, 2023. In making these assessments, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework issued in 2013.
As a result, we will need time to penetrate our target markets by furthering developing the profile companies that could benefit the most from our products and technology. If we are not successful in discovering these companies it could greatly slow our growth and adversely impact our financial condition.
As a result, we will need time to penetrate our target markets by further developing the profile companies that could benefit the most from our products and technology. If we are not successful in discovering these companies it could greatly slow our growth and adversely impact our financial condition.
Moore received Restricted Stock Units in lieu of a cash bonus, his bonus amount is set forth under “Stock Awards” in the above table. (7) Includes 20,959 Restricted Stock Units under our 2019 Equity Incentive Plan, which were issued to Mr. Moore in lieu of executive bonus he earned for 2020.
Moore received Restricted Stock Units in lieu of a cash bonus, his bonus amount is set forth under “Stock Awards” in the above table. (9) Includes 20,959 Restricted Stock Units under our 2019 Equity Incentive Plan, which were issued to Mr. Moore in lieu of executive bonus he earned for 2020.
(9) Includes 75,545 held in the name of C&S Trust, a trust controlled by Kathren Beabout, who is Mr. Beabout’s spouse. Mr. Beabout’s children are the beneficiaries of C&S Trust. Mr. Beabout also has interests in IDTEC, LLC and SOBR Safe, LLC, both of which own shares of our common stock. Mr.
(7) Includes 75,545 held in the name of C&S Trust, a trust controlled by Kathren Beabout, who is Mr. Beabout’s spouse. Mr. Beabout’s children are the beneficiaries of C&S Trust. Mr. Beabout also has interests in IDTEC, LLC and SOBR Safe, LLC, both of which own shares of our common stock. Mr.
Any substantive amendments or waivers of the code of business conduct and ethics or code of ethics for senior financial officers may be made only by our board of directors and will be promptly disclosed as required by applicable U.S. federal securities laws and the corporate governance rules of Nasdaq.
Any substantive amendments or waivers of the code of business conduct and ethics or code of ethics for senior financial officers may be made only by our board of directors and is promptly disclosed as required by applicable U.S. federal securities laws and the corporate governance rules of Nasdaq.
Corporate Governance As of December 31, 2022, our Board of Directors consisted of David Gandini, Noreen Butler, Ford Fay, Steven Beabout, and Sandy Shoemaker. As of December 31, 2022, four of our directors qualified as an “independent director” as the term is used in NASDAQ rule 5605(a)(2), namely Noreen Butler, Ford Fay, Steven Beabout, and Sandy Shoemaker.
Corporate Governance As of December 31, 2023, our Board of Directors consisted of David Gandini, Noreen Butler, Ford Fay, Steven Beabout, and Sandy Shoemaker. As of December 31, 2023, four of our directors qualified as an “independent director” as the term is used in NASDAQ rule 5605(a)(2), namely Noreen Butler, Ford Fay, Steven Beabout, and Sandy Shoemaker.
ITEM 4 – MINE SAFETY DISCLOSURES Not Applicable. 16 Table of Contents PART II ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is listed on the Nasdaq Capital Market under the symbol “SOBR”.
ITEM 4 – MINE SAFETY DISCLOSURES Not Applicable. 19 Table of Contents PART II ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is listed on the Nasdaq Capital Market under the symbol “SOBR”.
Shoemaker’s experience includes initial and secondary public offerings, reverse mergers, annual and quarterly audits/reviews of public companies, responses to SEC comment letters, assisting with implementation of new accounting pronouncements, business acquisitions, stock-based compensation, and internal controls. Ms. Shoemaker has provided services to companies in the various industries such as bio-tech, franchising, distribution, manufacturing, medical-device, restaurants and real estate industries.
Shoemaker’s experience includes initial and secondary public offerings, reverse mergers, annual and quarterly audits/reviews of public companies, responses to SEC comment letters, assisting with implementation of new accounting pronouncements, business acquisitions, stock-based compensation, and internal controls. Ms. Shoemaker has provided services to companies in the various industries such as biotech, franchising, distribution, manufacturing, medical-device, restaurants and real estate industries.
Long-Term Incentive Plan Currently, our Company does not have a formal long-term incentive plan in favor of any director, officer, consultant or employee of our Company. 40 Table of Contents ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Long-Term Incentive Plan Currently, our Company does not have a formal long-term incentive plan in favor of any director, officer, consultant or employee of our Company. 43 Table of Contents ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
If we continued to have material weaknesses in our internal controls, we may not be able to report our financial results accurately or timely or to detect fraud, which could have a material adverse effect on our business.
If we develop material weaknesses in our internal controls, we may not be able to report our financial results accurately or timely or to detect fraud, which could have a material adverse effect on our business.
Moore was appointed as our Chief Executive Officer on October 25, 2019, resigned as our Chief Executive Officer effective October 18, 2021, and continued employed in a strategic advisor position until October 31, 2022. (6) Since Mr.
Moore was appointed as our Chief Executive Officer on October 25, 2019, resigned as our Chief Executive Officer effective October 18, 2021, and continued employed in a strategic advisor position until October 31, 2022. (8) Since Mr.
Our Articles of Incorporation authorize the issuance of up to 100,000,000 shares of common stock and 25,000,000 shares of preferred stock. Our Board of Directors has the authority to issue additional shares of common stock and to issue options and warrants to purchase shares of our common stock without shareholder approval.
Our Certificate of Incorporation authorize the issuance of up to 100,000,000 shares of common stock and 25,000,000 shares of preferred stock. Our Board of Directors has the authority to issue additional shares of common stock and to issue options and warrants to purchase shares of our common stock without shareholder approval.
If we fail to successfully promote our products in a cost-effective manner, we may fail to attract or retain the market acceptance necessary to realize a sufficient return on our promotional efforts, or to achieve broad adoption of our products. We need to ensure strong product performance and reliability to maintain and grow our business.
If we fail to successfully promote our products in a cost-effective manner, we may fail to attract or retain the market acceptance necessary to realize a sufficient return on our promotional efforts, or to achieve broad adoption of our products. 13 Table of Contents We need to ensure strong product performance and reliability to maintain and grow our business.
If we get to that stage of growth, such loss of manufacturers could cause us to breach any contracts we have in place at that time and would likely cause us to lose sales. If our contract manufacturers fail to meet our requirements for quality, quantity and timeliness, our business growth could be harmed.
If we get to that stage of growth, such loss of manufacturers could cause us to breach any contracts we have in place at that time and would likely cause us to lose sales. 11 Table of Contents If our contract manufacturers fail to meet our requirements for quality, quantity and timeliness, our business growth could be harmed.
Gain (loss) on Fair Value Adjustment – Derivatives, net Fair value adjustment – derivatives, net was a loss of ($60,000) for the year ended December 31, 2021, compared to a gain of $1,040,000 for the year ended December 31, 2022 which was related to a financial instrument issued in September 2021 that contained an embedded derivative liability component.
Gain (loss) on Fair Value Adjustment – Derivatives, net Fair value adjustment – derivatives, net was a gain of $1,040,000 for the year ended December 31, 2022, compared to none for the year ended December 31, 2023 which was related to a financial instrument issued in September 2021 that contained an embedded derivative liability component.
If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management. ITEM 1B – UNRESOLVED STAFF COMMENTS None.
If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management. 17 Table of Contents ITEM 1B – UNRESOLVED STAFF COMMENTS None.
Failure to maintain or protect our information technology systems effectively could negatively affect our business, financial condition and results of operations. 13 Table of Contents If we are unable to recruit and retain qualified personnel, our business could be harmed. Our growth and success highly depend on qualified personnel.
Failure to maintain or protect our information technology systems effectively could negatively affect our business, financial condition and results of operations. If we are unable to recruit and retain qualified personnel, our business could be harmed. Our growth and success highly depend on qualified personnel.
Liquidity and Capital Resources for the Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 Introduction During the years ended December 31, 2022 and 2021, the Company has incurred recurring losses from operations.
Liquidity and Capital Resources for the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Introduction During the years ended December 31, 2023 and 2022, the Company has incurred recurring losses from operations.
ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 30 Table of Contents PART III ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 33 Table of Contents PART III ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
Our common stock is thinly traded compared to larger more widely known companies. Thinly traded common stock can be more volatile than common stock trading in an active public market. We cannot predict the extent to which an active public market for our common stock will develop or be sustained.
Our common stock is listed on Nasdaq. Our common stock is thinly traded compared to larger more widely known companies. Thinly traded common stock can be more volatile than common stock trading in an active public market. We cannot predict the extent to which an active public market for our common stock will develop or be sustained.
We do not own our own manufacturing facility but outsource with third party manufacturing companies for our manufacturing. ITEM 3 ‑ LEGAL PROCEEDINGS On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against us in Orange County California State Superior Court for Breach of Contract in the amount of $11,164.
We do not own our own manufacturing facility and outsource with third party manufacturing companies for our device manufacturing and product distribution. ITEM 3 ‑ LEGAL PROCEEDINGS On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against us in Orange County California State Superior Court for Breach of Contract in the amount of $11,164.
The following table sets forth, as of March 14, 2023, certain information with respect to our equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than 5% of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.
The following table sets forth, as of March 29, 2024, certain information with respect to our equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than 5% of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.
(13) Includes warrants purchased in the May 2022 Uplist Financing to acquire 2,023,400 shares of our Common Stock at an exercise price of $2.125 per share, warrants purchased in the PIPE Offering to acquire 3,378,378 shares of our Common Stock at an exercise price of $1.350 per share, and warrants acquired and subject to Adjustment terms (as defined in the respective Warrants) of the March 2022 Armistice Warrant and the September Armistice Warrant to acquire 2,258,356 shares of our Common Stock at an exercise price of $1.350 per share; however the number of shares for this Beneficial Owner gives effect to the beneficial ownership limitations where the beneficial owner may not exercise these warrants and prefunded warrants to the extent such exercise would cause the beneficial owner to beneficially own a number of shares of Common Stock which would exceed 4.99%, or 9.99%, as applicable, of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of the warrant which have not been exercised.
(11) Includes warrants purchased in the May 2022 Uplist Financing to acquire 2,023,400 shares of our Common Stock at an exercise price of $2.125 per share, warrants purchased in the PIPE Offering to acquire 3,378,378 shares of our Common Stock at an exercise price of $1.350 per share, and warrants acquired and subject to Adjustment terms (as defined in the respective Warrants) of the March 2022 Armistice Warrant and the September Armistice Warrant to acquire 4,917,387 shares of our Common Stock at an exercise price of $0.62 per share; however the number of shares for this Beneficial Owner gives effect to the beneficial ownership limitations where the beneficial owner may not exercise these warrants and prefunded warrants to the extent such exercise would cause the beneficial owner to beneficially own a number of shares of Common Stock which would exceed 4.99%, or 9.99%, as applicable, of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of the warrant which have not been exercised.
We currently outsource the manufacturing of devices utilizing the SOBR® Safe™ alcohol detection system to several contract manufacturers. These manufacturers will procure all of the raw materials for us and provide all necessary facilities and labor to manufacture our products.
We currently outsource the manufacturing of devices utilizing the SOBRsafe™ alcohol detection system to several contract manufacturers. These manufacturers will procure all of the raw materials for us and provide all necessary facilities and labor to manufacture our products.
However, continued increases in inflation could have an adverse effect on our results of future operations, financial position, and liquidity in 2023.
However, continued increases in inflation could have an adverse effect on our results of future operations, financial position, and liquidity in 2024.
(4) Includes 20,959 Restricted Stock Units under our 2019 Equity Incentive Plan, which were issued to Mr. Gandini in lieu of executive bonus he earned for 2020. The RSUs were valued based on the fair market value of our common stock on the date of grant. (5) Mr.
(6) Includes 20,959 Restricted Stock Units under our 2019 Equity Incentive Plan, which were issued to Mr. Gandini in lieu of executive bonus he earned for 2020. The RSUs were valued based on the fair market value of our common stock on the date of grant. (7) Mr.
The Audit Committee is informed of each service performed pursuant to its pre-approval policies and procedures. Auditor Independence The Audit Committee has considered the role of MGO in providing services to us for the year ended December 31, 2022, and has concluded that such services are acceptable with such firm’s independence.
The Audit Committee is informed of each service performed pursuant to its pre-approval policies and procedures. Auditor Independence The Audit Committee has considered the role of Haynie in providing services to us for the year ended December 31, 2023, and has concluded that such services are acceptable with such firm’s independence.
(9) Includes the value of 91,667 Restricted Stock Units under our 2019 Equity Incentive Plan based on the fair market value of our common stock on the date of grant. (10) Mr. Bennett was hired as our Executive Vice President of Business Operations in October 2021.
(12) Includes the value of 91,667 Restricted Stock Units under our 2019 Equity Incentive Plan based on the fair market value of our common stock on the date of grant. (13) Mr. Bennett was hired as our Executive Vice President of Business Operations in October 2021.
A default judgment was taken against us in this matter. In mid-2013 we learned the Plaintiff’s perfected the judgment against us, but we have not heard from the Plaintiffs as of December 31, 2022.
A default judgment was taken against us in this matter. In mid-2013 we learned the Plaintiffs perfected the judgment against us, but we have not heard from the Plaintiffs as of December 31, 2023.
Directors and Executive Officers The following table sets forth the names and ages of our directors, director nominees, and executive officers as of March 14, 2023, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company.
Directors and Executive Officers The following table sets forth the names and ages of our directors, director nominees, and executive officers as of March 29, 2024, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company.
The issuance of these securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The investor is accredited, familiar with our operations, and there was no general solicitation or advertising.
The issuance of these securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The investors were accredited, familiar with our operations, and there was no general solicitation or advertising.
The Board also acted by unanimous written consent seven times during the year ended December 31, 2022. Committees As of April 22, 2022, our Board of Directors has a designated compensation committee, consisting of Steven Beabout and Ford Fay. Our Board of Directors has a designated audit committee, consisting of Sandy Shoemaker, Steve Beabout and Ford Fay.
The Board also acted by unanimous written consent eight times during the year ended December 31, 2023. Committees Since April 22, 2022, our Board of Directors has a designated compensation committee, consisting of Steven Beabout and Ford Fay. Our Board of Directors has a designated audit committee, consisting of Sandy Shoemaker, Steve Beabout and Ford Fay.
The particulars of compensation paid to the following persons: (a) all individuals serving as our principal executive officer during the year ended December 31, 2022; (b) each of our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2022 who had total compensation exceeding $100,000; and (c) up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at December 31, 2022, who we will collectively refer to as the named executive officers, for the years ended December 31, 2022 and 2021, are set out in the following summary compensation table: 36 Table of Contents Executive Officers and Directors The following tables set forth certain information about compensation paid, earned or accrued for services by (i) the Company’s Chief Executive Officer and (ii) all other executive officers who earned in excess of $100,000 in the years ended December 31, 2022, 2021, and 2020 (“Named Executive Officers”): SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) (1) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) David Gandini, CEO and Secretary (2) 2022 253,750 150,000 -0- -0- -0- -0- -0- 403,750 2021 210,000 -0- (3) 43,804 (4) -0- -0- -0- -0- 253,804 (4) 2020 185,000 -0- -0- -0- -0- -0- -0- 185,000 Kevin Moore, Former CEO (5) 2022 40,000 -0- -0- -0- -0- -0- -0- 40,000 2021 185,500 -0- (6) 43,804 (7) -0- -0- -0- -0- 229,304 (7) 2020 213,000 -0- -0- -0- -0- -0- -0- 213,000 Jerry Wenzel, CFO (8) 2022 185,417 -0- 287,750 (9) 409,611 -0- -0- -0- 882,778 (9) Scott Bennett, EVP of Bus Ops (10) 2022 175,000 -0- 108,500 (11) -0- -0- -0- -0- 283,500 (11) 2021 89,167 -0- 45,532 (12) 540,706 -0- -0- -0- 675,405 (12) Michael Watson, EVP of Sales & Marketing (13) 2022 175,000 -0- 162,750 (14) -0- -0- -0- -0- 337,750 (14) 2021 39,824 -0- -0- 687,639 -0- -0- -0- 727,463 Dean Watson, Former CTO (15) 2021 138,472 -0- -0- -0- -0- -0- -0- 138,472 (1) Includes amounts paid and/or accrued.
The particulars of compensation paid to the following persons: (a) all individuals serving as our principal executive officer during the year ended December 31, 2023; (b) each of our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2023 who had total compensation exceeding $100,000; and (c) up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at December 31, 2023, 38 Table of Contents Executive Officers and Directors The following tables set forth certain information about compensation paid, earned or accrued for services by (i) the Company’s Chief Executive Officer and (ii) all other executive officers who earned in excess of $100,000 in the years ended December 31, 2023, 2022, and 2021 (“Named Executive Officers”): SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) (1) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) David Gandini, CEO and Secretary (2) 2023 300,000 -0- 150,062 (3) 1,048,159 (4) -0- -0- -0- 1,498,221 (3,4) 2022 253,750 150,000 -0- -0- -0- -0- -0- 403,750 2021 210,000 -0- (5) 43,804 (6) -0- -0- -0- -0- 253,804 (6) Kevin Moore, Former CEO (7) 2023 -0- -0- -0- -0- -0- -0- -0- -0- 2022 40,000 -0- -0- -0- -0- -0- -0- 40,000 2021 185,500 -0- (8) 43,804 (9) -0- -0- -0- -0- 229,304 (9) Jerry Wenzel, Former CFO (10) 2023 225,000 -0- 24,000 (11) -0- -0- -0- -0- 249,000 (11) 2022 185,417 -0- 287,750 (12) 409,611 -0- -0- -0- 882,778 (12) Scott Bennett, EVP of Bus Ops (13) 2023 N/A N/A N/A N/A N/A N/A N/A N/A 2022 175,000 -0- 108,500 (14) -0- -0- -0- -0- 283,500 (14) 2021 89,167 -0- 45,532 (15) 540,706 -0- -0- -0- 675,405 (15) Michael Watson, Former EVP of Sales & Marketing (16) 2023 158,333 -0- -0- -0- -0- -0- -0- 158,333 2022 175,000 -0- 162,750 (17) -0- -0- -0- -0- 337,750 (17) 2021 39,824 -0- -0- 687,639 -0- -0- -0- 727,463 Dean Watson, Former CTO (18) 2021 138,472 -0- -0- -0- -0- -0- -0- 138,472 39 Table of Contents (1) Includes amounts paid and/or accrued.
Audit Fees The aggregate fees billed for the two most recently completed fiscal periods ended December 31, 2022 and December 31, 2021 for professional services rendered by Macias, Gini, & O’Connell, LLP (MGO), independent registered public accounting firm, for the audits for the years ended December 31, 2022 and December 31, 2021, quarterly reviews of our interim consolidated financial statements in 2022 and 2021, and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: Year Ended December 31, Year Ended December 31, 2022 2021 Audit Fees (1) $ 128,700 $ 126,126 Audit Related Fees (2) 90,150 - Tax Fees (3) 750 - All Other Fees (4) - - Total $ 219,600 $ 126,126 (1) Audit fees include fees and expenses for professional services rendered in connection with the audit of our financial statements for those years, reviews of the interim financial statements that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
Audit Fees The aggregate fees billed for the two most recently completed fiscal periods ended December 31, 2023 and December 31, 2022 for professional services rendered by Macias, Gini, & O’Connell, LLP (MGO), independent registered public accounting firm, for the audits for the years ended December 31, 2023 and December 31, 2022, quarterly reviews of our interim consolidated financial statements in 2023 and 2022, and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: 47 Table of Contents Year Ended December 31, Year Ended December 31, 2023 2022 Audit Fees (1) $ - $ 128,700 Audit Related Fees (2) 17,250 90,150 Tax Fees (3) - 750 All Other Fees (4) 8,400 - Total $ 25,650 $ 219,600 (1) Audit fees include fees and expenses for professional services rendered in connection with the audit of our financial statements for those years, reviews of the interim financial statements that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.
For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the audited consolidated statements of operations under other income (expense).
Our Board of Directors has a designated compensation committee, consisting of Steven Beabout and Ford Fay. Our Board of Directors has a designated audit committee, consisting of Sandy Shoemaker, Steve Beabout and Ford Fay.
Our Board of Directors has a designated compensation committee, consisting of Steven Beabout and Ford Fay. Our Board of Directors has a designated audit committee, consisting of Sandy Shoemaker, Steve Beabout and Ford Fay. Our Board of Directors has a designated nominating and corporate governance committee consisting of Ford Fay and Steve Beabout.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There have been no changes in or disagreements with accountants on accounting and financial disclosure. 45 Table of Contents PART IV ITEM 15 ‑ EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements For a list of financial statements and supplementary data filed as part of this Annual Report, see the Index to Financial Statements beginning at page F-1 of this Annual Report.
There have been no disagreements with Haynie on accounting and financial disclosure. 49 Table of Contents PART IV ITEM 15 ‑ EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements For a list of financial statements and supplementary data filed as part of this Annual Report, see the Index to Financial Statements beginning at page F-1 of this Annual Report.
(11) (12) Includes the value of 50,000 Restricted Stock Units under our 2019 Equity Incentive Plan based on fair market value of our common stock on the dates of grant. Includes the value of 20,000 Restricted Stock Units under our 2019 Equity Incentive Plan based on fair market value of our common stock on the dates of grant.
(11) Includes the value of 50,000 Restricted Stock Units under our 2019 Equity Incentive Plan based on the fair market value of our common stock on the date of the grant.
A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted.
Prior to the adoption of ASU 2020-06, a beneficial conversion feature existed on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted.
If we cannot obtain achieve or sustain profitability or additional funding, our technology and product development and commercialization efforts may be reduced or discontinued and we may not be able to continue operations. We have experienced recurring net losses since inception, and as of December 31, 2022, had an accumulated deficit of $78,327,845.
If we cannot obtain achieve or sustain profitability or additional funding, our technology and product development and commercialization efforts may be reduced or discontinued and we may not be able to continue operations. We have experienced recurring net losses since inception, and as of December 31, 2023, had an accumulated deficit of $87,765,981.
Internal control over financial reporting is defined in Rules 13a-15(c) and 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and any disposition of our assets; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Internal control over financial reporting is defined in Rules 13a-15(c) and 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and any disposition of our assets; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 32 Table of Contents A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
If any of our manufacturing facilities suffer damage, or a force majeure event, such damage or event could materially impact our ability to operate, which could materially and adversely affect our business and financial performance. 11 Table of Contents We are also subject to numerous other risks relating to our manufacturing capabilities, including: · quality and reliability of components, sub-assemblies and materials that we source from third-party suppliers, who are required to meet our quality specifications, almost all of whom are single source suppliers for the items and materials that they supply; · our inability to secure components, sub-assemblies and materials in a timely manner, in sufficient quantities or on commercially reasonable terms; · our inability to maintain compliance with quality system requirements or pass regulatory quality inspections; · our failure to increase production capacity or volumes to meet demand; · potential risks associated with disruptions in our supply chain, such as on account of the COVID- 19 pandemic or other macroeconomic events; · lead times associated with securing key components; · our inability to design or modify production processes to enable us to produce future products efficiently or implement changes in current products in response to design or regulatory requirements; and · difficulty identifying and qualifying, and obtaining new regulatory approvals, for alternative suppliers for components in a timely manner.
We are also subject to numerous other risks relating to our manufacturing capabilities, including: · quality and reliability of components, sub-assemblies and materials that we source from third-party suppliers, who are required to meet our quality specifications, almost all of whom are single source suppliers for the items and materials that they supply; · our inability to secure components, sub-assemblies and materials in a timely manner, in sufficient quantities or on commercially reasonable terms; · our inability to maintain compliance with quality system requirements or pass regulatory quality inspections; · our failure to increase production capacity or volumes to meet demand; · potential risks associated with disruptions in our supply chain, such as on account of the COVID- 19 pandemic or other macroeconomic events; · lead times associated with securing key components; · our inability to design or modify production processes to enable us to produce future products efficiently or implement changes in current products in response to design or regulatory requirements; and · difficulty identifying and qualifying, and obtaining new regulatory approvals, for alternative suppliers for components in a timely manner.
The following table sets forth information as of December 31, 2022, with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance, aggregated as follows: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plan approved by security holders 1,466,814 $ 1.69 2,125 Equity compensation plan not approved by security holders - - - Total 1,466,814 $ 1.69 2,125 43 Table of Contents ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE .
The following table sets forth information as of December 31, 2023, with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance, aggregated as follows: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plan approved by security holders 3,500,000 $ 1.99 1,611,216 Equity compensation plan not approved by security holders - - - Total 3,500,000 $ 1.99 1,611,216 ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
The investors were accredited, familiar with our operations, and there was no general solicitation or advertising. 17 Table of Contents On March 30, 2022, in connection with a Waiver Agreement we entered into with Armistice Capital Master Fund Ltd. the holder of an 18% Original Issue Discount Convertible Debenture in the principal amount of $3,048,780.50, we issued a second common stock purchase warrant, or the March 2022 Armistice Warrant to purchase up to 101,626 additional shares of our common stock expiring March 29, 2029, and extended the Termination Date of the September 2021 Armistice Warrant for 406,504 shares of our common from September 28,2026 to September 28, 2028.
On March 30, 2022, in connection with a Waiver Agreement we entered into with Armistice Capital Master Fund Ltd. the holder of an 18% Original Issue Discount Convertible Debenture in the principal amount of $3,048,780.50, we issued a second common stock purchase warrant, or the March 2022 Armistice Warrant to purchase up to 101,626 additional shares of our common stock expiring March 29, 2029, and extended the Termination Date of the September 2021 Armistice Warrant for 406,504 shares of our common from September 28, 2026 to September 28, 2028.
If we are unable to attract and retain necessary key talents, it would harm our ability to develop competitive products and retain good customers and could adversely affect our business and operating results. We may be unable to adequately protect our proprietary rights.
If we are unable to attract and retain necessary key talents, it would harm our ability to develop competitive products and retain good customers and could adversely affect our business and operating results.
(13) (14) Mr. Watson was hired as our Executive Vice President of Sales and Marketing in October 2021. Includes the value of 75,000 Restricted Stock Units under our 2019 Equity Incentive Plan based on fair market value of our common stock on the dates of grant.
(15) Includes the value of 20,000 Restricted Stock Units under our 2019 Equity Incentive Plan based on fair market value of our common stock on the dates of grant. (16) Mr. Watson was hired as our Executive Vice President of Sales and Marketing in October 2021. Mr. Watson was terminated effective October 13, 2023.
Gandini will receive salary adjustments as recommended by the Compensation Committee and approved by the Company’s Board of Directors (the “Board”). Mr. Gandini is also entitled to participate in the Company’s Annual Bonus Plan and any and all other incentive payments available to executives of the Company. Mr.
For each subsequent calendar year of the Term and Renewal Terms, Mr. Gandini will receive salary adjustments as recommended by the Compensation Committee and approved by the Company’s Board of Directors (the “Board”). Mr. Gandini is also entitled to participate in the Company’s Annual Bonus Plan and any and all other incentive payments available to executives of the Company. Mr.
Gandini graduated from Michigan State University with a degree in Telecommunications. He was a scholarship NCAA Division Hockey athlete, a member of the US Junior National Team, and a US Junior All American. Jerry Wenzel has served as our Chief Financial Officer since January 2022. Prior to SOBRsafe, Mr.
Gandini graduated from Michigan State University with a degree in Telecommunications. He was a scholarship NCAA Division Hockey athlete, a member of the US Junior National Team, and a US Junior All American. Christopher Whitaker has served as our Chief Financial Officer since January 2024. Prior to his appointment as Chief Financial Officer, Mr.
ITEM 9 ‑ CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 29 Table of Contents ITEM 9A - CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Accounting Officer), of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)).
ITEM 9A - CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Accounting Officer), of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)).
Additionally, we adopted a policy on insider trading which will be publicly available on our website.
Additionally, we adopted a policy on insider trading which is publicly available on our website.
During the most recent fiscal year, to the Company’s knowledge, the following delinquencies occurred: Name No. of Late Reports No. of Transactions Reported Late No. of Failures to File David Gandini 0 0 1 Jerry Wenzel 2 5 0 Ford Fay 0 0 0 Steven Beabout 0 2 0 Noreen Butler 0 0 1 Sandy Shoemaker 1 2 1 Michael Watson 1 1 1 Scott Bennett 0 0 2 ITEM 11 - EXECUTIVE COMPENSATION.
During the most recent fiscal year, to the Company’s knowledge, the following delinquencies occurred: Name No. of Late Reports No. of Transactions Reported Late No. of Failures to File David Gandini 0 0 0 Jerry Wenzel 0 0 0 Ford Fay 0 0 1 Steven Beabout 0 0 0 Noreen Butler 0 0 0 Sandy Shoemaker 0 0 0 Gary Graham 0 0 18 ITEM 11 - EXECUTIVE COMPENSATION.
Beabout does not have a controlling interest in either entity so the stock owned by those entities is not reflected in his ownership. Includes vested stock options to acquire 6,250 shares of our common stock at exercise prices at $2.32 per share. Includes warrants to acquire 117,600 shares of our Common Stock at an exercise price of $2.125 per share.
Beabout does not have a controlling interest in either entity so the stock owned by those entities is not reflected in his ownership. Includes vested stock options to acquire 75,000 shares of our common stock at an exercise price of $2.32 per share.
Beabout was involved in the company’s strategic business decisions and as General Counsel he was responsible for all legal aspects of business, including, but not limited to, negotiation of billion dollar plus contacts with major studios (Universal, Disney and Sony), and distributors (Comcast, Time- Warner, DIRECTV, DISH Networks, Netflix, etc.), human resources and related matters, general corporate matters, post-IPO public board matters, and reviewing filings with the Securities and Exchange Commission.
Beabout was involved in the company’s strategic business decisions and as General Counsel he was responsible for all legal aspects of business, including, but not limited to, negotiation of billion dollar plus contacts with major studios (Universal, Disney and Sony), and distributors (Comcast, Time- Warner, DIRECTV, DISH Networks, Netflix, etc.), human resources and related matters, general corporate matters, post-IPO public board matters, and reviewing filings with the Securities and Exchange Commission. 35 Table of Contents Noreen Butler has served as a member of our Board of Directors since October 2022.
ITEM 2 – PROPERTIES Our corporate office, consisting of approximately 5,000 square feet, is located at 6400 S. Fiddlers Green Circle, Suite 1400, Greenwood Village, Colorado 80111. We lease our office space under the terms of a commercial lease dated May 31, 2022. The lease is for twelve months and we pay $15,536 per month.
ITEM 2 – PROPERTIES Our corporate office, consisting of approximately 5,000 square feet, is located at 6400 S. Fiddlers Green Circle, Suite 1400, Greenwood Village, Colorado 80111. We lease our office space under the terms of a commercial lease dated July 31, 2023. The lease is for thirty-nine months and we pay $16,714 per month.
The RSUs were valued based on the fair market value of our common stock on the date of grant. (8) Mr. Wenzel was hired as our Chief Financial Officer in January 2022.
The RSUs were valued based on the fair market value of our common stock on the date of grant. (10) Mr. Wenzel was hired as our Chief Financial Officer in January 2022, resigned as our Chief Financial Officer effective December 31, 2023.
Our Board of Directors has affirmatively determined that Sandy Shoemaker meets the definition of “independent director” and an “audit committee expert”, and Steve Beabout and Ford Fay qualify as “independent directors” for purposes of serving on an audit committee under Rule 10A-3 of the Securities Exchange Act of 1934, as amended and Nasdaq Capital Market rules.
Our board of directors has affirmatively determined that Ford Fay and Steve Beabout meets the definition of “independent director” for purposes of serving on a nomination committee under Rule 10A-3 of the Securities Exchange Act of 1934, as amended and Nasdaq Capital Market rules.
Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline or limit our access to capital. We may be dependent on outside advisors to assist us.
Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline or limit our access to capital.
Overview We provide organizations with non-invasive technology to identify the presence of alcohol quickly and safely with its employees, contractors, participants or patients. These technologies are integrated within our robust and scalable data platform, producing statistical and measurable user and business data. Our mission is to save lives, increase productivity, create significant economic benefits and positively impact behavior.
Overview We provide non-invasive technology to quickly and humanely identify the presence of alcohol in individuals. These technologies are integrated within our robust and scalable data platform, producing statistical and measurable user and business data. Our mission is to save lives, increase productivity, create significant economic benefits and positively impact behavior.
Board Diversity Our five directors come from diverse backgrounds. We comply with Nasdaq Listing Rule 5605(f), which requires Nasdaq-listed smaller reporting companies to have at least two diverse directors. 34 Table of Contents The table below provides certain highlights of the composition of our Board members and nominees as of March 14, 2023.
We comply with Nasdaq Listing Rule 5605(f), which requires Nasdaq-listed smaller reporting companies to have at least two diverse directors. 36 Table of Contents The table below provides certain highlights of the composition of our Board members and nominees as of March 29, 2024.
On November 4, 2022, Mr. Watson was granted 75,000 Restricted Stock Units under our 2019 Equity Incentive Plan, that vest on June 1, 2023.
On November 4, 2022, Mr. Wenzel was granted 75,000 Restricted Stock Units under our 2019 Equity Incentive Plan, that vest on June 1, 2023. On November 10, 2023, Mr. Wenzel was granted 50,000 Restricted Stock Units under our 2019 Equity Incentive Plan, that vested on November 10, 2023. Scott Bennett.
The rights and preferences of the Series B Convertible Preferred Stock are as follows: (a) dividends shall not be mandatory or cumulative, (b) liquidation preference over the Company’s common stock, (c) each three shares of Series B Convertible Preferred Stock shall be convertible, at the option of the holder, beginning on the date that is six months from the date the Holder acquired the shares of Series B Convertible Preferred Stock, and without the payment of additional consideration by the holder , into one share of common stock, (d) no redemption rights by the Company, (e) no call rights by the Company, and (f) each share of Series B Convertible Preferred Stock will vote on an “as converted” basis. 20 Table of Contents Dividend Policy We have never issued any dividends to our common stockholders do not expect to pay any stock dividend or any cash dividends on our common stock in the foreseeable future.
The rights and preferences of the Series B Convertible Preferred Stock are as follows: (a) dividends shall not be mandatory or cumulative, (b) liquidation preference over the Company’s common stock, (c) each three shares of Series B Convertible Preferred Stock shall be convertible, at the option of the holder, beginning on the date that is six months from the date the Holder acquired the shares of Series B Convertible Preferred Stock, and without the payment of additional consideration by the holder , into one share of common stock, (d) no redemption rights by the Company, (e) no call rights by the Company, and (f) each share of Series B Convertible Preferred Stock will vote on an “as converted” basis.
In addition, the Board of Directors could issue large blocks of voting stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval. 15 Table of Contents Our common stock has been thinly traded and we cannot predict the extent to which a trading market will develop. Our common stock is listed on Nasdaq Capital Market.
Future issuances of common stock could represent further substantial dilution to investors. In addition, the Board of Directors could issue large blocks of voting stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval. Our common stock has been thinly traded and we cannot predict the extent to which a trading market will develop.
Gandini served as the President of IPS Denver, a bank card personalization and packaging entity where he managed the company and market transformations to become a leader in the U.S. secured gift market space with revenues of $46M. Prior to his engagement at IPS, Mr. Gandini was the Chief Operations Officer at First World Communications, a major U.S.
From 2001 until 2014, when the company was acquired, Mr. Gandini served as the President of IPS Denver, a bank card personalization and packaging entity where he managed the company and market transformations to become a leader in the U.S. secured gift market space with revenues of $46M. Prior to his engagement at IPS, Mr.
Equity Compensation Plan Information On October 24, 2019, our 2019 Equity Incentive Plan went effective. The plan was approved by our Board of Directors and the holders of a majority of our voting stock on September 9, 2019. The plan’s number of authorized shares was originally 1,282,823.
The Plan was approved by our Board of Directors and the holders of a majority of our voting stock on September 9, 2019. The Plan’s number of authorized shares under the Plan was originally 1,282,823.
On January 7, 2022, the holders of a majority of our voting stock approved an amendment to the Plan that increased the number of shares authorized under the Plan to 1,733,333.
In January 2022, the holders of a majority of our voting stock approved an amendment to the Plan that increased the number of shares authorized under the Plan to 1,733,333. In June 2023, the holders of a majority of our voting stock approved an amendment to the Plan that increased the number of shares authorized under the Plan to 3,500,000.
As a result, these competitors may be able to: · develop and expand their product offerings more rapidly; · adapt to new or emerging changes in customer requirements more quickly; · take advantage of acquisition and other opportunities more readily; and · devote greater resources to the marketing and sale of their products and adopt more aggressive pricing policies than we can. 10 Table of Contents If our products do not gain expected market acceptance, prospects for our sales revenue may be affected.
As a result, these competitors may be able to: · develop and expand their product offerings more rapidly; · adapt to new or emerging changes in customer requirements more quickly; · take advantage of acquisition and other opportunities more readily; and · devote greater resources to the marketing and sale of their products and adopt more aggressive pricing policies than we can.
Enhancements, modifications, and changes to our internal controls are necessary in order to eliminate these weaknesses. As of December 31, 2022, the specific weaknesses our management has identified include: (i) we do not have sufficient segregation of duties within our accounting functions, and (ii) we have not documented all our internal controls. See “Internal Control Over Financial Reporting”, herein.
As of December 31, 2022, the specific weaknesses our management identified include: (i) we do not have sufficient segregation of duties within our accounting functions, and (ii) we have not documented all our internal controls. Enhancements, modifications, and changes to our internal controls during fiscal 2023 were necessary in order to eliminate these weaknesses.
Audit Committee Pre-Approval Policies and Procedures All audit and non-audit services are pre-approved by the Audit Committee and were pre-approved by the full Board prior to the formation of the Audit Committee in April 2022, which considers, among other things, the possible effect of the performance of such services on the registered public accounting firm’s independence.
(4) All other fees consist of fees for products and services other than the services reported above. 48 Table of Contents Audit Committee Pre-Approval Policies and Procedures All audit and non-audit services are pre-approved by the Audit Committee and were pre-approved by the full Board prior to the formation of the Audit Committee in April 2023, which considers, among other things, the possible effect of the performance of such services on the registered public accounting firm’s independence.
… 318 more changes not shown on this page.