SOBR Safe, Inc. (SOBR) - 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. SOBR Safe, Inc. is a hardware and software company developing non-invasive alcohol monitoring and detection solutions (SOBRcheck, SOBRsure, and SOBRsafe). The Company is currently in a critical transition phase, having initiated a plan to discontinue its legacy revenue-generating operations effective July 31, 2026, to preserve cash for a proposed merger with Clean World Ventures, Inc. (CWV).
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Revenue | $108,078 | $190,845 |
| Gross Profit (Loss) | $(72,406) | $110,848 |
| Net Loss | $(5,354,606) | $(3,874,540) |
| Net Loss Per Share (Basic/Diluted) | $(2.00) | $(2.77) |
| Cash and Cash Equivalents (End of Period) | $429,068 | $8,466,322 |
| Net Cash Used in Operating Activities | $(4,359,606) | $(3,313,203) |
| Total Assets | $600,871 | $6,621,222 |
| Total Liabilities | $926,276 | $1,696,033 |
| Stockholders' Equity (Deficit) | $(325,405) | $4,925,189 |
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 43.4% year-over-year to $108,078, primarily due to backordered inventory and the strategic decision to cease manufacturing legacy devices.
- Gross Margin Collapse: The Company shifted from a gross profit of $110,848 in the prior year to a gross loss of $(72,406). This was driven by a $142,222 write-off of obsolete inventory related to discontinued products.
- Asset Impairment: A non-cash asset impairment loss of $1,105,052 was recognized, writing down the SOBRsafe intellectual technology intangible asset to zero as the Company ceased commercialization of the technology.
- Liquidity Deterioration: Cash balances plummeted from $4.76 million at year-end 2025 to $429,068 at June 30, 2026. The Company now holds a working capital deficit of approximately $411,000.
- Cost Reductions: Stock-based compensation decreased 94.9% and R&D expenses decreased 87.2% due to workforce reductions and the cessation of hardware development.
Outlook, Risks, and Unusual Items
- Going Concern Doubt: Management has raised substantial doubt about the Company's ability to continue as a going concern for the next 12 months. Current cash resources are insufficient to fund operations without the completion of the proposed merger or additional financing.
- Discontinuation of Operations: Effective July 31, 2026, the Company will cease manufacturing SOBRcheck and SOBRsure devices and terminate related software support. This is expected to reduce annual operating expenses by approximately $1.2 million.
- Nasdaq Listing Status: The Company received a deficiency letter regarding the $1.00 minimum bid price requirement. Nasdaq granted continued listing until September 15, 2026, conditioned on the completion of the merger with CWV and compliance with initial listing rules.
- Proposed Merger: The Company is pursuing a merger with Clean World Ventures, Inc. (CWV). Upon closing, existing SOBR shareholders are expected to own approximately 2% of the combined entity, while CWV shareholders will own approximately 98%. The transaction is subject to regulatory and stockholder approvals.
- Recent Financing: On July 16, 2026 (subsequent to the period end), the Company completed a warrant inducement transaction generating approximately $3.1 million in gross proceeds to extend its cash runway.
- Debt Defaults: Several notes payable to related and non-related parties are currently in default, though no interest expense was accrued on the related party note.
Investor Verification Checklist
- Verify the status and probability of closing the merger with Clean World Ventures, Inc. (CWV), as this is the primary condition for maintaining Nasdaq listing and solvency.
- Confirm the utilization of the $3.1 million proceeds from the July 2026 warrant inducement and whether it is sufficient to bridge operations until the merger closes.
- Review the specific terms of the Nasdaq compliance extension and the deadline of September 15, 2026.
- Assess the impact of the 98% dilution to existing shareholders upon the completion of the reverse recapitalization with CWV.
- Monitor the execution of the workforce reduction and the cessation of legacy operations to ensure projected cost savings are realized.