Over 50% Expense Reduction with Continued Improved Margins and
Liquidity as Company Continues Evaluating Strategic Opportunities
NEW YORK–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24ABG&src=ctag” target=”_blank”gt;$ABGlt;/agt; lt;a href=”https://twitter.com/hashtag/10Q?src=hash” target=”_blank”gt;#10Qlt;/agt;–DropCar, Inc. (Nasdaq:DCAR) (“DropCar” or the “Company”), a provider of
micro logistics technology, mobility services and cloud based software
for both the automotive industry and consumers, today announced
financial results and the filing of its Form 10-Q for the period ended
March 31, 2019 and provided an update on the results of initiatives
implemented to conserve cash on hand while focusing the business on its
most profitable clients and segments.
Spencer Richardson, DropCar’s Chief Executive Officer, stated, “We
remain focused on accelerating our business towards profitability, as
evidenced by the last two quarters. These quarters have seen the
streamlining of our back end operations, coupled with major gains to our
overall field driver efficiency lead to significant improvement in gross
margins compared to prior quarters.”
During the past few months, DropCar has taken the following
demonstrative actions to continue to reduce its burn and focus its
business on the most profitable clients and segments:
(i) completed the conversion of its B2C business to a self-park model,
which has shifted from a significant driver of losses to now a growing
positive gross margin business for the quarter ended ending March 31,
2019, compared to the prior quarter ended March 31; and
(ii) increased growth in B2B managed services revenues by 44% for the
quarter ended March 31, 2019, compared to the quarter ended March 31,
2018, which was primarily a result of the expansion of existing
contracts and changes to the Company’s B2B pricing model.
“For the second quarter of 2019, we are continuing our efforts to focus
our resources on reducing expenses while shepherding strategic growth to
enable the company to help maximize opportunities for enhancing
shareholder value,” added Mr. Richardson.
Financial Results for the Three Months Ended March 31, 2019 versus
Three Months Ended March 31, 2018
Revenue for the three months ended March 31, 2019 decreased $593,000, or
35%, to $1,099,000, as compared to $1,692,000 for the same period in
2018, as DropCar Operating revenue decreased by $695,000, or 51%, due to
the discontinued “Steve” parking and valet on-demand service. This was
partially offset by an increase in B2B revenue of $101,915, or 44%, to
$335,000, as compared to $234,000 for the three months ended March 31,
2018, and an increase in “Will” valet on-demand service revenue of
$35,000, or 52%, to $102,000, compared to $67,000 for the three months
ended March 31, 2018.
Cost of revenue during the three months ended March 31, 2019 totaled
$1,127,000, a decrease of $1,169,000, or 51%, compared to $2,296,000
recorded for the three months ended March 31, 2018. This decrease was
primarily due to a decrease in the Company’s valet workforce and
attributable to decreases of $1,011,000 in wages and related expenses,
$123,000 in repairs and damages, $75,000 in travel and $51,000 in cost
of gas and other service sold, partially offset by an increase of
$98,000 in parking garage fees and insurance costs.
The Company’s $1,976,000 net loss for the three months ended March 31,
2019 was comprised of $1,977,000 operating loss from DropCar Operations
and offset by $1,700 of interest income. This compared to a net loss of
$4,481,000 for the same period in 2018, a reduction of 56%.
Financial Results for the Three Months Ended March 31, 2019 versus
Three Months Ended December 31, 2018
Revenue for the three months ended March 31, 2019 decreased $23,000, or
2%, to $1,099,000, as compared to $1,122,000 for the three months ended
December 31, 2018, as DropCar Operating B2B revenue decreased by
$13,000, or 4% and Consumer Non Recurring revenue decreased $21,000, or
17%. This was offset by an increase in monthly subscription revenue of
$11,000, or 2%.
Cost of revenue during the three months ended March 31, 2019 totaled
$1,127,000, a decrease of $123,000, or 10% compared to $1,250,000
recorded for the three months ended December 31, 2018. This decrease was
primarily due to $43,000 in wages and related expenses, $45,000 in
damages, $15,000 in travel, $36,000 in other service cost, partially
offset by increase of $17,000 in parking garage fees, insurance and gas
expenses.
The Company’s $1,976,000 net loss for the three months ended March 31,
2019 was comprised of $1,977,000 operating loss from DropCar Operations
and offset by $1,700 of interest income. This compared to a net loss of
$6,634,000 for the three months ended December 31, 2018.
About DropCar
Founded and launched in New York City in 2015, DropCar’s mission is to
power the next generation of mobility by bringing the automotive
industry’s products and services to everyone’s front door. DropCar’s
core Mobility Cloud platform and integrated mobile apps help consumers
and automotive-related companies reduce the cost, hassles and
inefficiencies of owning a car, or fleet of cars, in urban centers.
Dealerships, fleet owners, OEMs and shared mobility companies use
DropCar’s last mile logistics platform to reduce costs, streamline
logistics and deepen relationships with customers. More information is
available at https://drop.car/.
Forward-Looking Statements
This press release contains “forward-looking statements” that involve
substantial risks and uncertainties for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, included in this
press release regarding strategy, future operations, future financial
position, future revenue, projected expenses, prospects, plans and
objectives of management are forward-looking statements. Such statements
are based on management’s current expectations and involve risks and
uncertainties. Actual results and performance could differ materially
from those projected in the forward-looking statements as a result of
many factors, including, without limitation, the ability to project
future cash utilization and reserves needed for contingent future
liabilities and business operations, the availability of sufficient
resources of the company to meet its business objectives and operational
requirements and the impact of competitive products and services and
technological changes. The foregoing review of important factors that
could cause actual events to differ from expectations should not be
construed as exhaustive and should be read in conjunction with
statements that are included herein and elsewhere, including the risk
factors under the heading “Risk Factors” in DropCar’s filings with the
Securities and Exchange Commission. Except as required by applicable
law, DropCar undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.
| DropCar, Inc. and Subsidiaries | |||||||||||
| Consolidated Balance Sheets Data | |||||||||||
| March 31, | December 31, | ||||||||||
| 2019 | 2018 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash | $4,358,633 | $4,303,480 | |||||||||
| Accounts receivable, net | 413,413 | 295,626 | |||||||||
| Prepaid expenses and other current assets | 359,193 | 328,612 | |||||||||
| Total current assets | 5,131,239 | 4,927,718 | |||||||||
| Property and equipment, net | 33,319 | 39,821 | |||||||||
| Capitalized software costs, net | 626,599 | 659,092 | |||||||||
| Operating lease right-of-use asset | 14,877 | – | |||||||||
| Other assets | 3,525 | 3,525 | |||||||||
| TOTAL ASSETS | $5,809,559 | $5,630,156 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable and accrued expenses | $1,972,376 | $2,338,560 | |||||||||
| Deferred income | 272,812 | 253,200 | |||||||||
| Lease liability | 7,332 | – | |||||||||
| Total current liabilities | 2,252,520 | 2,591,760 | |||||||||
| Convertible note payable, net of debt discount | – | – | |||||||||
| TOTAL LIABILITIES | 2,252,520 | 2,591,760 | |||||||||
| TOTAL STOCKHOLDERS’ EQUITY | 3,557,039 | 3,038,396 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $5,809,559 | $5,630,156 | |||||||||
|
DropCar, Inc. and Subsidiaries |
|||||||||||
|
Consolidated Statements of Operations Data |
|||||||||||
|
(unaudited) |
|||||||||||
| For the Quarter Ended March 31, | |||||||||||
| 2019 | 2018 | ||||||||||
|
(Restated) |
|||||||||||
| NET REVENUES | $1,099,443 | $1,692,075 | |||||||||
| COST OF REVENUES | 1,127,045 | 2,295,781 | |||||||||
| GROSS LOSS | (27,602) | (603,706) | |||||||||
|
OPERATING EXPENSES |
|||||||||||
|
Research and development |
68,982 | 114,161 | |||||||||
| Selling, general and administrative expenses | 1,773,097 | 2,910,797 | |||||||||
| Depreciation and amortization | 107,749 | 79,232 | |||||||||
| TOTAL OPERATING EXPENSES | 1,949,828 | 3,104,190 | |||||||||
| OPERATING LOSS | (1,977,430) | (3,707,896) | |||||||||
| Interest income (expense), net | 1,724 | (1,082,217) | |||||||||
| LOSS FROM CONTINUING OPERATIONS | (1,975,706) | (4,790,113) | |||||||||
| DISCONTINUED OPERATIONS | |||||||||||
| Income from operations of discontinued component | – | 309,378 | |||||||||
| LOSS FROM DISCONTINUED OPERATIONS | – | 309,378 | |||||||||
|
NET LOSS |
$(1,975,706) | $(4,480,735) | |||||||||
| LOSS PER SHARE FROM CONTINUING OPERATIONS: | |||||||||||
| Basic | $(0.93) | $(4.75) | |||||||||
| Diluted | $(0.93) | $(4.75) | |||||||||
| (LOSS) EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS: | |||||||||||
| Basic | $(0.93) | $0.31 | |||||||||
| Diluted | $(0.93) | $0.31 | |||||||||
| NET LOSS PER SHARE: | |||||||||||
| Basic | $(0.93) | $(4.44) | |||||||||
| Diluted | $(0.93) | $(4.44) | |||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||
| Basic | 2,117,688 | 1,008,058 | |||||||||
| Diluted | 2,117,668 | 1,008,058 | |||||||||
|
DropCar, Inc. and Subsidiaries |
|||||||||
|
Consolidated Statements of Operations Data |
|||||||||
|
(unaudited) |
|||||||||
| For the Three Months Ended | |||||||||
| March 31, 2019 | December 31, 2018 | ||||||||
| NET REVENUES | $1,099,443 | $1,122,461 | |||||||
| COST OF REVENUES | 1,127,045 | 1,250,090 | |||||||
| GROSS LOSS | (27,602) | (127,629) | |||||||
|
OPERATING EXPENSES |
|||||||||
|
Research and development |
68,982 | 56,901 | |||||||
| Selling, general and administrative expenses | 1,773,097 | 2,430,623 | |||||||
| Depreciation and amortization | 107,749 | 100,549 | |||||||
| TOTAL OPERATING EXPENSES | 1,949,828 | 2,588,073 | |||||||
| OPERATING LOSS | (1,977,430) | (2,715,702) | |||||||
| Interest income (expense), net | 1,724 | 103 | |||||||
| LOSS FROM CONTINUING OPERATIONS | (1,975,706) | (2,715,599) | |||||||
| DISCONTINUED OPERATIONS | |||||||||
| Income from operations of discontinued component | – | 315,119 | |||||||
| Loss on sale of component | – | (4,169,718) | |||||||
| LOSS FROM DISCONTINUED OPERATIONS | – | (3,854,599) | |||||||
|
NET LOSS |
$(1,975,706) | $(6,570,198) | |||||||
| Deemed dividend on exchange of warrants | – | (63,760) | |||||||
| NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $(1,975,706) | $(6,633,958) | |||||||
| AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS | |||||||||
| Loss from continuing operations | (1,975,706) | (2,779,359) | |||||||
| Loss from discontinued operations | – | (3,854,599) | |||||||
| NET LOSS | (1,975,706) | (6,633,958) | |||||||
| LOSS PER SHARE FROM CONTINUING OPERATIONS: | |||||||||
| Basic | $(0.93) | $(1.71) | |||||||
| Diluted | $(0.93) | $(1.71) | |||||||
| (LOSS) EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS: | |||||||||
| Basic | $(0.93) | $(2.38) | |||||||
| Diluted | $(0.93) | $(2.38) | |||||||
| NET LOSS PER SHARE: | |||||||||
| Basic | $(0.93) | $(4.09) | |||||||
| Diluted | $(0.93) | $(4.09) | |||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||
| Basic | 2,117,688 | 1,621,130 | |||||||
| Diluted | 2,117,668 | 1,621,130 | |||||||
Contacts
Investor Relations
Spencer Richardson
[email protected]
(646)
916-4595
