Exhibit
99.1
DropCar Announces Financial Results for the Three and Nine Months
Ended September 30, 2019
Q3 Shows 133% Increase in Gross Profit and 83% Decrease in Net Loss
Versus Prior Year as Company Continues Evaluating Strategic
Opportunities
NEW YORK – November 14, 2019 (Business Wire)
–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 three and nine months ended
September 30, 2019, including an update on the results of
initiatives implemented to conserve cash on hand, while focusing on
its most profitable business segments.
Spencer
Richardson, DropCar’s Chief Executive Officer, stated,
“Our plan is to continue to focus on our most profitable
business segments which has translated into continued improvements
to our gross margin. These improvements have also afforded the
Company the opportunity to thoroughly explore the best options for
strategic growth and alternatives.”
During
the past few months, DropCar has taken the following actions to
continue to reduce its cash burn and focus on the most profitable
segments of its business:
(i)
leverage improvements to its in-house technology and data analysis
to refine labor scheduling and service pricing models, resulting in
the Company transitioning from a gross loss of $399,887 for the
quarter ended September 30, 2018 to a gross profit of $131,628, or
133% increase for the quarter ended September 30, 2019;
and
(ii)
improving efficiency of overall backend and driver field operations
while reducing low margin services, resulting in the Company
transitioning from a gross loss of $1,658,377 for the nine months
ended September 30, 2018 to a gross profit of $234,783, or 114%
increase for the nine months ended September 30, 2019.
Financial Results for the Three Months Ended September 30, 2019
versus Three Months Ended September 30, 2018
Revenue
for the three months ended September 30, 2019 decreased $294,000,
or 21%, to $1,095,000, as compared to $1,389,000 for the same
period in 2018, as DropCar Operating revenue decreased by $329,000,
or 29%, due to the discontinued “Steve” parking
offering. This was partially offset by an increase in
“Will” valet on-demand service and DropCar 360 service
revenue of $25,000, or 54%, to $71,000, compared to $46,000 for the
three months ended September 30, 2018 primarily due to the
cancellation of the tip payment to NY valets, as well as an
increase in B2B service revenue of $9,000, or 4%, to $234,000 as
compared to $225,000 for the three months ended September 30,
2018.
Cost of
revenue during the three months ended September 30, 2019 totaled
$964,000, a decrease of $825,000, or 46%, compared to $1,789,000
recorded for the three months ended September 30, 2018. This
decrease was primarily due to a decrease of $825,000 in the
Company’s valet and field support workforce.
The
Company's $750,000 net loss for the three months ended September
30, 2019 was comprised of $753,000 operating loss from DropCar
Operations and offset by $3,000 of interest income. This compared
to a net loss of $4,348,000 for the same period in 2018, a
reduction of 83%.
Financial Results for the Nine Months Ended September 30, 2019
versus Nine Months Ended September 30, 2018
Revenue
for the nine months ended September 30, 2019 decreased $1,514,000,
or 31%, to $3,441,000, as compared to $4,955,000 for the nine
months ended September 30, 2018, as (i) DropCar Operating
subscription service revenue decreased by $1,510,000, or 40% due to
the discontinued “Steve” parking and valet on-demand
service, and (ii) a decrease in “Will” valet on-demand
service and DropCar 360 service revenue of $220,000, or 45%, to
$267,000, compared to $487,000 for the nine months ended September
30th 2018.
This decrease was offset by an increase in B2B revenue of $216,000,
or 30%, to $926,000, compared to $710,000 for the nine months ended
September 30, 2018.
Cost of
revenue during the nine months ended September 30, 2019
totaled $3,207,000, a
decrease of $3,407,000, or 52% compared to $6,614,000 recorded for
the nine months ended September 30, 2018. This decrease was
primarily due to $3,207,000 in wages and related expenses, $432,000
in repairs and damages, $197,000 in cost of gas, car wash and other
service sold, partially offset by increase of $429,000 in parking
garage fees and insurance costs.
The
Company's $3,677,000 net loss for the nine months ended September
30, 2019 was comprised of $3,693,000 operating loss from DropCar
Operations and offset by $16,000 of interest income. This compared
to a net loss of $11,802,000 for the nine months ended September
30, 2018, a reduction of 69%.
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.
Contact Investor Relations
Spencer
Richardson
ir@DropCar.com
(646) 916-4595
DropCar,
Inc. and Subsidiaries
Consolidated
Balance Sheets Data
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ASSETS
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CURRENT
ASSETS:
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Cash
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$2,594,888
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$4,303,480
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Accounts
receivable, net
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176,328
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295,626
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Prepaid expenses
and other current assets
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311,567
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328,612
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Total current
assets
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3,082,783
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4,927,718
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Property and
equipment, net
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28,255
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39,821
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Capitalized
software costs, net
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478,129
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659,092
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Operating lease
right-of-use asset
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3,772
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-
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Other
assets
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3,525
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3,525
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TOTAL
ASSETS
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$3,596,464
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$5,630,156
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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CURRENT
LIABILITIES:
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Accounts payable
and accrued expenses
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$1,528,797
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$2,338,560
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Deferred
income
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304,683
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253,200
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Total current
liabilities
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1,833,480
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2,591,760
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TOTAL
STOCKHOLDERS' EQUITY
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1,762,984
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3,038,396
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TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
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$3,596,464
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$5,630,156
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DropCar,
Inc. and Subsidiaries
Consolidated
Statements of Operations Data
(unaudited)
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For
the Three Months Ended September 30,
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SERVICE
REVENUES
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$1,095,320
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$1,389,134
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COST
OF REVENUES
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963,692
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1,789,021
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GROSS
PROFIT (LOSS)
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131,628
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(399,887)
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OPERATING
EXPENSES
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Research and
development
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43,690
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60,299
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Selling, general
and administrative expenses
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745,827
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2,690,991
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Depreciation and
amortization
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95,360
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94,031
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TOTAL
OPERATING EXPENSES
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884,877
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2,845,321
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OPERATING
LOSS
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(753,249)
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(3,245,208)
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Interest income
(expense), net
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3,240
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171
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LOSS
FROM CONTINUING OPERATIONS
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(750,009)
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(3,245,037)
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DISCONTINUED
OPERATIONS
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Loss
from operations of discontinued component
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-
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(83,736)
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LOSS
FROM DISCONTINUED OPERATIONS
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-
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(83,736)
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NET
LOSS
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$(750,009)
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$(3,328,773)
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Deemed dividend on
exchange of warrants
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-
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(1,019,040)
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NET
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
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$(750,009)
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$(4,347,813)
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LOSS
PER SHARE FROM CONTINUING OPERATIONS:
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Basic
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$(0.19)
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$(2.26)
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Diluted
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$(0.19)
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$(2.26)
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LOSS
PER SHARE FROM DISCONTINUED OPERATIONS:
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Basic
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-
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$(0.06)
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Diluted
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-
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$(0.06)
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NET
LOSS PER SHARE:
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Basic
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$(0.19)
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$(3.03)
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Diluted
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$(0.19)
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$(3.03)
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WEIGHTED
AVERAGE SHARES OUTSTANDING
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Basic
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4,050,006
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1,434,963
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Diluted
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4,050,006
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1,434,963
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DropCar,
Inc. and Subsidiaries
Consolidated
Statements of Operations Data
(unaudited)
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For the
Nine Months Ended September 30,
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SERVICE
REVENUES
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$3,441,307
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$4,955,206
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COST
OF REVENUES
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3,206,524
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6,613,583
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GROSS
PROFIT (LOSS)
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234,783
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(1,658,377)
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OPERATING
EXPENSES
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Research and
development
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161,002
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238,431
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Selling, general
and administrative expenses
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3,464,312
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8,943,389
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Depreciation and
amortization
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302,076
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257,440
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TOTAL
OPERATING EXPENSES
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3,927,390
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9,439,260
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OPERATING
LOSS
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(3,692,607)
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(11,097,637)
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Interest income
(expense), net
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15,937
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(1,081,328)
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LOSS
FROM CONTINUING OPERATIONS
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(3,676,670)
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(12,178,965)
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DISCONTINUED
OPERATIONS
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Income
from operations of discontinued component
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-
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377,207
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INCOME
FROM DISCONTINUED OPERATIONS
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-
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377,207
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NET
LOSS
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$(3,676,670)
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$(11,801,758)
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Deemed dividend on
exchange of warrants
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-
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(1,335,901)
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NET
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
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$(3,676,670)
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$(13,137,659)
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LOSS
PER SHARE FROM CONTINUING OPERATIONS:
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Basic
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$(1.09)
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$(9.65)
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Diluted
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$(1.09)
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$(9.65)
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EARNINGS
PER SHARE FROM DISCONTINUED OPERATIONS:
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Basic
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-
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$0.30
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Diluted
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-
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$0.30
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NET
LOSS PER SHARE:
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Basic
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$(1.09)
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$(10.41)
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Diluted
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$(1.09)
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$(10.41)
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WEIGHTED
AVERAGE SHARES OUTSTANDING
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Basic
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3,381,026
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1,262,409
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Diluted
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3,381,026
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1,262,409
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