10-Q

014

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38107

ShotSpotter, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	47-0949915
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
39300 Civic Center Dr., Suite 300 Fremont, California	94538
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 794-3100

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common stock, par value $0.005 per share	SSTI	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2022 the registrant had 12,195,950 shares of common stock, $0.005 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Qualitative and Quantitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II.	OTHER INFORMATION
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 6.	Exhibits	62
Exhibit Index		63
Signatures		64

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

ShotSpotter, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	September 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	9,604		$	15,636
Accounts receivable and contract asset, net		20,199			16,134
Prepaid expenses and other current assets		4,018			2,701
Total current assets		33,821			34,471
Property and equipment, net		22,027			17,390
Operating lease right-of-use assets		3,467			2,323
Goodwill		23,171			2,816
Intangible assets, net		27,850			13,564
Other assets		2,430			1,740
Total assets	$	112,766		$	72,304
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	1,214		$	1,587
Deferred revenue, short-term		34,896			26,235
Accrued expenses and other current liabilities		9,007			6,680
Total current liabilities		45,117			34,502
Deferred revenue, long-term		2,073			474
Other liabilities		6,354			3,513
Total liabilities		53,544			38,489
Commitments and contingencies (Note 14)
Stockholders' equity
Preferred stock: $0.005 par value; 20,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Common stock: $0.005 par value; 500,000,000 shares authorized; 12,191,762 and 11,703,430 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		61			58
Additional paid-in capital		150,855			132,780
Accumulated deficit		(91,355	)		(98,785	)
Accumulated other comprehensive loss		(339	)		(238	)
Total stockholders' equity		59,222			33,815
Total liabilities and stockholders' equity	$	112,766		$	72,304

See accompanying notes to condensed consolidated financial statements.

ShotSpotter, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenues	$	18,775		$	14,547		$	60,005		$	44,184
Costs
Cost of revenues		8,473			6,520			25,130			19,137
Impairment of property and equipment		—			—			—			25
Total costs		8,473			6,520			25,130			19,162
Gross profit		10,302			8,027			34,875			25,022

Operating expenses
Sales and marketing		5,357			4,018			16,727			11,881
Research and development		2,409			1,703			7,570			5,156
General and administrative		3,866			3,217			11,710			8,900
Change in fair value of contingent consideration		(5,405	)		—			(8,842	)		—
Total operating expenses		6,227			8,938			27,165			25,937
Operating income (loss)		4,075			(911	)		7,710			(915	)
Other income (expense), net
Interest income, net		11			8			26			28
Other expense, net		(53	)		(46	)		(306	)		(184	)
Total other income (expense), net		(42	)		(38	)		(280	)		(156	)
Income (loss) before income taxes		4,033			(949	)		7,430			(1,071	)
Provision for income taxes		—			—			—			49
Net income (loss)	$	4,033		$	(949	)	$	7,430		$	(1,120	)
Net income (loss) per share, basic	$	0.33		$	(0.08	)	$	0.61		$	(0.10	)
Net income (loss) per share, diluted	$	0.33		$	(0.08	)	$	0.60		$	(0.10	)
Weighted average shares used in computing adjusted net income (loss) per share, basic		12,167,632			11,680,413			12,156,980			11,634,422
Weighted average shares used in computing adjusted net income (loss) per share, diluted		12,357,136			11,680,413			12,306,839			11,634,422

See accompanying notes to condensed consolidated financial statements.

ShotSpotter, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net income (loss)	$	4,033		$	(949	)	$	7,430		$	(1,120	)
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net		(78	)		(14	)		(101	)		7
Comprehensive income (loss)	$	3,955		$	(963	)	$	7,329		$	(1,113	)

See accompanying notes to condensed consolidated financial statements.

ShotSpotter, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


	Common Stock					Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders' Equity/
	Shares			Par Value		Capital			Deficit			Income (Loss)			(Deficit)
Balance at January 1, 2022		11,703,430		$	58	$	132,780		$	(98,785	)	$	(238	)	$	33,815
Exercise of stock options		8,528			—		13			—			—			13
Repurchase of common stock		(57,623	)		—		(1,634	)		—			—			(1,634	)
Issuance of common stock from RSUs vested		22,755			—		—			—			—			—
Issuance of common stock for acquisition		464,540		3			14,263			—			—			14,266
Stock-based compensation		—			—		1,855			—			—			1,855
Other comprehensive income		—			—		—			—		73				73
Net income		—			—		—		387				—			387
Balance at March 31, 2022		12,141,630			61		147,277			(98,398	)		(165	)		48,775
Exercise of stock options		686			—		2			—			—			2
Repurchase of common stock		(49,369	)		—		(1,450	)		—			—			(1,450	)
Issuance of common stock from ESPP purchase		20,630			—		489			—			—			489
Issuance of common stock from RSUs vested		41,198			—		—			—			—			—
Stock-based compensation		—			—		2,131			—			—			2,131
Other comprehensive loss		—			—		—			—			(96	)		(96	)
Net income		—			—		—			3,010			—			3,010
Balance at June 30, 2022		12,154,775			61		148,449			(95,388	)		(261	)		52,861
Exercise of stock options		13,475			—		249			—			—			249
Issuance of common stock from RSUs vested		23,512			—		—			—			—			—
Stock-based compensation		—			—		2,157			—			—			2,157
Other comprehensive loss		—			—		—			—			(78	)		(78	)
Net income		—			—		—			4,033			—			4,033
Balance at September 30, 2022		12,191,762		$	61	$	150,855		$	(91,355	)	$	(339	)	$	59,222


	Common Stock					Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders' Equity/
	Shares			Par Value		Capital			Deficit			Income (Loss)			(Deficit)
Balance at January 1, 2021		11,538,998		$	58	$	128,771		$	(94,354	)	$	(170	)	$	34,305
Exercise of stock options		60,600			—		213			—			—			213
Issuance of common stock in connection with exercise of warrants		50,716			—		8			—			—			8
Issuance of common stock from RSUs vested		24,332			—		—			—			—			—
Repurchase of common stock		(56,162	)		—		(2,192	)		—			—			(2,192	)
Stock-based compensation		—			—		1,375			—			—			1,375
Other comprehensive loss		—			—		—			—			(17	)		(17	)
Net income		—			—		—			79			—			79
Balance at March 31, 2021		11,618,484			58		128,175			(94,275	)		(187	)		33,771
Exercise of stock options		16,432			—		364			—			—			364
Issuance of common stock from ESPP purchase		18,294			—		462