00
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, 2019
OR
☐ |
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 |
7979 Gateway Blvd., Suite 210 Newark, California |
94560 |
(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 |
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☐ |
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Accelerated filer |
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☒ |
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Non-accelerated filer |
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☐ |
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Smaller reporting company |
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☐ |
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Emerging growth company |
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☒ |
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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 November 7, 2019, the registrant had 11,432,652 shares of common stock, $0.005 par value per share, outstanding.
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Page |
PART I. |
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Item 1. |
2 |
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|
Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 |
2 |
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3 |
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4 |
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5 |
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 |
7 |
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8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
Item 3. |
27 |
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Item 4. |
27 |
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PART II. |
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Item 1. |
29 |
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Item 1A. |
29 |
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Item 2. |
54 |
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Item 6. |
55 |
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56 |
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57 |
i
Item 1. Condensed Consolidated Financial Statements (Unaudited)
ShotSpotter, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
|
|
(Unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
26,138 |
|
|
$ |
10,218 |
|
Accounts receivable and unbilled revenue |
|
|
6,785 |
|
|
|
15,267 |
|
Prepaid expenses and other current assets |
|
|
1,985 |
|
|
|
1,527 |
|
Restricted cash |
|
|
— |
|
|
|
60 |
|
Total current assets |
|
|
34,908 |
|
|
|
27,072 |
|
Property and equipment, net |
|
|
16,574 |
|
|
|
16,504 |
|
Operating lease right-of-use asset |
|
|
627 |
|
|
|
— |
|
Goodwill |
|
|
1,379 |
|
|
|
1,379 |
|
Intangible assets, net |
|
|
243 |
|
|
|
242 |
|
Other assets |
|
|
1,518 |
|
|
|
1,922 |
|
Total assets |
|
$ |
55,249 |
|
|
$ |
47,119 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
716 |
|
|
$ |
1,307 |
|
Deferred revenue, short-term |
|
|
20,584 |
|
|
|
23,102 |
|
Accrued expenses and other current liabilities |
|
|
4,643 |
|
|
|
4,427 |
|
Total current liabilities |
|
|
25,943 |
|
|
|
28,836 |
|
Deferred revenue, long-term |
|
|
755 |
|
|
|
1,060 |
|
Other liabilities |
|
|
383 |
|
|
|
76 |
|
Total liabilities |
|
|
27,081 |
|
|
|
29,972 |
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
57 |
|
|
|
55 |
|
Additional paid-in capital |
|
|
125,235 |
|
|
|
114,618 |
|
Accumulated deficit |
|
|
(96,906 |
) |
|
|
(97,377 |
) |
Accumulated other comprehensive loss |
|
|
(218 |
) |
|
|
(149 |
) |
Total stockholders' equity |
|
|
28,168 |
|
|
|
17,147 |
|
Total liabilities and stockholders' equity |
|
$ |
55,249 |
|
|
$ |
47,119 |
|
See accompanying notes to condensed consolidated financial statements.
2
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
|
|
|
|
|
|
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||||||||||
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Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Revenues |
|
$ |
9,984 |
|
|
$ |
9,211 |
|
|
$ |
29,837 |
|
|
$ |
25,045 |
|
Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
4,019 |
|
|
|
3,898 |
|
|
|
12,300 |
|
|
|
10,795 |
|
Impairment of property and equipment |
|
|
— |
|
|
|
271 |
|
|
|
— |
|
|
|
632 |
|
Total costs |
|
|
4,019 |
|
|
|
4,169 |
|
|
|
12,300 |
|
|
|
11,427 |
|
Gross profit |
|
|
5,965 |
|
|
|
5,042 |
|
|
|
17,537 |
|
|
|
13,618 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,426 |
|
|
|
2,453 |
|
|
|
7,494 |
|
|
|
6,202 |
|
Research and development |
|
|
1,358 |
|
|
|
1,196 |
|
|
|
4,026 |
|
|
|
3,687 |
|
General and administrative |
|
|
1,803 |
|
|
|
2,912 |
|
|
|
5,669 |
|
|
|
6,764 |
|
Total operating expenses |
|
|
5,587 |
|
|
|
6,561 |
|
|
|
17,189 |
|
|
|
16,653 |
|
Operating income (loss) |
|
|
378 |
|
|
|
(1,519 |
) |
|
|
348 |
|
|
|
(3,035 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
131 |
|
|
|
23 |
|
|
|
335 |
|
|
|
72 |
|
Other expense, net |
|
|
(70 |
) |
|
|
(21 |
) |
|
|
(179 |
) |
|
|
(96 |
) |
Total other income (expense), net |
|
|
61 |
|
|
|
2 |
|
|
|
156 |
|
|
|
(24 |
) |
Income (loss) before income taxes |
|
|
439 |
|
|
|
(1,517 |
) |
|
|
504 |
|
|
|
(3,059 |
) |
Provision (benefit) for income taxes |
|
|
(7 |
) |
|
|
(76 |
) |
|
|
33 |
|
|
|
(32 |
) |
Net income (loss) |
|
$ |
446 |
|
|
$ |
(1,441 |
) |
|
$ |
471 |
|
|
$ |
(3,027 |
) |
Net income (loss) per share, basic |
|
$ |
0.04 |
|
|
$ |
(0.13 |
) |
|
$ |
0.04 |
|
|
$ |
(0.29 |
) |
Net income (loss) per share, diluted |
|
$ |
0.04 |
|
|
$ |
(0.13 |
) |
|
$ |
0.04 |
|
|
$ |
(0.29 |
) |
Weighted average shares used in computing net income (loss) per share, basic |
|
|
11,449,946 |
|
|
|
10,780,996 |
|
|
|
11,275,195 |
|
|
|
10,481,901 |
|
Weighted average shares used in computing net income (loss) per share, diluted |
|
|
11,917,382 |
|
|
|
10,780,996 |
|
|
|
11,865,319 |
|
|
|
10,481,901 |
|
See accompanying notes to condensed consolidated financial statements.
3
ShotSpotter, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Net income (loss) |
|
$ |
446 |
|
|
$ |
(1,441 |
) |
|
$ |
471 |
|
|
$ |
(3,027 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in foreign currency translation adjustment, net |
|
|
(91 |
) |
|
|
(32 |
) |
|
|
(69 |
) |
|
|
(136 |
) |
Comprehensive income (loss) |
|
$ |
355 |
|
|
$ |
(1,473 |
) |
|
$ |
402 |
|
|
$ |
(3,163 |
) |
See accompanying notes to condensed consolidated financial statements.
4
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' |
|
|||||||||
|
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Deficit |
|
|
Income (Loss) |
|
|
Equity |
|
||||||
Balance at December 31, 2018 |
|
|
10,864,722 |
|
|
$ |
55 |
|
|
$ |
114,618 |
|
|
$ |
(97,377 |
) |
|
$ |
(149 |
) |
|
$ |
17,147 |
|
Exercise of stock options |
|
|
177,408 |
|
|
|
1 |
|
|
|
218 |
|
|
|
— |
|
|
|
— |
|
|
|
219 |
|
Issuance of common stock upon secondary offering, net of costs |
|
|
250,000 |
|
|
|
1 |
|
|
|
10,553 |
|
|
|
— |
|
|
|
— |
|
|
|
10,554 |
|
Issuance of common stock from RSUs vested |
|
|
28,790 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
754 |
|
|
|
— |
|
|
|
— |
|
|
|
754 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13 |
) |
|
|
(13 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(362 |
) |
|
|
— |
|
|
|
(362 |
) |
Balance at March 31, 2019 |
|
|
11,320,920 |
|
|
$ |
57 |
|
|
$ |
126,143 |
|
|
$ |
(97,739 |
) |
|
$ |
(162 |
) |
|
$ |
28,299 |
|
Exercise of stock options |
|
|
65,960 |
|
|
|
— |
|
|
|
129 |
|
|
|
— |
|
|
|
— |
|
|
|
129 |
|
Issuance of common stock in connection with exercise of warrants |
|
|
12,225 |
|
|
|
— |
|
|
|
51 |
|
|
|
— |
|
|
|
— |
|
|
|
51 |
|
Issuance of common stock from ESPP purchase |
|
|
53,508 |
|
|
|
— |
|
|
|
642 |
|
|
|
— |
|
|
|
— |
|
|
|
642 |
|
Issuance of common stock from RSUs vested |
|
|
24,072 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
905 |
|
|
|
— |
|
|
|
— |
|
|
|
905 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35 |
|
|
|
35 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
387 |
|
|
|
— |
|
|
|
387 |
|
Balance at June 30, 2019 |
|
|
11,476,685 |
|
|
$ |
57 |
|
|
$ |
127,870 |
|
|
$ |
(97,352 |
) |
|
$ |
(127 |
) |
|
$ |
30,448 |
|
Exercise of stock options |
|
|
58,806 |
|
|
|
1 |
|
|
|
94 |
|
|
|
— |
|
|
|
— |
|
|
|
95 |
|
Repurchase of common stock |
|
|
(120,000 |
) |
|
|
(1 |
) |
|
|
(3,465 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,466 |
) |
Issuance of common stock in connection with exercise of warrants |
|
|
13,873 |
|
|
|
— |
|
|
|
20 |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
Issuance of common stock from RSUs vested |
|
|
2,814 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
716 |
|
|
|
— |
|
|
|
— |
|
|
|
716 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(91 |
) |
|
|
(91 |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
446 |
|
|
|
— |
|
|
|
446 |
|
Balance at September 30, 2019 |
|
|
11,432,178 |
|
|
$ |
57 |
|
|
$ |
125,235 |
|
|
$ |
(96,906 |
) |
|
$ |
(218 |
) |
|
$ |
28,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
Common Stock |
|
|
Additional Paid-in |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders' |
|
|||||||||
|
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Deficit |
|
|
Income (Loss) |
|
|
Equity |
|
||||||
Balance at December 31, 2017 |
|
|
9,827,129 |
|
|
$ |
48 |
|
|
$ |
109,708 |
|
|
$ |
(97,595 |
) |
|
$ |
1 |
|
|
$ |
12,162 |
|
Exercise of stock options |
|
|
486,588 |
|
|
|
3 |
|
|
|
340 |
|
|
|
— |
|
|
|
— |
|
|
|
343 |
|
Issuance of common stock in connection with exercise of warrants |
|
|
16,129 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
427 |
|
|
|
— |
|
|
|
— |
|
|
|
427 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29 |
|
|
|
29 |
|
Cumulative effect of change in accounting principle |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,025 |
|
|
|
— |
|
|
|
3,025 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,217 |
) |
|
|
— |
|
|
|
(1,217 |
) |
Balance at March 31, 2018 |
|
|
10,329,846 |
|
|
$ |
51 |
|
|
$ |
110,475 |
|
|
$ |
(95,787 |
) |
|
$ |
30 |
|
|
$ |
14,769 |
|
Exercise of stock options |
|
|
66,628 |
|
|
|
— |
|
|
|
108 |
|
|
|
— |
|
|
|
— |
|
|
|
108 |
|
Issuance of common stock in connection with exercise of warrants |
|
|
272,309 |
|
|
|
1 |
|
|
|
988 |
|
|
|
— |
|
|
|
— |
|
|
|
989 |
|
Issuance of common stock from ESPP purchase |
|
|
43,624 |
|
|
|
1 |
|
|
|
420 |
|
|
|
— |
|
|
|
— |
|
|
|
421 |
|
Issuance of common stock from RSU's vested |
|
|
47,312 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
648 |
|
|
|
— |
|
|
|
— |
|
|
|
648 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(133 |
) |
|
|
(133 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(369 |
) |
|
|
— |
|
|
|
(369 |
) |
Balance at June 30, 2018 |
|
|
10,759,719 |
|
|
$ |
53 |
|
|
$ |
112,639 |
|
|
$ |
(96,156 |
) |
|
$ |
(103 |
) |
|
$ |
16,433 |
|
Exercise of stock options |
|
|
37,822 |
|
|
|
1 |
|
|
|
71 |
|
|
|
— |
|
|
|
— |
|
|
|
72 |
|
Issuance of common stock in connection with exercise of warrants |
|
|
6,169 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of common stock from ESPP purchase |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of common stock from RSU's vested |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
748 |
|
|
|
— |
|
|
|
— |
|
|
|
748 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32 |
) |
|
|
(32 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,441 |
) |
|
|
— |
|
|
|
(1,441 |
) |
Balance at September 30, 2018 |
|
|
10,803,710 |
|
|
$ |
54 |
|
|
$ |
113,458 |
|
|
$ |
(97,597 |
) |
|
$ |
(135 |
) |
|
$ |
15,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
6
ShotSpotter, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
471 |
|
|
$ |
(3,027 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,641 |
|
|
|
2,766 |
|
Impairment of property and equipment |
|
|
— |
|
|
|
632 |
|
Stock-based compensation |
|
|
2,375 |
|
|
|
1,823 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
8,482 |
|
|
|
(3,472 |
) |
Prepaid expenses and other assets |
|
|
(303 |
) |
|
|
(891 |
) |
Accounts payable |
|
|
(617 |
) |
|
|
715 |
|
Accrued expenses and other current liabilities |
|
|
(73 |
) |
|
|
860 |
|
Deferred revenue |
|
|
(2,825 |
) |
|
|
3,109 |
|
Net cash provided by operating activities |
|
|
11,151 |
|
|
|
2,515 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(3,672 |
) |
|
|
(7,426 |
) |
Investment in intangible and other assets |
|
|
(59 |
) |
|
|
(36 |
) |
Net cash used in investing activities |
|
|
(3,731 |
) |
|
|
(7,462 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock upon secondary offering |
|
|
11,247 |
|
|
|
— |
|
Payment of line of credit costs |
|
|
— |
|
|
|
(10 |
) |
Payments of offering costs |
|
|
(445 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
|
443 |
|
|
|
523 |
|
Repurchases of common stock |
|
|
(3,466 |
) |
|
|
— |
|
Proceeds from exercise of warrants |
|
|
71 |
|
|
|
988 |
|
Proceeds from employee stock purchase plan |
|
|
642 |
|
|
|
421 |
|
Net cash provided by financing activities |
|
|
8,492 |
|
|
|
1,922 |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
|
15,912 |
|
|
|
(3,025 |
) |
Effect of exchange rate on cash and cash equivalents |
|
|
(52 |
) |
|
|
(164 |
) |
Cash, cash equivalents and restricted cash at beginning of year |
|
|
10,278 |
|
|
|
19,597 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
26,138 |
|
|
$ |
16,408 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Deferred offering costs included in other assets |
|
$ |
— |
|
|
$ |
249 |
|
Line of credit costs included in other assets |
|
$ |
— |
|
|
$ |
91 |
|
Supplemental disclosure of non-cash operating activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment included in accounts payable |
|
$ |
26 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
7
ShotSpotter, Inc.
Notes to Condensed Consolidated Financial Statements
Note 1. Organization and Description of Business
ShotSpotter, Inc. (the “Company”) provides precision-policing solutions for law enforcement to help deter gun violence and make cities, campuses and facilities safer. The company’s flagship product, ShotSpotter Flex, is the leading outdoor gunshot detection, location and forensic system trusted by approximately 100 cities. ShotSpotter Missions uses machine learning-driven analysis to help strategically plan patrol missions and tactics for maximum crime deterrence. ShotSpotter Labs is the Company’s effort to support innovative uses of its technology to help protect wildlife and the environment. The Company offers its solutions on a SaaS-based subscription model to its customers.
The Company’s principal executive offices are located in Newark, California. The Company has two wholly-owned subsidiaries, ShotSpotter (Pty) Ltd. formed in South Africa and ShotSpotter Colombia S.A.S. which was formed in Colombia in March 2019.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated during consolidation.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, stockholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations or cash flows to be anticipated for the full year 2019 or any future period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including the valuation of accounts receivable, the lives of tangible and intangible assets, stock-based compensation expense, and accounting for revenue recognition and income taxes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the Company’s financial position and results of operations.