Exhibit 99.1
 
DropCar Announces Financial Results for the Three
Months Ended March 31, 2019
 
Over 50% Expense Reduction with Continued Improved Margins and Liquidity as Company Continues Evaluating Strategic Opportunities
 
NEW YORK – May 15, 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 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.
 
Contact Investor Relations
 
Spencer Richardson
ir@DropCar.com
(646) 916-4595
 
 
 
 
 
 
 
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 
 
 

The following information was filed by Dropcar, Inc. (DCAR) on Wednesday, May 15, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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