Delaware
|
|
001-36280
|
|
05-0502529
|
(State
or other jurisdiction of
Incorporation
or Organization)
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer
Identification
No.)
|
5001 Celebration Pointe Avenue, Gainesville, FL
|
|
32608
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each
class
|
Trading
Symbol(s)
|
Name of exchange on
which registered
|
Common Stock, $0.001 par value per share
|
SHSP
|
The NASDAQ Stock Market LLC
|
Exhibit
No.
|
|
Description
|
|
Press
Release dated November 7, 2019 – Third Quarter 2019
Results*
|
SHARPSPRING,
INC.
|
|
|
|
|
|
By:
|
/s/ Bradley M. Stanczak
|
|
|
Bradley
M. Stanczak,
|
|
|
Chief
Financial Officer
|
|
SharpSpring, Inc.
|
||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
(Unaudited)
|
||||
|
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Revenue
|
$5,723,978
|
$4,873,329
|
$16,567,696
|
$13,500,281
|
|
|
|
|
|
Cost
of services
|
1,840,764
|
1,472,410
|
5,014,964
|
4,380,069
|
Gross
profit
|
3,883,214
|
3,400,919
|
11,552,732
|
9,120,212
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
3,102,653
|
2,640,697
|
8,976,466
|
7,368,128
|
Research
and development
|
1,207,605
|
1,106,995
|
3,684,314
|
3,065,689
|
General
and administrative
|
1,991,329
|
1,518,106
|
6,154,295
|
4,368,744
|
Non-employee
stock issuance expense
|
-
|
508,561
|
-
|
508,561
|
Intangible
asset amortization
|
95,250
|
115,000
|
285,750
|
345,000
|
|
|
|
|
|
Total
operating expenses
|
6,396,837
|
5,889,359
|
19,100,825
|
15,656,122
|
|
|
|
|
|
Operating
loss
|
(2,513,623)
|
(2,488,440)
|
(7,548,093)
|
(6,535,910)
|
|
|
|
|
|
Other
expense, net
|
(15,781)
|
(243,956)
|
(161,873)
|
(513,759)
|
Loss
on induced conversion
|
-
|
-
|
(2,162,696)
|
-
|
Gain
(loss) on embedded derivative
|
-
|
27,295
|
214,350
|
(426,154)
|
|
|
|
|
|
Loss
before income taxes
|
(2,529,404)
|
(2,705,101)
|
(9,658,312)
|
(7,475,823)
|
Provision
(benefit) for income taxes
|
(2,291)
|
5,130
|
835
|
(247,415)
|
|
|
|
|
|
Net
loss
|
$(2,527,113)
|
$(2,710,231)
|
$(9,659,147)
|
$(7,228,408)
|
|
|
|
|
|
Basic
net loss per share
|
$(0.23)
|
$(0.32)
|
$(0.96)
|
$(0.85)
|
Diluted
net loss per share
|
$(0.23)
|
$(0.32)
|
$(0.96)
|
$(0.85)
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
|
|
Basic
|
10,948,416
|
8,530,858
|
10,028,246
|
8,482,976
|
Diluted
|
10,948,416
|
8,530,858
|
10,028,246
|
8,482,976
|
SharpSpring, Inc.
|
||
CONSOLIDATED BALANCE SHEETS
|
||
(Unaudited)
|
||
|
|
|
|
September 30,
|
December 31,
|
|
2019
|
2018
|
Assets
|
|
|
Cash
and cash equivalents
|
$13,753,942
|
$9,320,866
|
Accounts
receivable
|
95,498
|
80,521
|
Unbilled
receivables
|
927,952
|
740,425
|
Income
taxes receivable
|
43,813
|
22,913
|
Other
current assets
|
1,414,396
|
1,184,217
|
Total
current assets
|
16,235,601
|
11,348,942
|
|
|
|
Property
and equipment, net
|
1,880,926
|
1,260,798
|
Goodwill
|
8,860,980
|
8,866,413
|
Intangibles,
net
|
1,580,250
|
1,866,000
|
Right-of-use
assets
|
5,392,330
|
-
|
Other
long-term assets
|
559,186
|
665,123
|
Total
assets
|
$34,509,273
|
$24,007,276
|
|
|
|
Liabilities
and Shareholders' Equity
|
|
|
Accounts
payable
|
$1,617,034
|
$1,613,477
|
Accrued
expenses and other current liabilities
|
729,476
|
774,944
|
Deferred
revenue
|
508,804
|
250,656
|
Income
taxes payable
|
13,340
|
23,705
|
Lease
liability
|
362,065
|
-
|
Total
current liabilities
|
3,230,719
|
2,662,782
|
|
|
|
Convertible
notes, including accrued interest
|
-
|
8,342,426
|
Convertible
notes embedded derivative
|
-
|
214,350
|
Lease
liability, net of current portion
|
5,081,623
|
-
|
Total
liabilities
|
8,312,342
|
11,219,558
|
|
|
|
Shareholders'
equity:
|
|
|
Preferred
stock, $0.001 par value
|
-
|
-
|
Common
stock, $0.001 par value
|
10,972
|
8,639
|
Additional
paid in capital
|
53,515,915
|
30,446,838
|
Accumulated
other comprehensive loss
|
(234,103)
|
(231,053)
|
Accumulated
deficit
|
(27,011,853)
|
(17,352,706)
|
Treasury
stock
|
(84,000)
|
(84,000)
|
Total
shareholders' equity
|
26,196,931
|
12,787,718
|
|
|
|
Total
liabilities and shareholders' equity
|
$34,509,273
|
$24,007,276
|
SharpSpring, Inc.
|
||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Unaudited)
|
||||
|
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Net
loss
|
$(2,527,113)
|
$(2,710,231)
|
$(9,659,147)
|
$(7,228,408)
|
|
|
|
|
|
Adjustments
to reconcile loss from operations:
|
|
|
|
|
Depreciation
and amortization
|
256,355
|
240,416
|
727,873
|
632,132
|
Amortization
of costs to acquire contracts
|
228,812
|
194,479
|
431,757
|
758,014
|
Non-cash
stock compensation
|
284,308
|
234,659
|
849,900
|
710,879
|
Non-employee
stock issuance expense
|
-
|
508,561
|
-
|
508,561
|
Deferred
income taxes
|
-
|
(45,625)
|
-
|
(153,890)
|
(Gain)/Loss
on disposal of property and equipment
|
-
|
-
|
(617)
|
-
|
Non-cash
interest
|
-
|
100,000
|
139,372
|
204,301
|
Amortization
of debt issuance costs and embedded derivative
|
-
|
6,359
|
2,903
|
12,991
|
(Gain)/loss
on embedded derivative
|
-
|
(27,295)
|
(214,350)
|
426,154
|
Loss
on induced conversion
|
-
|
-
|
2,162,696
|
-
|
Unrealized
foreign currency gain/loss
|
26,344
|
122,475
|
43,470
|
290,386
|
Changes
in assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
10,280
|
(1,251)
|
(15,014)
|
40,253
|
Unbilled
receivables
|
(50,188)
|
(49,419)
|
(189,008)
|
(143,716)
|
Right-of-use
assets
|
109,247
|
-
|
323,180
|
-
|
Other
assets
|
(360,253)
|
(321,026)
|
(547,716)
|
(973,904)
|
Income
taxes, net
|
(2,291)
|
211,913
|
(30,853)
|
2,050,292
|
Accounts
payable
|
82,722
|
104,774
|
3,891
|
669,474
|
Lease
liabilities
|
(95,068)
|
59,370
|
(280,643)
|
27,784
|
Other
liabilities
|
50,661
|
-
|
(36,639)
|
-
|
Deferred
revenue
|
193,379
|
19,063
|
258,991
|
59,972
|
Net
cash used in operating activities
|
(1,792,805)
|
(1,352,778)
|
(6,029,954)
|
(2,108,725)
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
Purchases
of property and equipment
|
(450,149)
|
(208,035)
|
(1,062,252)
|
(396,153)
|
Proceeds
from the sale of property and equipment
|
-
|
-
|
617
|
-
|
Net
cash used in investing activities
|
(450,149)
|
(208,035)
|
(1,061,635)
|
(396,153)
|
|
|
|
|
|
Cash
flows used in financing activities:
|
|
|
|
|
Proceeds
from issuance of convertible note
|
-
|
-
|
-
|
8,000,000
|
Debt
issuance costs
|
-
|
-
|
-
|
(141,657)
|
Proceeds
from exercise of stock options
|
19,733
|
207,455
|
926,350
|
449,259
|
Proceeds
(cost) from issuance of common stock, net
|
-
|
-
|
10,649,005
|
-
|
Net
cash provided by financing activities
|
19,733
|
207,455
|
11,575,355
|
8,307,602
|
|
|
|
|
|
Effect
of exchange rate on cash
|
(20,504)
|
635
|
(50,690)
|
(18,687)
|
|
|
|
|
|
Change
in cash and cash equivalents
|
$(2,243,725)
|
$(1,352,723)
|
$4,433,076
|
$5,784,037
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
$15,997,667
|
$12,536,507
|
$9,320,866
|
$5,399,747
|
|
|
|
|
|
Cash
and cash equivalents, end of period
|
$13,753,942
|
$11,183,784
|
$13,753,942
|
$11,183,784
|
SharpSpring, Inc.
|
||||
RECONCILIATION TO ADJUSTED EBITDA
|
||||
(Unaudited, in Thousands)
|
||||
|
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Net
loss
|
$(2,527)
|
$(2,710)
|
$(9,659)
|
$(7,228)
|
Provision
(benefit) for income taxes
|
(2)
|
5
|
1
|
(247)
|
Other
expense, net
|
16
|
244
|
162
|
514
|
Non-cash
gain on embedded derivative
|
-
|
(27)
|
(214)
|
426
|
Non-cash
loss on induced conversion
|
-
|
-
|
2,163
|
-
|
Depreciation
& amortization
|
256
|
240
|
728
|
632
|
Non-cash
stock compensation
|
284
|
235
|
850
|
711
|
Non-employee
stock issuance expense
|
-
|
509
|
-
|
509
|
Franchise
tax settlement
|
-
|
-
|
318
|
-
|
Restructuring
|
-
|
-
|
133
|
-
|
Adjusted EBITDA
|
(1,973)
|
(1,504)
|
(5,518)
|
(4,683)
|
SharpSpring, Inc.
|
||||
RECONCILIATION TO CORE NET LOSS AND CORE NET LOSS PER
SHARE
|
||||
(Unaudited, in Thousands)
|
||||
|
|
|
|
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Net
loss
|
$(2,527)
|
$(2,710)
|
$(9,659)
|
$(7,228)
|
Amortization
of intangible assets
|
95
|
115
|
286
|
345
|
Non-cash
stock compensation
|
284
|
235
|
850
|
711
|
Non-employee
stock issuance expense
|
-
|
509
|
-
|
509
|
Non-cash
gain on embedded derivative
|
-
|
(27)
|
(214)
|
426
|
Non-cash
loss on induced conversion
|
-
|
-
|
2,163
|
-
|
Franchise
tax settlement
|
-
|
-
|
318
|
-
|
Restructuring
|
-
|
-
|
133
|
-
|
Tax
adjustment
|
3
|
2
|
4
|
(77)
|
Core net loss
|
$(2,145)
|
$(1,876)
|
$(6,119)
|
$(5,314)
|
|
|
|
|
|
Core net loss per share
|
$(0.20)
|
$(0.22)
|
$(0.61)
|
$(0.63)
|
Weighted
average common shares outstanding
|
10,948
|
8,531
|
10,028
|
8,483
|