SOUNDTHINKING, INC. [SSTI] Filings

10-Q 1 ssti-20230630.htm 10-Q 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 June 30, 2023

☐ 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

SoundThinking, 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 August 1, 2023 the registrant had 12,229,332 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	16
Item 3.	Qualitative and Quantitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION
Item 1	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 6.	Exhibits	59
Exhibit Index		60
Signatures		61

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

SoundThinking, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	June 30,			December 31,
	2023			2022
	Unaudited
Assets
Current assets
Cash and cash equivalents	$	3,925		$	10,479
Accounts receivable and contract asset, net		27,600			30,957
Prepaid expenses and other current assets		3,520			3,225
Total current assets		35,045			44,661
Property and equipment, net		21,848			21,988
Operating lease right-of-use assets		2,781			3,240
Goodwill		22,971			22,971
Intangible assets, net		25,198			27,318
Other assets		2,836			2,570
Total assets	$	110,679		$	122,748
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	1,324		$	1,633
Deferred revenue, short-term		37,098			41,907
Accrued expenses and other current liabilities		9,387			9,965
Total current liabilities		47,809			53,505
Deferred revenue, long-term		1,897			1,813
Deferred tax liability		852			685
Other liabilities		2,058			5,800
Total liabilities		52,616			61,803
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 June 30, 2023 and December 31, 2022, respectively		—			—
Common stock: $0.005 par value; 500,000,000 shares authorized; 12,229,335 and 12,243,929 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		62			62
Additional paid-in capital		155,251			153,573
Accumulated deficit		(96,887	)		(92,400	)
Accumulated other comprehensive loss		(363	)		(290	)
Total stockholders' equity		58,063			60,945
Total liabilities and stockholders' equity	$	110,679		$	122,748

See accompanying notes to condensed consolidated financial statements.

SoundThinking, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues	$	22,075		$	20,016		$	42,695		$	41,230
Costs
Cost of revenues		9,413			8,367			18,656			16,657
Impairment of property and equipment		—		—				72			—
Total costs		9,413			8,367			18,728			16,657
Gross profit		12,662			11,649			23,967			24,573

Operating expenses
Sales and marketing		7,443			5,794			13,291			11,370
Research and development		3,057			2,534			5,710			5,161
General and administrative		5,513			3,555			10,129			7,844
Change in fair value of contingent consideration		(999	)		(3,437	)		(1,005	)		(3,437	)
Total operating expenses		15,014			8,446			28,125			20,938
Operating income (loss)		(2,352	)		3,203			(4,158	)		3,635
Other income (expense), net
Interest income, net		52			7			106			15
Other expense, net		(53	)		(200	)		(91	)		(253	)
Total other income (expense), net		(1	)		(193	)		15			(238	)
Income (loss) before income taxes		(2,353	)		3,010			(4,143	)		3,397
Provision for income taxes		344			—			344			—
Net income (loss)	$	(2,697	)	$	3,010		$	(4,487	)	$	3,397
Net income (loss) per share, basic	$	(0.22	)	$	0.25		$	(0.37	)	$	0.28
Net income (loss) per share, diluted	$	(0.22	)	$	0.24		$	(0.37	)	$	0.28
Weighted-average shares used in computing net income (loss) per share, basic		12,224,501			12,145,993			12,238,432			12,151,450
Weighted-average shares used in computing net income (loss) per share, diluted		12,224,501			12,309,701			12,238,432			12,304,767

See accompanying notes to condensed consolidated financial statements.

SoundThinking, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income (loss)	$	(2,697	)	$	3,010		$	(4,487	)	$	3,397
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of taxes		(56	)		(96	)		(73	)		(24	)
Comprehensive income (loss)	$	(2,753	)	$	2,914		$	(4,560	)	$	3,373

See accompanying notes to condensed consolidated financial statements.

SoundThinking, 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			Loss			Equity
Balance at January 1, 2023		12,243,929		$	62	$	153,573		$	(92,400	)	$	(290	)	$	60,945
Exercise of stock options		10,063			—		127			—			—			127
Repurchase of common stock		(35,369	)		—		(1,256	)		—			—			(1,256	)
Issuance of common stock from RSUs vested		25,157			—		—			—			—			—
Stock-based compensation		—			—		2,220			—			—			2,220
Foreign currency translation loss		—			—		—			—			(17	)		(17	)
Net loss		—			—		—			(1,790	)		—			(1,790	)
Balance at March 31, 2023		12,243,780			62		154,664			(94,190	)		(307	)		60,229
Exercise of stock options		4,097			—		17			—			—			17
Repurchase of common stock		(100,401	)		—		(2,392	)		—			—			(2,392	)
Issuance of common stock from ESPP purchases		25,193			—		483			—			—			483
Issuance of common stock from RSUs vested		56,666			—		—			—			—			—
Stock-based compensation		—			—		2,479			—			—			2,479
Foreign currency translation loss		—			—		—			—			(56	)		(56	)
Net loss		—			—		—			(2,697	)		—			(2,697	)
Balance at June 30, 2023		12,229,335		$	62	$	155,251		$	(96,887	)	$	(363	)	$	58,063


	Common Stock					Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares			Par Value		Capital			Deficit			Loss			Equity
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 from acquisition		464,540			3		14,263			—			—			14,266
Stock-based compensation		—			—		1,855			—			—			1,855
Foreign currency translation loss		—			—		—			—			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 purchases		20,630					489									489
Issuance of common stock from RSUs vested		41,198			—		—			—			—			—
Stock-based compensation		—			—		2,131			—			—			2,131
Foreign currency translation 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

See accompanying notes to condensed consolidated financial statements.

SoundThinking, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net income (loss)	$	(4,487	)	$	3,397
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property and equipment

SOUNDTHINKING, INC. [SSTI] Filings
10-Q	[2023-08-10]
10-Q	[2023-05-15]
10-K	[2023-03-14]
10-Q	[2022-11-09]
10-Q	[2022-08-10]
10-Q	[2022-05-16]
10-K	[2022-03-29]
10-Q	[2021-11-15]
10-Q	[2021-08-12]
10-Q	[2021-05-12]
10-K	[2021-03-29]
10-Q	[2020-11-09]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-03-13]
10-Q	[2019-11-12]
10-Q	[2019-08-06]
10-Q	[2019-05-09]
10-K	[2019-03-04]
10-Q	[2018-11-14]
10-Q	[2018-08-08]
10-Q	[2018-05-10]
10-K	[2018-03-28]
10-Q	[2017-11-14]
10-Q	[2017-08-14]
S-1	[2017-05-02]