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TEL AVIV, IsraelMarch 22, 2024 (GLOBE NEWSWIRE) — ParaZero Technologies Ltd. (Nasdaq: PRZO) (the “company” or “ParaZero”), an aerospace company focused on drone technologies for commercial drones, defense drones, and urban air mobility aircraft, reported today its financial results for year ended December 31, 2023.

Key Highlights of ParaZero’s Achievements in 2023 & Recent Highlights:

  • ParaZero announced a new development agreement with Colombia-based drone OEM, Black Square, an industrial drone producer leader in the region that focuses on enterprise drone platforms.
  • ParaZero announced the formation of a working partnership with KULR Technology Group, Inc., a global leader in sustainable energy management, to leverage its business network within the defense industry for applying KULR’s vibration reduction technology on helicopter and rotorcraft fleets.
  • ParaZero facilitated one of its customers in obtaining the first-ever light uncrewed aircraft system operator certificate (LUC) in Denmark. The LUC is an organizational approval certificate granted by the European Union Aviation Safety Agency (EASA) that allows for cross-border operations throughout the European Union without additional approvals required.
  • The Australian Civil Aviation Safety Agency authorized drones to operate over populated area and near people when using ParaZero’s safety systems, the first such authorization of its kind in Australia.
  • The Human Environment and Transport Inspectorate (issued a precedent-setting approval for the first drone flights over densely populated areas for drones equipped with ParaZero SafeAir ASTM-certified parachute recovery systems.
  • ParaZero announced that it completed a drone safety project with a Fortune 500 leading automotive manufacturer.
  • ParaZero announced that it expanded its collaboration with Vayu Aerospace Corporation, a US-based drone original equipment manufacturer, where ParaZero will customize its SafeAir system to be integrated at the design stage of Vayu’s G-1MKII VTOL aircraft and jointly participate in performance-based regulatory compliance testing and validation.
  • ParaZero closed its IPO on July 31, 2023, issuing 1,950,000 ordinary shares. Gross proceeds for the offering were approximately $7.8 million prior to deducting underwriting discounts and other offering expenses.
  • ParaZero closed a private placement on October 30, 2023, issuing an aggregate of 1,136,364 ordinary shares, 3,500,000 pre-funded warrants, 4,636,364 series A warrants and 140,373 series B warrants. Gross proceeds for the offering were approximately $5.1 million prior to deducting placement agent expenses and other offering expenses.

ParaZero’s CEO, Boaz Shetzer, stated, “2023 was a crucial year for ParaZero, as we continued to push the boundaries of innovation in drone safety. We believe that our strategic partnerships, coupled with significant regulatory approvals, position us strongly for continued growth and leadership in the drone safety industry. We remain committed to our mission of enhancing the safety and operational capabilities of drones and eVTOLs worldwide, ensuring safer skies for tomorrow.”

Full Year 2023 Financial Highlights:

  • Sales increased by $60,390, or 10.8% to $620,508 for the year ended December 31, 2023, compared to $560,118 for the year ended December 31, 2022. This increase was mainly attributed to that fact, that the company shifted towards sales to OEMs integrations that contributed to a higher volume of sales rather than to the aftermarket segment. This shift is accompanied with recuring revenues.
  • Cost of sales increased by $139,045, or 41.2%, to $476,610 for the year ended December 31, 2023, compared to $337,565 for the year ended December 31, 2022. The increase was mainly due to the increase in and the volume of sales during the year ended December 31, 2023 and an inventory write off increase of approximately $21,000 and partly due to the increase in sales.
  • Research and development expenses decreased by $3,527, or 0.6%, to $636,801 for the year ended December 31, 2023, compared to $640,328 for the year ended December 31, 2022. Research and development expenses mainly consist of labor and subcontractors’ cost.
  • Sales and marketing expenses increased by $223,176, or 84.3%, to $487,904 for the year ended December 31, 2023, compared to $264,728 for the year ended December 31, 2022. The increase resulted mainly from labor and more subcontractors’ costs of $131,000 accompanied an increase in by travel and conferences participation costs of $28,000.
  • General and administrative expenses increased by $706,161, or 92.1%, to $1,472,872 for the year ended December 31, 2023, compared to $766,711 for the year ended December 31, 2022. The increase resulted mainly from expansion in labor and professional services rendered after the IPO and costs associated with becoming a public company, including an increase in D&O insurance and certain filing services.
  • Other finance income, net was $210,675 for the year ended December 31, 2023, compared to finance income, net of $202,958 for the year ended December 31, 2022. Other finance income, net, primarily includes income from interest on deposits and exchange rate differences.
  • Net loss and comprehensive loss increased by $2,118,341, or 128.1%, to $3,771,379 for the year ended December 31, 2023, compared to a net loss of $1,653,038 for the year ended December 31, 2022. The increase was the result of increase with non-cash items such as changes in fair value of convertible note, changes in fair value of derivative warrant liabilities, along with increase in operating expenses, as described above.
  • The loss per share in 2023, was $0.77 compared to net loss per share of $0.49 in 2022.
  • As of December 31, 2023, the company’s cash and cash equivalents was $7,428,405 and the company’s total shareholders’ equity was $6,105,058.

About ParaZero Technologies

ParaZero (https://parazero.com/) is a world-leading developer of autonomous parachute safety systems for commercial and defense unmanned systems, drone and urban air mobility (UAM) aircraft. Started in 2014 by a passionate group of aviation professionals and drone industry veterans, ParaZero designs smart, autonomous parachute safety systems designed to enable safe flight operations in advanced use cases, including flight over populated areas and beyond-visual-line-of-sight (BVLOS).

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, ParaZero is using forward-looking statements when it discusses its belief that its strategic partnerships, coupled with significant regulatory approvals, position it strongly for continued growth and leadership in the drone safety industry and its mission of enhancing the safety and operational capabilities of drones and eVTOLs worldwide, ensuring safer skies for tomorrow. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s Annual Report on Form 20-F filed with the SEC on March 21, 2024. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. ParaZero is not responsible for the content of third-party websites.

Investor Relations Contact:

Michal EfratyInvestor Relations, Israel+972-(0)52-3044404michal@efraty.com

ParaZero Technologies Ltd. | 30 Dov Hoz, Kiryat Ono, Israel 5555626P: +972-36885252 | E: contact@parazero.com | F: +972-3-688-5246

ParaZero Technologies Ltd.BALANCE SHEET(U.S. dollars in thousands, except share data and per share data)
December 31,2023December 31,2022
ASSETS(audited)
CURRENT ASSETS:
Cash and cash equivalents7,428,40589,806
Trade receivables22,376184,064
Other current assets651,560179,541
Deferred prospective initial public offering costs291,133
Inventories264,468304,823
TOTAL CURRENT ASSETS8,366,8091,049,367
NON-CURRENT ASSETS:
Operating lease right-of-use asset8,12756,893
Property and equipment, net49,98141,311
TOTAL NON-CURRENT ASSETS58,10898,204
TOTAL ASSETS8,424,9171,147,571
LIABILITIES AND SHAREHOLDERS’ EQUITY(U.S. dollars in thousands, except share data and per share data)
December 31,2023December 31,2022
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)(audited)
CURRENT LIABILITIES:
Trade payables56,68247,260
Operating lease liabilities7,54345,097
Other current liabilities690,861774,647
Convertible notes1,514,928
TOTAL CURRENT LIABILITIES755,0862,381,932
NON-CURRENT LIABILITIES:
Derivative warrant liabilities1,564,773
Operating lease liabilities, net of current portion7,775
Loan from a related party399,794
TOTAL NON-CURRENT LIABILITIES1,564,773407,569
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY (DEFICIT):
Ordinary shares, NIS 0.02 par value: Authorized 25,000,000 as of December 31, 2023 and December 31, 2022; Issued and outstanding 10,073,956 and 3,597,442 shares as of December 31, 2023 and as of December 31, 2022, respectively56,22721,456
Additional paid-in capital24,471,88812,988,292
Accumulated losses(18,423,057)(14,651,678)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)6,105,058(1,641,930)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)8,424,9171,147,571
STATEMENTS OF COMPREHENSIVE LOSS(U.S. dollars in thousands, except share data and per share data)
Year ended December 31,
202320222021
(audited)
Sales620,508560,118724,391
Cost of Sales476,610337,565464,715
Gross profit143,898222,553259,676
Research and development expenses636,801640,328603,702
Selling and marketing expenses487,904264,728168,700
General and administrative expenses1,472,872766,711474,703
Prospective initial public offering expenses345,925389,396—_
Operating loss2,799,6041,838,610987,429
Change in fair value of convertible notes504,976
Change in fair value of derivative warrant liabilities277,600
Issuance expenses attributable to derivate warrant liability247,129
Interest expenses on related party loan152,74517,386
Other finance income, net(210,675)(202,958)(372,048)
Net loss and comprehensive loss3,771,3791,653,038615,381
Net loss per ordinary share, basic and diluted0.770.491.71
Weighted-average number of ordinary shares outstanding, basic and diluted4,891,0713,349,071359,743
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)(U.S. dollars in thousands, except share data and per share data)
Ordinary sharesAdditional
Number ofsharesAmountpaid-inCapitalAccumulated LossesTotal
U.S. dollars
BALANCE AS OF JANUARY 1,2021359,7431,9456,380,403(12,383,259)(6,000,911)
Comprehensive loss(615,381)(615,381)
BALANCE AS OF DECEMBER 31,2021359,7431,9456,380,403(12,998,640)(6,616,292)
Conversion of Former Parent Company’s debt into ordinary shares and warrants3,237,69919,5116,403,7976,423,308
Stock based compensation91,37791,377
Benefit to the Company by an equity holder with respect to funding transactions112,715112,715
Comprehensive and net loss(1,653,038)(1,653,038)
BALANCE AS OF DECEMBER 31,20223,597,44221,45612,988,292(14,651,678)(1,641,930)
Stock based compensation490,015490,015
Conversion of convertible note into ordinary shares504,9762,7342,017,1702,019,904
Issuance of ordinary shares and warrants upon initial public offering, net of issuance costs1,950,00010,5615,919,0645,929,625
Issuance of ordinary shares, pre-funded warrants, and warrants upon private placement, net of issuance costs4,021,53821,4763,045,1803,066,656
Benefit to the Company by an equity holder with respect to funding transactions12,16712,167
Comprehensive loss(3,771,379)(3,771,379)
BALANCE AS OF DECEMBER 31,202310,073,95656,22724,471,888(18,423,057)6,105,058)
STATEMENTS OFCASH FLOWS(U.S. dollars in thousands, except share data and per share data)
Year ended December 31
202320222021
CASH FLOWS FROM OPERATING ACTIVITIES:(audited)
Net loss(3,771,379)(1,653,038)(615,381)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation17,08718,49517,627
Stock based compensation14,81552,286
Interest expenses with respect to funding from related party112,37312,509
Change in fair value of convertible loan504,976
Changes in fair value of derivative liabilities277,600
Issuance expenses attributable to derivative warrant liabilities247,129
Inventory write-down33,36012,387
Foreign currency exchange differences with respect to amount due to a Former Parent Company(243,948)(402,365)
Finance expenses5834,021342
Changes in operating assets and liabilities:
Trade receivables, net161,689(176,863)28,595
Other current assets(472,020)(96,782)21,667
Deferred prospective initial public offering cost(252,041)
Inventories6,99534,2056,738
Operating lease right-of-use asset48,766(48,633)49,020
Trade payables9,42210,145(35,764)
Operating lease liabilities(45,911)(48,975)50,836
Other accounts payable(83,785)404,597(107,213)
Net cash used in operating activities(2,938,300)(1,971,635)(985,898)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment(25,757)(9,725)(5,572)
Net cash used in investing activities(25,757)(9,725)(5,572)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cost associated with the conversion of the Former Parent Company’s debt(84,780)
Proceeds from issuance of convertible notes1,514,928
Issuance of ordinary shares in initial public offering, net of issuance costs6,695,957
Issuance of ordinary shares, pre-funded warrants and warrants in private placement, net of issuance costs4,106,699
Receipt of loan from related party245,000500,000
Repayment of loan from related party(745,000)
Receipt of loans from the Former Parent Company107,994940,624
Repayment of bank loan(30,068)
Net cash provided by financing activities10,302,6562,038,142910,556