DropCar Announces $6,000,000 Private Placement
March 09 2018 - 8:00AM
DropCar, Inc. (NASDAQ:DCAR), a provider of app-based automotive
logistics and mobility services for consumers and the automotive
industry, announced today that it has completed a financing with
certain institutional and accredited investors (the “H-4
Investors”) to issue newly designated Series H-4 convertible
preferred stock (the “Series H-4 Shares”) and warrants to purchase
shares of its common stock in a private placement transaction. The
private placement resulted in aggregate gross proceeds to DropCar
of approximately $6,000,000.
Under the terms of the Securities Purchase Agreement related to
the private placement (“SPA”), the Company issued an aggregate of
26,843 Series H-4 Shares and warrants to purchase 2,684,300 shares
of common stock of the Company, par value $0.0001 per share
("Common Stock"), with an exercise price of $2.60 per share
("Warrants") based upon the closing price of the Common Stock on
the Nasdaq Capital Market on March 7, 2018. The purchase price for
each Series H-4 Share was $235.50. The Series H-4 Shares are
convertible into 2,684,300 shares of Common Stock.
The conversion price for the Series H-4 Shares and the warrant
strike price may become subject to anti-dilution protection if
approved by the Company’s stockholders. Accordingly, the Company
intends to promptly file a proxy statement to seek stockholder
approval.
Financing Proceeds Augment DropCar’s Ability to Achieve
Upstream GrowthDropCar intends to use the net proceeds
from the private placement for general corporate purposes,
including, to address accelerating demand for DropCar’s B2B
services and software, particularly from larger automotive
enterprises.
While most of DropCar’s enterprise partnerships have been with
luxury-brand car dealers, the Company is garnering increasing
attention from major auto-related companies (including, but not
limited to, OEMs, Rental, and Car Sharing companies).
"The additional investment from both current and new investors
in this financing reflects the confidence they have in our vision
and the team’s ability to execute,” stated CEO Spencer Richardson.
“Our top priority is to meet the rapidly-accelerating demand for
both DropCar’s consumer and enterprise offers, while enhancing the
quality and efficiency of the services we provide. This financing
will enable us to continue investing in people and technology to do
just that.”
Palladium Capital Advisors, LLC acted as the sole placement
agent for the offering.
The securities sold and issued in connection with the private
placement are not registered under the Securities Act of 1933, as
amended, or any state securities laws, and will be sold pursuant to
Regulation D under the Securities Act. The securities may not
be offered or sold in the United States absent registration or
pursuant to an exemption from the registration requirements of the
Securities Act and applicable state securities laws. DropCar has
agreed to file a registration statement covering the resale of the
shares issuable upon conversion of the preferred stock acquired by
the investors and shares of common stock issuable upon exercise of
the warrants acquired by the investors.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of such securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of
any such jurisdiction.
About DropCarFounded and launched in New York
City in 2015, DropCar (NASDAQ:DCAR) offers its Vehicle Support
Platform (VSP), a cloud-based platform and mobile app that helps
consumers and automotive-related companies reduce the cost, hassles
and inefficiencies of owning a car, or fleet of cars, in urban
centers. Its technology platform blends the efficiency and scale of
cloud computing, machine learning and connected cars with the
high-touch of highly trained drivers to move cars to/from fully
staffed, secure garages to/from the people (or businesses) who own
them. Consumers use DropCar’s mobile app to ease the cost and
stress of owning a car in the city. Dealerships, leasing companies,
OEMs and shared mobility companies use DropCar’s enterprise
platform to reduce costs, streamline logistics and deepen
relationships with customers. More information is available at
www.dropcar.com.
* * * * *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 combined 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
included in DropCar’s registration statement on Form S-4, including
the proxy statement, prospectus, and information-statement therein,
DropCar’s most recent Annual Report on Form 10-K, and DropCar’s
recent Quarterly Report on Form 10-Q and Current Reports on Form
8-K filed 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.
Investor Relations Contact
Daniel Gelbtuch, VP of Corporate Finance for DropCar
daniel@dropcar.com (917) 509-9582
Media Contact
John Williams, Scoville PR for DropCar
jwilliams@scovillepr.com (206) 660-5503