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What changed in SOUNDTHINKING, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SOUNDTHINKING, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+421 added−427 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in SOUNDTHINKING, INC.'s 2024 10-K

421 paragraphs added · 427 removed · 316 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+41 added−23 removed104 unchanged
Biggest changeAs part of the rebranding, we introduced our SafetySmart TM platform that includes five data-driven tools consisting of: (i) our flagship product, ShotSpotter ® (formerly ShotSpotter Respond), our leading outdoor gunshot detection, location and alerting system trusted by 170 cities and 19 universities and corporations as of December 31, 2023, (ii) CrimeTracer™ (formerly COPLINK X), a leading law enforcement search engine that enables investigators to search through more than one billion criminal justice records from across jurisdictions to generate tactical leads and quickly make intelligent connections to solve cases, (iii) CaseBuilder™ (formerly ShotSpotter Investigate), a one-stop investigative management system for tracking, reporting, and collaborating on cases, (iv) ResourceRouter™ (formerly ShotSpotter Connect), which directs the deployment of patrol and community anti-violence resources in an objective way to help maximize the impact of limited resources and improve community safety, and (v) SafePointe ™, an artificial intelligence ("AI")-based weapons detection system, that we added when we acquired SafePointe, LLC (“SafePointe”) in August 2023.
Biggest changeOur SafetySmart TM platform includes six data-driven tools consisting of: (i) our flagship product, ShotSpotter ® , our leading outdoor gunshot detection, location and alerting system trusted by 177 cities and 20 universities and corporations as of December 31, 2024, (ii) CrimeTracer™ , a leading law enforcement search engine that enables investigators to search through more than one billion criminal justice records from across jurisdictions to generate tactical leads and quickly make intelligent connections to solve cases, (iii) CaseBuilder™, a one-stop investigative management system for tracking, reporting, and collaborating on cases, (iv) ResourceRouter™, which directs the deployment of patrol and community anti-violence resources in an objective way to help maximize the impact of limited resources and improve community safety, (v) PlateRanger™ powered by Rekor ® , an advanced license plate recognition ("ALPR") and vehicle identification solution that leverages artificial intelligence ("AI") and machine learning to enhance investigative efficiency and provide real-time data sharing for law enforcement, introduced in July 2024 through a strategic partnership with Rekor Systems, Inc. and (vi) SafePointe™, an AI-based weapons detection system.
Because law enforcement agencies or government entities have limited funds, they may have to choose among resources or solutions that help them to meet their overall mission such as video management systems, and other security solutions. Accordingly, we compete not only with our customers’ internal budget decisions, but with other companies vying for these limited funds.
Because law enforcement agencies or government entities have limited funds, they may have to choose among resources or solutions that help them to meet their overall mission such as video management systems, and other security solutions. Accordingly, we compete not only with our customers’ internal budget decisions, but also with other companies vying for these limited funds.
We also offer other security solutions within our flagship product offering ShotSpotter, including ShotSpotter for Highways, ShotSpotter for Campus and ShotSpotter for Corporate, that are typically smaller-scale deployments of ShotSpotter vertically marketed to universities, corporate campuses, highways, and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents, saving critical minutes for first responders to arrive.
We also offer other security solutions within our flagship product offering ShotSpotter, including, ShotSpotter for Campus and ShotSpotter for Corporate, that are typically smaller-scale deployments of ShotSpotter vertically marketed to universities, corporate campuses and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents, saving critical minutes for first responders to arrive.
We actively foster a learning culture where employees are empowered to drive their career progression, supporting professional development and providing on-demand learning platforms. Our development programs play a critical role in engaging and retaining our 24 employees as these programs offer opportunities to continually enhance their skills for a variety of career opportunities across the Company.
We actively foster a learning culture where employees are empowered to drive their career progression, supporting professional development and providing on-demand learning platforms. Our development programs play a critical role in engaging and retaining our employees as these programs offer opportunities to continually enhance their skills for a variety of career opportunities across the Company.
Unfortunately, the options to do this in a digitized and automated way are generally lacking. We believe CaseBuilder offers the most complete investigative case management solution on the market that has been proven to be effective with one of the leading law 18 enforcement agencies in the country.
Unfortunately, the options to do this in a digitized and automated way are generally lacking. We believe CaseBuilder offers the most complete investigative case management solution on the market that has been proven to be effective with one of the leading law enforcement agencies in the country.
When gunfire is confirmed, our IRC team sends an alert directly to emergency dispatch centers and field personnel through a computer or mobile device with access to the Internet. This process typically takes less than 45 seconds from the report of the gunfire incident.
When gunfire is confirmed, our IRC 8 team sends an alert directly to emergency dispatch centers and field personnel through a computer or mobile device with access to the Internet. This process typically takes less than 45 seconds from the report of the gunfire incident.
Our sensors are designed and tested against international standards for installation in unprotected outdoor environments. Special consideration is given to minimize the sound of wind, rain and hail, which could otherwise 8 limit the range of detection and produce false results.
Our sensors are designed and tested against international standards for installation in unprotected outdoor environments. Special consideration is given to minimize the sound of wind, rain and hail, which could otherwise limit the range of detection and produce false results.
Customer Revenue Model We generate annual subscription revenues from the deployment of ShotSpotter on a per-square-mile basis. Our security solutions, ShotSpotter for Campus, ShotSpotter for Corporate and ShotSpotter for Highways are typically sold on a subscription basis, each with a customized deployment plan.
Customer Revenue Model We generate annual subscription revenues from the deployment of ShotSpotter on a per-square-mile basis. Our security solutions, ShotSpotter for Campus, and ShotSpotter for Corporate are typically sold on a subscription basis, each with a customized deployment plan.
Mobile Device Support-Apple iOS and Android-phones/tablets and watches 10 Related Applications and Services ShotSpotter Insight All historical incident data in our database can be viewed, searched, sorted, and filtered using our ShotSpotter Insight application.
Mobile Device Support-Apple iOS and Android-phones/tablets and watches 9 Related Applications and Services ShotSpotter Insight 10 All historical incident data in our database can be viewed, searched, sorted, and filtered using our ShotSpotter InSight application.
We implement our customer success initiative early in the sales process in order to ensure that we are aligned with the customer’s objectives and can positively impact their defined outcomes. We apply consultative best practices and policy development at the command staff level as well as tactical training 19 for field patrol officers.
We implement our customer success 21 initiative early in the sales process in order to ensure that we are aligned with the customer’s objectives and can positively impact their defined outcomes. We apply consultative best practices and policy development at the command staff level as well as tactical training for field patrol officers.
In addition to other gunfire detection companies, we may face competition from companies offering alternative security technologies, such as video surveillance, access control, alarm and lighting systems. The direct competitors for security solutions include the Alarm.com, Safety Dynamics Inc., V5 Systems, EAGL, Wi-fiber, AmberBox, Inc and Flock Safety.
In addition to other gunfire detection companies, we may face competition from companies offering alternative security technologies, such as video surveillance, access control, alarm and lighting systems. The direct competitors for security solutions include the Alarm.com, ZeroEyes. Safety Dynamics Inc., EAGL, Wi-fiber, AmberBox, Inc and Flock Safety.
Our total attrition rate in 2023 was less than 20%, we have not experienced work stoppages, and we believe our employee relations are good. We have been designated a Great Place to Work® Company for the last six years. Diversity, Equity and Inclusion Our vision is to advance diversity, equity and inclusion across the company.
Our total attrition rate in 2024 was less than 20%, we have not experienced work stoppages, and we believe our employee relations are good. We have been designated a Great Place to Work ® Company for the last six years. Diversity, Equity and Inclusion Our vision is to advance diversity, equity and inclusion across the company.
SoundThinking Competitors SoundThinking is unique because it provides scalable wide area gunshot detection over large and geographically diverse areas, provides immediate and precise data on gunfire, helps communities define the scope of illegal gunfire, and provides cities with detailed forensic data for investigation, prosecution and analysis.
ShotSpotter Competitors ShotSpotter is unique because it provides scalable wide area gunshot detection over large and geographically diverse areas, provides immediate and precise data on gunfire, helps communities define the scope of illegal gunfire, and provides cities with detailed forensic data for investigation, prosecution and analysis.
We believe that in areas with significant levels of gun activity, SoundThinking is uniquely positioned to assist customers in interrupting, detecting and preventing gun violence. ShotSpotter for Campus, ShotSpotter for Corporate and ShotSpotter for Highways Competitors Our security solutions operate in a highly competitive environment.
We believe that in areas with significant levels of gun activity, SoundThinking is uniquely positioned to assist customers in interrupting, detecting and preventing gun violence. ShotSpotter for Campus, ShotSpotter for Corporate Competitors 24 Our security solutions operate in a highly competitive environment.
Since our founding over 27 years ago, SoundThinking has been and continues to be a purpose-led company. We are a mission-driven organization that is focused on improving public safety outcomes.
Since our founding over 28 years ago, SoundThinking has been and continues to be a purpose-led company. We are a mission-driven organization that is focused on improving public safety outcomes.
ResourceRouter, CaseBuilder, and CrimerTracer are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city. With the acquisition of SafePointe, we generate revenues from subscriptions of our AI-based weapons detection system based on the number of entryways, or lanes being covered, a lane being the detection area between two sensors.
ResourceRouter, CaseBuilder and CrimeTracer are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city. With the acquisition 22 of SafePointe, we generate revenues from subscriptions of our AI-based weapons detection system based on the number of entryways, or lanes being covered, a lane being the detection area between two sensors.
While we are not aware of any direct competitors offering wide-area solutions comparable to SoundThinking, we believe the primary competitors in the broader gunfire detection space are V5 Systems, Safety Dynamics, Inc., Wi-Fiber, Inc., Databouy, EAGL Technology, Alarm.com and Flock Safety.
While we are not aware of any direct competitors offering wide-area solutions comparable to SoundThinking, we believe the primary competitors in the broader gunfire detection space are ZeroEyes, Safety Dynamics, Inc., Wi-Fiber, Inc., Databouy, EAGL Technology, Alarm.com and Flock Safety.
The accuracy of the coordinates derived from our proprietary software is significantly improved when, as is typically the case, more than three sensors 7 participate. We deploy our sensor arrays such that, on average, six to eight sensors participate in the detection of a gunshot.
The accuracy of the locations derived from our proprietary software is significantly improved when, as is typically the case, more than three sensors participate. We deploy our sensor arrays such that, on average, six to eight sensors participate in the detection of a gunshot.
In addition, we believe that there exists a broader market for our security solutions that include, primarily the outdoor areas of college campuses and airports outside of the United States as well as large corporate campuses, train stations and other highly-trafficked areas worldwide.
In addition, we believe that there exists a broader market for our security solutions that include, primarily the outdoor areas of college campuses outside of the United States as well as large corporate campuses and other highly-trafficked areas worldwide.
Based on data made available by the National Center for Education Statistics and the Federal Aviation Administration, we believe that the domestic market for our security solutions includes approximately 5,000 college campuses and airports. We estimate that, on average, a customer in this market could invest approximately $50,000-$75,000 per year for one of our security solutions.
Based on data made available by the National Center for Education Statistics and the Federal Aviation Administration, we believe that the domestic market for our security solutions includes thousands of college and university campuses. We estimate that, on average, a customer in this market could invest approximately $50,000-$75,000 per year for one of our security solutions.
Our board of directors endeavors to bring together diverse skills, professional experience, perspectives, age, race, ethnicity, gender, and cultural backgrounds that reflect our customer base and the citizens served by our customers, and to guide us in a way that reflects the best interests of all of our stockholders. There are currently seven members on our board of directors.
Our board of directors endeavors to bring together diverse skills, professional experience, perspectives and cultural backgrounds that reflect our customer base and the citizens served by our customers, and to guide us in a way that reflects the best interests of all of our stockholders. There are currently seven members on our board of directors.
We believe that our solutions provide additional and valuable information regarding gunshot incidents as the alerts we provide give additional insight and situational awareness, including round count, potential multiple shooters and potential use of an automatic weapon, that allow the responders to be better prepared to respond appropriately.
We believe that our solutions provide additional and valuable information regarding gunshot incidents as the alerts we provide give additional insight and situational awareness, including round count, potential multiple shooters and potential use of an automatic weapon, that allow the responders to be better prepared to respond appropriately. • Prevention and Deterrence of Gun Violence.
For example, of our ShotSpotter customers, approximately 39% have expanded their coverage areas from their original deployment areas by an average of almost eight square miles as of December 31, 2023. Our overall revenue retention rate was 107% for 2023, 124% for 2022 and was 125% for 2021. • Expand Our International Footprint.
For example, of our ShotSpotter customers, approximately 39% have expanded their coverage areas from their original deployment areas by an average of almost eight square miles as of December 31, 2024. Our overall revenue retention rate was 105% for 2024, 107% for 2023 and 124% for 2022. • Expand Our International Footprint.
With only three currently deployed ShotSpotter customers outside of the United States in South Africa, the Bahamas and Uruguay, we believe that we have a significant opportunity to expand internationally.
With only four currently deployed ShotSpotter customers outside of the United States in South Africa, the Bahamas, Brazil and Uruguay, we believe that we have a significant opportunity to expand internationally.
Item 1. B USINESS Overview We are a leading public safety technology company that combines data-driven solutions and strategic advisory services for law enforcement and civic leadership. As of December 31, 2023 we had approximately 250 customers and to date have worked with approximately 2,100 agencies to help drive more efficient, effective, and equitable public safety outcomes.
Item 1. B USINESS Overview We are a leading public safety technology company that combines data-driven solutions and strategic advisory services for law enforcement, security teams and civic leadership. As of December 31, 2024 we had approximately 328 customers and to date have worked with approximately 2,100 agencies to help drive more efficient, effective, and equitable public safety outcomes.
Our public safety solution provides cities with the ability to react quickly to gun violence, thus providing the ability to improve their responses and residents’ perception 12 of their responses. This provides our customers with the opportunity to foster improved community relations and collaboration with their residents. • Improved Police Officer Safety .
Our public safety solution provides cities with the ability to react quickly to gun violence, thus providing 13 the ability to improve their responses and residents’ perception of their responses. This provides our customers with the opportunity to foster improved community relations and collaboration with their residents.
We estimate the market for our solution consists of over nearly 3,000 local, state and federal agencies in the United States and potentially thousands internationally. We expect that, on average, United States customers could invest approximately $100,000 per year for our CaseBuilder solution and international customers could invest approximately $500,000 per year.
We estimate the market for our solution consists of over nearly 3,000 local, state and federal agencies in the United States and potentially thousands internationally. We expect that, on average, United States customers could invest approximately $100,000 per year for our CaseBuilder solution and some customers could invest over $1 million per year.
SoundThinking, the SoundThinking logo, ShotSpotter TM , ShotSpotter for Campus TM , ShotSpotter for Corporate TM , ShotSpotter for Highways, ResourceRouter ®, CaseBuilder TM , CrimeTracer TM , SafePointe, SoundThinking Labs and other trade names, trademarks or service marks of SoundThinking appearing in this Annual Report on Form 10-K are the property of SoundThinking, Inc.
SoundThinking, the SoundThinking logo, ShotSpotter TM , ShotSpotter for Campus TM , ShotSpotter for Corporate TM , ResourceRouter ® , CaseBuilder TM , CrimeTracer TM , PlateRanger™ powered by Rekor ® , SafePointe TM , SoundThinking Labs and other trade names, trademarks or service marks of SoundThinking appearing in this Annual Report on Form 10-K are the property of SoundThinking, Inc.
Coverage areas under contract included 170 cities and 19 universities and corporations across the United States, South Africa, Uruguay and the Bahamas, including some of the largest cities in the United States. Most of our revenue is attributable to customers based in the United States.
Coverage areas under contract included 177 cities and 20 universities and corporations across the United States, South Africa, Uruguay, Brazil and the Bahamas, including some of the largest cities in the United States. Most of our revenue is attributable to customers based in the United States.
Competition The markets for public safety and security solutions are highly fragmented and evolving. Whether installed in local communities, on critical infrastructure or on a campus, for a gunfire and weapons detection system to be effective, the protection zone must be comprehensive. We believe our gunshot detection solutions represent the most effective public safety and security solutions on the market.
Whether installed in local communities, on critical infrastructure or on a campus, for a gunfire and weapons detection system to be effective, the protection zone must be comprehensive. We believe our gunshot detection solutions represent the most effective public safety and security solutions on the market.
For the year ended December 31, 2023, our two largest customers, the City of New York and the City of Chicago accounted for 25% and 9% of our revenues, respectively. For the year ended December 31, 2022, our two largest customers, the City of New York and the City of Chicago accounted for 30% and 10% of our revenues, respectively.
For the year ended December 31, 2024, our two largest customers, the City of New York and the City of Chicago, accounted for 23% and 10% of our revenues, respectively. For the year ended December 31, 2023, our two largest customers, the City of New York and the City of Chicago accounted for 25% and 9% of our revenues, respectively.
We are continually investing in our global workforce to further drive diversity and inclusion, provide fair and competitive pay and benefits to support our employees’ well-being, and to foster the growth and development of all employees. As of December 31, 2023, we employed 312 people, all of whom were based in the United States.
We are continually investing in our global workforce to further drive diversity and inclusion, provide fair and competitive pay and benefits to support our employees’ well-being, and to foster the growth and development of all employees. As of December 31, 2024, we employed 316 people, all but one of whom were full-time and based in the United States.
As of December 31, 2023, women represented 40% of our employees, and underrepresented minorities, defined as those who identify as Black/African American, Hispanic/Latinx, Native American, Pacific Islander and/or two or more races, represented 51% of our employees.
As of December 31, 2024, women represented 39% of our employees, and underrepresented minorities, defined as those who identify as Black/African American, Hispanic/Latinx, Native American, Pacific Islander and/or two or more races, represented 56% of our employees.
As of December 31, 2023, 50% of our board members were women and 50% of our board members were from underrepresented communities. Compensation, Benefits and Well-being We strive to offer fair, competitive compensation and benefits that support our employees’ overall well-being.
As of December 31, 2024, 43% of our board members were women and 57% of our board members were from underrepresented communities. Compensation, Benefits and Well-being 26 We strive to offer fair, competitive compensation and benefits that support our employees’ overall well-being.
We offer our solutions on a software-as-a-service subscription model to our customers. Our current approach is to leverage trusted relationships with current customers to drive initial adoption and increase revenue and lifetime value per customer. • Maintain Passionate Focus on Customer Success.
Our 2024 strategic partnership with Rekor brings ALPR to our product line. We offer our solutions on a software-as-a-service subscription model to our customers. Our current approach is to leverage trusted relationships with current customers to drive initial adoption and increase revenue and lifetime value per customer. • Maintain Passionate Focus on Customer Success.
Coverage areas under contract for ShotSpotter included over 170 cities and coverage areas under contract for ShotSpotter for Campus and ShotSpotter for Corporate included 19 campuses/sites across the United States, South Africa, Uruguay and the Bahamas, including some of the largest cities in the United States. As of December 31, 2023, we had 158 SafePointe lanes under contract.
Coverage areas under contract for ShotSpotter included over 177 cities and coverage areas under contract for ShotSpotter for Campus and ShotSpotter for Corporate included 20 campuses/sites across the United States, South Africa, Uruguay, Brazil and the Bahamas, including some of the largest cities in the United States. As of December 31, 2024, we had 277 SafePointe lanes under contract.
As of December 31, 2023, we had ShotSpotter, ShotSpotter for Campus, and ShotSpotter for Corporate coverage areas under contract for over 1,160 square miles, of which over 1,120 square miles had gone live.
As of December 31, 2024, we had ShotSpotter, ShotSpotter for Campus, and ShotSpotter for Corporate coverage areas under contract for over 1,076 square miles, of which over 1,074 square miles had gone live.
We also license software from third parties for integration into our offerings, including open source software and other software available on commercially reasonable terms. 23 Human Capital Our values encourage us to be genuine, innovative, engaged and exceptional.
The issued patents expire on various dates from 2025 to 2034. We also license software from third parties for integration into our offerings, including open source software and other software available on commercially reasonable terms. Human Capital Our values encourage us to be genuine, innovative, engaged and exceptional.
As of December 31, 2023, we had ShotSpotter, ShotSpotter for Campus, ShotSpotter for Corporate and 20 ShotSpotter for Highways coverage areas under contract of over 1,160 square miles in the aggregate, of which 1,120 miles have gone live.
As of December 31, 2024, we had ShotSpotter, ShotSpotter for Campus and ShotSpotter for Corporate coverage areas under contract of over 1,076 square miles in the aggregate, of which 1,074 miles have gone live.
We believe there is an opportunity to bring a complete digital case management solution to the market to help improve clearance rates of all crime types and accelerate solvability under the SoundThinking brand and sell to both our installed base and new potential customers, such as prisons. 15 CaseBuilder provides a complete case management solution for detectives and supervisors in local, state and federal law enforcement agencies.
We believe there is an opportunity to bring a complete digital case management solution to the market to help improve clearance rates of all crime types and accelerate solvability under the SoundThinking brand and sell to both our installed base and new potential customers, such as prisons.
The study concluded: • In Minneapolis, each additional gun homicide in a given year was statistically correlated with 80 fewer jobs. • In Oakland, every additional gun homicide in a given year was statistically associated with five fewer job opportunities in contracting businesses in the next year. • In Washington, D.C., every additional gun homicide in a given year was statistically associated with two fewer retail and service establishments the next year. 4 In addition, several studies have suggested that property values are inversely correlated with violent crime.
The study concluded: • In Minneapolis, each additional gun homicide in a given year was statistically correlated with 80 fewer jobs. 4 • In Oakland, every additional gun homicide in a given year was statistically associated with five fewer job opportunities in contracting businesses in the next year. • In Washington, D.C., every additional gun homicide in a given year was statistically associated with two fewer retail and service establishments the next year.
The reviewed alert is then pushed to the customer through the cloud-based software in a variety of delivery options; email, text, mobile app, or browser notification. 17 Our Markets We believe there is significant demand for advanced gunfire detection and location notification solutions that accurately and quickly report instances of gunfire, based on three primary use cases: • Law enforcement — for domestic and international law enforcement serving communities plagued by persistent, localized gun violence, in order to identify, locate and deter gun violence; and • Security — for security personnel (which may include law enforcement personnel) serving universities, corporate campuses, key infrastructure, transportation centers and other areas in which authorities desire to prepare for and mitigate risks related to an active-shooter event, and desire to provide a zone of detection coverage surrounding the respective campus or secured area. • Corporate/Other — for security personnel (which may include law enforcement personnel) serving large enterprise businesses, hospitals, casinos, hotels, and other areas in which authorities desire to know if and when weapons are being brought onto their property.
These solutions that accurately and quickly report instances of gunfire are based on three primary use cases: • Law enforcement — for domestic and international law enforcement serving communities plagued by persistent and localized gun violence, in order to identify, locate and deter gun violence; and • Security — for security personnel (which may include law enforcement personnel) serving universities, corporate campuses, key infrastructure, transportation centers and other areas in which authorities desire to prepare 19 for and mitigate risks related to an active-shooter event, and desire to provide a zone of detection coverage surrounding the respective campus or secured area. • Corporate/Other — for security personnel (which may include law enforcement personnel) serving large enterprise businesses, hospitals, casinos, hotels, and other areas in which authorities desire to know if and when weapons are being brought onto their property.
It enables police to have all case-related data in one place in a digital and structured format so that it is quickly searchable and able to be used to drive analysis and reporting.
CaseBuilder addresses the challenges investigators and supervisors face in conducting and documenting investigations. It enables police to have all case-related data in one place in a digital and structured format so that it is quickly searchable and able to be used to drive analysis and reporting.
Innovations have made their way back into our commercial business such as the development of a solar-powered sensor from the Kruger deployment; that technology is similar to those now being used for our freeway deployment.
We have been able to collect revenues from philanthropic entities to cover direct and indirect costs. Innovations have made their way back into our commercial business such as the development of a solar-powered sensor from the Kruger deployment; that technology is similar to those now being used for our freeway deployment.
During the COVID-19 pandemic, IRC personnel performed their job function from our IRC facilities and/or remote locations. Gunshot Detection Alerts Our alerts are delivered in the following forms: Real-Time Alerts Our IRC sends real-time notifications of outdoor gunfire incidents to the ShotSpotter application, which is specifically designed for emergency communications centers, dispatch centers, and other public safety answering points.
Gunshot Detection Alerts Our alerts are delivered in the following forms: Real-Time Alerts Our IRC sends real-time notifications of outdoor gunfire incidents to the ShotSpotter application, which is specifically designed for emergency communications centers, dispatch centers, and other public safety answering points.
We have also developed ShotSpotter for Corporate (formerly ShotSpotter SiteSecure) for customers such as corporations trying to safeguard their employees, customers, brand and profits, and ShotSpotter for Highways for public agencies focused on protecting citizens on highways. As of December 31, 2023, we had 19 ShotSpotter for Campus and ShotSpotter for Corporate customers under contract.
We have also developed ShotSpotter for Corporate (formerly ShotSpotter SiteSecure) for customers such as corporations trying to safeguard their employees, customers, brand and profits. As of December 31, 2024, we had 20 ShotSpotter for Campus and ShotSpotter for Corporate customers under contract.
We believe SafePointe is uniquely positioned in the AI-powered weapons detection space due to its robust and regularly enhanced sensor platform, as well as the cost/benefit ratio we provide to our customers by deploying un-manned lanes and leveraging the ARC, which provides synergies with ShotSpotter’s IRC.
We believe SafePointe is uniquely positioned in the AI-powered weapons detection space due to its robust and regularly enhanced sensor platform, as well as the cost/benefit ratio we provide to our customers by deploying un-manned lanes and leveraging the Alert Review Center ("ARC"), which provides synergies with ShotSpotter’s IRC. 25 Intellectual Property Our future success and competitive position depend in part on our ability to protect our intellectual property and proprietary technologies.
Our Vision We see a world where data is converted into actionable intelligence thereby enabling police departments to implement modern 21st century policing practices. These practices can help police be more efficient directing law enforcement interventions toward the few that commit crimes and more effective in building community trust and engagement while co-producing public safety outcomes.
Our Vision We see a world where data are converted into actionable intelligence thereby enabling law enforcement and security departments to implement modern 21st century public safety practices. These practices can help police and security personnel be more efficient in directing interventions toward the relative few that commit crimes and present security threats.
This mandate must be met while facing municipal budget pressures and community activist calls to defund the police while violent crime is on a measurable uptick and case closure rates are at all-time lows. There are three distinct problems associated with the public safety gap, which are discussed below. The Violent Crime Problem The majority of urban gunfire goes unreported.
This mandate must be met while facing municipal budget pressures, evolving public safety policies, and calls for police reform, all while violent crime remains a critical concern and case closure rates struggle to improve. There are three distinct problems associated with the public safety gap, which are discussed below. The Violent Crime Problem The majority of urban gunfire goes unreported.
A comprehensive audit trail of all changes to the incident is maintained that includes the time the alert was received and acknowledged by the dispatcher.
A comprehensive audit trail of all changes to the incident is maintained that includes the time the alert was received and acknowledged by the dispatcher. These data may be used to measure key performance indicators by dispatch personnel.
CrimeTracer Competitors CrimeTracer has a few direct competitors and also competes with a few alternative approaches to develop investigative leads. Direct competitors include Lexis Nexis Accurint Virtual Crime Center, Peregrine, and Finder Software Solutions.
We believe none of our security solutions competitors is able to offer the comprehensive outdoor coverage we offer. CrimeTracer Competitors CrimeTracer has a few direct competitors and also competes with a few alternative approaches to develop investigative leads. Direct competitors include Lexis Nexis Accurint Virtual Crime Center, Peregrine, ForceMetrics and Finder Software Solutions.
This application allows field personnel to directly receive alerts of outdoor gunshots and related critical information. The alert includes a unique identification number (ShotSpotter ID number), a precise time and date of the gunfire (trigger time), nearest street address to the location of the gunfire, number of shots and police district and beat identification.
The alert includes a unique identification number (ShotSpotter ID number), a precise time and date of the gunfire (trigger time), nearest street address to the location of the gunfire, number of shots and police district and beat identification.
Human response time to unfolding violence often delays calls for several minutes in circumstances where response time can be critical. By contrast, our solutions typically alert emergency dispatch centers and field personnel within 45 seconds of the report of the gunfire incident and provide an exact location, enabling them to respond faster and to a specific location.
By contrast, our solutions typically alert emergency dispatch centers and field personnel within 45 seconds of the report of the gunfire incident and provide an exact location, enabling them to respond faster and to a specific location.
It has been used by the New York Police Department for years at scale by thousands of officers as an on-premise solution. The solution provides: • Complete Digital Case Management. CaseBuilder addresses the challenges investigators and supervisors face in conducting and documenting investigations.
CaseBuilder provides a complete case management solution for detectives and supervisors in local, state and federal law enforcement agencies. It has been used by the New York Police Department for years at scale by thousands of officers as an on-premises solution. The solution provides: • Complete Digital Case Management.
In August 2023, we acquired SafePointe, LLC ("SafePointe") and added their AI-based weapons detection system to our SafetySmart platform. 5 6 ShotSpotter ShotSpotter (formerly ShotSpotter Respond), our acoustic gunshot detection technology serves cities and municipalities seeking to identify, locate and deter persistent, localized gun violence by incorporating a real-time gunshot detection system into their policing systems.
Law Enforcement Services Platform 5 Security Market Services Platform ShotSpotter ShotSpotter, our acoustic gunshot detection technology serves cities and municipalities seeking to identify, locate and deter persistent, localized gun violence by incorporating a real-time gunshot detection system into their policing 6 systems.
Intelligent and Ruggedized Sensors Our rugged gunshot detection sensor is an intelligent, internet-enabled device that is specially built to ignore ambient noise and respond to impulsive sounds, accurately time-stamping their arrival times.
The time from a report of an outdoor trigger-pull to a notification being sent to our customers is typically 45 seconds or less. 7 Intelligent and Ruggedized Sensors Our rugged gunshot detection sensor is an intelligent, internet-enabled device that is specially built to ignore ambient noise and respond to impulsive sounds, accurately time-stamping their arrival times.
SafePointe Competitors SafePointe has a few direct competitors and also competes with a few alternative approaches to weapons detection. Direct competitors include Evolv Technology, Xtract One Technologies, and CEIA USA. Competitors with alternate approaches include ZeroEyes and Omnilert.
Direct competitors include Evolv Technology, Xtract One Technologies, and CEIA USA. Competitors with alternate approaches include ZeroEyes and Omnilert.
Detailed Forensic Reports and Certified Expert Witness Services As part of our solution, we offer Detailed Forensic Reports (“DFRs”). These provide investigators and attorneys with comprehensive, court-admissible analysis of a shooting incident, including the gunfire audio. We also offer expert witness testimony to introduce the forensic analysis of the DFRs at trial and to provide technical expertise regarding our technology.
We continue to evaluate new technologies that may integrate with our solutions to generate additional value for our customers. Detailed Forensic Reports and Certified Expert Witness Services As part of our solution, we offer Detailed Forensic Reports (“DFRs”). These provide investigators and attorneys with comprehensive, court-admissible analysis of a shooting incident, including the gunfire audio.
These data may be used to measure key performance indicators by dispatch personnel. 9 ShotSpotter Application We offer a robust ShotSpotter application for use by patrol officers and security personnel that is available on iPhone or Android mobile devices and computers installed in patrol vehicles and dispatch centers.
ShotSpotter Application We offer a robust ShotSpotter application for use by patrol officers and security personnel that is available on iPhone or Android mobile devices and computers installed in patrol vehicles and dispatch centers. This application allows field personnel to directly receive alerts of outdoor gunshots and related critical information.
For the year ended December 31, 2021, our two largest customers, the City of New York and the City of Chicago accounted for 28% and 14% of our revenues, respectively. Delivery of CaseBuilder in the City of New York will add additional professional services requirements and revenue.
For the year ended December 31, 2022, our two largest customers, the City of New York and the City of Chicago, accounted for 30% and 10% of our revenues, respectively. Delivery of CaseBuilder in the City of New York has added additional professional services requirements and revenue. Go-To-Market We sell our solutions through our direct sales teams.
ShotSpotter is used by local police departments and a version of ShotSpotter, branded as ShotSpotter for Highways, ShotSpotter for Campus and ShotSpotter for Corporate, are used by security personnel in the protection of critical assets such as colleges, universities, commercial campuses and highways.
ShotSpotter is used by local police departments and a version of ShotSpotter, branded as ShotSpotter for Campus and ShotSpotter for Corporate, are used by security personnel in the protection of critical assets such as colleges, universities and commercial campuses. Our gunshot detection solutions consist of highly-specialized, cloud-based software integrated with proprietary, internet-enabled sensors designed to detect outdoor gunfire.
Our sales team identifies communities with the opportunity to benefit from our solutions, communicates with key stakeholders, navigates the challenges associated with our customers’ complex funding and procurement cycles, and establishes a foundation for a successful customer relationship. In addition, our sales team works with customers to identify and procure funds from alternate sources, including state and federal government grants.
Our sales teams focus on both new customer acquisition, customer renewal, add-on sales, and coverage expansion. Our sales team identifies communities with the opportunity to benefit from our solutions, communicates with key stakeholders, navigates the challenges associated with our customers’ complex funding and procurement cycles, and establishes a foundation for a successful customer relationship.
We continue to expand the breadth and depth of our content library that is on display primarily in the Resource Center and Results page of our website and make the information easier to find and share for prospective customers and influencers. 21 Research and Development We focus our research and development efforts on enhancing our advanced signal processing and classification algorithms, updating our sensor hardware technology, reducing manufacturing costs, developing mobile, web and desktop applications, evolving our cloud-deployed back-end infrastructure and integration with “smart cities” initiatives.
Research and Development 23 We focus our research and development efforts on enhancing our advanced signal processing and classification algorithms, updating our sensor hardware technology, reducing manufacturing costs, developing mobile, web and desktop applications, evolving our cloud-deployed back-end infrastructure and integration with “smart cities” initiatives.
Outside of the United States, we estimate that the market for ShotSpotter includes approximately 200 cities in Central America, the Caribbean, South America and southern Africa that have at least 500,000 residents. We estimate that a customer in this market could invest an average of approximately $1.0 million per year for our public safety solution.
Investments by customers in this market for our security solutions continue to be evaluated but could be similar to those made by our city customers. Outside of the United States, we estimate that the market for ShotSpotter includes approximately 200 cities in Central America, the Caribbean, South America and southern Africa that have at least 500,000 residents.
We also believe that knowledge of the existence of our solutions may have a deterrent effect on localized gun violence.
We believe increasing the speed and accuracy of law enforcement responses to gunfire can act as a long-term deterrent that can decrease the overall prevalence of gunfire. We also believe that knowledge of the existence of our solutions may have a deterrent effect on localized gun violence.
As of December 31, 2023, we had 34 issued patents, 27 in the United States, two in Brazil, and one each in Israel, Mexico, the United Kingdom, France and Germany. The issued patents expire on various dates from 2024 to 2034.
To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws, and contractual protections in the United States and other jurisdictions. As of December 31, 2024, we had 34 issued patents, 28 in the United States, two in Brazil, and one each in Israel, Mexico, the United Kingdom, France and Germany.
Our acquisition of SafePointe has allowed us to expand our TAM into the estimated $20 billion weapons detection market. Furthermore, this acquisition broadens our customer base into healthcare, casinos/hospitality, and enterprise level corporations. SoundThinking Labs SoundThinking Labs houses our advanced technology efforts to adapt and extend our commercial technology to address significant wildlife and environmental issues.
Our acquisition of SafePointe has allowed us to expand our TAM into the estimated $20 billion weapons detection market. Furthermore, this acquisition broadens our customer base into healthcare, casinos/hospitality, and enterprise level corporations. Additionally, our partnership with Rekor to offer the PlateRanger product has led to an additional TAM expansion of $3.2 billion into the ALPR market.
Alerts are delivered using push notifications to our mobile, desktop or browser applications and through email or SMS text messages. The time from a report of an outdoor trigger-pull to a notification being sent to our customers is typically 45 seconds or less.
Alerts are delivered using push notifications to our mobile, desktop or browser applications and through email or SMS text messages.
ResourceRouter crime forecasting uses machine learning and has led to additional investment in data science resources. As of December 31, 2023, we had 53 employees in our research and development organization. In addition, we engage in research and development activities with manufacturing partners and outsource certain activities to engineering firms to further supplement our internal team.
As of December 31, 2024, we had 64 employees in our research and development organization. In addition, we engage in research and development activities with manufacturing partners and outsource certain activities to engineering firms to further supplement our internal team. Competition The markets for public safety and security solutions are highly fragmented and evolving.
Our current focus is on combating rhino poaching in Kruger National Park, South Africa and blast fishing that threatens coral reefs and food security in Southeast Asia. We have been able to collect revenues from philanthropic entities to cover direct and indirect costs.
SoundThinking Labs SoundThinking Labs houses our advanced technology efforts to adapt and extend our commercial technology to address significant wildlife and environmental issues. Our current focus is on combating rhino poaching in Kruger National Park, South Africa and blast fishing that threatens coral reefs and food security in Southeast Asia.
We also plan to leverage our large and growing installed base of customers with high net promoter attributes that consider SoundThinking a trusted partner, to grow adoption of our newer products ResourceRouter, CaseBuilder, and CrimeTracer not only within the installed base, but outside of it. Key elements of our strategy include: • Accelerate Our Acquisition of Public Safety Customers.
We plan to leverage our large and growing installed base of customers with high net promoter attributes that consider SoundThinking a trusted partner. Key elements of our strategy include: 20 • Entry Into Large and Fast-Growing Advanced License Plate Recognition (ALPR) Market.
Our forensic employees have testified in over 300 cases throughout the United States. Our forensic analyses have survived dozens of challenges in numerous states, under both the Frye and Daubert standards of admissibility. The following is an example of a DFR. 11 Detailed Forensic Report: ShotSpotter Results and Benefits • Expedited Response to Gunfire.
We also offer expert witness testimony to introduce the forensic analysis of the DFRs at trial and to provide technical expertise regarding our technology. Our forensic employees have testified in over 300 cases throughout the United States. Our forensic analyses have survived dozens of challenges in numerous states, under both the Frye and Daubert standards of admissibility.
In 2023, we issued over 328,000 gunshot alerts to our customers. In areas where gun violence is persistent, we believe most gunshots are not otherwise reported. Even when calls are made, many callers are unable to provide a location of the gunshot or other relevant details.
The following is an example of a DFR. Detailed Forensic Report: 11 ShotSpotter Results and Benefits 12 • Expedited Response to Gunfire. In 2024, we issued over 328,000 gunshot alerts to our customers. In areas where gun violence is persistent, we believe most gunshots are not otherwise reported.
We believe none of our security solutions competitors is able to offer the comprehensive outdoor coverage we offer. 22 ResourceRouter Competitors ResourceRouter operates in an emerging market with little direct competition since the 2023 exit of the market leader, Geolitica. We acquired the primary technology and intellectual property of Geolitica in 2023.
ResourceRouter Competitors ResourceRouter operates in an emerging market with little direct competition since the 2023 exit of the market leader, Geolitica. We acquired the primary technology and intellectual property of Geolitica in 2023. However, competitors may include computer-aided dispatch providers and other third-party solutions providers, such as CentralSquare Technologies, Mark 43, Genetec, Inc., and Motorola Solutions, Inc.
However, competitors may include computer-aided dispatch providers and other third-party solutions providers, such as CentralSquare Technologies, Mark 43, Genetec, Inc., and Motorola Solutions, Inc. In addition, we may face competition from companies offering alternative solutions as well as solutions developed internally by our customers.
In addition, we may face competition from companies offering alternative solutions as well as solutions developed internally by our customers. PlateRanger Competitors PlateRanger is in an active growing market with multiple offerings. Primary direct competitors include Flock ALPR, Motorola with multiple branded offerings and Genetec.
ResourceRouter helps address this new reality by helping agencies make their largest cost center – patrol – more efficient and effective in reducing crime and better engaging with the community. ResourceRouter automates the planning of directed patrols for all serious crime data across an entire jurisdiction on a daily basis.
How CaseBuilder works 15 ResourceRouter Law enforcement agencies today are tasked with an impossible feat: maintain an efficient, data-driven police force in the face of staffing shortages, data silos and outdated manual report processes. ResourceRouter helps address this new reality by helping agencies make their largest cost center–patrol–more efficient and effective in reducing crime and better engaging with the community.
ResourceRouter uses AI-driven analysis to direct officers to patrol a location within their beat that is likely to have the highest risk for crime during their shift. A timer guides officers to patrol this area for a short period of time, often 15 minutes, to create a deterrent effect that can last for hours.
A timer guides officers to patrol this area for a short period of time, often 15 minutes, to create a deterrent effect that can last for hours. This proactive strategy is a community-focused, long-term approach that deters major crime before it happens. Leveraging their data, agencies can allocate resources efficiently while working within the community to reduce crime.
CrimeTracer provides law enforcement with the abilities to: • Search through structured and unstructured data to obtain immediate tactical leads. • Access law enforcement data records from a centralized, user-friendly interface. • Leverage advanced link analysis to quickly detect relationships between people, places and events. • Link leads to reports, suspects and other entities. • Identify crime trends to make operational and resource decisions.
CrimeTracer CrimeTracer is the #1 law enforcement search engine that enables investigators to search through more than 1.3 billion structured and unstructured data across jurisdictions to obtain immediate tactical leads, leverage advanced link analysis to make intelligent connections, link NIBIN leads to reports, suspects and other entities, and more. CrimeTracer provides law enforcement with the following capabilities: • Advanced Search.
ShotSpotter Potentially Helps Save Lives The below graphic demonstrates positive impact results observed at a few of our customers. 1 Albuquerque PD statistics 2022 2 Oakland PD Statistics 2020 3 Winston Salem, NC, Public Safety News Conference, October 12, 2022 4 Detroit PD statistics 2022 ResourceRouter (formerly ShotSpotter Connect) Law enforcement agencies are increasingly facing challenges in maintaining a functional level of staffing due to early retirements and a more limited ability to recruit new officers.
The ability to respond more quickly increases the chances of apprehending the shooter and assisting victims of violence, in addition to aiding in evidence collection. • ShotSpotter Potentially Helps Save Lives The below graphic demonstrates positive impact results observed at a few of our customers. 1 - Oakland PD statistics 2023 2 - Albuquerque PD statistics 2022 3 - Las Vegas PD statistics 2023 4 - Baltimore PD statistics 2024 • Improved Police Officer Safety .
We believe the SoundThinking SafetySmart platform can be a valuable set of tools in implementing 21st century policing practices. Our precision policing solutions included our flagship product ShotSpotter, CrimeTracer, CaseBuilder and ResourceRouter.
These practices in turn help build community trust and engagement while co-producing positive public safety outcomes. We believe the SafetySmart platform can be a valuable set of technological solutions for implementing 21st century public safety practices.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operations involve the collection, receipt, storage, storage processing, generation, use, transfer, disclosure, protection, disposal of, transmission, and sharing (collectively, “processing”) of proprietary, confidential, and sensitive data, including personal information, intellectual property, trade secrets and other sensitive information such as gunfire incident data, including date, time, address and GPS coordinates, occurring in our customer’s coverage area (collectively, “sensitive information”).
Biggest changeIf our information technology systems or data, or those of third parties with whom we work, are or were compromised, our customers may be harmed and we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions; litigation or mass arbitration demands; fines and penalties; disruptions of our business operations; reputation harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. 41 Our operations and those of the third parties with whom we work, involve the processing, collection, receipt, storage, storage processing, generation, use, transfer, disclosure, protection, disposal of, transmission, and sharing (collectively, “processing”) of proprietary, confidential and sensitive data, including personal information, intellectual property, trade secrets and other sensitive information such as gunfire incident data, including date, time, address and GPS coordinates, occurring in our customer’s coverage area (collectively, “sensitive information”).
For example, under the EU GDPR and UK GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal information brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal information brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. For example, certain data privacy and security laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. For example, certain privacy laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.
In particular, plaintiffs have become increasingly more active in bringing data privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
In addition, we face and will continue to face risks in doing business internationally that could adversely affect our business, including: • the potential impact of currency exchange fluctuations; • the need to comply with local data residency requirements; • the availability and reliability of local data centers and internet bandwidth providers; • the difficulty of staffing and managing international operations and the increased operations, travel, shipping and compliance costs associated with having customers in numerous international locations; • potentially greater difficulty collecting accounts receivable and longer payment cycles; • the availability and cost of coverage by wireless carriers in international markets; • higher or more variable costs associated with wireless carriers and other service providers; • the need to offer customer support in various languages; • challenges in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including laws regarding privacy and government surveillance; • export controls and economic sanctions administered by the Department of Commerce Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control; 44 • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and United Kingdom Bribery Act of 2010; • tariffs and other non-tariff barriers, such as quotas and local content rules; • more limited protection for our intellectual property in some countries; • adverse or uncertain tax consequences as a result of international operations; • currency control regulations, which might restrict or prohibit our conversion of other currencies into U.S. dollars; • restrictions on the transfer of funds; • deterioration of political relations between the United States and other countries; and • political or social unrest, global pandemics, or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
In addition, we face and will continue to face risks in doing business internationally that could adversely affect our business, including: • the potential impact of currency exchange fluctuations; • the need to comply with local data residency requirements; • the availability and reliability of local data centers and internet bandwidth providers; • the difficulty of staffing and managing international operations and the increased operations, travel, shipping and compliance costs associated with having customers in numerous international locations; • potentially greater difficulty collecting accounts receivable and longer payment cycles; • the availability and cost of coverage by wireless carriers in international markets; • higher or more variable costs associated with wireless carriers and other service providers; • the need to offer customer support in various languages; • challenges in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including laws regarding privacy and government surveillance; • export controls and economic sanctions administered by the Department of Commerce Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control; • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and United Kingdom Bribery Act of 2010; • tariffs and other non-tariff barriers, such as quotas and local content rules; • more limited protection for our intellectual property in some countries; • adverse or uncertain tax consequences as a result of international operations; • currency control regulations, which might restrict or prohibit our conversion of other currencies into U.S. dollars; • restrictions on the transfer of funds; • deterioration of political relations between the United States and other countries; and • political or social unrest, global pandemics, or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
Acquisitions in the future that we complete will give rise to risks, including: • incurring higher than anticipated capital expenditures and operating expenses; • failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business; • failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies, into our platform and applications; • disrupting our ongoing business; • diverting our management’s attention and other company resources; • failing to maintain uniform standards, controls and policies; • incurring significant accounting charges; • impairing relationships with our customers and employees; 37 • finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely; • failing to realize the expected synergies of the transaction; • being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and • being unable to generate sufficient revenues and profits from acquisitions to offset the associated acquisition costs.
Acquisitions in the future that we complete will give rise to risks, including: • incurring higher than anticipated capital expenditures and operating expenses; • failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business; • failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies, into our platform and applications; • disrupting our ongoing business; • diverting our management’s attention and other company resources; • failing to maintain uniform standards, controls and policies; • incurring significant accounting charges; • impairing relationships with our customers and employees; • finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely; • failing to realize the expected synergies of the transaction; • being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and • being unable to generate sufficient revenues and profits from acquisitions to offset the associated acquisition costs.
While the Delaware courts have determined that such choice of forum 54 provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
However, perceived privacy concerns may result in negative media coverage and efforts by private citizens to persuade municipalities, educational institutions or other potential customers not to purchase our precision policing solutions for their communities, campuses or facilities. In addition, laws may exist or be enacted to address such concerns that could impact our ability to deploy our solutions.
However, perceived privacy concerns may result in negative media coverage and efforts by private citizens to persuade municipalities, educational institutions or other potential customers not to purchase our precision policing solutions for their communities, campuses or facilities. In addition, 35 laws may exist or be enacted to address such concerns that could impact our ability to deploy our solutions.
We have in the past experienced, and may in the future experience, performance issues due to a variety of factors, including infrastructure changes, human or software errors, intentional or accidental damage to our technology (including sensors), website or third-party hosting disruptions or capacity constraints due to a number of potential causes including technical failures, natural disasters or security attacks.
We have in the past experienced, and may in the future experience, performance issues due to a variety of factors, including infrastructure changes, human or software errors, intentional or accidental damage to our technology (including sensors and cameras), website or third-party hosting disruptions or capacity constraints due to a number of potential causes including technical failures, natural disasters or security attacks.
If we are unable to attract, integrate and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, our business will be adversely affected. 45 Volatility or lack of positive performance in our stock price may also affect our ability to attract and retain our key employees.
If we are unable to attract, integrate and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, our business will be adversely affected. Volatility or lack of positive performance in our stock price may also affect our ability to attract and retain our key employees.
Our ability to meet customer expectations will depend on a wide range of factors, including: • our ability to continue to offer high-quality, innovative and accurate precision policing solutions; • our ability to maintain continuous gunshot detection monitoring during high outdoor-noise activity periods such as New Year’s Day, the Fourth of July and Cinco de Mayo, and Carnival for international deployments; • our ability to maintain high customer satisfaction, including meeting our service level agreements standards; • the perceived value and quality of our solutions; • differences in opinion regarding the metrics that measure the success of our solutions; • our ability to successfully communicate the unique value proposition of our solutions; • our ability to provide high-quality customer support; • any misuse or perceived misuse of our solutions; • interruptions, delays or attacks on our platform; • litigation- or regulation-related developments; and • damage to or degradation of our sensors or sensor network by third parties.
Our ability to meet customer expectations will depend on a wide range of factors, including: • our ability to continue to offer high-quality, innovative and accurate precision policing solutions; 36 • our ability to maintain continuous gunshot detection monitoring during high outdoor-noise activity periods such as New Year’s Day, the Fourth of July and Cinco de Mayo, and Carnival for international deployments; • our ability to maintain high customer satisfaction, including meeting our service level agreements standards; • the perceived value and quality of our solutions; • differences in opinion regarding the metrics that measure the success of our solutions; • our ability to successfully communicate the unique value proposition of our solutions; • our ability to provide high-quality customer support; • any misuse or perceived misuse of our solutions; • interruptions, delays or attacks on our platform; • litigation- or regulation-related developments; and • damage to or degradation of our sensors or sensor network and cameras by third parties.
In addition, difficulties in transitioning from an existing supplier to a new supplier could create delays in component availability that would have a significant impact on our ability to fulfill orders for our products. 42 Many of the key components used to manufacture our proprietary ShotSpotter sensors also come from limited or sole sources of supply.
In addition, difficulties in transitioning from an existing supplier to a new supplier could create delays in component availability that would have a significant impact on our ability to fulfill orders for our products. Many of the key components used to manufacture our proprietary ShotSpotter sensors also come from limited or sole sources of supply.
This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new customers generally are recognized over the applicable agreement term. Our subscription-based approach may result in uneven recognition of revenues. We recognize subscription revenues over the term of a subscription agreement.
This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales 29 in any period, as revenues from new customers generally are recognized over the applicable agreement term. Our subscription-based approach may result in uneven recognition of revenues. We recognize subscription revenues over the term of a subscription agreement.
Government entities often impose compliance requirements that are complicated, require preferential pricing or “most favored nation” terms and conditions, or are otherwise 29 time-consuming and expensive to satisfy. Compliance with these special standards or satisfaction of such requirements could complicate our efforts to obtain business or increase the cost of doing so.
Government entities often impose compliance requirements that are complicated, require preferential pricing or “most favored nation” terms and conditions, or are otherwise time-consuming and expensive to satisfy. Compliance with these special standards or satisfaction of such requirements could complicate our efforts to obtain business or increase the cost of doing so.
In addition, like many companies, at the beginning of the COVID-19 pandemic, we implemented a work from home 35 policy. We expect to work in a hybrid work model for the foreseeable future. This policy may negatively impact productivity of our employees. Any disruptions in our operations could negatively impact our business and operating results and harm our reputation.
In addition, like many companies, at the beginning of the COVID-19 pandemic, we implemented a work from home policy. We expect to work in a hybrid work model for the foreseeable future. This policy may negatively impact productivity of our employees. Any disruptions in our operations could negatively impact our business and operating results and harm our reputation.
Moreover, data suppliers have recently been subject to increased litigation under various claims of violating certain state privacy laws. These laws and related challenges may make it so difficult for us or our suppliers to provide the data that the costs associated with the data materially increase or may materially decrease the availability of data that data suppliers can provide.
Moreover, data suppliers have recently been subject to increased litigation under various claims of violating certain state privacy laws. These laws and challenges may make it so difficult for us or our suppliers to provide the data that the costs associated with the data materially increase or may materially decrease the availability of data that data suppliers can provide.
Providing these services requires that our personnel have specific experience, knowledge and expertise, making it more difficult for us to hire qualified personnel and to scale up our support operations. The importance of high-quality customer support will increase as we expand our business and pursue new customers.
Providing these services requires that our personnel have specific experience, 44 knowledge and expertise, making it more difficult for us to hire qualified personnel and to scale up our support operations. The importance of high-quality customer support will increase as we expand our business and pursue new customers.
Our sales process involves educating prospective customers and existing customers about the use, technical capabilities and benefits of our solutions. Prospective customers, especially government agencies, often undertake a prolonged evaluation process that may last up to nine months or more and that typically involves comparing the 30 benefits of our solutions to alternative uses of funds.
Our sales process involves educating prospective customers and existing customers about the use, technical capabilities and benefits of our solutions. Prospective customers, especially government agencies, often undertake a prolonged evaluation process that may last up to nine months or more and that typically involves comparing the benefits of our solutions to alternative uses of funds.
To date, substantially all of our revenues have been derived from contracts with local governments and their agencies, in particular the police departments of major cities in the United States. To a lesser extent, we also generate 28 revenues from federal agencies, foreign governments and higher education institutions.
To date, substantially all of our revenues have been derived from contracts with local governments and their agencies, in particular the police departments of major cities in the United States. To a lesser extent, we also generate revenues from federal agencies, foreign governments and higher education institutions.
We believe that the success and growth of our business will continue to depend on our ability to add new police departments and other government agencies, domestically and internationally, as customers of our public safety solution and new universities, corporate campuses and key infrastructure and transportation centers as customers of our security solutions.
We believe that the success and growth of our business will continue to depend on our ability to add new police departments and other government agencies, domestically and internationally, as customers of our public safety solutions and new universities, corporate campuses and key infrastructure and transportation centers as customers of our security solutions.
We are in the process of expanding our international operations, which exposes us to significant risks. We currently operate in limited number of locations outside the United States. A key component to our business strategy is to expand our international operations to increase our revenues from customers outside of the United States as part of our growth strategy.
We are in the process of expanding our international operations, which exposes us to significant risks. We currently operate in limited number of locations outside the United States. A key component to our business strategy is to expand our international operations to increase our revenues from customers outside of the United States 46 as part of our growth strategy.
Our ability to successfully face these challenges depends on several factors, including increasing the awareness of our solutions and their benefits; the effectiveness of our marketing programs; the costs of our solutions; our ability 33 to attract, retain and effectively train sales and marketing personnel; and our ability to develop relationships with communication carriers and other partners.
Our ability to successfully face these challenges depends on several factors, including increasing the awareness of our solutions and their benefits; the effectiveness of our marketing programs; the costs of our solutions; our ability to attract, retain and effectively train sales and marketing personnel; and our ability to develop relationships with communication carriers and other partners.
To the extent that we do not successfully avoid or overcome the risks or problems related to any such acquisitions, our results of operations and financial condition could be harmed. Acquisitions also could impact our financial position and capital requirements or could cause fluctuations in our quarterly and annual results of operations.
To the extent that we do not successfully avoid or overcome the risks or problems related to any such 40 acquisitions, our results of operations and financial condition could be harmed. Acquisitions also could impact our financial position and capital requirements or could cause fluctuations in our quarterly and annual results of operations.
Furthermore, we may not have adequate visibility into security issues of such acquired or integrated entities, may discover security issues that were not found during due diligence of such entities, and it may be difficult to integrate companies and their products into our information technology environment and security program.
Furthermore, we may not have adequate visibility into security issues of such acquired or 42 integrated entities, may discover security issues that were not found during due diligence of such entities, and it may be difficult to integrate companies and their products into our information technology environment and security program.
Our failure to manage any of these risks successfully could harm our international operations, and adversely affect our business, operating results and financial condition. We are dependent on the continued services and performance of our senior management and other key personnel, the loss of any of whom could adversely affect our business.
Our failure to manage any of these risks successfully could harm our international operations, and adversely affect our business, operating results and financial condition. 47 We are dependent on the continued services and performance of our senior management and other key personnel, the loss of any of whom could adversely affect our business.
A portion of our technologies incorporates open source software, and we expect to continue to incorporate open source software into our platform in the future. Few of the licenses applicable to open source software have been interpreted by courts, and their application to the open source software integrated into our proprietary technology platform may be uncertain.
A portion of our technologies incorporates open source software, and we expect to continue to incorporate open source software into our platform in the future. Few of the licenses applicable to open source software have been interpreted by courts, and their application to the open source software integrated into our proprietary technology 53 platform may be uncertain.
Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property. 49 We rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position.
Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property. We rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position.
We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects. We intend to continue to make substantial investments to fund our business and support our growth.
We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects. 30 We intend to continue to make substantial investments to fund our business and support our growth.
Changes in the availability of federal funding to support local law enforcement efforts could impact our business. Many of our customers rely to some extent on funds from the U.S. federal government in order to purchase and pay for our solutions.
Changes in the availability of federal funding to support local law enforcement efforts could impact our business. 33 Many of our customers rely to some extent on funds from the U.S. federal government in order to purchase and pay for our solutions.
The number of new shares of our common stock issued in connection with raising additional capital could constitute a material portion of the then outstanding shares of our common stock. In the event a large number of shares of common stock are sold in the public market, such share sales could reduce the trading price of our common stock.
The number of new shares of our common stock issued in connection with raising additional capital could constitute a material portion of the then outstanding 55 shares of our common stock. In the event a large number of shares of common stock are sold in the public market, such share sales could reduce the trading price of our common stock.
The ShotSpotter sensors are 41 mounted on city facilities and third-party buildings, and occasionally on city or utility-owned light poles, and installing the sensors requires the consent of the property owners, which can be time-consuming to obtain and can delay deployment.
The ShotSpotter sensors are mounted on city facilities and third-party buildings, and occasionally on city or utility-owned light poles, and installing the sensors requires the consent of the property owners, which can be time-consuming to obtain and can delay deployment.
If cities and other government entities increase their efforts to reduce gun violence or our solutions gain visibility in the market, companies could decide to enter into the public safety solution market and thereby increase the competition we face.
If cities and other government entities increase their efforts to reduce gun violence or our solutions gain visibility in the market, companies could decide to enter into the public safety solutions market and thereby increase the competition we face.
Failure to obtain a SOC2 Type 2 audit report or to be compliant with the CJIS standard could adversely affect our reputation and sales, as well as the availability of our solutions in certain markets.
Failure to obtain a SOC2 Type 2 audit report or to be compliant with the CJIS standard or HIPAA could adversely affect our reputation and sales, as well as the availability of our solutions in certain markets.
For example, in November 2023, we discovered that a recently terminated employee logged on to an employee resource, obtained our confidential information, and began posting some of the information publicly on social media.
For example, in November 2023, we discovered that a terminated employee logged on to an employee resource, obtained our confidential information, and began posting some of the information publicly on social media.
We, or our customers, may be subject to requests for our data or information concerning our techniques and processes, pursuant to state or federal law (for example, public-records requests or subpoenas to provide information 48 or to testify in court).
We, or our customers, may be subject to requests for our data or information concerning our techniques and processes, pursuant to state or federal law (for example, public-records requests or subpoenas to provide information or to testify in court).
Similarly, the future announcement of the termination or suspension 52 of the stock repurchase program, or our decision not to utilize the full authorized repurchase amount under the stock repurchase program, could result in a decrease in the trading price of our stock.
Similarly, the future announcement of the termination or suspension of the stock repurchase program, or our decision not to utilize the full authorized repurchase amount under the stock repurchase program, could result in a decrease in the trading price of our stock.
Because there are several possible uses of funds for security needs, we may face increased challenges in demonstrating or distinguishing the benefits of ShotSpotter for Highways, ShotSpotter for Campus and ShotSpotter for Corporate.
Because there are several possible uses of funds for security needs, we may face increased challenges in demonstrating or distinguishing the benefits of ShotSpotter for Campus and ShotSpotter for Corporate.
Some actors now engage and are expected to continue to engage in 39 cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
If a court were to find either exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects. 55 Item 1B.
If a court were to find either exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects. 58 Item 1B.
If the economic conditions of the general economy or industries in which we operate worsen from present levels, or if past political changes result in less funding being 32 available to purchase our solutions, our business, operating results, financial condition and cash flows could be adversely affected. New competitors may enter the market for our public safety solution.
If the economic conditions of the general economy or industries in which we operate worsen from present levels, or if past political changes result in less funding being available to purchase our solutions, our business, operating results, financial condition and cash flows could be adversely affected. New competitors may enter the market for our public safety solutions.
Security incidents and attendant consequences may prevent or cause customers to stop using our solutions, deter new customers from using our solutions, and negatively impact our ability to grow and operate our business.
Security incidents and attendant material consequences may prevent or cause customers to stop using our solutions, deter new customers from using our solutions, and negatively impact our ability to grow and operate our business.
We do not intend to pay dividends for the foreseeable future. 53 We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future.
We do not intend to pay dividends for the foreseeable future. We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future.
Some potential public safety customers may be reluctant or unwilling to use our solution for a number of reasons, including concerns about additional costs, unwillingness to expose or lack of concern regarding the extent of gun violence in their community, uncertainty regarding the reliability and security of cloud-based offerings or lack of awareness of the benefits of our public safety solutions.
Some potential public safety customers may be reluctant or unwilling to use our solution for a number of reasons, including concerns about additional costs or increased prices, unwillingness to expose or lack of concern regarding the extent of gun violence in their community, uncertainty regarding the reliability and security of cloud-based offerings or lack of awareness of the benefits of our public safety solutions.
Real or perceived errors, failures, vulnerabilities, or bugs in our software could adversely affect our operating results and growth prospects. Because our software is complex, undetected errors, failures or bugs may occur.
Real or perceived errors, failures, or bugs in our software could adversely affect our operating results and growth prospects. Because our software is complex, undetected errors, failures or bugs may occur.
Our ability to successfully grow our business depends on a number of factors including our ability to: • accelerate our acquisition of new customers; • further sell expansions of coverage areas to our existing customers; • expand our international footprint; 25 • expand into new vertical markets, such as precision policing, and security solutions; • increase awareness of the benefits that our solutions offer; • maintain our competitive and technology leadership position; and • manage our business successfully through macroeconomic pressures, such as inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and any resulting impact on economic conditions, including conditions impacting the availability of funding for our public safety solution.
Our ability to successfully grow our business depends on a number of factors including our ability to: • accelerate our acquisition of new customers; • further sell expansions of coverage areas to our existing customers; • expand our international footprint; • expand into new vertical markets, such as precision policing, and security solutions; • increase awareness of the benefits that our solutions offer; • maintain our competitive and technology leadership position; and • manage our business successfully through macroeconomic pressures, such as the imposition of tariffs, inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and any resulting impact on economic conditions, including conditions impacting the availability of funding for our public safety solutions.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing personal information.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing personal information.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, and supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, attacks enhanced or facilitated by artificial intelligence (“AI”), telecommunications failures, earthquakes, fires, floods, and other similar threats.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, and supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
The market price of our common stock has fluctuated and may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below and other factors described in this “Risk Factors” section: • actual or anticipated fluctuations in our operating results; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • ratings changes by any securities analysts who follow our company; • changes in the availability of federal funding to support local law enforcement efforts, or local budgets; • announcements by us of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; 51 • changes in operating performance and stock market valuations of other software companies generally; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; • lawsuits threatened or filed against us; • novel and unforeseen market forces and trading strategies, as well as short sales, hedging and other derivative transactions involving our capital stock; • the impact of past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and other macroeconomic pressures; • general economic conditions in the United States and abroad; • other events or factors, including those resulting from pandemics, protests against racial inequality, protests against police brutality and movements such as “Defund the Police,” war, incidents of terrorism or responses to these events; and • negative publicity, including false information, regarding our solutions.
Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors. 54 The market price of our common stock has fluctuated and may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below and other factors described in this “Risk Factors” section: • actual or anticipated fluctuations in our operating results; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • ratings changes by any securities analysts who follow our company; • changes in the availability of federal funding to support local law enforcement efforts, or local budgets; • announcements by us of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; • changes in operating performance and stock market valuations of other software companies generally; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; • lawsuits threatened or filed against us; • novel and unforeseen market forces and trading strategies, as well as short sales, hedging and other derivative transactions involving our capital stock; • the impact of past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and other macroeconomic pressures; • general economic conditions in the United States and abroad; • other events or factors, including those resulting from pandemics, protests against racial inequality, protests against police brutality and movements such as “Defund the Police,” war, incidents of terrorism or responses to these events; and • negative publicity, including false information, regarding our solutions.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security incidents.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
In the United States, federal, state, and local governments have enacted numerous data privacy 48 and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank capital and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in Israel, and other macroeconomic pressures in the United States and the global economy, such as rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank capital and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy, such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.
Real or perceived false positive gunshot alerts or false positive security threat detection, or failure or perceived failure to generate alerts for actual gunfire could adversely affect our customers and their operations, damage our brand and reputation and adversely affect our growth prospects and results of operations.
Real or perceived false positive gunshot alerts or false positive security threat detection, or failure or perceived failure to generate alerts for actual gunfire or missed weapon detection could adversely affect our customers and their operations, damage our brand and reputation and adversely affect our growth prospects and results of operations.
In addition, we may face compliance risks and limitations on our ability to use certain data provided by our data suppliers if those suppliers have not complied with applicable privacy laws, provided appropriate notice to data subjects, obtained necessary consents, or established a legal basis for the transfer and processing of the data by us.
In addition, we may face compliance risks and limitations on our ability to use certain data provided by our third-party suppliers if those suppliers have not complied with applicable privacy laws, provided appropriate notice to 49 data subjects, obtained necessary consents, or established a legal basis for the transfer and processing of the data by us.
Negative conditions in the general economy both in the United States and abroad, including past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, conditions resulting from changes in gross domestic product growth, labor market shortages, inflation, interest rates, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare, geopolitical tensions, such as the ongoing conflicts between Russia and Ukraine and in Israel, terrorist attacks, climate change and global pandemics, could cause a decrease in funds available to our existing and potential customers and negatively affect the rate of growth of our business.
Negative conditions in the general economy both in the United States and abroad, including past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, conditions resulting from changes in gross domestic product growth, labor market shortages, the imposition of tariffs, inflation, interest rates, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare, geopolitical tensions, such as the ongoing conflicts between Russia and Ukraine and in the Middle East, terrorist attacks, climate change and global pandemics, could cause a decrease in funds available to our existing and potential customers and negatively affect the rate of growth of our business.
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in Israel, and other macroeconomic pressures in the United States and the global economy such as rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, these risks are more pronounced than usual, as government entities struggle with reduced levels of resources related to implications of such global events.
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, these risks are more pronounced than usual, as government entities struggle with reduced levels of resources related to implications of such global events.
During periods of economic uncertainty resulting from past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in Israel, and other macroeconomic pressures in the United States and the global economy, such as rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.
During periods of economic uncertainty resulting from past and potential future disruptions in access to bank deposits and lending 32 commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy, such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in Israel, and other macroeconomic pressures in the United States and the global economy such as rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual.
During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual.
For example, our ability to have our ShotSpotter customers renew their annual subscriptions and expand their mileage coverage or purchase and implement our other products, such as CaseBuilder (formerly ShotSpotter Investigate) and ResourceRouter (formerly ShotSpotter Connect), drives our ability to increase our revenues. Most of our ShotSpotter customers begin using our solution in a limited coverage area.
For example, our ability to have our ShotSpotter customers renew their annual subscriptions and expand their mileage coverage or purchase and implement our other products, such as CaseBuilder and ResourceRouter, drives our ability to increase our revenues. Most of our ShotSpotter customers begin using our solution in a limited coverage area.
The perception of a false positive alert or of a failure to generate an alert, even where our customers understand that our solutions were utilized correctly, could lead to negative publicity or harm the public perception of our solutions, which could harm our reputation and adversely impact our business and operating results.
The perception of a false positive alert or of a failure to generate an alert or missed weapon detection, even where our customers understand that our solutions were utilized correctly, could lead to negative publicity or harm the public perception of our solutions, which could harm our reputation and adversely impact our business and operating results.
A failure to alert law enforcement or security personnel of actual gunfire or security threats (false negative) could result in a less rapid or no response by police officers and first responders, increasing the probability of injury or loss of life.
A failure to alert law enforcement or security personnel of actual gunfire or security threats (false negative) or missed weapon detection could result in a less rapid or no response by police officers and first responders, increasing the probability of injury or loss of life.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended (“the Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income.
In general, under Section 382 of the Internal Revenue Code 50 of 1986, as amended (the "Code"), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims and mass arbitration demands); additional reporting requirements and/or oversight; bans 47 on processing personal information; orders to destroy or not use personal information; and imprisonment of company officials.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal information; orders to destroy or not use personal information; and imprisonment of company officials.
Both false positive alerts and the failure to generate alerts of actual 31 gunfire or security threats (false negative) may result in customer dissatisfaction, potential loss of confidence in our solutions, and potential liabilities to customers or other third parties, any of which could harm our reputation and adversely impact our business and operating results.
Both false positive alerts and the failure to generate alerts of actual gunfire or security threats (false negative) or missed weapon detection may result in customer dissatisfaction, potential loss of confidence in our solutions, and potential liabilities to customers or other third parties, any of which could harm our reputation and adversely impact our business and operating results.
The issued patents expire on various dates from 2023 to 2034. We have patent applications pending for examination in the United States, Europe, Mexico and Brazil, but we cannot guarantee that these patent applications will be granted. We also license one other U.S. patent from one third party.
The issued patents expire on various dates from 2025 to 2034. We have patent applications pending for examination in the United States, Europe, Mexico and Brazil, but we cannot guarantee that these patent applications will be granted. We also license one other U.S. patent from one third party which expired in November 2023.
In February 2024, we amended the Umpqua Credit Agreement to extend the maturity date from October 15, 2024 to October 15, 2025. As of December 31, 2023, there was $7.0 million outstanding on our line of credit.
In February 2024, we amended the Umpqua Credit Agreement to extend the maturity date from October 15, 2024 to October 15, 2025. As of December 31, 2024, there was $4.0 million outstanding on our line of credit.
The past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia in Israel, and other macroeconomic pressures in the United States and the global economy such as rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, could also cause or exacerbate any of the foregoing.
The past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other 31 macroeconomic pressures in the United States and the global economy such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, could also cause or exacerbate any of the foregoing.
If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology and our business might be adversely affected. As of December 31, 2023, we had 34 issued patents directed to our technologies, 27 in the United States, two in Brazil, one each in Israel, Mexico, the United Kingdom, France and Germany.
If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology and our business might be adversely affected. 51 As of December 31, 2024, we had 34 issued patents directed to our technologies, 28 in the United States, two in Brazil, one each in Israel, Mexico, the United Kingdom, France and Germany.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
Any of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that could result in unauthorized, unlawful or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
In particular, we expect to continue to expend substantial financial and other resources on: • higher costs to procure the sensors required for our solutions due to inflationary pressures; • sales and marketing, including a significant expansion of our sales organization, both domestically and internationally; • research and development related to our solutions, including investments in our engineering and technical teams; • acquisition of complementary technologies or businesses, such as our acquisition of HunchLab technology in October 2018, our acquisition of Technologic in November 2020, our acquisition of Forensic Logic in January 2022 and our acquisition of SafePointe in August 2023; • continued international expansion of our business; and • general and administrative expenses.
In particular, we expect to continue to expend substantial financial and other resources on: • higher costs to procure the sensors required for our solutions due to inflationary pressures; • sales and marketing, including a significant expansion of our sales organization, both domestically and internationally; • research and development related to our solutions, including investments in our engineering and technical teams; • acquisition of complementary technologies or businesses, such as our acquisition of LEEDS, LLC, now known as Technologic, in November 2020, our acquisition of Forensic Logic in January 2022 and our acquisition of SafePointe in August 2023; • continued international expansion of our business; and • general and administrative expenses.
Additionally, California’s Delete Act requires a regulatory agency to establish by January 1, 2026 a mechanism to allow California consumers to submit a single, verifiable request to delete all of their personal information held by all registered data brokers and their service providers.
Additionally, California’s Delete Act requires the California Privacy Protection Agency to establish by January 1, 2026 a mechanism to allow California consumers to submit a single, verifiable request to delete all of their personal information held by all registered data brokers and their service providers.
Our revenues and results of operations could vary significantly from quarter to quarter as a result of various factors, many of which are outside of our control, including: • the expansion or contraction of our customer base; • the renewal or non-renewal of subscription agreements with, and expansion of coverage areas by, existing customers; • the size, timing, terms and deployment schedules of our sales to both existing and new customers; • the introduction of products or services that may compete with us for the limited funds available to our customers, and changes in the cost of such products or services; • changes in our customers’ and potential customers’ budgets; • our ability to control costs, including our operating expenses; • our ability to hire, train and maintain our direct sales force; • the timing of satisfying revenues recognition criteria in connection with initial deployment and renewals; • fluctuations in our effective tax rate; • the concentration of our revenue in a small number of large contracts with the potential for fluctuations and delays; and 26 • general economic factors, such as inflation, rising interest rates, past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and political conditions, both domestically and internationally.
Our quarterly results of operations may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict. 28 Our revenues and results of operations could vary significantly from quarter to quarter as a result of various factors, many of which are outside of our control, including: • the expansion or contraction of our customer base; • the renewal or non-renewal of subscription agreements with, and expansion of coverage areas by, existing customers; or cross-selling of other products or services to existing customers; • the size, timing, terms and deployment schedules of our sales to both existing and new customers; • the introduction of products or services that may compete with us for the limited funds available to our customers, and changes in the cost of such products or services; • changes in our customers’ and potential customers’ budgets; • our ability to control costs, including our operating expenses; • our ability to hire, train and maintain our direct sales force; • the timing of satisfying revenues recognition criteria in connection with initial deployment and renewals; • fluctuations in our effective tax rate; • the concentration of our revenue in a small number of large contracts with the potential for fluctuations and delays; and • general economic factors, such as the imposition of tariffs, inflation, rising interest rates, past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and political conditions, both domestically and internationally.
A number of factors could cause current and/or potential customers to delay or refrain from purchasing our solutions, prevent expansion of, or reduce coverage areas and/or terminate use of our solutions, including: • decreases or changes in available funding, including tax revenues, budgetary allocations, government grants and other government funding programs; • potential delays or changes in appropriations or other funding authorization processes; • changes in fiscal or contracting policies; • macro- and/or local economic changes, such as inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, that may affect customer funding; • changes in elected or appointed officials; • changes in public perception of the accuracy of our solutions and the appropriate use of our solutions by law enforcement, including as a result of negative publicity; and • changes in laws or public sentiment regarding privacy or surveillance.
A number of factors could cause current and/or potential customers to delay or refrain from purchasing our solutions, prevent expansion of, or reduce coverage areas and/or terminate use of our solutions, including: • decreases or changes in available funding, including as a result of policies implemented by Trump administration’s Department of Government Efficiency within the Office of Management and Budget (“DOGE”), tax revenues, budgetary allocations, government grants and other government funding programs; • potential delays or changes in appropriations or other funding authorization processes; • changes in fiscal or contracting policies; • macro- and/or local economic changes, such as the imposition of tariffs, inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, that may affect customer funding; • changes in elected or appointed officials; • changes in public perception of the accuracy of our solutions and the appropriate use of our solutions by law enforcement, including as a result of negative publicity; and • changes in laws or public sentiment regarding privacy or surveillance.
The remaining net operating losses of $4.9 million can be carried forward indefinitely under the Tax Cuts and Jobs Act. As of December 31, 2023, we also had state NOLs of approximately $42.7 million, which begin expiring in 2024. These federal and state NOLs may be available to reduce future income subject to income taxes.
The remaining net operating losses of $4.9 million can be carried forward indefinitely under the Tax Cuts and Jobs Act. As of December 31, 2024, we also had state NOLs of approximately $41.5 million, which begin expiring in 2025. These federal and state NOLs may be available to reduce future income subject to income taxes.
In November 2022, our board of directors approved a new stock repurchase program for up to $25.0 million of our common stock, of which $5.6 million was utilized as of December 31, 2023.
In November 2022, our board of directors approved a new stock repurchase program for up to $25.0 million of our common stock, of which $11.6 million was utilized as of December 31, 2024.
Accordingly, our data processing activities are subject to a variety of data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security and restrictions on audio monitoring and the collection, use, storage and disclosure of personal information.
Accordingly, our data processing activities subject us to a variety of data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security and restrictions on audio monitoring and the processing of personal information.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We invest resources to comply with evolving laws, regulations and standards, and these investments may result in increased operating expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
For example the California Consumer Privacy Act (“CCPA”), applies to personal information of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights, such as those noted below.
For example the California Consumer Privacy Act of 2018 (“CCPA”), applies to personal information of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
We are continually improving our security, compliance, and processes. Our general processes are based on the NIST-800-53 standard with some aspects also being controlled by CJIS. In the fourth quarter of 2022, an audit of our processes under a SOC2 Type 2 audit was completed. These initiatives require fiscal and time investments.
Our general processes are based on the NIST-800-53 standard with some aspects also being controlled by CJIS. In the fourth quarter of 2024, an audit of our processes under a SOC2 Type 2 audit was completed. These initiatives require fiscal and time investments.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. 34 In addition, our IRC department personnel operate either remotely or out of our offices.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. In addition, our IRC department personnel operate either in a hybrid work model or out of our offices.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDepending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider, including for example, conducting risk assessment of certain vendors, providing our vendors with a security questionnaire or reviewing their SOC report, reviewing the vendor’s written information security program in certain circumstances, conducting audits of our vendors as may be needed, and requiring certain technical controls of our vendors through contractual obligations.
Biggest changeDepending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider, including for example, conducting risk assessment of certain vendors, providing our vendors with a security questionnaire or reviewing their SOC report, reviewing the vendor’s written information security program in certain circumstances, conducting audits of our vendors as may be needed, and requiring certain technical controls of our vendors through contractual obligations. 59 For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1.
Those members of management work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response and vulnerability management processes includes reporting to the audit committee of the board of directors for certain cybersecurity incidents.
Those members of management work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response and vulnerability management processes includes members of management reporting to the audit committee of the board of directors for certain cybersecurity incidents.
We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, and network and cellular communications providers. We have a vendor management program to manage cybersecurity risks associated with our use of these providers.
We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, and network and cellular communications providers. We have a vendor management program to manage cybersecurity risks associated with our use of certain of these providers.
These teams identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our industry’s risk profile using various methods including, for example manual and automated tools (including firewalls and endpoint protection); subscribing to and analyzing reports and services that identify cybersecurity threats; conducting scans of our environment; evaluating threats reported to us and coordinating with law enforcement concerning certain threats; conducting threat assessments of both internal and external threats; conducting vulnerability assessments to identify vulnerabilities; working with third-parties to conduct testing and tabletop exercises; and using external threat intelligence feeds.
These teams identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our industry’s risk profile using various methods including, for example manual and automated tools (including firewalls and endpoint protection); subscribing to and analyzing reports and services that identify cybersecurity threats; conducting scans of our environment; evaluating threats reported to us and coordinating with law enforcement concerning certain threats as may be appropriate; conducting threat assessments of both internal and external threats; conducting risk, threat and vulnerability assessments to identify vulnerabilities; working with third parties to conduct testing and tabletop exercises; and using external threat intelligence feeds.
The board of directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Vice President of Operational Engineering, Dave Halliday. Mr.
The board of directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Vice President of Operational Engineering.
Risk Factors in this Annual Report on Form 10-K, including the 56 risks titled “If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, our solutions may be perceived as not being secure, our customers may be harmed and we could experience adverse consequences, including but not limited to regulatory investigations or actions; litigation or mass arbitration demands; fines and penalties; disruptions of our business operations; reputation harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Risk Factors in this Annual Report on Form 10-K, including the risks titled “If our information technology systems or data, or those of third parties with whom we work, are or were compromised, our solutions may be perceived as not being secure, our customers may be harmed and we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation or mass arbitration demands; fines and penalties; disruptions of our business operations; reputation harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Halliday has over thirty years of experience in information technology and information security management and oversees our operational engineering component, which includes our information security function, IT, networking, cloud operations, and development operations teams. Mr.
Our Vice President of Operational Engineering has over thirty years of experience in information technology and information security management and oversees our operational engineering component, which includes our information security function, IT, networking, cloud operations, and development operations teams.
Halliday is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Our Chief Financial Officer is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Our Vice President of Operational Engineering is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Our Chief Financial Officer is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Removed
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. P ROPERTIES Our principal facilities consist of office space for our corporate headquarters in Fremont, California. We also have offices in Washington D.C., Newark, New Jersey, Walnut Creek, California, Eustis, Florida and Tucson, Arizona. We lease our facilities and do not own any real property. We may procure additional space as we add employees and expand geographically.
Biggest changeItem 2. P ROPERTIES Our principal facilities consist of office space for our corporate headquarters in Fremont, California. We also have offices in Washington D.C., Iselin, New Jersey and Tucson, Arizona. We lease our facilities and do not own any real property. We may procure additional space as we add employees and expand geographically.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn the basis of the allegations, the 57 Plaintiff has petitioned for compensatory and punitive damages and other costs and expenses, including attorney’s fees. We believe that the Plaintiff’s claims are without merit and are disputing them vigorously.
Biggest changeOn the basis of 60 the allegations, the Plaintiff petitioned for compensatory and punitive damages and other costs and expenses, including attorney’s fees. In September 2024, SoundThinking was dismissed from the lawsuit.
We may become subject to legal proceedings, as well as demands and claims that arise in the normal course of our business, including claims of alleged infringement of third-party patents and other intellectual property rights, breach of contract, employment law violations, and other matters and matters involving requests for information from us or our customers under federal or state law.
We may become subject to legal proceedings, as well as demands and claims that arise in the normal course of our business, including claims of alleged infringement of third-party patents and other intellectual property rights, breach of contract, employment law violations and other matters involving requests for information from us or our customers under federal or state law.
As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters or legal proceedings could have a material adverse effect on our business, operating results, financial condition and cash flows. Item 4. MINE SAF ETY DISCLOSURES Not Applicable. 58 PART II.
As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters or legal proceedings could have a material adverse effect on our business, operating results, financial condition and cash flows. Item 4. MINE SAF ETY DISCLOSURES Not Applicable. 61 PART II.
Item 3. LEGA L PROCEEDINGS On August 28, 2018, Silvon S. Simmons (the “Plaintiff”) amended a complaint against the City of Rochester, New York and various city employees, filed in the United States District Court, Western District of New York, to add us and employees as defendants.
Item 3. LEGA L PROCEEDINGS On August 28, 2018, Silvon S. Simmons (the “Plaintiff”) amended a complaint against the City of Rochester, New York and various city employees, filed in the United States District Court, Western District of New York, to add us and certain of our employees as defendants.
The amended complaint alleges conspiracy to violate the Plaintiff's civil rights, denial of the right to a fair trial, and malicious prosecution. The Plaintiff claims that we colluded with the City of Rochester to fabricate and create gunshot alert evidence to secure Plaintiff's conviction.
The amended complaint alleged conspiracy to violate the Plaintiff's civil rights, denial of the right to a fair trial, and malicious prosecution. The Plaintiff claimed that we colluded with the City of Rochester to fabricate and create gunshot alert evidence to secure Plaintiff’s conviction.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe stock repurchase program does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time. We did not repurchase any common stock during the quarter ended December 31, 2023.
Biggest changeThe stock repurchase program does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time. There were no repurchases during the three months ended December 31, 2024.
On November 24, 2020, we used $14.6 million of our IPO proceeds to fund the acquisition of LEEDS. Securities Authorized for Issuance under Equity Compensation Plans Information about securities authorized for issuance under our equity compensation plan is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Item 6. [ Reserved] 60
On November 24, 2020, we used $14.6 million of our IPO proceeds to fund the acquisition of LEEDS. Securities Authorized for Issuance under Equity Compensation Plans Information about securities authorized for issuance under our equity compensation plan is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Item 6. [ Reserved] 63
We used $13.7 million of the net proceeds from our IPO to repay outstanding indebtedness of $13.5 million, including early termination fees of $0.2 million, during the quarter ending September 30, 2017. On October 3, 2018, 59 we used $1.7 million of our IPO proceeds to fund the acquisition of HunchLab.
We used $13.7 million of the net proceeds from our IPO to repay outstanding indebtedness of $13.5 million, including early termination fees of $0.2 million, during the quarter ending September 30, 2017. On October 3, 2018, 62 we used $1.7 million of our IPO proceeds to fund the acquisition of HunchLab.
On March 26, 2024, the last reported sale price of our common stock as reported on the Nasdaq Capital Market was $15.05 per share. As of March 26, 2024, we had approximately 66 holders of record of our common stock.
On March 27, 2025, the last reported sale price of our common stock as reported on the Nasdaq Capital Market was $18.52 per share. As of March 27, 2025, we had approximately 56 holders of record of our common stock.
Added
During the year ended December 31, 2024, the Company repurchased 418,940 shares of its common stock at an average price of $14.31 per share for a total of $6.0 million under its stock repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIf our actual results and updated projections vary significantly from the projections used as a basis for this determination, we may need to change the valuation allowance against the gross deferred tax assets. 68 Results of Operations The following table sets forth our consolidated statements of operations data for the years ended December 31, 2023 and 2022 (in thousands): As a % of As a % of Change 2023 Revenues 2022 Revenues $ % Revenues $ 92,717 100 % $ 81,003 100 % $ 11,714 14 % Costs Cost of revenues 39,988 43 % 34,218 42 % 5,770 17 % Total costs 39,988 43 % 34,218 42 % 5,770 17 % Gross profit 52,729 57 % 46,785 58 % 5,944 13 % Operating expenses: Sales and marketing 26,959 29 % 22,416 28 % 4,543 20 % Research and development 12,138 13 % 10,026 12 % 2,112 21 % General and administrative 20,557 22 % 15,750 19 % 4,807 31 % Change in fair value of contingent consideration (5,686 ) (6 %) (9,154 ) (11 %) 3,468 (38 %) Total operating expenses 53,968 58 % 39,038 48 % 14,930 38 % Operating income (loss) (1,239 ) (1 %) 7,747 10 % (8,986 ) (116 %) Other expense, net (275 ) — (195 ) — (80 ) -41 % Provision for income taxes 1,204 1 % 1,167 1 % 37 3 % Net income (loss) $ (2,718 ) (3 %) $ 6,385 8 % $ (9,103 ) (143 %) Revenues The increase of $11.7 million was primarily attributable to an $11.6 million increase in revenues from new customers and expansions of existing customer coverage areas, and a $1.0 million increase in revenues from SafePointe which was acquired in the third quarter of 2023.
Biggest changeIf our actual results and updated projections vary significantly from the projections used as a basis for this determination, we may need to change the valuation allowance against the gross deferred tax assets. 71 Results of Operations The following table sets forth our consolidated statements of operations data for the years ended December 31, 2024 and 2023 (in thousands): As a % of As a % of Change 2024 Revenues 2023 Revenues $ % Revenues $ 102,031 100 % $ 92,717 100 % $ 9,314 10 % Costs Cost of revenues 43,542 43 % 39,874 43 % 3,668 9 % Impairment of property and equipment 605 1 % 114 — 491 431 % Total costs 44,147 44 % 39,988 43 % 4,159 10 % Gross profit 57,884 56 % 52,729 57 % 5,155 10 % Operating expenses: Sales and marketing 28,138 28 % 26,959 29 % 1,179 4 % Research and development 13,925 14 % 12,138 13 % 1,787 15 % General and administrative 23,894 23 % 20,557 22 % 3,337 16 % Change in fair value of contingent consideration (554 ) -1 % (5,686 ) -6 % 5,132 -90 % Restructuring expense 336 — — — 336 — Total operating expenses 65,739 64 % 53,968 58 % 11,771 22 % Operating income (loss) (7,855 ) -8 % (1,239 ) -1 % (6,616 ) 534 % Other expense, net (547 ) — (275 ) — (272 ) -99 % Provision for income taxes 778 1 % 1,204 1 % (426 ) -35 % Net income (loss) $ (9,180 ) -9 % $ (2,718 ) -2 % $ (6,462 ) 238 % Revenues The increase of $9.3 million was primarily attributable to an $6.2 million increase in revenues from new customers and expansions of existing customer coverage areas, $2.0 million increase due to 12 months of revenue in 2024 compared to four months in 2023 from acquisition of Safepointe and $2.0 million increase from new CaseBuilder customers.
We also generate revenues from CaseBuilder Crime Gun, a first-of-its-kind digital case management solution that automates the process by which key information is input, captured and used to identify associated gun crime cases leading to the identification of persons of interest. Subscriptions for CaseBuilder Crime Gun recognize revenue similar to our ShotSpotter and CrimeTracer products.
We also generate revenues from CaseBuilder, a first-of-its-kind digital case management solution that automates the process by which key information is input, captured and used to identify associated gun crime cases leading to the identification of persons of interest. Subscriptions for CaseBuilder recognize revenue similar to our ShotSpotter and CrimeTracer products.
We also offer other security solutions within our flagship product offering ShotSpotter, including ShotSpotter for Highways, ShotSpotter for Campus and ShotSpotter for Corporate that are typically smaller-scale deployments of ShotSpotter vertically marketed to universities, corporate campuses, highways, and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents, saving critical minutes for first responders to arrive.
We also offer other security solutions within our flagship product offering ShotSpotter, including ShotSpotter for Campus and ShotSpotter for Corporate that are typically smaller-scale deployments of ShotSpotter vertically marketed to universities, corporate campuses and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents, saving critical minutes for first responders to arrive.
All fees billed in advance of services being delivered are recorded as deferred revenue. The timing of when new miles go live can be uncertain and, as a result, can have a significant impact on the levels of revenues and deferred revenue from quarter to quarter. 65 For ShotSpotter, our pricing model is based on a per-square-mile basis.
All fees billed in advance of services being delivered are recorded as deferred revenue. The timing of when new miles go live can be uncertain and, as a result, can have a significant impact on the levels of revenues and deferred revenue from quarter to quarter. For ShotSpotter, our pricing model is based on a per-square-mile basis.
Substantially all of our sales are to governmental agencies and universities, which often undertake a prolonged contract evaluation process that affects the size or the timing of our sales contracts and may likewise increase our customer acquisition costs. 62 We rely on a limited number of suppliers and contract manufacturers to produce components of our solutions.
Substantially all of our sales are to governmental agencies and universities, which often undertake a prolonged contract evaluation process that affects the size or the timing of our sales contracts and may likewise increase our customer acquisition costs. We rely on a limited number of suppliers and contract manufacturers to produce components of our solutions.
We are investing in engineering resources to support further development of ResourceRouter, CrimeTracer, CaseBuilder and SafePointe. The focus of this effort will be in the areas of data science modeling, user experience, core application functionality and backend infrastructure improvements, including integration of ShotSpotter gunshot data to enhance forecasting of gun violence.
We are investing in engineering resources to support further development of ResourceRouter, CrimeTracer, CaseBuilder, PlateRanger and SafePointe. The focus of this effort will be in the areas of data science modeling, user experience, core application functionality and backend infrastructure improvements, including integration of ShotSpotter gunshot data to enhance forecasting of gun violence.
Certain of these applications and outputs may expand the platform of services that we will be able to offer our customers. General and Administrative General and administrative expenses primarily consist of personnel-related costs attributable to our executive, finance, and administrative personnel, legal, litigation, strategic communications, accounting and other professional services fees, and other corporate expenses and allocated overhead.
Certain of these applications and outputs may expand the platform of services that we will be able to offer our customers. 70 General and Administrative General and administrative expenses primarily consist of personnel-related costs attributable to our executive, finance, and administrative personnel, legal, litigation, strategic communications, accounting and other professional services fees, and other corporate expenses and allocated overhead.
For revenues generated through the sale of a proprietary software license and related maintenance and support services and professional software development services, cost of revenues generally includes employee compensation costs that are relatively fixed, third-party contractor costs, allocated facility costs and overhead, and the costs of billable expenses such as travel and lodging.
For revenues generated through the sale of a proprietary software license and related maintenance and support services and professional software development services, cost of revenues generally includes employee compensation costs that are relatively fixed, third-party contractor costs, allocated facility costs and overhead, and the costs of 69 billable expenses such as travel and lodging.
As a result of our process for invoicing contracts and renewals upon execution, our cash flow from operations and accounts receivable can fluctuate due to timing of contract execution and timing of deployment. We generally invoice subscription service renewals for 100% of the total contract value when the renewal contract is executed.
As a result of our process for invoicing contracts and renewals upon execution, our cash flow from operations and accounts receivable can fluctuate due to timing of contract execution and timing of deployment. 68 We generally invoice subscription service renewals for 100% of the total contract value when the renewal contract is executed.
We offer our solutions on a software-as-a-service subscription model to our customers. We generate annual subscription revenues from the deployment of ShotSpotter on a per-square-mile basis. Our security solutions, ShotSpotter for Highways, ShotSpotter for Campus, and ShotSpotter for Corporate are typically sold on a subscription basis, each with a customized deployment plan.
We offer our solutions on a software-as-a-service subscription model to our customers. We generate annual subscription revenues from the deployment of ShotSpotter on a per-square-mile basis. Our security solutions, ShotSpotter for Campus, and ShotSpotter for Corporate are typically sold on a subscription basis, each with a customized deployment plan.
Net New “Go-Live” Square Miles 64 Net new “go-live” square miles represent the square miles covered by deployments of our gunshot detection solutions that were formally approved by customers during the year, both from initial and expanded customer deployments, net of square miles that ceased to be “live” during the year due to customer cancellations.
Net New “Go-Live” Square Miles Net new “go-live” square miles represent the square miles covered by deployments of our gunshot detection solutions that were formally approved by customers during the year, both from initial and expanded customer deployments, net of square miles that ceased to be “live” during the year due to customer cancellations.
Net New “Go-Live” Cities Net new “go-live” cities represent the number of cities covered by deployments of our gunshot detection solutions that were formally approved by customers during the year, both from initial and expanded customer deployments, net of cities that ceased to be “live” during the year due to customer cancellations.
Net New “Go-Live” Cities 67 Net new “go-live” cities represent the number of cities covered by deployments of our gunshot detection solutions that were formally approved by customers during the year, both from initial and expanded customer deployments, net of cities that ceased to be “live” during the year due to customer cancellations.
To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders.
To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common 73 stockholders.
For SafePointe, we generally invoice the first year's subscription price when the contract is fully executed. For ShotSpotter for Highways, ShotSpotter for Campus, ShotSpotter for Corporate and CrimeTracer, we generally invoice customers 100% of the total contract value when the subscription service is operational, which is often soon after contract execution.
For SafePointe, we generally invoice the first year's subscription price when the contract is fully executed. For ShotSpotter for Campus, ShotSpotter for Corporate and CrimeTracer, we generally invoice customers 100% of the total contract value when the subscription service is operational, which is often soon after contract execution.
Overview We are a leading public safety technology company that combines data-driven solutions and strategic advisory services for law enforcement and civic leadership. In April 2023, we changed the company name, ShotSpotter, Inc., to SoundThinking, Inc., reflecting our broader impact on public safety through a growing set of industry-leading law enforcement tools and community-focused solutions.
Overview We are a leading public safety technology company that combines data-driven solutions and strategic advisory services for law enforcement, security teams and civic leadership. In April 2023, we changed the company name, ShotSpotter, Inc., to SoundThinking, Inc., reflecting our broader impact on public safety through a growing set of industry-leading law enforcement tools and community-focused solutions.
The Umpqua Credit Agreement subjects us to certain restrictive and financial covenants, see the risk entitled “The incurrence of debt may impact our financial position and subject us to additional financial and operating restrictions ” in Part II, Item 1A, Risk Factors , included in this Annual Report on Form 10-K .
The Umpqua Credit Agreement subjects us to certain restrictive and financial covenants, see the risk entitled “The incurrence of debt may impact our financial position and subject us to additional financial and operating restrictions ” in Part I, Item 1A, Risk Factors , included in this Annual Report on Form 10-K .
Our trained incident review specialists can supplement alerts with additional tactical information, such as the potential presence of multiple shooters or the use of high-capacity weapons. 61 Gunshot incidents reviewed by our IRC result in alerts typically sent within approximately 45 seconds of the receipt of the gunfire incident.
Our trained incident review specialists can supplement alerts with 64 additional tactical information, such as the potential presence of multiple shooters or the use of high-capacity weapons. Gunshot incidents reviewed by our IRC result in alerts typically sent within approximately 45 seconds of the receipt of the gunfire incident.
We may also seek additional capital to fund our 70 operations, including through the sale of equity or debt financings.
We may also seek additional capital to fund our operations, including through the sale of equity or debt financings.
Comparison of the Years Ended December 31, 2022 and 2021 A discussion of changes in our cash flows from the year ended December 31, 2021 to the year ended December 31, 2022 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of the 2022 Form 10-K.
Comparison of the Years Ended December 31, 2023 and 2022 A discussion of changes in our cash flows from the year ended December 31, 2022 to the year ended December 31, 2023 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of the 2023 Form 10-K.
In assessing the need for or release of a valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. 76
In assessing the need for or release of a valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. 78
The repurchases were made in open market transactions using cash on hand, and all of the shares repurchased were retired. As of December 31, 2023, $19.4 million remains available under the 2022 Repurchase Program. Credit Facility In September 2018, we entered into our Umpqua Credit Agreement, initially providing for borrowing capacity of $10.0 million.
The repurchases were made in open market transactions using cash on hand, and all of the shares repurchased were retired. As of December 31, 2024, $13.4 million remains available under the 2022 Repurchase Program. Credit Facility In September 2018, we entered into our Umpqua Credit Agreement, initially providing for borrowing capacity of $10.0 million.
We derive the majority of our revenues from subscription services. We recognize subscription fees ratably, on a straight-line basis, over the term of the subscription, which for new customers is typically initially one to three years in length. Customer contracts include one-time set-up fees for the set-up of our sensors in the customer’s coverage areas, training, and third-party integration licenses.
We recognize subscription fees ratably, on a straight-line basis, over the term of the subscription, which for new customers is typically initially one to three years in length. Customer contracts include one-time set-up fees for the set-up of our sensors in the customer’s coverage areas, training, and third-party integration licenses.
We believe that despite our negative working capital, the costs to perform the short-term deferred revenue is relatively low compared to the balance of $41.3 million. However, should additional working capital be needed, we can utilize our unused credit facility.
We believe that despite our negative working capital, the costs to perform the short-term deferred revenue is relatively low compared to the balance of $38.4 million. However, should additional working capital be needed, we can utilize our unused credit facility.
We are in compliance with all the covenants under the Umpqua Credit Agreement as of December 31, 2023.
We are in compliance with all covenants under the Umpqua Credit Agreement as of December 31, 2024.
Comparison of the Years Ended December 31, 2022 and 2021 For discussion of our 2022 results and a comparison with 2021 results please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on March 14, 2023 (the "2022 Form 10-K").
Comparison of the Years Ended December 31, 2023 and 2022 For discussion of our 2023 results and a comparison with 2022 results please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that was filed with the SEC on April 1, 2024 (the "2023 Form 10-K").
For SafePointe, our pricing model is based on a per-lane basis. For ShotSpotter for Highways, ShotSpotter for Campus, ShotSpotter for Corporate and CaseBuilder, our pricing model is on a customized-site basis. For ResourceRouter, CaseBuilder Crime Gun (formerly ShotSpotter GCM™) and CrimeTracer, pricing is currently customized, generally tied to the number of sworn police officers in a particular agency.
For SafePointe, our pricing model is based on a per-lane basis. For ShotSpotter for Campus, ShotSpotter for Corporate and CaseBuilder, our pricing model is on a customized-site basis. For ResourceRouter, CaseBuilder and CrimeTracer, pricing is currently customized, generally tied to the number of sworn police officers in a particular agency.
Business Acquisitions We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
As such, expected dividend yield is zero. Business Acquisitions We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Our two current largest customers, the City of New York, and the City of Chicago each accounted for 25% and 9%, respectively, of our total revenues for the year ended December 31, 2023.
Our two largest customers, the City of New York and the City of Chicago, each accounted for 23% and 10%, respectively, of our total revenues for the year ended December 31, 2024. The City of New York and the City of Chicago each accounted for 25% and 9%, respectively, of our total revenues for the year ended December 31, 2023.
Investing Activities Our investing activities consist primarily of capital expenditures to install our solutions in customer coverage areas, purchases of property and equipment, and investments in intangible assets and business acquisitions. Investing activities used $16.5 million and $15.5 million in the years ended December 31, 2023 and 2022, respectively.
Investing Activities Our investing activities consist primarily of capital expenditures to install our solutions in customer coverage areas, purchases of property and equipment, and investments in intangible assets. Investing activities used $6.4 million and $16.5 million in the years ended December 31, 2024 and 2023, respectively.
Liquidity and Capital Resources Sources of Funds Our operations have been financed primarily through net proceeds from the sale of equity, debt financing arrangements and cash from operating activities. Our principal source of liquidity is cash and cash equivalents totaling $5.7 million as of December 31, 2023.
Liquidity and Capital Resources Sources of Funds Our operations have been financed primarily through net proceeds from the sale of equity, debt financing arrangements and cash from operating activities. Our principal source of liquidity is cash and cash equivalents totaling $13.2 million and account receivable of $25.5 million as of December 31, 2024.
On December 31, 2023, our available credit facility was approximately $18.0 million and we had $7.0 million outstanding on our line of credit, which was primarily used to fund our acquisition of SafePointe.
On December 31, 2024, our available credit facility was approximately $21.0 million and we had $4.0 million outstanding on our line of credit, which was primarily used to fund our acquisition of SafePointe.
During the year ended December 31, 2023, the fair value of the contingent consideration that we recorded in connection with our acquisition of Forensic Logic, decreased by $3.2 million, based upon adjustments to recorded liabilities as a result of actual revenues.
Our accumulated deficit was $104.3 million and $95.1 million as of December 31, 2024 and 2023, respectively. During the year ended December 31, 2023, the fair value of the contingent consideration that we recorded in connection with our acquisition of Forensic Logic, decreased to zero by $3.2 million, based upon adjustments to recorded liabilities as a result of actual revenues.
Coverage areas under contract for ShotSpotter included 170 cities and coverage areas under contract for ShotSpotter for Campus and ShotSpotter for Corporate included 19 campuses/sites across the United States, South Africa and the Bahamas, including some of the largest cities in the United States. As of December 31, 2023, we had 158 SafePointe lanes under contract.
Coverage areas under contract for ShotSpotter included 177 cities and coverage areas under contract for ShotSpotter for Campus and ShotSpotter for Corporate included 20 campuses/sites across the United States, South Africa, Brazil and the Bahamas, including some of the largest cities in the United States. As of December 31, 2024, we had 277 SafePointe lanes under contract.
We generated revenues of $92.7 million, $81.0 million, and $58.2 million for the years ended December 31, 2023, 2022, and 2021, respectively, representing year-over-year increases of 14% and 39%. For the years ended December 31, 2023, 2022, and 2021, revenues from ShotSpotter represented approximately 70%, 69% and 82% of total revenues, respectively.
We generated revenues of $102.0 million, $92.7 million, and $81.0 million for the years ended December 31, 2024, 2023 and 2022, respectively, representing year-over-year increases of 10% and 14%. For the years ended December 31, 2024, 2023 and 2022, revenues from ShotSpotter represented approximately 71%, 70% and 69% of total revenues, respectively.
Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment. We performed our annual test for goodwill impairment as of October 1, 2023 and concluded that no impairment charge was necessary. Income Taxes We account for income taxes under the asset and liability approach.
Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment. We performed our annual test for goodwill impairment as of October 1, 2024 and concluded that no impairment charge was necessary.
The stock repurchase program does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time. 71 During the year ended December 31, 2023, we repurchased 228,782 shares of our common stock under the 2022 Repurchase Program at an average price of $24.41 per share for approximately $5.6 million.
The stock repurchase program does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time. 74 During the year ended December 31, 2024, we repurchased 418,940 shares of our common stock at an average price of $14.31 per share for approximately $6.0 million, under the 2022 Repurchase Program.
In addition, we do not engage in trading activities involving non-exchange traded contracts. Critical Accounting Estimates and Policies Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of revenues, assets, liabilities, costs, and expenses.
Critical Accounting Estimates and Policies Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of revenues, assets, liabilities, costs, and expenses.
We completed our acquisition of Forensic Logic for approximately $4.6 million in cash, net of $0.3 million cash acquired at closing during the year ended December 31, 2022. 72 Financing Activities Cash generated by financing activities includes net proceeds from the exercise of stock options and warrants and proceeds from the employee stock purchase plan (“ESPP”) purchases, offset by payments for repurchases of our common stock and debt issuance and financing costs.
We completed our acquisition of SafePointe for approximately $11.0 million in cash, net of $0.4 million cash acquired at closing during the year December 31, 2023. 75 Financing Activities Cash generated by financing activities includes net proceeds from the exercise of stock options and proceeds from the employee stock purchase plan (“ESPP”) purchases, offset by payments for repurchases of our common stock and debt.
We are committed to developing comprehensive, respectful, and engaged partnerships with law enforcement agencies, elected officials and communities focused on making a positive difference in the world. We enter into subscription agreements that typically range from one to three years in duration.
Bob Showen, who believes that the highest and best use of technology is to promote social good. We are committed to developing comprehensive, respectful, and engaged partnerships with law enforcement agencies, elected officials and communities focused on making a positive difference in the world. 65 We enter into subscription agreements that typically range from one to three years in duration.
Cash Flows Comparison of Years Ended December 31, 2023 and 2022 The following table presents a summary of our cash flows for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ 10,951 $ 12,184 Investing activities (16,485 ) (15,539 ) Financing activities 795 (1,749 ) Net change in cash and cash equivalents $ (4,739 ) $ (5,104 ) As of December 31, 2023 and 2022, $0.5 million and $0.9 million in cash was held by our consolidated foreign subsidiaries, respectively.
Cash Flows Comparison of Years Ended December 31, 2024 and 2023 The following table presents a summary of our cash flows for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ 22,220 $ 10,951 Investing activities (6,432 ) (16,485 ) Financing activities (8,247 ) 795 Net change in cash and cash equivalents $ 7,541 $ (4,739 ) As of December 31, 2024 and 2023, $0.8 million and $0.5 million in cash was held by our consolidated foreign subsidiaries, respectively.
As part of the rebranding, we introduced our SafetySmart TM platform that includes five data-driven tools consisting of: (i) our flagship product, ShotSpotter ® (formerly ShotSpotter Respond), our leading outdoor gunshot detection, location and alerting system trusted by 170 cities and 19 universities and corporations as of December 31, 2023, (ii) CrimeTracer™ (formerly COPLINK X) a leading law enforcement search engine that enables investigators to search through more than one billion criminal justice records from across jurisdictions to generate tactical leads and quickly make intelligent connections to solve cases, (iii) CaseBuilder™ (formerly ShotSpotter Investigate) a one-stop investigative management system for tracking, reporting, and collaborating on cases, (iv) ResourceRouter ™ (formerly ShotSpotter Connect), which directs the deployment of patrol and community anti-violence resources in an objective way to help maximize the impact of limited resources and improve community safety, and (v) SafePointe ™, an AI-based weapons detection system, that we added when we acquired SafePointe in August 2023.
As part of the rebranding, we introduced our SafetySmart TM platform that includes six data-driven tools consisting of: (i) our flagship product, ShotSpotter ® , our leading outdoor gunshot detection, location and alerting system trusted by 177 cities and 20 universities and corporations as of December 31, 2024, (ii) CrimeTracer™, a leading law enforcement search engine that enables investigators to search through more than one billion criminal justice records from across jurisdictions to generate tactical leads and quickly make intelligent connections to solve cases, (iii) CaseBuilder™, a one-stop investigative management system for tracking, reporting, and collaborating on cases, (iv) ResourceRouter ™ , which directs the deployment of patrol and community anti-violence resources in an objective way to help maximize the impact of limited resources and improve community safety, (v) PlateRanger™ powered by Rekor ® , an ALPR and vehicle identification solution that leverages AI and machine learning to enhance investigative efficiency and provide real-time data sharing for law enforcement, introduced in July 2024 through a strategic partnership with Rekor Systems, Inc. and (vi) SafePointe ™, an AI-based weapons detection system.
See Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of our other significant accounting policies.
See Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of our other significant accounting policies. Revenue Recognition Revenue Recognition We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers.
Our security solutions, ShotSpotter for Highways, ShotSpotter for Campus, ShotSpotter for Corporate as well as CaseBuilder are typically sold on a subscription basis, each with a customized deployment plan. Our ResourceRouter solution, CaseBuilder Crime Gun (formerly ShotSpotter GCM™) and CrimeTracer are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city.
Our security solutions, ShotSpotter for Campus and ShotSpotter for Corporate are typically sold on a subscription basis, each with a customized deployment plan. Our ResourceRouter, CaseBuilder and CrimeTracer solutions are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city. We derive the majority of our revenues from subscription services.
Substantially all of our revenues for the years ended December 31, 2023, 2022, and 2021 were derived from customers within the United States (including Puerto Rico and the U.S. Virgin Islands).
The City of New York and the City of Chicago each accounted for 30% and 10%, respectively, of our total revenues for the year ended December 31, 2022. Substantially all of our revenues for the years ended December 31, 2024, 2023 and 2022 were derived from customers within the United States (including Puerto Rico and the U.S. Virgin Islands).
The agreement was amended in November 2022 to increase the size of our available credit facility to $25.0 million with an expiration date of October 15, 2024 and to increase the letter of credit sub-facility to $7.5 million. In February 2024, we amended the Umpqua Credit Agreement to extend the maturity date from October 15, 2024 to October 15, 2025.
The agreement was amended in November 2022 to increase the size of our available credit facility to $25.0 million with an expiration date of October 15, 2024, and further amended in February 2024 to extend the expiration date to October 15, 2025. The revolving loan facility is for general working capital purposes.
This also reflected a decrease in the fair value of the SafePointe contingent consideration liability of $2.5 million, based upon revised 2024 and 2025 revenue estimates utilized in the fair value methodology to estimate the contingent liability for the earnouts. Other Income (Expense), Net Other income (expense) did not increase materially compared with the prior year.
This reflected a decrease in the fair value of the SafePointe contingent consideration liability, based upon revised 2024 and 2025 revenue estimates utilized in the fair value methodology to estimate the contingent liability for the earnouts.
We may face additional challenges that may delay contract execution related to negotiating with governments in transition, the use of third-party integrations and consultants. Moreover, we anticipate that different political and regulatory considerations that vary across different jurisdictions could extend or make more difficult to predict the length of what is already a lengthy sales cycle.
Moreover, we anticipate that different political and regulatory considerations that vary across different jurisdictions could extend or make more difficult to predict the length of what is already a lengthy sales cycle.
We accomplish this by earning the trust of law enforcement and providing solutions to help them better engage and strengthen the police-community relationships in fulfilling their sworn obligation to serve and protect all. Our inspiration comes from our principal founder, Dr. Bob Showen, who believes that the highest and best use of technology is to promote social good.
We are a mission-driven organization that focuses on improving public safety outcomes. We accomplish this by earning the trust of law enforcement and providing solutions to help them better engage and strengthen the police-community relationships in fulfilling their sworn obligation to serve and protect all. Our inspiration comes from our principal founder, Dr.
In addition, we believe that entering into strategic partnerships with other service providers to cities and municipalities offers another potential avenue for expansion. 63 We will also focus on expanding our business by introducing new products and services to existing customers, such as ResourceRouter, CrimeTracer and as a result of our acquisition of SafePointe, an AI-driven weapon detection system and acquiring intellectual property assets.
We will also focus on expanding our business by introducing new products and services to existing customers, such as ResourceRouter, CrimeTracer and as a result of our acquisition of SafePointe, an AI-driven weapon detection system, and acquiring intellectual property assets. We believe that developing and acquiring products for law enforcement in adjacent categories is a path for additional growth.
Our ResourceRouter solution, CaseBuilder Crime Gun (formerly ShotSpotter GCM™) an offering of CaseBuilder focused on gun violence, and CrimeTracer are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city.
Our ResourceRouter solution, CaseBuilder an offering of CaseBuilder focused on gun violence, and CrimeTracer are also sold on a subscription basis generally customized based on the number of sworn officers in a particular city. We generate annual subscription revenues from the deployment of SafePointe on a per-lane basis, a lane being the detection area between two lanes.
Cost of revenues for our SafePointe solution are similar except that depreciation of the capitalized customer equipment is smaller due to the lower costs of SafePointe customer equipment.
Cost of revenues for our SafePointe solution are similar except that depreciation of the capitalized customer equipment is smaller due to the lower costs of SafePointe customer equipment. Impairment of property and equipment is primarily attributable to our write-off of the remaining book value of sensor networks related to customers lost.
During the year ended December 31, 2023, the fair value of the contingent consideration that we recorded in connection with our acquisition of SafePointe decreased by $2.4 million. This adjustment was prompted by revised revenue estimates for 2024 and 2025, which were incorporated into our fair value methodology.
During the year ended December 31, 2024, the fair value of the contingent consideration that we recorded in connection with our acquisition of SafePointe decreased to zero by $0.6 million. During the year ended December 31, 2023, the fair value of the contingent consideration that we recorded in connection with our acquisition of SafePointe decreased by $2.4 million.
Net cash provided by operating activities decreased $1.2 million in the year ended December 31, 2023 compared to net cash provided in the same period of 2022, primarily due to a decrease of $13.8 million in the change of deferred revenue and a decrease of $1.0 million in the change of accrued and other liabilities offset by a $13.8 million increase in collections.
Net cash provided by operating activities increased by $11.3 million in the year ended December 31, 2024 compared to net cash provided in the same period of 2023, primarily due to an increase of $4.4 million in the change of deferred revenue and an increase of $4.4 million in account receivable collection and $1.9 million in other liabilities.
The initial focus of these efforts is to develop innovative sensor applications as well as to test and expand the functionality of our outdoor sensors in challenging environmental conditions. 67 In the near term, we expect our research and development expenses to increase in absolute dollars and as a percentage of revenues as we increase our research and development headcount to further strengthen our software and invest in the development of our services.
In the near term, we expect our research and development expenses to increase in absolute dollars and as a percentage of revenues as we increase our research and development headcount to further strengthen our software and invest in the development of our services.
In addition, depreciation expense associated with deployed equipment is recognized over the first five years from the go live date. We also expect cost of revenues to increase in absolute dollars as we continue to invest in our customer success capabilities to drive growth and value for our customers.
We also expect cost of revenues to increase in absolute dollars as we continue to invest in our customer success capabilities to drive growth and value for our customers.
In some cases, we will need to bring in new skill sets to properly develop, market, sell or service these new products depending on the categories they represent. Consistent with this strategy, we expanded our suite of solutions with the acquisitions of Technologic, Forensic Logic and SafePointe.
Challenges we face in this area include ensuring our new products are reliable, integrated well with other SoundThinking solutions, and priced and serviced appropriately. In some cases, we will need to bring in new skill sets to properly develop, market, sell or service these new products depending on the categories they represent.
We had net loss of $2.7 million for the year ended December 31, 2023, net income of $6.4 million for the year ended December 31, 2022, and net loss of $4.4 million for the year ended December 31, 2021. Our accumulated deficit was $95.1 million and $92.4 million as of December 31, 2023 and 2022, respectively.
Our contract with the City of Chicago ended in November 2024. We had net loss of $9.2 million for the year ended December 31, 2024, net loss of $2.7 million for the year ended December 31, 2023, and net income of $6.4 million for the year ended December 31, 2022.
This was primarily due to $7.0 million in proceeds from our line of credit which was primarily used to fund our acquisition of SafePointe, approximately $0.2 million in proceeds from the exercise of stock options and $0.7 million in proceeds from ESPP purchases, offset by $5.6 million in payments for repurchases of our common stock, and $1.5 million in contingent liability payments.
Financing activities used $8.2 million in cash during the year ended December 31, 2024. This was primarily due to $3.0 million in payment on our line of credit and $6.0 million in payments for repurchases of our common stock, offset by $0.7 million in proceeds from ESPP purchases.
However, we recognize that we have limited international operational experience and currently operate in a limited number of regions outside of the United States. Operating successfully in international markets will require significant resources and management attention and will subject us to additional regulatory, economic, and political risks.
By adding additional sales resources in strategic locations, we believe we will be better positioned to reach these markets. However, we recognize that we have limited international operational experience and currently operate in a limited number of regions outside of the United States.
With respect to international sales, we believe that we have the potential to expand our coverage within existing areas, and to pursue opportunities in Latin America and other regions of the world. By adding additional sales resources in strategic locations, we believe we will be better positioned to reach these markets.
Consistent with this strategy, we expanded our suite of solutions with the acquisitions of Technologic, Forensic Logic and SafePointe. With respect to international sales, we believe that we have the potential to expand our coverage within existing areas, and to pursue opportunities in Latin America and other regions of the world.
In August 2023, we acquired SafePointe, a provider of an AI-driven next-generation concealed weapons detection solution and added this technology to our SafetySmart platform. Since our founding over 27 years ago, SoundThinking has been and continues to be a purpose-led company. We are a mission-driven organization that focuses on improving public safety outcomes.
In August 2023, we acquired SafePointe, a provider of an AI-driven next-generation concealed weapons detection solution and added this technology to our SafetySmart platform.
Impairment of property and equipment is primarily attributable to our write-off of the remaining book value of sensor networks related to customers lost. 66 In the near term, we expect our cost of revenues to increase in absolute dollars as our installed base increases, although certain of our costs of revenues are fixed and do not need to increase commensurate with increases in revenues.
In the near term, we expect our cost of revenues to increase in absolute dollars as our installed base increases, although certain of our costs of revenues are fixed and do not need to increase commensurate with increases in revenues. In addition, depreciation expense associated with deployed equipment is recognized over the first five years from the go live date.
The revolving loan facility is for general working capital purposes. Our available credit facility as of December 31, 2023 was approximately $18.0 million. On December 31, 2023, there was $7.0 million outstanding on our line of credit.
Our available credit facility as of December 31, 2024 was $21.0 million. On December 31, 2024, there was $4.0 million outstanding on our line of credit.
We generate annual subscription revenues from the deployment of SafePointe on a per-lane basis, a lane being the detection area between two lanes. As of December 31, 2023, we had ShotSpotter, ShotSpotter for Campus, and ShotSpotter for Corporate coverage areas under contract for over 1,160 square miles, of which over 1,120 square miles had gone live.
As of December 31, 2024, we had ShotSpotter, ShotSpotter for Campus, and ShotSpotter for Corporate coverage areas under contract for over 1,076 square miles, of which over 1,074 square miles had gone live.
Key Business Metrics December 31, 2023 2022 Revenue retention rate 107 % 124 % Sales and marketing spend per $1.00 of new annualized contract value $ 0.52 $ 0.40 Net new "go-live" square miles 155 102 Net new "go-live" cities 25 16 Annual recurring revenue (in millions) $ 95.4 $ 79.7 Revenue Retention Rate We calculate our revenue retention rate annually by dividing the (a) total revenues for such year from those customers who were customers during the corresponding prior year by (b) the total revenues from all customers in the corresponding prior year.
Key Business Metrics December 31, 2024 2023 Revenue retention rate 105 % 107 % Sales and marketing spend per $1.00 of new annualized contract value $ 0.63 $ 0.52 Net new "go-live" square miles (64 ) * 155 Net new "go-live" cities and universities 25 25 Annual recurring revenue (in millions) $ 95.6 $ 95.4 * 2024 "go-live" square miles is negative due to the fact that contract with City of Chicago was terminated in 2024.
Change in Fair Value of Contingent Consideration The fair value of contingent consideration related to our acquisitions decreased by $5.7.million during the year ended December 31, 2023. This was due to a decrease in the fair value of the Forensic Logic contingent consideration liability of $3.2 million, based upon adjustments to recorded liabilities as a result of actual revenues.
Change in Fair Value of Contingent Consideration The fair value of contingent consideration related to our acquisitions decreased by $0.6 million during the year ended December 31, 2024.
We believe that developing and acquiring products for law enforcement in adjacent categories is a path for additional growth. We believe our large and growing installed base of police departments who trust SoundThinking’s products, support, and way of doing business provide revenue growth opportunities.
We believe our large and growing installed base of police departments who trust SoundThinking’s products, support, and way of doing business provide revenue growth opportunities. The ability to cross-sell new products provides an opportunity to grow revenues per customer and 66 lifetime value.
General and Administrative Expense General and administrative expense increased by $4.8 million and was primarily due to a $2.3 million increase in consulting and outside services that included acquisition expenses related to our acquisition of SafePointe in the third quarter of 2023, increased legal expense and increased consulting expense for contract employees, a $2.0 million increase in personnel costs and a $0.5 million increase in office expense including insurance costs and other costs.
Research and Development Expense Research and development expense increased by $1.8 million primarily due to 12 months of expenses related to SafePointe in 2024 compared to four months in 2023. 72 General and Administrative Expense General and administrative expense increased by $3.3 million and was primarily due to a $2.2 million increase in stock-based compensation, a $0.9 million increase in bonus expense and a $1.4 million increase due to 12 months of expenses related to SafePointe in 2024 compared to four months in 2023, and offset by decrease of $1 million in legal fees related to the 2023 acquisition of SafePointe.
We are also investing in research and development resources in conjunction with our SoundThinking Labs projects and initiatives.
We are also investing in research and development resources in conjunction with our SoundThinking Labs projects and initiatives. The initial focus of these efforts is to develop innovative sensor applications as well as to test and expand the functionality of our outdoor sensors in challenging environmental conditions.
Operating Expenses Sales and Marketing Expense Sales and marketing expense increased by $4.5 million and was primarily due to a $1.4 million increase in personnel costs, a $0.8 million increase in tradename asset amortization related to our Forensic Logic acquisition, $0.8 million increase in marketing expense, a $0.7 million increase in consulting and commission expenses, a $0.3 million increase in credit loss expense, and a $0.5 million increase in other costs. 69 Research and Development Expense Research and development expense increased by $2.1 million and was primarily due to a $1.7 million increase in personnel-related costs due to increased headcount and a $0.4 million increase in consulting and outside services expense and other costs.
Operating Expenses Sales and Marketing Expense Sales and marketing expense increased by $1.2 million and was primarily due to 12 months of expenses related to SafePointe in 2024 compared to four months in 2023, offset by $0.7 million reduced costs in outside commission.
Removed
The City of New York and the City of Chicago each accounted for 30% and 10%, respectively, of our total revenues for the year ended December 31, 2022. The City of New York and the City of Chicago each accounted for 28% and 14%, respectively, of our total revenues for the year ended December 31, 2021.
Added
In July 2024, we announced a strategic partnership to create and launch a new end-to-end vehicle and ALPR public safety solution, “PlateRanger, Powered by Rekor.” This collaboration combines SoundThinking's expertise in acoustic gunshot detection and investigative solutions with Rekor's vehicle ALPR solutions. Since our founding over 28 years ago, SoundThinking has been and continues to be a purpose-led company.
Removed
The balance sheet within the consolidated financial statements as of and for the year ended December 31, 2023 within this Annual Report Form 10-K have been revised since our financial results for the year were reported in our earnings press release (the “Earnings Press Release”) and included in our Current Report on Form 8-K dated February 27, 2024.
Added
These adjustments were prompted by revised revenue estimates for 2024 and 2025, which were incorporated into our fair value methodology.
Removed
The changes were the result of changes to our purchase price accounting for our acquisition of SafePointe, which we acquired in the third quarter of 2023.
Added
In addition, we believe that entering into strategic partnerships with other service providers to cities and municipalities offers another potential avenue for expansion.
Removed
These changes impacted goodwill, accounts receivable and contract assets, and deferred revenue reflected on our balance sheet as of December 31, 2023, which were $34.2 million, $30.7 million and $42.1 million, respectively, as compared to the $33.7 million, $31.6 million and $41.9 million, respectively, initially reported in the Earnings Press Release in our Current Report on Form 8-K dated February 27, 2024.
Added
Operating successfully in international markets will require significant resources and management attention and will subject us to additional regulatory, economic, and political risks. We may face additional challenges that may delay contract execution related to negotiating with governments in transition, the use of third-party integrations and consultants.
Removed
Additionally, we recorded an escrow claim receivable of $0.6 million. The information in this Annual Report on Form 10-K amends and supersedes the disclosures in the Earnings Press Release.
Added
Revenue Retention Rate We calculate our revenue retention rate annually by dividing the (a) total revenues for such year from those customers who were customers during the corresponding prior year by (b) the total revenues from all customers in the corresponding prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHowever, if the average value of the South African Rand had been 10% higher relative to the U.S. dollar during 2023, 2022 or 2021, it would not have resulted in a significant impact to our results of operations for the years ended December 31, 2023, 2022 or 2021. To date, we have not engaged in any hedging strategies.
Biggest changeHowever, if the average value of the South African Rand had been 10% higher relative to the U.S. dollar during 2024, 2023 or 2022, it would not have resulted in a significant impact to our results of operations for the years ended December 31, 2024, 2023 or 2022. To date, we have not engaged in any hedging strategies.
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 77
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 79
Based on the outstanding balance of our Credit Agreement at December 31, 2023, a 100 basis point increase in the interest rate would increase interest expense by $0.1 million annually. Our cash includes cash in readily available checking and money market accounts.
Based on the outstanding balance of our Credit Agreement at December 31, 2024, a 100 basis point increase in the interest rate would increase interest expense by $0.04 million annually. Our cash includes cash in readily available checking and money market accounts.
These securities are not dependent on interest rate fluctuations that may cause the principal amount of these assets to fluctuate. We had cash and cash equivalents of $5.7 million as of December 31, 2023, which consists entirely of bank deposits.
These securities are not dependent on interest rate fluctuations that may cause the principal amount of these assets to fluctuate. We had cash and cash equivalents of $13.2 million as of December 31, 2024, which consists entirely of bank deposits.
Interest Rate Risk We are exposed to interest rate risk in the ordinary course of our business. At December 31, 2023, the outstanding balance of our Credit Agreement was $7.0 million, which bears interest at a variable rate. At December 31, 2023, the rate in effect was approximately 7.3%.
Interest Rate Risk We are exposed to interest rate risk in the ordinary course of our business. At December 31, 2024, the outstanding balance of our Credit Agreement was $4.0 million, which bears interest at a variable rate. At December 31, 2024, the rate in effect was approximately 6.5%.

Other SSTI 10-K year-over-year comparisons