ParaZero Announces 2024 Financial Results

TEL AVIV, Israel, March 21, 2025 (GLOBE NEWSWIRE) -- ParaZero Technologies Ltd. (Nasdaq: PRZO) (the "company" or "ParaZero"), an aerospace company focused on safety systems for commercial unmanned aircrafts and defense Counter UAS systems, reported today its financial results for year ended December 31, 2024.

Key Highlights of ParaZero's Achievements in 2024 & Recent Highlights:

   -- Sales increased by 50.2% to $932,154 for the year ended December 31, 
      2024, mainly thanks to shifting towards sales to OEM integrations, which 
      couples with recuring revenues in addition to the traditional aftermarket 
      segment. 
 
   -- Since the beginning of 2025, the Company has significantly strengthened 
      its cash position by completing a registered direct offering of aggregate 
      gross proceeds of approximately $3.1 million, in addition to receiving 
      $1.3 million in proceeds from warrant exercises. 

Expanded operations in the defense sector & Recent Highlights:

   -- During 2024, the company enhanced its penetration to the defense market 
      with new developments and collaborations. The company launched its 
      DropAir - Precision Airdrop System for rapid delivery of blood 
      transfusions in high-risk operational zones. ParaZero successfully tested 
      the system in collaboration with a leading drone company and moved 
      forward to phase II of the project with Israeli Ministry of Defense. 
 
   -- The company continued to advance its Counter-Unmanned Aerial Systems 
      (C-UAS) solution, securing new orders, including from a Tier-1 defense 
      customer. 
 
   -- Both systems gained approvals from the Israeli Defense Export Controls 
      Agency $(DECA)$, under the Israel Ministry of Defense $(MOD)$. 

Commercial developments:

ParaZero continued to establish its position as a leader in safety systems for urban mobility and aerial vehicles.

   -- The company launched number of new collaborations that led to new orders, 
      including a $187,000 purchase order from a U.S.-based Advanced Air 
      Mobility $(AAM)$ company. 
 
   -- In addition, it successfully delivered a special drone safety system 
      project for a leading Fortune 500 automotive manufacturer as part of the 
      customer's proprietary drone program. 
 
   -- ParaZero received a significant order from a leading Australian 
      distributor, strengthening its presence in Australia. 
 
   -- ParaZero announced its expansion in the U.S. through collaboration with 
      one of North America's largest drone distributors, Drone Nerds, to 
      promote and sell ParaZero's products. 

Regulatory approval:

The Company continues to facilitate its customers in achieving regulatory approvals for their operations as well as securing new approvals for its solutions.

   -- ParaZero received the prestigious Design Verification Report $(DVR.AU)$ 
      approval from the European Union Aviation Safety Agency (EASA) for its 
      SafeAir M-300 Pro and SafeAir M-350 Pro parachute safety kits. Its 
      SafeAir systems, integrated with the DJI Matrice 350, DJI Mavic 3T and 
      DJI Mavic 3E, have successfully achieved CE Class C5 compliance. 
 
   -- The company also announced that a leading drone solutions provider, 
      utilizing ParaZero's advanced safety technology, secured a Federal 
      Aviation Administration (FAA) waiver to conduct Beyond Visual Line of 
      Sight (BVLOS) drone operations. 

"2024 was a year of advancements for ParaZero, as recent geopolitical events have demonstrated the growing reliance on drones in modern warfare, both as offensive tools and as critical assets for delivering essential supplies in high-risk operational zones. At ParaZero, we have spent over a decade developing and refining our innovative, patent-protected technologies to address these evolving threats," stated Boaz Shetzer, CEO of ParaZero. "I am proud of the company's ability to successfully translate our innovation to meet the new needs of our customers and the market."

Shetzer added, "Our commitment to enhancing operational efficiency and safety is evident in our recent accomplishments, including strategic collaborations in the defense, urban mobility and aerial vehicle sectors, the successful advancement of our new DropAir Precision Airdrop System, the late-stage development of our C-UAS solution and our leadership in regulatory achievements."

Full Year 2024 Financial Highlights:

   -- Sales increased by $311,646, or 50.2%, to $932,154 for the year ended 
      December 31, 2024, compared to $620,508 for the year ended December 31, 
      2023. This increase was mainly attributed to that fact, that the company 
      shifted towards sales to OEMs integrations that contributed to a higher 
      volume of sales rather than to the aftermarket segment. This shift is 
      accompanied with recuring revenues. 
 
   -- Cost of sales increased by $397,251, or 83.3%, to $873,861 for the year 
      ended December 31, 2024, compared to $476,610 for the year ended 
      December 31, 2023. The increase was mainly due to the increase in the 
      volume of sales during the year ended December 31, 2024 and an inventory 
      write off of approximately $114,680 
 
   -- Research and development expenses increased by $1,506,552, or 237%, to 
      $2,143,353 for the year ended December 31, 2024, compared to $636,801 for 
      the year ended December 31, 2023. The increase resulted mainly from labor 
      costs of $843,881 accompanied an increase in by materials and experiments 
      costs of $386,839. 
 
   -- Sales and marketing expenses increased by $593,099, or 121.6%, to 
      $1,081,003 for the year ended December 31, 2024, compared to $487,904 for 
      the year ended December 31, 2023. The increase resulted mainly from labor, 
      professional services and more subcontractors' costs of $449,788 
      accompanied an increase in by travel and conferences participation costs 
      of $122,288. 
 
   -- General and administrative expenses increased by $927,128, or 62.9%, to 
      $2,400,000 for the year ended December 31, 2024, compared to $1,472,872 
      for the year ended December 31, 2023. The increase resulted mainly from 
      professional services rendered after the IPO and costs associated with 
      becoming a public company. 
 
   -- Other finance income, net was $200,724 for the year ended December 31, 
      2024, compared to finance income, net of $210,675 for the year ended 
      December 31, 2023. Other finance income, net, primarily includes income 
      from interest on deposits and exchange rate differences. 
 
   -- Net loss and comprehensive loss increased by $7,282,851, or 193%, to 
      $11,054,230 for the year ended December 31, 2024, compared to a net loss 
      of $3,771,379 for the year ended December 31, 2023. The increase was the 
      result of an increase of mainly a non-cash item, changes in fair value of 
      derivative warrant liabilities, along with an increase in operating 
      expenses, as described above. 
 
   -- The loss per share in 2024, was $0.99 compared to net loss per share of 
      $0.77 in 2023. 
 
   -- As of December 31, 2024, the company's cash and cash equivalents was 
      approximately $4.2 million and the company's total shareholders' deficit 
      was approximately $0.3 million. 

As a result of the warrant exercise and registered direct offering in January 2025 and February 2025, and as of the date of this current report, the Company believes it has stockholders' equity of $3.6 million.

A copy of ParaZero's annual report on Form 20-F for the year ended December 31, 2024 has been filed with the U.S. Securities and Exchange Commission at https://www.sec.gov/ and posted on ParaZero's investor relations website at https://parazero.com/investor-relations/. ParaZero will deliver a hard copy of its annual report, including its complete audited consolidated financial statements, free of charge, to its shareholders upon request at michal@efraty.com.

About ParaZero Technologies

ParaZero (Nasdaq: PRZO) is an aerospace company focused on drone safety systems for defense and commercial drones and urban air mobility aircraft. Started in 2014 by a passionate group of aviation professionals and drone industry veterans, ParaZero designs smart, autonomous parachute safety systems designed to enable safe flight operations over populated areas and beyond-visual-line-of-sight (BVLOS) as well as for various military applications including Counter UAS. For more information about ParaZero, please visit https://parazero.com/

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management's expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company's reports filed from time to time with the Securities and Exchange Commission ("SEC"), including, but not limited to, the risks detailed in the Company's Annual Report on Form 20-F filed with the SEC on March 21, 2025. Forward-looking statements speak only as of

the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. ParaZero is not responsible for the content of third-party websites.

Investor Relations Contact:

Michal Efraty

Investor Relations

michal@efraty.com

ParaZero Technologies Ltd. | 30 Dov Hoz, Kiryat Ono, Israel 5555626

P: +972-36885252 | E: contact@parazero.com | F: +972-3-688-5246

 
ParaZero Technologies Ltd. 
 BALANCE SHEET 
 (U.S. dollars in thousands, except share data and 
 per share data) 
-------------------------------------------------- 
 
 
                                      December 31,  December 31, 
                                Note      2024          2023 
                                ----  ------------  ------------ 
ASSETS 
CURRENT ASSETS: 
   Cash and cash equivalents             4,178,866     7,428,405 
   Trade receivables                       114,564        22,376 
   Other current assets          3,4       421,919       651,560 
   Inventories                     5       394,193       264,468 
                                      ------------  ------------ 
TOTAL CURRENT ASSETS                     5,109,542     8,366,809 
                                      ------------  ------------ 
 
NON-CURRENT ASSETS: 
   Restricted Deposit             2Z        68,001            -- 
   Prepaid expenses, net of 
   current portion                          33,333            -- 
   Operating lease 
    right-of-use asset             6       418,790         8,127 
   Property and equipment, net     7       107,906        49,981 
                                      ------------  ------------ 
TOTAL NON-CURRENT ASSETS                   628,030        58,108 
                                      ------------  ------------ 
 
TOTAL ASSETS                             5,737,572     8,424,917 
                                      ============  ============ 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY 
 (U.S. dollars in thousands, except share data and 
 per share data) 
-------------------------------------------------- 
 
 
                                    December 31,   December 31, 
                              Note      2024           2023 
                              ----  ------------   ------------ 
LIABILITIES AND 
SHAREHOLDERS' EQUITY 
(DEFICIT) 
CURRENT LIABILITIES: 
     Trade payables                      184,247         56,682 
     Operating lease 
      liabilities                6       202,563          7,543 
     Other current 
      liabilities                9       933,995        690,861 
                                    ------------   ------------ 
   TOTAL CURRENT LIABILITIES           1,320,805        755,086 
                                    ------------   ------------ 
 
   NON-CURRENT LIABILITIES: 
     Derivative warrant 
      liabilities              13A     4,511,491      1,564,773 
     Operating lease 
      liabilities, net of 
      current portion                    216,917              0 
                                    ------------   ------------ 
   TOTAL NON-CURRENT 
    LIABILITIES                        4,728,408      1,564,773 
                                    ------------   ------------ 
 
   COMMITMENTS AND 
   CONTINGENCIES 
   SHAREHOLDERS' EQUITY 
   (DEFICIT): 
     Ordinary shares, NIS 
      0.02 par value: 
      Authorized 200,000,000 
      and 25,000,000 as of 
      December 31, 2024 and 
      December 31, 2023; 
      Issued and outstanding 
      12,817,092 and 
      10,073,956 shares as 
      of December 31, 2024 
      and as of December 31, 
      2023, respectively       10A        72,061         56,227 
     Additional paid-in 
      capital                         29,093,585     24,471,888 
     Accumulated losses              (29,477,287)   (18,423,057) 
                                    ------------   ------------ 
   TOTAL SHAREHOLDERS' 
    EQUITY (DEFICIT)                    (311,641)     6,105,058 
                                    ------------   ------------ 
 
   TOTAL LIABILITIES AND 
    SHAREHOLDERS' EQUITY 
    (DEFICIT)                          5,737,572      8,424,917 
                                    ============   ============ 
 
 
STATEMENTS OF COMPREHENSIVE LOSS 
 (U.S. dollars in thousands, except share data and 
 per share data) 
-------------------------------------------------- 
 
 
                                  Year ended December 31, 
                             ---------------------------------- 
                       Note     2024        2023        2022 
                       ----  ----------   ---------   --------- 
     Sales               11     932,154     620,508     560,118 
     Cost of Sales              873,861     476,610     337,565 
                             ----------   ---------   --------- 
   Gross profit                  58,293     143,898     222,553 
     Research and 
      development 
      expenses                2,143,353     636,801     640,328 
     Selling and 
      marketing 
      expenses                1,081,003     487,904     264,728 
     General and 
      administrative 
      expenses                2,400,000   1,472,872     766,711 
     Initial public 
      offering 
      expenses                       --     345,925     389,396 
                             ----------   ---------   --------- 
   Operating loss             5,566,063   2,799,604   1,838,610 
     Change in fair 
     value of 
     convertible 
     notes              8C1          --     504,976          -- 
     Change in fair 
      value of 
      derivative 
      warrant 
      liabilities       13A   5,688,891     277,600          -- 
     Issuance 
      expenses 
      attributable to 
      derivate 
      warrant 
      liability         10B          --     247,129          -- 
     Interest 
      expenses on 
      related party 
      loan               15          --     152,745      17,386 
   Other finance 
    income, net                (200,724)   (210,675)   (202,958) 
                             ----------   ---------   --------- 
 
   Net loss and 
    comprehensive 
    loss                     11,054,230   3,771,379   1,653,038 
                             ==========   =========   ========= 
 
   Net loss per 
    ordinary share, 
    basic and 
    diluted                        0.99        0.77        0.49 
                             ----------   ---------   --------- 
   Weighted-average 
    number of 
    ordinary shares 
    outstanding, 
    basic and diluted 
    (*)                      11,129,978   4,891,071   3,349,071 
                             ----------   ---------   --------- 
 
 
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) 
 (U.S. dollars in thousands, except share data and 
 per share data) 
------------------------------------------------------- 
 
 
                     Ordinary shares    Additional 
                   ------------------- 
                    Number of            paid-in     Accumulated 
                      shares    Amount    Capital       Losses        Total 
                   -----------  ------  ----------   -----------   ----------- 
                                          U.S. dollars 
BALANCE AS OF 
 DECEMBER 31, 
 2021                  359,743   1,945   6,380,403   (12,998,640)   (6,616,292) 
  Conversion of 
   Former Parent 
   Company's debt 
   into ordinary 
   shares and 
   warrants          3,237,699  19,511   6,403,797            --     6,423,308 
  Stock based 
   compensation             --      --      91,377            --        91,377 
  Benefit to the 
   Company by an 
   equity holder 
   with respect to 
   funding 
   transactions             --      --     112,715            --       112,715 
  Comprehensive             --      --          --    (1,653,038)   (1,653,038) 
                    ----------  ------  ----------   -----------   ----------- 
BALANCE AS OF 
 DECEMBER 31, 
 2022                3,597,442  21,456  12,988,292   (14,651,678)   (1,641,930) 
  Stock based 
   compensation             --      --     490,015            --       490,015 
  Conversion of 
   convertible 
   note into 
   ordinary 
   shares              504,976   2,734   2,017,170            --     2,019,904 
  Issuance of 
   ordinary shares 
   and warrants 
   upon initial 
   public 
   offering, net 
   of issuance 
   costs             1,950,000  10,561   5,919,064            --     5,929,625 
  Issuance of 
   ordinary 
   shares, 
   pre-funded 
   warrants, and 
   warrants upon 
   private 
   placement, net 
   of issuance 
   costs (*)         4,021,538  21,476   3,045,180            --     3,066,656 
  Benefit to the 
   Company by an 
   equity holder 
   with respect to 
   funding 
   transactions             --      --      12,167            --        12,167 
  Comprehensive 
   loss                     --      --          --    (3,771,379)   (3,771,379) 
                    ----------  ------  ----------   -----------   ----------- 
BALANCE AS OF 
 DECEMBER 31, 
 2023               10,073,956  56,227  24,471,888   (18,423,057)    6,105,058 
  Stock based 
   compensation             --      --      75,357            --        75,357 
    Exercise of 
     pre-funded 
     warrants and 
     consultants 
     warrants (*)    1,088,590   5,792      (5,792)           --            -- 
    Exercise of 
     warrants A      1,654,546  10,042   4,552,132            --     4,562,174 

Comprehensive loss                                   (11,054,230)  (11,054,230) 
                    ----------  ------  ----------   -----------   ----------- 
BALANCE AS OF 
 DECEMBER 31, 
 2024               12,817,092  72,061  29,093,585   (29,477,287)     (311,641) 
 
 
STATEMENTS OF CASH FLOWS 
 (U.S. dollars in thousands, except share data and 
 per share data) 
-------------------------------------------------- 
 
 
                            Year ended December 31, 
                     -------------------------------------- 
                         2024          2023         2022 
                     ------------   ----------   ---------- 
CASH FLOWS FROM 
OPERATING 
ACTIVITIES: 
Net loss              (11,054,230)  (3,771,379)  (1,653,038) 
Adjustments 
required to 
reconcile net loss 
to net cash used 
in operating 
activities: 
  Depreciation             22,814       17,087       18,495 
  Stock based 
   compensation            75,357       14,815       52,286 
  Interest expenses 
   with respect to 
   funding from 
   related party               --      112,373       12,509 
  Change in fair 
  value of 
  convertible 
  loan                         --      504,976           -- 
  Changes in fair 
   value of 
   derivative 
   liabilities          5,688,891      277,600           -- 
  Issuance 
  expenses 
  attributable to 
  derivative 
  warrant 
  liabilities                  --      247,129           -- 
  Inventory 
   write-down             114,617       33,360       12,387 
  Foreign currency 
   exchange 
   differences with 
   respect to amount 
   due to a Former 
   Parent Company              --           --     (243,948) 
  Finance expenses            689          583        4,021 
Loss from exchange 
differences on 
cash and 
equivalents                31,579           --           -- 
Changes in 
operating assets 
and liabilities: 
  Trade receivables, 
   net                    (92,188)     161,689     (176,863) 
  Other current 
   assets                 229,641     (472,020)     (96,782) 
  Prepaid expenses, 
   net of current 
   portion                (33,333) 
  Deferred initial 
   public offering 
   cost                        --           --     (252,041) 
  Inventories            (244,343)       6,995       34,205 
  Operating lease 
   right-of-use 
   asset                  135,266       48,766      (48,633) 
  Trade payables          127,565        9,422       10,145 
  Operating lease 
   liabilities           (134,681)     (45,911)     (48,975) 
  Other current 
   liabilities            243,134      (83,785)     404,597 
                      -----------   ----------   ---------- 
 
  Net cash used in 
   operating 
   activities          (4,889,222)  (2,938,300)  (1,971,635) 
                      -----------   ----------   ---------- 
 
CASH FLOWS FROM 
INVESTING 
ACTIVITIES: 
  Change in 
   restricted 
   deposit                (68,001) 
  Purchase of 
   property and 
   equipment              (80,738)     (25,757)      (9,725) 
                      -----------   ----------   ---------- 
 
  Net cash used in 
   investing 
   activities            (148,739)     (25,757)      (9,725) 
                      -----------   ----------   ---------- 
 
CASH FLOWS FROM 
FINANCING 
ACTIVITIES: 
  Cost associated 
   with the 
   conversion of the 
   Former Parent 
   Company's debt              --           --      (84,780) 
  Proceeds from 
   issuance of 
   convertible 
   notes                       --           --    1,514,928 
  Proceeds from 
   exercise of 
   warrants             1,820,001 
  Issuance of 
  ordinary shares 
  in initial 
  public offering, 
  net of issuance 
  costs (Note 
  10c)                         --    6,695,957           -- 
  Issuance of 
  ordinary shares, 
  pre-funded 
  warrants and 
  warrants in 
  private 
  placement, net 
  of issuance 
  costs (Note 
  10b)                         --    4,106,699           -- 
  Receipt of loan 
   from related 
   party                       --      245,000      500,000 
  Repayment of loan 
   from related 
   party                       --     (745,000)          -- 
  Receipt of loans 
   from the Former 
   Parent Company              --           --      107,994 
                      -----------   ----------   ---------- 
 
  Net cash provided 
   by financing 
   activities           1,820,001   10,302,656    2,038,142 
                      -----------   ----------   -- 

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