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Nauticus Robotics(KITT) - 2024 Q3 - Quarterly Report
KITTNauticus Robotics(KITT)2024-11-12 22:19
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Financial Performance - Total revenue for the nine months ended September 30, 2024, was 1,593,854,adecreasefrom1,593,854, a decrease from 5,542,749 for the same period in 2023[14] - Operating loss for the nine months ended September 30, 2024, was (17,131,765),comparedto(17,131,765), compared to (20,891,533) for the same period in 2023, indicating an improvement[14] - Net loss for the nine months ended September 30, 2024, was (16,316,664),comparedto(16,316,664), compared to (11,144,012) for the same period in 2023[14] - Basic loss per share for the nine months ended September 30, 2024, was (8.54),comparedto(8.54), compared to (9.92) for the same period in 2023[14] - Total costs and expenses for the nine months ended September 30, 2024, were 18,468,014,comparedto18,468,014, compared to 26,434,282 for the same period in 2023[14] - Total revenue for the three months ended September 30, 2024, was 370,187,adecreaseof76.8370,187, a decrease of 76.8% compared to 1,593,854 for the same period in 2023[65] - For the three months ended September 30, 2024, total revenue decreased by 1,223,667or771,223,667 or 77% compared to the same period in 2023, primarily due to a reduction in government-related contracts[183] - For the nine months ended September 30, 2024, total revenue decreased by 4,206,500 or 76% compared to the same period in 2023, driven by similar factors[183] Cash and Liquidity - Cash and cash equivalents increased to 2,915,757asofSeptember30,2024,from2,915,757 as of September 30, 2024, from 753,398 as of December 31, 2023[13] - Cash and cash equivalents at the end of the period on September 30, 2024, were 2,915,757,downfrom2,915,757, down from 6,771,531 at the end of the same period in 2023[23] - The company reported a net cash used in operating activities of (20,128,427)fortheninemonthsendedSeptember30,2024,comparedto(20,128,427) for the nine months ended September 30, 2024, compared to (16,626,631) in the prior year[23] - The company received net proceeds of 22,346,163fromdebtandequityfinancingduringtheninemonthsendedSeptember30,2024[193]−Thecompanymayrequireadditionalliquiditytocontinueoperationsoverthenexttwelvemonths,withacurrentinvestorcommittedtoprovidesupport[192]AssetsandLiabilities−Totalcurrentliabilitiesdecreasedto22,346,163 from debt and equity financing during the nine months ended September 30, 2024[193] - The company may require additional liquidity to continue operations over the next twelve months, with a current investor committed to provide support[192] Assets and Liabilities - Total current liabilities decreased to 13,135,564 as of September 30, 2024, from 17,387,236asofDecember31,2023[13]−Totalassetsdecreasedto17,387,236 as of December 31, 2023[13] - Total assets decreased to 24,987,925 as of September 30, 2024, from 26,148,475asofDecember31,2023[13]−Totalliabilitiesdecreasedto26,148,475 as of December 31, 2023[13] - Total liabilities decreased to 61,493,781 as of September 30, 2024, from 67,935,325asofDecember31,2023[13]−Totalstockholders′equity(deficit)asofSeptember30,2024,was67,935,325 as of December 31, 2023[13] - Total stockholders' equity (deficit) as of September 30, 2024, was (36,505,856), a decrease from (2,676,314)asofSeptember30,2023[21]−TheaccumulateddeficitasofSeptember30,2024,was(2,676,314) as of September 30, 2023[21] - The accumulated deficit as of September 30, 2024, was (135,108,367), an increase from (79,249,114)asofSeptember30,2023[21]Expenses−Researchanddevelopmentexpenseswere(79,249,114) as of September 30, 2023[21] Expenses - Research and development expenses were 64,103 for the nine months ended September 30, 2024, down from 984,882forthesameperiodin2023[14]−Thecompanyreportedasignificantincreaseindepreciationexpenses,totaling984,882 for the same period in 2023[14] - The company reported a significant increase in depreciation expenses, totaling 1,283,858 for the nine months ended September 30, 2024, compared to 487,052intheprioryear[23]−Stock−basedcompensationfortheninemonthsendedSeptember30,2024,was487,052 in the prior year[23] - Stock-based compensation for the nine months ended September 30, 2024, was 1,872,504, a decrease from 3,995,020inthesameperiodof2023[23]−Generalandadministrativecostsdecreasedby3,995,020 in the same period of 2023[23] - General and administrative costs decreased by 3,858,934 or 58% for the three months ended September 30, 2024, compared to the same period in 2023, due to headcount reductions[187] - Research and development costs decreased by 275,154or100275,154 or 100% for the three months ended September 30, 2024, compared to the same period in 2023, as the company achieved technological feasibility[186] Debt and Financing - The company raised 14,305,000 from notes payable and 9,857,857fromanAt−the−Market(ATM)offeringduringtheninemonthsendedSeptember30,2024[23]−AsofSeptember30,2024,totalnotespayableamountedto9,857,857 from an At-the-Market (ATM) offering during the nine months ended September 30, 2024[23] - As of September 30, 2024, total notes payable amounted to 58,438,574, an increase of 19.5% from 48,825,320onDecember31,2023[79]−Thecompanyissuedconvertiblesecureddebentureswithaprincipalamountof48,825,320 on December 31, 2023[79] - The company issued convertible secured debentures with a principal amount of 36,530,320, generating gross proceeds of 35,800,000,withadebtdiscounttotaling35,800,000, with a debt discount totaling 21,679,716[80] - The effective interest rate on the debentures was approximately 25.2% as of September 30, 2024[87] - The company entered into a 2023 Term Loan Agreement providing up to 20millioninsecuredtermloans,withaninitialfundingof20 million in secured term loans, with an initial funding of 11,600,000[90][91] - The 2023 Term Loan Agreement includes a 2.5% exit fee of 290,000andbearsinterestat12.5290,000 and bears interest at 12.5% per annum, payable quarterly[91] Internal Controls and Compliance - As of September 30, 2024, the company concluded that its disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting[197] - The previously identified material weakness relates to a lack of qualified accounting personnel and inadequate procedures for the accounting close process, affecting timely financial statement preparation[199] - Remediation initiatives include hiring additional experienced accounting personnel and modifying a new Enterprise Resource Planning (ERP) System to automate processes and enhance compliance[200] - The company plans to document system controls, conduct user access reviews, and develop policies for internal control over financial reporting as part of its remediation plan[202] - The significant turnover of key finance personnel at the end of 2023 has created a gap in the implementation of remediation initiatives[200] Business Operations - Nauticus Robotics, Inc. does not generate sufficient revenue to cover operating expenses, working capital, and capital expenditures, necessitating cost-cutting measures and potential additional liquidity support from investors[27] - Nauticus Robotics is currently testing and certifying a new generation of vehicles aimed at reducing operational costs and improving data collection for subsea infrastructure[1] - The company’s business model includes providing robotic systems for service, selling vehicles and components, and licensing related software to commercial and government sectors[1] - Major customers accounted for 100% of total revenue during the three and nine months ended September 30, 2024, indicating a high concentration of credit risk[59] Stock and Equity - A 1-for-36 reverse stock split resulted in 150,107,598 shares being converted into 4,169,679 shares[116] - The Company issued 50,631,263 shares under an At The Market Offering Agreement for gross proceeds of 9,857,857[123] - The Company entered into a Securities Purchase Agreement to sell shares at a price of 2pershare,resettingconversionpricesunderexistingwarrantsanddebentures[124]−Thecompanyhas8,624,991PublicWarrantsoutstanding,exercisableat2 per share, resetting conversion prices under existing warrants and debentures[124] - The company has 8,624,991 Public Warrants outstanding, exercisable at 11.50 per share, with an expiration date of September 9, 2027[128] - The company assumed 7,175,000 Private Warrants, which are not publicly traded, also exercisable at $11.50 per share[132]