Part I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2025 financial statements show increased assets and positive equity, with a significantly improved net loss [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$48.5 million** due to the SeaTrepid acquisition, turning stockholders' equity positive | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $10,054,304 | $1,186,047 | | Total Assets | $48,481,073 | $22,685,087 | | Goodwill | $10,652,388 | $0 | | Total Liabilities | $46,959,571 | $43,082,500 | | Total Stockholders' Equity (Deficit) | $1,521,502 | $(20,397,413) | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue decreased, but net loss significantly narrowed to **$(7.6) million** due to the absence of a large prior-year debt extinguishment loss | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :--- | :--- | :--- | | Total Revenue | $165,256 | $464,354 | | Operating Loss | $(5,863,763) | $(5,549,330) | | Loss on extinguishment of debt | $0 | $78,734,949 | | Net Loss | $(7,567,187) | $(72,838,936) | | Basic and diluted LPS | $(0.28) | $(58.75) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities used cash, while financing provided **$19.4 million** from an ATM offering, resulting in **$10.1 million** cash at quarter-end | Cash Flow Activity | Q1 2025 (USD) | Q1 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,649,883) | $(6,660,282) | | Net cash (used in) provided by investing activities | $(3,919,981) | $68,482 | | Net cash from financing activities | $19,438,121 | $12,025,709 | | Net change in cash and cash equivalents | $8,868,257 | $5,433,909 | | Cash and cash equivalents, end of period | $10,054,304 | $6,187,307 | - The company raised **$19.4 million** net from an At The Market (ATM) offering[23](index=23&type=chunk) - The acquisition of SeaTrepid used **$3.9 million** in cash, net of cash acquired[23](index=23&type=chunk) [Notes to Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include the **$14.4 million** SeaTrepid acquisition, liquidity concerns, and equity changes including a reverse stock split - The company acquired SeaTrepid International LLC on March 20, 2025, for a total consideration of **$14.4 million** to integrate its AI software into SeaTrepid's ROV fleet[29](index=29&type=chunk)[136](index=136&type=chunk) - The company does not generate sufficient revenue to cover expenses and may require additional liquidity, but believes it has sufficient resources to continue as a going concern for at least one year due to investor support[30](index=30&type=chunk) - In Q1 2025, two customers accounted for **100%** of total revenue (**75%** and **25%** respectively)[73](index=73&type=chunk) - The company effected a **1-for-36** reverse stock split on July 22, 2024, with all share and per-share data retroactively adjusted[159](index=159&type=chunk) [Management's Discussion and Analysis (MD&A)](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, noting a **64%** revenue decrease but a significant improvement in net loss due to a one-time prior-year event [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Revenue decreased **64%** in Q1 2025, but net loss improved **90%** to **$(7.6) million** due to the absence of a large prior-year debt extinguishment loss | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $165,256 | $464,354 | -64% | | Cost of Revenue | $1,238,957 | $2,093,955 | -41% | | G&A Expenses | $4,309,686 | $3,430,010 | +26% | | Operating Loss | $(5,863,763) | $(5,549,330) | +6% | | Net Loss | $(7,567,187) | $(72,838,936) | -90% | - The decrease in revenue was primarily driven by a reduction in government-related contracts[222](index=222&type=chunk) - The increase in G&A costs was driven by the SeaTrepid acquisition[225](index=225&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$10.1 million** cash, relying on external financing, including **$19.4 million** from an ATM offering, to support operations - The company had **$10,054,304** in cash and cash equivalents as of March 31, 2025[231](index=231&type=chunk) - The company received net proceeds of **$19.4 million** from an ATM share offering in Q1 2025[232](index=232&type=chunk) - Cash used in operating activities was **$6.6 million**, and cash used for the SeaTrepid acquisition was **$3.9 million**[234](index=234&type=chunk) - Management states that with committed investor support, they believe there are sufficient resources to continue as a going concern for at least one year[230](index=230&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to material weaknesses, with a remediation plan underway targeting full implementation by end of 2025 - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[236](index=236&type=chunk) - Material weaknesses were identified related to (1) ineffective controls over significant complex transactions and (2) failure to remediate previously reported weaknesses in user access controls[240](index=240&type=chunk) - A remediation plan is in progress, targeting formal review processes and user access controls, with full implementation expected by the end of 2025[241](index=241&type=chunk) Part II [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceeding[245](index=245&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported for the quarter - No material changes in risk factors were reported for the quarter[246](index=246&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued **17,823,603** common shares through unregistered sales, primarily from preferred stock and term loan conversions - Issued **16,018,211** common shares upon conversion of Series A Preferred Stock by related parties ATW I and SLS[247](index=247&type=chunk)[165](index=165&type=chunk) - Issued **1,805,392** common shares upon conversion of 2024 Term Loan notes by related parties ATW I and ATW II[247](index=247&type=chunk)[166](index=166&type=chunk)

Company Overview - Nauticus Robotics, Inc. develops autonomous robots for ocean industries, utilizing sensors, artificial intelligence, and algorithms for adaptability in changing environments [3] - The company's business model includes providing robotic systems for services, selling vehicles and components, and licensing software to commercial and defense sectors [3] - Nauticus is testing and certifying a new generation of vehicles aimed at reducing operational costs and gathering data for subsea infrastructure maintenance [3] Financial Results Announcement - Nauticus plans to host its first quarter financial and operating results call for the period ended March 31, 2025, on May 15, 2025, at 10:00 am Central Time [1] - Participants can join the earnings conference call by dialing a toll-free number or accessing a listen-only webcast [2]

Core Insights - Nauticus Robotics, Inc. is actively participating in multiple key industry conferences in May 2025, showcasing its innovations in autonomous subsea robotics and software solutions [1][4]. Conference Participation - At the Offshore Technology Conference (OTC) on May 8, 2025, Nauticus will present a paper on the Aquanaut® vehicle, detailing its transition from design to commercial viability [2]. - Nauticus' Chief Technology Officer, JD Yamokoski, will be part of a panel discussion at the DeepStar Technology Symposium on May 9, 2025, focusing on robotics for digital twin data acquisition [3]. - The company's President and CEO, John Gibson, will participate in a panel at the Louisiana Energy Conference (LEC) on May 27, 2025, discussing offshore supply vessels and marine services [4]. Company Overview - Nauticus Robotics develops autonomous robots for ocean industries, utilizing sensors, artificial intelligence, and algorithms for effective decision-making in changing environments [5]. - The company's business model includes providing robotic services, selling vehicles and components, and licensing software to both commercial and defense sectors [5]. - Nauticus is focused on reducing operational costs and environmental impact while enhancing safety and efficiency in subsea operations through its innovative technologies [5].

Core Insights - Nauticus Robotics, Inc. has commenced its 2025 offshore season with significant contracts in both oil and gas and offshore wind industries [1][2] - The company is leveraging its autonomous robotic systems to enhance operational efficiency and safety in subsea environments [3] Group 1: Offshore Operations - The first ROV is contracted for a minimum of 120 days to support oil and gas drill operations in the Gulf Coast [1] - A second ROV has completed mobilization for the offshore wind industry and is transitioning to the Gulf Coast for further operations [2] Group 2: Technology and Innovation - Nauticus Robotics focuses on developing autonomous robots that utilize sensors, AI, and algorithms for effective decision-making in changing environments [3] - The company is testing a new generation of vehicles aimed at reducing operational costs and improving data collection for subsea infrastructure [3] Group 3: Business Model and Market Strategy - Nauticus' business model includes service provision, vehicle sales, and software licensing across commercial and defense sectors [3] - The combination of ROVs and Aquanaut vehicles on a single vessel is expected to expand Nauticus' customer base and strengthen existing relationships [2]

Financial Data and Key Metrics Changes - Revenue for the year was $1.8 million, down $4.8 million from 2023, primarily due to a reduction in government contracts [24][25] - Operating expenses for the year were $24.9 million, which is a $36.8 million improvement from 2023 [25] - Net loss for the year was $134.9 million, an increase of $84.2 million from the previous year, mainly due to a $127.6 million loss on extinguishment of debt [27] - Adjusted net loss for the year was $26.1 million, compared to $34.3 million for the prior year, showing an $8.2 million improvement [28] - Cash at the end of 2024 was $1.2 million, compared to $0.7 million at the end of 2023 [29] Business Line Data and Key Metrics Changes - The company recognized revenue for commercial operations of the Aquanaut vehicle for the first time in its history [25] - The acquisition of C-Trepid is expected to enhance the company's offerings and reduce customer concentration [14][15] Market Data and Key Metrics Changes - The offshore market is experiencing a resurgence, with stable oil prices allowing for long-term planning [73] - The company is positioned to take advantage of a busy offshore market in 2025, with significant demand for its services [39][45] Company Strategy and Development Direction - The company is transitioning from a research and development focus to a commercial revenue-generating model [8] - Plans for 2025 include leveraging lessons learned from the inaugural offshore operations and expanding the customer base [10][12] - The government contracting side is seen as a stable opportunity with longer lead times and larger upside potential [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, anticipating significant revenue growth and margin improvement [49] - The company is focused on customer needs and operational efficiency, with a strong pipeline of contracts expected [46][82] Other Important Information - The company cured its noncompliance issues with NASDAQ in early 2025 [17] - A restatement of financial statements was announced due to a correction in accounting treatment for a complex debt transaction [19][20] Q&A Session Summary Question: What is the potential revenue for 2025? - Management anticipates revenue significantly higher than $16 million for 2025, with potential upside if additional assets are deployed [59] Question: What differentiates the company's autonomous underwater vehicles from competitors? - The company has a leadership position in manipulators for autonomous underwater vehicles, offering unique capabilities such as untethered operation and advanced imaging [61][62] Question: What are the capital requirements for the business? - The company is exploring non-dilutive capital options to fund additional assets based on demand, with expected revenue generation of $6 to $8 million per asset per season [66][69] Question: What market dynamics are contributing to a strong offshore season? - Stable oil prices and increased investment in offshore infrastructure are driving demand, alongside regulatory inspections and decommissioning projects [74][76]

Financial Data and Key Metrics Changes - Revenue for 2024 was $1.8 million, down $4.8 million from 2023, primarily due to a reduction in government contracts [24][25] - Operating expenses for the year were $24.9 million, which is a $36.8 million improvement from 2023 [25] - Net loss for the year was $134.9 million, an increase of $84.2 million from the previous year, mainly due to a $127.6 million loss on extinguishment of debt [27] - Adjusted net loss for the year was $26.1 million, compared to $34.3 million for the prior year, showing an $8.2 million improvement [28] - Cash at the end of 2024 was $1.2 million, compared to $0.7 million at the end of 2023 [29] Business Line Data and Key Metrics Changes - The company recognized revenue for commercial operations of the Aquanaut vehicle for the first time in its history [25] - The acquisition of C-Trepid is expected to provide a significant backlog of work and reduce customer concentration [14][34] Market Data and Key Metrics Changes - The offshore market is experiencing a resurgence, with stable oil prices and increased long-term investments in infrastructure [73][76] - The company anticipates 2025 to be one of the busiest offshore markets in the past decade, with strong demand for its services [45] Company Strategy and Development Direction - The company is transitioning from a research and development focus to a commercial revenue-generating model [8] - Plans for 2025 include leveraging lessons learned from the inaugural offshore operations and enhancing the capabilities of the Aquanaut vehicle [10][36] - The government contracting side is expected to provide stability and larger upside compared to seasonal commercial contracts [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming offshore season, citing eagerness from customers to adopt autonomous technology [12][13] - The company has cured its noncompliance issues with NASDAQ and is focused on securing necessary cash for 2025 [22][17] - Management expects significant revenue growth in 2025, projecting revenues greater than $16 million [59] Other Important Information - The company filed restated financial statements due to a correction in accounting treatment for a complex debt transaction [19] - The acquisition of SeaTrepid is seen as a game-changer, providing access to a broader group of early adopters [14] Q&A Session Summary Question: What is the potential revenue for 2025? - Management is confident that revenue will be significantly higher than 2024, projecting greater than $16 million [59] Question: What differentiates the company's autonomous underwater vehicles from competitors? - The company has a leadership position in manipulators for autonomous underwater vehicles, offering unique capabilities such as untethered operation and depth capabilities of 3,000 meters [61][62] Question: What are the capital requirements for the business? - The company is exploring non-dilutive approaches to bring in capital for additional assets based on demand, with potential revenue generation of $6 to $8 million per season per asset [66][69] Question: What market dynamics are contributing to a strong offshore season? - Stable oil prices and long-term investment commitments in offshore platforms are driving demand, along with regulatory inspections and decommissioning activities [73][76]

Financial Results - Nauticus Robotics, Inc. reported its financial results for the quarter and year ended December 31, 2024, along with amended quarterly results for Q1, Q2, and Q3 of 2024[4] Conference Call - The company will hold a conference call to discuss its operating results following the press release issued on April 15, 2025[4] Press Release - The press release is incorporated as Exhibit 99.1 in the Current Report on Form 8-K[4]

Core Insights - Nauticus Robotics, Inc. has transitioned from a research and development company to a commercial entity focused on generating revenue, marking a transformational year in 2024 [2][9] - The company is set to enhance its offshore inspection operations by moving from tethered to autonomous execution, which is expected to improve operational efficiency for customers [3][4] - Nauticus completed the acquisition of SeaTrepid International, which is anticipated to expand its customer base and operational capabilities [8] Financial Highlights - For the fourth quarter of 2024, Nauticus reported revenue of $0.5 million, a decrease from $1.1 million in the same period of 2023, with full-year revenue at $1.8 million compared to $6.6 million in 2023 [10] - Total operating expenses for the fourth quarter were $6.5 million, down $28.8 million from the prior year, while full-year expenses were $24.9 million, a decrease of $36.8 million [11] - The adjusted net loss for the fourth quarter was $6.9 million, an improvement from an adjusted net loss of $8.8 million in the same period of 2023, with a full-year adjusted net loss of $26.1 million compared to $34.3 million in 2023 [12][29] Operational Highlights - The Aquanaut vehicle successfully completed its first deepwater testing in 2024, leading to immediate commercial work and ongoing discussions with new customers [4] - The ToolKITT software team confirmed operations on an existing ROV, aiming to reduce subsea operational costs for customers, with a commercial product release targeted for 2025 [5] - The Olympic Arm team is set to complete the first electric manipulator units for Aquanaut vehicles and existing ROVs by the end of 2025, enhancing the vehicle's capabilities [6] Balance Sheet and Liquidity - As of December 31, 2024, Nauticus had cash and cash equivalents of $1.2 million, an increase from $0.8 million at the end of 2023 [15] - The company raised $19.4 million through At The Market offerings in Q1 2025, issuing nearly 7.5 million shares [15] Strategic Developments - The government team established a formal alliance with its largest customer to address emerging challenges, indicating a focus on long-term stability and growth in governmental contracting [7] - Nauticus is actively pursuing opportunities in the offshore sector, leveraging its acquisition of SeaTrepid to enhance its service offerings and customer relationships [8]

Financial Performance - The company incurred a net loss of $134.9 million and $50.7 million for the years ended December 31, 2024 and 2023, respectively, and expects to continue incurring operating and net losses until at least Q1 2026 [105]. - Negative cash flow from operating activities was $24.2 million and $21.7 million for the years ended December 31, 2024 and 2023, respectively, with expectations of continued negative cash flow for the remainder of 2025 [106]. - The company has not yet achieved positive operating cash flow and its ability to generate positive cash flow in the near term is uncertain [107]. - The company reported negative cash flow from operating activities of $24.2 million and $21.7 million for the years ended December 31, 2024, and 2023, respectively, and expects to continue having negative cash flow for the remainder of 2025 [218]. - As of December 31, 2024, the company had federal net operating losses (NOLs) of approximately $121 million, with about $646,000 beginning to expire in 2035 [219]. Revenue Concentration and Customer Dependence - The company relies on a limited number of customers for a significant portion of its revenue, which poses risks related to revenue concentration [101]. - For the year ended December 31, 2024, sales to three customers accounted for 82% of total revenue, with Customer A at 39%, Customer B at 27%, and Customer C at 16% [125]. - Total accounts receivable for the year ended December 31, 2024 was primarily from these three customers, indicating a high concentration of revenue risk [125]. - Sales to government entities are subject to significant risks, including competitive bidding processes and potential funding delays, which could adversely affect revenue [127]. Operational Risks and Challenges - The company identified material weaknesses in internal control over financial reporting, which could adversely affect the accuracy and timeliness of financial reporting [114]. - The company is dependent on suppliers, some of which are single or limited source suppliers, which could adversely affect operations if they fail to deliver necessary components [103]. - The company relies on third-party manufacturers, which increases the risk of supply chain disruptions that could impact product availability and profit margins [134]. - The company may experience delays or disruptions in its supply chain, which could lead to increased costs and affect operational efficiency [162]. - The company has sourced lithium-ion battery cells from only one supplier for commercial production, which poses a risk of disruption in production if supply issues arise [199]. - The company is experiencing increases in the cost and interruptions in the supply of materials, which could delay product commercialization and negatively impact financial results [196]. Strategic Plans and Investments - The company plans to continue developing and commercializing ocean robotic systems, increasing sales and marketing activities, and enhancing technology infrastructure [109]. - The company plans to invest significantly in expanding its operations, including hiring additional personnel to support growth in ocean robotic systems [129]. - The company anticipates ongoing significant capital expenditures to support the development and commercialization of its products, influenced by customer demand [138]. - The company may undertake acquisitions to add new products and technologies, but failure to integrate these acquisitions could adversely affect its financial condition [225]. Compliance and Regulatory Risks - The company incurs significant legal, accounting, and other expenses as a public company, which may increase operating costs in future periods [164]. - Compliance with extensive government laws and regulations related to health, safety, and the environment may lead to significant costs and liabilities [172]. - The company is subject to evolving data privacy and security laws, and any data breach may result in significant liabilities and negatively affect its financial condition [173]. - The company faces cybersecurity risks that could disrupt operations and lead to loss of sensitive data [176]. - The company is subject to governmental export and import controls, which could result in substantial civil or criminal penalties if noncompliance occurs [185]. Market and Competitive Landscape - The company operates in a competitive industry with rapid technological changes, facing competition from both established and emerging players in the blue technology markets [206]. - The company faces potential competition from automotive and aerospace sectors as it expands its autonomy software platform [210]. - The company targets large corporations as customers, which have substantial negotiating power and may develop competitive internal solutions [205]. Shareholder and Stock Market Considerations - The company may issue a significant number of shares or equity-linked securities in the future, which could dilute existing shareholders [103]. - The market price of the company's Common Stock is volatile and may be subject to wide fluctuations due to various factors [257]. - Significant stockholder sales could negatively impact the market price of the company's Common Stock [256]. - The company has received a determination letter from Nasdaq regarding non-compliance with the minimum $35 million market value requirement for continued listing [260]. - The company was granted an exception until December 31, 2024, to demonstrate compliance with Nasdaq listing rules [260]. Internal Control and Management - The effectiveness of internal controls over financial reporting is critical, with potential weaknesses identified for the years ended December 31, 2024 and 2023 [120]. - Management's operating and financial projections are based on several assumptions, including timely hiring of skilled personnel and demand for ocean robotic systems, which may prove incorrect [131]. - The company must attract and retain qualified personnel to ensure successful product design, manufacturing, and market launch, with competition for skilled employees being intense [161]. Product Development and Technology - The company launched commercial services utilizing the Aquanaut robotic system in 2024 and expects to launch a commercial version of ToolKITT software in 2025, although timelines may be delayed due to various challenges [147]. - The company faces risks associated with the performance of its ocean robotic systems, which may not meet customer expectations or perform consistently, potentially harming its reputation and financial condition [145]. - The company may face challenges in adopting new technologies due to customer resistance, which could hinder market penetration and growth [143]. - The company’s growth strategy relies on developing systems and products, which may have shorter useful lives than anticipated, adversely affecting business operations and financial condition [230]. Legal and Liability Risks - The company may experience significant liabilities from litigation or legal proceedings, which could negatively impact its reputation and financial position [221]. - The company is exposed to potential liabilities from product malfunctions or operator errors, which could adversely affect its financial condition and reputation [154]. - Any failure to comply with product regulations could lead to significant fines and adversely affect the company's revenues [168].

Company Overview - Nauticus Robotics, Inc. develops autonomous robots for ocean industries, utilizing sensors, artificial intelligence, and algorithms for adaptability in changing environments [3] - The company's business model includes providing robotic systems for services, selling vehicles and components, and licensing software to commercial and defense sectors [3] - Nauticus is testing and certifying a new generation of vehicles aimed at reducing operational costs and gathering data for subsea infrastructure maintenance [3] - The services offered by Nauticus focus on data collection, analytics, and subsea manipulation, which help customers reduce operational footprints, costs, and greenhouse gas emissions [3] Financial Results Announcement - Nauticus plans to host an earnings conference call on April 16, 2025, at 9:00 am Central Time to discuss its fourth quarter and year-end financial results for the period ending December 31, 2024 [1]