As you can probably surmise, Nauticus Robotics is a robotics company. It uses sensors, AI and algorithms to develop autonomous robots for oceans. Nauticus Robotics: 'From Promise to Product' Nauticus Robotics successfully tested the AUV Aquanaut Mark 2 in the Gulf of Mexico for "launch and recovery, emergency procedures, and maneuverability." Consequently, Nauticus Robotics is confident that this vehicle will be "capable of generating daily revenue in Q3 2024 from existing contracts." Perhaps the full deplo ...

Group 1 - Nauticus Robotics (NASDAQ: KITT) stock is experiencing significant trading activity, with over 41 million shares traded in pre-market, compared to a daily average of about 14.1 million shares [1] - The stock saw a rally of 49% on Monday, with more than 212 million shares changing hands, despite the absence of clear news or analyst coverage [2][3] - As of Tuesday morning, KITT stock increased by 58.9%, although it was down 60.9% year-to-date as of the previous market close [3] Group 2 - KITT is classified as a penny stock, with a prior closing price of 23 cents and a market capitalization of only $14.416 million, making it susceptible to volatility [4]

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $500,000, down $2.4 million from the same period last year and down $600,000 from the prior quarter [17] - Adjusted net loss for Q1 2024 was $7.4 million, an improvement from a loss of $8.8 million in the prior quarter and a loss of $10.7 million in the same period last year [19] - Cash at the end of Q1 2024 was $6.2 million, compared to $0.8 million at the end of 2023, due to $11.7 million net cash received from funding [40] Business Line Data and Key Metrics Changes - The company is transitioning from defense dependency to focus on industrial, commercial, and environmental sectors, with a strong pipeline of opportunities around the Aquanaut ToolKITT [10][16] - Operating expenses for Q1 2024 were $6.0 million, a decrease of $2.6 million from Q1 2023 [38] Market Data and Key Metrics Changes - The ocean market is anticipated to have CAGRs ranging from 8% to 15% for offshore drilling and win respectively through 2030 [4] - The company is actively cultivating a promising sales pipeline that includes six potential long-term blue-chip customers across diverse industry segments [15] Company Strategy and Development Direction - The company aims to generate daily revenue by Q3 2024 with the Aquanaut, supported by contracts with Shell, Petrobras, and Equinor [11] - A reverse stock split is being recommended to comply with NASDAQ bid price requirements, which is seen as a necessary step for the company’s growth [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the near-term completion of Aquanaut's certification and the potential for significant commercial expansion [16] - The company is focused on cash preservation and cost management, with expectations for continued improvement in future quarters [20][41] Other Important Information - The company is collaborating with Florida Atlantic University to significantly reduce testing and certification costs for new vehicles [41] - The net income for Q1 2024 was $414,000, a substantial increase from previous quarters, including an $8.3 million gain in fair value of warrant liabilities [39] Q&A Session Summary Question: No questions were raised during the Q&A session - The absence of questions was noted, with management expressing excitement about the commercial team and the future prospects of the company [43][44]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 13, 2024 NAUTICUS ROBOTICS, INC. (Exact name of registrant as specified in its charter) Delaware 001-40611 87-1699753 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 17146 Feathercraft Lane, Suite 450, Webster, TX 77598 (Address of p ...

HOUSTON, May 13, 2024 /PRNewswire/ -- Nauticus Robotics, Inc. ("Nauticus" or the "Company") (NASDAQ: KITT) today announced its financial results for the quarter ended March 31, 2024. "We have successfully deployed Aquanaut Mark 2 in the Gulf of Mexico and tested the platform at depths greater than 1300 meters," said John W. Gibson, Jr., Nauticus' CEO and President. "We should generate daily revenue from the Aquanaut Mark 2 vehicle beginning in Q3 2024 and have a strong queue of new opportunities developing. ...

[Part I — Financial Information](index=5&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Nauticus Robotics reported a significant revenue decrease to **$0.46 million**, yet achieved a net income of **$0.41 million** due to a non-cash gain on warrant liabilities [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$29.4 million**, while warrant liabilities decreased, improving the stockholders' deficit to **($39.5 million)** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $6,187,307 | $753,398 | | Total Current Assets | $11,816,501 | $9,221,131 | | Total Assets | $29,431,488 | $26,148,475 | | **Liabilities & Stockholders' Deficit** | | | | Total Current Liabilities | $14,028,307 | $17,387,236 | | Warrant liabilities | $8,726,903 | $18,376,180 | | Notes payable - long-term, net | $44,949,988 | $31,597,649 | | Total Liabilities | $68,934,417 | $67,935,325 | | Total Stockholders' Deficit | ($39,502,929) | ($41,786,850) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue plummeted by **84%** to **$0.46 million**, but a non-cash gain on warrant liabilities led to a net income of **$0.41 million** Q1 2024 vs Q1 2023 Statement of Operations (Unaudited) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Total Revenue | $464,354 | $2,820,780 | | Cost of Revenue | $2,093,955 | $2,932,267 | | Operating Loss | ($5,549,330) | ($5,824,197) | | Change in fair value of warrant liabilities | ($8,309,623) | $2,236,904 | | Net Income (Loss) | $413,612 | ($14,138,665) | | Basic Earnings (Loss) Per Share | $0.01 | ($0.36) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash outflow improved to **$6.66 million**, with financing activities providing **$12.03 million**, leading to a net cash increase of **$5.43 million** Q1 2024 vs Q1 2023 Cash Flow Summary (Unaudited) | Cash Flow Activity | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,660,282) | ($8,873,938) | | Net cash from investing activities | $68,482 | $3,506,022 | | Net cash from financing activities | $12,025,709 | $59,190 | | Net change in cash and cash equivalents | $5,433,909 | ($5,308,726) | | Cash and cash equivalents, end of period | $6,187,307 | $12,478,433 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight going concern reliance on investor support, high customer concentration, significant debt financing, and ongoing material weakness in internal controls - The company does not generate sufficient revenue to cover operating expenses and may require additional liquidity over the next twelve months, which a current investor has committed to provide. This support is crucial for the company to continue as a going concern[27](index=27&type=chunk) - In Q1 2024, **100%** of total revenue came from two customers. In Q1 2023, two customers accounted for **99%** of revenue, indicating significant customer concentration risk[63](index=63&type=chunk) - In January 2024, the company entered into multiple debt agreements, including a new Senior Secured Term Loan for **$9.55 million** and an incremental loan of **$3.75 million**, to fund operations[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - The fair value of warrant liabilities decreased significantly, resulting in a non-cash gain of **$8.31 million** for the quarter, which was the primary driver of the company's net income[168](index=168&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses an **84%** revenue decrease, **30%** operating expense reduction, and a net income of **$0.41 million** driven by a non-cash gain, confirming reliance on external financing Q1 2024 vs Q1 2023 Operational Performance | Item | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $464,354 | $2,820,780 | ($2,356,426) | -84% | | Cost of revenue | $2,093,955 | $2,932,267 | ($838,312) | -29% | | General and administrative | $3,430,010 | $5,212,644 | ($1,782,634) | -34% | | Operating loss | ($5,549,330) | ($5,824,197) | ($274,867) | 5% | | Net income (loss) | $413,612 | ($14,138,665) | $14,552,277 | 103% | - The company acknowledges its current inability to generate sufficient revenue to cover operating expenses and capital expenditures. It has implemented cost-cutting measures and relies on committed investor support for liquidity to continue as a going concern[183](index=183&type=chunk) - During Q1 2024, the company received net proceeds of **$12.03 million** from debt financing, which was a significant source of cash. This was used to fund operating activities, which consumed **$6.66 million**[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Disclosure is not required for smaller reporting companies - Disclosure is not required for smaller reporting companies[186](index=186&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to an ongoing material weakness in internal control over financial reporting, with a remediation plan underway - The CEO and Interim CFO concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to a continuing material weakness in internal control over financial reporting[188](index=188&type=chunk) - The material weakness, first identified in 2021, relates to a lack of qualified accounting personnel and inadequate procedures for the accounting close process. Remediation efforts were gapped by significant turnover of key finance personnel at the end of 2023[190](index=190&type=chunk)[191](index=191&type=chunk) - The remediation plan involves formally documenting system controls, segregation of duties, and implementing a quarterly review and testing plan for all internal controls, with completion expected by the end of Q2 2024[192](index=192&type=chunk) [Part II — Other Information](index=35&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Legal Proceedings](index=35&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[196](index=196&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported - No material changes in risk factors were reported for the quarter ended March 31, 2024, compared to the 2023 Form 10-K[197](index=197&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company entered into a **$9.55 million** senior secured term loan agreement in January 2024, convertible into common stock at **$0.4582** per share - The company entered into the 2024 Term Loan Agreement on January 30, 2024, providing **$9,551,856** of secured term loans[198](index=198&type=chunk)[199](index=199&type=chunk) - The 2024 Loans are convertible at the lender's option into common stock at a conversion price of **$0.4582** per share[202](index=202&type=chunk) [Defaults upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[203](index=203&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[204](index=204&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated trading arrangements during the quarter - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[205](index=205&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including debt agreements and officer certifications - A list of exhibits filed with the report is provided, including debt agreements, amendments, and certifications[206](index=206&type=chunk)[207](index=207&type=chunk)

HOUSTON, May 6, 2024 /PRNewswire/ -- Nauticus Robotics, Inc. ("Nauticus" or the "Company") (NASDAQ: KITT) today announced the Company's schedule for releasing its first quarter financial and operating results for the period ended March 31, 2024. The Company plans to release its first quarter financial and operating results after market close on May 13, 2024. The Company plans to host an earnings conference call on May 14 at 9:00 am Central Daylight Time.To participate in the earnings conference call, partic ...

Financial Data and Key Metrics - Net loss for Q4 2023 was $8.8 million, compared to $5.7 million in the same period last year [12] - Full-year adjusted net loss for 2023 was $34.3 million, an increase of $18.7 million from the previous year [12] - Revenue for Q4 2023 was $1.1 million, down $2.1 million from the previous year [43] - Full-year revenue for 2023 was $6.6 million, down $4.8 million from 2022 [43] - Operating expenses for Q4 2023 were $35.3 million, a $24.9 million increase from the same period in 2022, including a one-time impairment charge of $25.3 million [43] - Cash at the end of 2023 was $800,000, with an additional $13.4 million secured in Q1 2024 from current investors [16] Business Line Data and Key Metrics - Autonomous Solutions group is focused on the Aquanaut Mark 2 vehicle, currently undergoing full system testing in the Gulf of Mexico, with testing exceeding 1,300 meters [5] - ToolKITT software platform is platform-independent and has been successfully used on several subsea robots [6] - Electric Manipulators differentiate the company from competitors, with a focus on transitioning subsea work to autonomous untethered systems [7] - Government Solutions completed two projects for the Department of Defense in 2023 and Q1 2024, with no future work expected from these projects [50] Market Data and Key Metrics - The government market segment is believed to exceed $1.5 billion in 2025, but the company's addressable market is smaller due to capital constraints [50] - The ROV market is expected to see growth in 2025, particularly in the oil & gas industry, with opportunities for the company to enter the market with a tested vehicle [18] Company Strategy and Industry Competition - The company is transitioning from a research and development organization to a customer-centric innovation for profit enterprise [9] - Organizational changes include the addition of an Interim CFO, General Counsel, and sales leadership, with a focus on reducing G&A expenses by more than 50% year-on-year in 2024 [16] - The company has reorganized into four business units: Autonomous Solutions, Electrical Manipulators, Autonomy Software, and Government Solutions [40] - The company is focusing on cost management and aligning its culture to be customer-centric, with a reduction in headcount from over 100 to less than 50 [23] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the 2025 market uplift for ROVs and the company's ability to step into the market with a tested vehicle [18] - The company is focused on delivering on contractual requirements and transforming its culture to be customer-centric [21] - Management is confident in the company's ability to create value for shareholders, lenders, and customers through cost management and operational efficiency [23] Other Important Information - The company has one Aquanaut vehicle fully assembled and being tested, with a second vehicle in the shop and a third in preparation for assembly in early 2025 [32] - The company has no plans to build additional vehicles beyond the three currently in progress, pending commercial success [32] - Management compensation is heavily weighted towards shares, reflecting confidence in the company's future [28] Q&A Session Summary Question: What are the key areas of opportunity for the ROV market in 2025? - The ROV market, particularly in the oil & gas industry, is expected to see growth in 2025, with opportunities for the company to enter the market with a tested vehicle [18] Question: What are the most important factors for the team to focus on as the company becomes more customer-focused? - The most important factors are contractual requirements, aligning the culture to be customer-centric, and being cost-conscious [23] Question: How many Aquanauts does the company currently have, and how many are planned for the near future? - The company currently has one Aquanaut fully assembled and being tested, with a second in the shop and a third in preparation for assembly in early 2025 [32] Question: Why isn't there any insider buying of the company's shares? - Management compensation is heavily weighted towards shares, and the window for insider buying has been closed due to potential merger discussions and material non-public information [28]

HOUSTON, April 9, 2024 /PRNewswire/ -- Nauticus Robotics, Inc. ("Nauticus" or the "Company") (NASDAQ: KITT) today announced preliminary testing results for its Aquanaut Mk2 vehicle and financial results for the quarter and year ended December 31, 2023.  "We have spent the past few months transforming Nauticus from a company with great R&D capabilities to one poised to be commercially successful," said John W. Gibson, Jr., Nauticus' CEO and President.  "We successfully raised additional capital, reorganized ...

Financial Performance and Losses - The company incurred a net loss of $50.7 million and $28.3 million for the years ended December 31, 2023 and 2022, respectively, and expects to continue incurring operating and net losses until at least Q1 2025[103] - The company had negative cash flow from operating activities of $21.7 million and $37.3 million for the years ended December 31, 2023, and 2022, respectively[213] - The company expects to continue to have negative cash flow from operating and investing activities for the remainder of 2024[213] - The company had federal net operating losses (NOLs) of approximately $74.4 million as of December 31, 2023, with $646,000 beginning to expire in 2035[214] - R&D expenses were $1.4 million and $2.4 million for the years ended December 31, 2023, and 2022, respectively, and are likely to grow in the future[216] - The company expects to incur significant R&D, sales and marketing, and general and administrative expenses in 2024[213] - The company's ability to utilize NOLs may be limited due to potential ownership changes under Sections 382 and 383 of the Code[215] Revenue Concentration and Customer Dependence - A significant portion of the company's revenue is generated from a limited number of customers, including government entities, which are subject to uncertainties and risks[98] - Sales to two customers accounted for almost 100% of total revenue for the year ended December 31, 2023, with 68% of accounts receivable from these customers[121] - Sales to two customers accounted for 95% of total revenue for the year ended December 31, 2022, with 82% of accounts receivable from these customers[121] - The company relies heavily on government contracts, which are subject to risks such as budget cycles, funding delays, and potential contract terminations[122] - A substantial portion of the company's revenue comes from U.S. Department of Defense contracts, which are subject to government scrutiny, audits, and potential termination or modification, posing financial risks[263] Internal Controls and Financial Reporting - The company identified a material weakness in internal control over financial reporting, which could adversely affect its ability to report financial results accurately and timely[98][113] - The company has restated its unaudited condensed consolidated financial statements for certain prior periods, leading to additional risks such as loss of investor confidence[109][110] - The company identified a material weakness in the classification of SPA Warrants, previously recorded as equity, which was remediated as of December 31, 2023[118][119] - The company strengthened internal controls over financial reporting by implementing an ERP system in 2023[208] - The company's independent registered public accounting firm is not required to formally attest to the effectiveness of internal control over financial reporting until it is no longer an emerging growth company[212] - The company's remediation plan for material weaknesses includes enhancing contract review processes and engaging third-party specialists for complex transactions[209] - The company's financial statements for 2023 and 2022 have been audited and found to present fairly the financial position, results of operations, and cash flows in conformity with U.S. GAAP[358] Supply Chain and Manufacturing Risks - The company relies on a limited number of suppliers for raw materials and components, which has caused and may continue to cause supply chain disruptions[104] - The company relies on third-party manufacturers/suppliers, which increases risks related to product availability, cost, and quality[131][132] - The company relies on single or limited-source suppliers for key components, and supply disruptions or price increases could adversely affect its business and product commercialization[179][180] - The company relies on a single supplier for lithium-ion battery cells, limiting flexibility in changing suppliers and posing risks of production disruption[182] - Supply chain disruptions, particularly in electronic components, have delayed ongoing projects, prompting the company to expand its supplier base to mitigate procurement delays[248] - The company relies on a limited number of suppliers for raw materials and components, which could result in increased costs, delays in manufacturing, and challenges in meeting contractual obligations[246] Product Development and Commercialization - The company expects to incur substantial R&D costs and devote significant resources to identifying and commercializing new products, which could reduce profitability[100] - The company's core product, a tetherless subsea robot, is expected to launch commercially in 2024, but delays may occur due to challenges in recruitment, supply chain, and manufacturing[144] - The company's revenue will be concentrated in a limited number of product models, primarily the Aquanaut platform, which could be adversely affected if market reception is poor[145] - The company plans to launch a newer version of the Aquanaut in 2024, requiring significant additional expenses, but there is no guarantee of successful commercialization or meeting expected timelines[146] - The company's products may face resistance from customers due to lack of confidence in autonomous and semi-autonomous ocean vehicles, potentially delaying adoption and impacting financial performance[143] - The company's products and services have not been substantiated through long-term trials, raising concerns about performance consistency and customer satisfaction[142] - The company expects commercial use of its core products, such as Aquanaut and Olympic Arm, to begin in Q3 2024, but delays in design, development, or production could harm its business and reputation[171][172] Operational and Strategic Risks - The company is transitioning to an outsourced manufacturing model for commercial products, which may not be successful and could harm revenue recognition[100] - The company has not yet achieved positive operating cash flow and its ability to generate positive cash flow is uncertain[100] - The company is highly dependent on senior management and key employees, and the inability to attract and retain qualified personnel could harm its operations[100] - The company plans to expand operations by hiring additional personnel, including engineers and service technicians, but faces challenges in recruiting experienced individuals[126] - The company's financial projections are based on assumptions that may prove incorrect, including demand for ocean robotic systems and manufacturing costs[127] - The company has limited experience commercializing products at a large scale, which could impact sales and market penetration[134] - The company requires significant capital to fund operations and may need to raise additional funds through equity or debt financing, potentially diluting stockholders[135][137] - The company plans to dispose of assets to fund new opportunities but may not achieve full book or market value for these assets[140] - The company may face significant costs and reputational damage if product defects, glitches, or malfunctions occur, leading to recalls or safety concerns[148] - The company has no experience in large-scale maintenance and servicing of its products, which could lead to increased costs and customer dissatisfaction if not adequately addressed[154] - The company's reliance on third-party manufacturers and vendors for production and components may reduce control over quality and flexibility, potentially impacting product delivery and performance[159] - The company's ability to attract and retain qualified personnel, particularly engineers and production staff, is critical for meeting product development and manufacturing timelines[161] - The company's products incorporate complex software that may contain errors, potentially leading to delays in market acceptance, increased service costs, and reputational damage[151] - Strategic alliances and acquisitions may subject the company to risks including sharing proprietary information, non-performance by third parties, and increased expenses, potentially adversely affecting the business[163] - The company may seek to acquire complementary assets, products, or technologies, but acquisitions could result in significant cash use, equity dilution, goodwill impairment, and integration challenges[165] - The company is highly dependent on senior management and key employees, and failure to retain or attract qualified personnel could harm product development and business operations[166] - The company lacks high-volume manufacturing experience and relies on third-party manufacturers, which may face challenges in meeting quality, cost, and production volume requirements[173] - Failure to secure third-party manufacturing agreements could force the company to develop its own capabilities, increasing capital expenditures and potentially delaying production[174] - The company may need to develop its own manufacturing facilities if third-party partnerships fail, significantly increasing capital and operating expenditures and delaying production[190] - The company faces significant competition from both established and emerging players in the blue technology markets, including companies with greater financial and technological resources[194] - The company's financial results may fluctuate significantly due to variations in operating costs, product demand, and the pace of new product development and market expansion[201] - The company's systems, products, and related equipment may have shorter useful lives than anticipated, potentially leading to delays in follow-on work and new business, which could materially affect the business, financial condition, and results of operations[243] - The company's management has broad discretion in strategic decisions, and poor decisions could negatively impact growth prospects and stock price[237] - The company's ability to adapt to customer demands and industry cycles is critical, and failure to do so could negatively impact revenue, cost structure, and financial condition[241][242] Regulatory and Compliance Risks - The company faces risks from climate change laws and environmental regulations, which could increase operating costs and reduce demand for its products and services[169][170] - Climate change and environmental regulations may increase operating costs, reduce demand for products, and require compliance with new energy usage and recycling standards[186] - The company is subject to U.S. and foreign anti-corruption laws, and violations could lead to criminal liability, reputational damage, and financial penalties[230][231] - The company's products are subject to export/import controls and economic sanctions, and non-compliance could result in fines, loss of export privileges, and reputational harm[233][234] - Government contracts require compliance with specialized disclosure, accounting, and socioeconomic requirements, increasing operational costs and potential liability for non-compliance[264] - The company faces risks related to government audits, which could result in adjustments to contract costs, refunds, fines, or suspension from government contracting[253] - The company is committed to complying with federal securities laws, disclosing material contracts in redacted form when necessary for national security concerns[260] Cybersecurity and Data Risks - The company faces significant risks of operational disruptions, data breaches, and cyberattacks, which could result in loss of intellectual property, customer data, and reputational damage[224][225][226] - The company plans to implement data connectivity in product services for performance monitoring and preventative maintenance, but customer objections to data usage could increase costs and harm business prospects[225] - The company is implementing security measures to protect data and systems, but these measures cannot guarantee complete protection against cyberattacks or breaches[226] - System disruptions or failures could impair the company's ability to manage data, inventory, and financial reporting, potentially leading to operational and reputational damage[227] - Any security breach or system outage could result in legal, regulatory, and financial exposure, as well as loss of customer confidence and reputational harm[229] - The company's privacy policy is published on its website, but compliance failures could lead to investigations, claims, and significant costs[221] Government Contracts and Funding Risks - U.S. government contracts are subject to partial funding, immediate termination, and heavy regulation, with potential adverse impacts on revenue, profitability, and cash flows if funding is reduced or terminated[252] - The U.S. government's budget deficit and national debt could adversely affect the company's business, financial condition, and cash flows, particularly in defense spending priorities[250] - The company is limited in its ability to disclose sensitive terms of certain contracts, which, if disclosed, could harm its competitive position and relationships with partners[258] - Disputes with subcontractors or their inability to perform could lead to untimely or unsatisfactory delivery of products, systems, or services[261] - The company uses estimates for accounting certain contracts, and changes in these estimates could significantly impact financial results[249] Stock and Equity Risks - The company may issue a significant number of shares or equity-linked securities for future investments or acquisitions, potentially diluting existing stockholders' equity[267] - The company's common stock is currently below $10.00 per share, with certain stockholders holding shares purchased at significantly lower prices, which could negatively impact the market price[269] - The company's common stock is highly volatile, influenced by factors such as operational results, market conditions, and regulatory changes, which could lead to significant price fluctuations[270] - The company received notices from Nasdaq regarding non-compliance with minimum bid price and market value requirements, risking potential delisting if not resolved[271][272] - The company does not anticipate paying cash dividends in the foreseeable future, making capital appreciation the sole source of gain for investors[275] - The company is classified as an "emerging growth company," which may limit investor interest and make performance comparisons with other public companies more challenging[276][277] - The company has elected not to opt out of the extended transition period for emerging growth companies, which may make financial statement comparisons with other public companies difficult or impossible[278] - The company may remain a smaller reporting company until the market value of its common equity held by non-affiliates equals or exceeds $250 million or $700 million with annual revenues of at least $100 million[279] - The company has the ability to redeem outstanding Public Warrants at $0.01 per warrant if the Common Stock price equals or exceeds $16.50 per share for 20 out of 30 trading days[281] - The exercise price of Public Warrants and Private Warrants is $11.50 per share, while the SPA Warrants have a weighted average exercise price of $3.28 per share and New SPA Warrants are priced at $20.00 per share[282] - Outstanding Public Warrants and Private Warrants are exercisable for 15,799,991 shares of Common Stock (8,624,991 Public Warrant Shares and 7,175,000 Private Warrant Shares)[286] - The Debentures are convertible into 95,670,851 shares of Common Stock at a conversion price of $0.4582, pending shareholder approval[286] - Term loans closed in September 2023 and January 2024 are convertible into 2,674,691 shares at $6.00 and 18,664,024 shares at $0.4582, respectively[286]