Company Performance - Knightscope, Inc. reported a quarterly loss of $0.9 per share, which was better than the Zacks Consensus Estimate of a loss of $1.09, and an improvement from a loss of $2.5 per share a year ago, resulting in an earnings surprise of +17.43% [1] - The company posted revenues of $2.75 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.52%, and down from $3.2 million in the same quarter last year [2] - Over the last four quarters, Knightscope has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Knightscope shares have declined approximately 54.2% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.08 on revenues of $2.98 million, and for the current fiscal year, it is -$4.38 on revenues of $12.17 million [7] Industry Outlook - The Technology Services industry, to which Knightscope belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Knightscope's stock performance [5]

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q%20Filing%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides the basic identification details for Knightscope, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2025, including its incorporation state, principal executive offices, and stock listing information - Knightscope, Inc. is a Delaware corporation, headquartered in Sunnyvale, CA, and its Class A Common Stock is traded on The Nasdaq Capital Market under the symbol KSCP[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[4](index=4&type=chunk)[5](index=5&type=chunk) Shares Outstanding as of August 8, 2025 | Class of Stock | Shares Outstanding as of August 8, 2025 | | :--------------- | :------------------------------------ | | Class A Common Stock | 9,846,715 | | Class B Common Stock | 336,424 | [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) [Cautionary Note on Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section advises readers that the report contains forward-looking statements, which are subject to various known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from projections. It emphasizes that these statements are not guarantees of future performance and should not be unduly relied upon - The report includes forward-looking statements covered by safe harbor provisions, identified by words like 'believe,' 'may,' 'will,' 'estimate,' 'potential,' 'continue,' 'anticipate,' 'intend,' 'expect,' 'could,' 'would,' 'project,' 'plan,' 'target,' or similar expressions[9](index=9&type=chunk) - Key risks include the need for significant capital for product development, market acceptance, intellectual property protection, limited operating history, ability to continue as a going concern, compliance with Nasdaq listing requirements, ability to operate under privacy laws, ability to raise capital, and managing operating expenses[11](index=11&type=chunk) - The company has not yet generated profits or significant revenues, anticipates continued losses, and may never achieve profitability, with substantial doubt expressed about its ability to continue as a going concern without additional funding[11](index=11&type=chunk) [Part I — Financial Information](index=6&type=section&id=PART%20I%20%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for Knightscope, Inc., including the balance sheets, statements of operations, statements of preferred stock and stockholders' equity (deficit), and statements of cash flows, along with their accompanying notes, providing a detailed view of the company's financial position and performance for the periods ended June 30, 2025 and 2024 [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheets (in thousands) | (In thousands) | June 30, 2025 (unaudited) | December 31, 2024 (audited) | | :--------------- | :-------------------------- | :-------------------------- | | **ASSETS** | | | | Cash and cash equivalents | $8,211 | $11,124 | | Total current assets | $13,293 | $15,099 | | Total assets | $29,220 | $28,185 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $7,012 | $8,265 | | Total liabilities | $14,105 | $12,404 | | Total stockholders' equity | $15,115 | $15,781 | | Total liabilities and stockholders' equity | $29,220 | $28,185 | [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) Condensed Statements of Operations (in thousands) | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue, net | $2,749 | $3,203 | $5,666 | $5,457 | | Gross loss | $(918) | $(558) | $(1,586) | $(2,003) | | Total operating expenses | $5,350 | $6,203 | $11,510 | $13,038 | | Loss from operations | $(6,268) | $(6,761) | $(13,096) | $(15,041) | | Net loss | $(6,329) | $(6,271) | $(13,226) | $(13,863) | | Basic and diluted net loss per common share | $(0.90) | $(2.68) | $(2.13) | $(6.51) | [Condensed Statements of Preferred Stock and Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Statements%20of%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) Condensed Statements of Preferred Stock and Stockholders' Equity (Deficit) (in thousands) | (In thousands) | Balance as of Dec 31, 2024 | Stock-based compensation | Proceeds from Equity Sale, net | Net loss | Balance as of June 30, 2025 | | :--------------- | :------------------------- | :----------------------- | :----------------------------- | :------- | :-------------------------- | | Additional paid-in capital | $208,969 | $807 | $11,708 | — | $221,526 | | Accumulated deficit | $(193,192) | — | — | $(13,226) | $(206,418) |\ | Total Stockholders' Equity | $15,781 | $807 | $11,708 | $(13,226) | $15,115 | - As of May 15, 2024, all Preferred Stock was automatically converted into Class A and Class B Common Stock, resulting in no Preferred Stock outstanding[65](index=65&type=chunk)[96](index=96&type=chunk) [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Condensed Statements of Cash Flows (in thousands) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(11,865) | $(12,642) | | Net cash used in investing activities | $(1,186) | $(1,763) | | Net cash provided by financing activities | $10,036 | $14,749 | | Net change in cash, cash equivalents and restricted cash | $(3,015) | $344 | | Cash, cash equivalents and restricted cash at end of the period | $8,211 | $2,726 | [Notes to Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) [NOTE 1: The Company and Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%201:%20The%20Company%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes Knightscope, Inc.'s business as a public safety innovator building Autonomous Security Robots (ASRs) and Emergency Communication Devices (ECDs), operating in a market with high demand for automation. It also outlines the basis of financial statement presentation, the company's liquidity challenges, and significant accounting policies including the reverse stock split, segment reporting, use of estimates, and treatment of cash, inventory, and intangible assets - Knightscope, Inc. designs, manufactures, and deploys Autonomous Security Robots (ASRs) and Emergency Communication Devices (ECDs) to improve public safety for private and government clients[32](index=32&type=chunk) - The company operates in a highly fragmented U.S. public safety market driven by demand for automation and AI due to rising labor costs, staffing shortages, and crime rates[33](index=33&type=chunk) - The company has historically incurred losses and negative cash flows from operations, with an accumulated deficit of **$206.4 million** and stockholders' equity of **$15.1 million** as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern without additional funding[38](index=38&type=chunk)[39](index=39&type=chunk) - A 1-for-50 reverse stock split for Class A and Class B Common Stock became effective on September 13, 2024, with all share and per-share amounts retroactively adjusted[40](index=40&type=chunk) Inventory Components (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | Raw materials | $1,376 | $1,539 | | Work in process | $190 | $123 | | Finished goods | $176 | $135 | | **Total** | **$1,742** | **$1,797** | Intangible Assets, Net (in thousands) | Intangible Asset | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :---------------- | | Developed technology | $454 | $553 | | Customer relationships | $628 | $688 | | **Total** | **$1,082** | **$1,241** | [NOTE 2: Revenue and Deferred Revenue](index=18&type=section&id=NOTE%202:%20Revenue%20and%20Deferred%20Revenue) This note details the company's revenue recognition policies for ASRs and ECDs, distinguishing between lease-based subscription revenue for ASRs and point-in-time sales for ECDs. It also explains the accounting for deferred revenue, which primarily arises from annual advance billings for MaaS subscriptions - ASR revenue is primarily generated from 12-month operating lease subscriptions, recognized ratably over the lease term[73](index=73&type=chunk) - ECD revenue is recognized upon completion of installation or upgrades, or when maintenance services are performed[72](index=72&type=chunk) - Deferred revenue of **$1.821 million** as of June 30, 2025, primarily represents advance billings for MaaS subscriptions, amortized over the service delivery period[75](index=75&type=chunk)[77](index=77&type=chunk) Disaggregated Revenue by Product Line and Timing (in thousands) | Product Line | Three Months Ended June 30, 2025 (Total) | Three Months Ended June 30, 2024 (Total) | Six Months Ended June 30, 2025 (Total) | Six Months Ended June 30, 2024 (Total) | | :----------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | ASRs | $1,146 | $1,012 | $2,328 | $2,002 | | ECDs | $1,603 | $2,191 | $3,338 | $3,455 | | **Total** | **$2,749** | **$3,203** | **$5,666** | **$5,457** | [NOTE 3: Fair Value Measurement](index=20&type=section&id=NOTE%203:%20Fair%20Value%20Measurement) This note outlines the company's approach to fair value measurement, categorizing financial instruments into a three-level hierarchy based on the observability of inputs. It primarily reports cash equivalents in money market funds as Level 1 assets and notes the reclassification of preferred stock warrant liabilities from Level 3 to equity in 2024 - The company uses a fair value hierarchy (Level 1, 2, 3) to measure financial instruments, maximizing observable inputs[82](index=82&type=chunk)[85](index=85&type=chunk) Cash Equivalents (in thousands) | Asset | June 30, 2025 | December 31, 2024 | | :---- | :------------ | :---------------- | | Money market funds | $7,747 | $10,638 | - Preferred stock warrant liabilities, previously classified as Level 3, were reclassified to additional paid-in capital on May 15, 2024, and are no longer subject to remeasurement[60](index=60&type=chunk)[86](index=86&type=chunk) [NOTE 4: Debt Obligations](index=21&type=section&id=NOTE%204:%20Debt%20Obligations) This note details Knightscope's debt obligations, including Public Safety Infrastructure Bonds, the August 2024 Note, and Insurance Notes. It highlights the full repayment of the August 2024 Note by June 30, 2025, and provides a breakdown of current and non-current debt balances - The August 2024 Note, a **$3.0 million** senior secured promissory note, was paid in full as of June 30, 2025[89](index=89&type=chunk)[93](index=93&type=chunk) - The company issued Public Safety Infrastructure Bonds, unsecured and bearing **10% annual interest**, with **$3.991 million** outstanding as of June 30, 2025[87](index=87&type=chunk)[95](index=95&type=chunk) Amortized Carrying Amount of Debt Obligations (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | Bonds, net | $3,991 | $3,952 | | August 2024 Note | $0 | $1,364 | | Insurance Notes | $281 | $0 | | **Total debt** | **$4,272** | **$5,316** | | Less: current portion | $(281) | $(1,364) |\ | **Non-current portion** | **$3,991** | **$3,952** | [NOTE 5: Capital Stock and Warrants](index=22&type=section&id=NOTE%205:%20Capital%20Stock%20and%20Warrants) This note details changes in the company's capital structure, including the conversion of all preferred stock to common stock in May 2024, the authorization of 'blank check' preferred stock, and activities related to pre-funded, underwriter, and vendor warrants. It also covers the At-the-Market (ATM) Offering Program as a source of capital - All Preferred Stock was converted to Class A and Class B Common Stock on May 15, 2024, and preferred warrants were reclassified from liabilities to equity[96](index=96&type=chunk)[97](index=97&type=chunk) - Stockholders approved the authorization of **40,000,000 shares** of 'blank check' preferred stock on August 16, 2024[98](index=98&type=chunk) - The company completed a public offering of Class A Common Stock and pre-funded warrants in November 2024, generating approximately **$12.1 million** gross proceeds, with all pre-funded warrants exercised by June 30, 2025[99](index=99&type=chunk)[101](index=101&type=chunk) Outstanding Warrants as of June 30, 2025 | Class of shares | Number of Warrants | Exercise Price | Expiration Date | | :---------------- | :----------------- | :------------- | :-------------- | | Class A Common Stock (previously Series m-3 Preferred Stock) | 28,656 | $200.00 | Dec 31, 2027 | | Class A Common Stock (previously Series S Preferred Stock) | 121,455 | $93.87 | Dec 31, 2027 | | Class A Common Stock (Vendor Warrants) | 15,238 | $0.001 | 6 years from each issuance |\ | Class A Common Stock (Underwriter Warrants) | 36,300 | $18.29 | Nov 21, 2029 | - Under its At-the-Market (ATM) Offering Program, the company sold **1,779,720 shares** of Class A Common Stock for net proceeds of approximately **$10.3 million** for the six months ended June 30, 2025[107](index=107&type=chunk) [NOTE 6: Stock-Based Compensation](index=24&type=section&id=NOTE%206:%20Stock-Based%20Compensation) This note details the company's equity incentive plans, including the 2014, 2016, and 2022 Plans, and the accounting for stock-based compensation. It provides a summary of stock option activity, the Black-Scholes option pricing model assumptions, and the recognized stock-based compensation expense - The 2022 Equity Incentive Plan allows for the issuance of up to **100,000 shares** of Class A Common Stock, with an annual increase of up to **5%** of outstanding Class A and Class B Common Stock[109](index=109&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Category | Shares Outstanding | | :--------- | :----------------- | | Available and outstanding as of Dec 31, 2024 | 296,391 | | Granted | 33,876 | | Forfeited | (15,316) | | Available and outstanding as of June 30, 2025 | 314,951 | | Vested and exercisable as of June 30, 2025 | 169,957 | Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue, net | $40 | $8 | $86 | $65 | | Research and development | $115 | $146 | $263 | $268 | | Sales and marketing | $22 | $32 | $43 | $80 | | General and administrative | $208 | $83 | $415 | $190 | | **Total** | **$385** | **$269** | **$807** | **$603** | [NOTE 7: Commitments and contingencies](index=26&type=section&id=NOTE%207:%20Commitments%20and%20contingencies) This note outlines the company's commitments and contingencies, primarily focusing on operating lease agreements for facilities, including a new headquarters in Sunnyvale, California. It also covers purchase commitments for ASR raw materials, legal matters, and potential sales tax contingencies - In April 2025, Knightscope entered into a new operating lease for its future headquarters in Sunnyvale, California, with a term through June 30, 2030, and an annual base rent of **$0.9 million**[115](index=115&type=chunk) Operating Lease Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :---------------- | | Operating lease right-of-use assets | $2,948 | $407 | | Operating lease liabilities, current | $119 | $412 | | Operating lease liabilities, non-current | $3,011 | $0 | | **Total operating lease liabilities** | **$3,130** | **$412** | - The company has a purchase commitment of **$0.8 million** for ASR raw materials, with monthly purchases of **$40 thousand** from January 2025 to August 2026, and **$0.1 million** paid in the first six months of 2025[118](index=118&type=chunk) - No material legal proceedings or unaccrued liabilities related to indemnification obligations were identified as of June 30, 2025[119](index=119&type=chunk)[120](index=120&type=chunk) [NOTE 8: Segment Information](index=28&type=section&id=NOTE%208:%20Segment%20Information) This note clarifies that Knightscope operates as a single reportable segment, as its Chief Executive Officer, the chief operating decision maker, reviews financial information and allocates resources at a company-wide level - Knightscope operates as one operating and reportable segment, with all long-lived assets and substantially all revenue attributed to the United States[41](index=41&type=chunk)[122](index=122&type=chunk) [NOTE 9: Subsequent Events](index=28&type=section&id=NOTE%209:%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued, specifically detailing further activities under the At-the-Market (ATM) Offering Program - From July 1, 2025, to August 8, 2025, the company sold **2,750,030 shares** of Class A Common Stock under its ATM program, generating approximately **$19.7 million** in net proceeds, increasing cash on hand to **$24.2 million**[125](index=125&type=chunk) - On July 18, 2025, the company filed a new prospectus supplement to increase the ATM Facility's offering capacity to up to **$50.0 million** in Class A Common Stock[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Knightscope's financial condition and results of operations, highlighting the company's strategic focus on AI-driven robotics for public safety, recent developments in liquidity and innovation, and operational efficiency efforts. It also offers a detailed comparison of financial performance for the three and six months ended June 30, 2025, versus 2024, and discusses the company's liquidity and capital resources [Overview](index=29&type=section&id=Overview) - Knightscope aims to transform public safety with AI-driven robotics, emergency communication solutions, and real-time monitoring, offering Autonomous Security Robots (ASR), AI-powered detection, Emergency Communication Devices (ECD), and the cloud-based Knightscope Security Operations Center (KSOC)[130](index=130&type=chunk) - The company's core technologies combine autonomy, robotics, artificial intelligence, and electric vehicle technology, with products manufactured in the United States[130](index=130&type=chunk)[131](index=131&type=chunk) [Business Environment](index=29&type=section&id=Business%20Environment) - Knightscope operates in a dynamic trade environment, facing challenges in material sourcing and manufacturing costs due to global material availability and supplier delivery performance, which have impacted equipment production and delivery[131](index=131&type=chunk) - The company is investing in a new, larger production facility in Sunnyvale, California, and optimizing procurement and production strategies to enhance throughput, strengthen yield, and improve delivery performance[133](index=133&type=chunk) [Recent Developments](index=29&type=section&id=Recent%20Developments) - The company extinguished warrants with anti-dilution features by canceling 2022 warrants in exchange for a **$3.0 million** senior secured promissory note, which was paid in full by June 30, 2025[134](index=134&type=chunk)[135](index=135&type=chunk) - Cash and cash equivalents increased by **$5.6 million** year-over-year to **$8.2 million** as of June 30, 2025, attributed to disciplined expense management and strategic financing[136](index=136&type=chunk) - Knightscope signed a lease for a new, expanded corporate headquarters in Sunnyvale, California, more than doubling its former facility to **33,355 square feet**, to enhance engineering, manufacturing, and client support[137](index=137&type=chunk) - R&D investments are focused on the K7 platform, ECD products, autonomous navigation, and AI-powered analytics to drive high-margin growth[138](index=138&type=chunk) - Operational efficiency efforts include staffing a second production shift to reduce overtime, improve capacity, and shorten delivery timelines, alongside a comprehensive review of inventory and manufacturing processes at the new facility[139](index=139&type=chunk)[141](index=141&type=chunk) - Supply chain issues caused lower Q2 product revenues due to ECD component shortages, which the company is mitigating by diversifying suppliers and implementing proactive material replenishment[142](index=142&type=chunk) Backlog as of August 8, 2025 (in thousands) | Product | Amount | | :-------- | :----- | | ECDs | $2,200 | | ASRs | $700 | | **Total** | **$2,900** | [Legislative and Regulatory Developments](index=31&type=section&id=Legislative%20and%20Regulatory%20Developments) - The One-Big-Beautiful-Bill-Act (OBBBA) signed on July 4, 2025, includes comprehensive U.S. corporate tax legislation, but a preliminary analysis indicates no material impact on the company's financial statements[144](index=144&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) For the three months ended June 30, 2025, total revenue decreased by $0.5 million year-over-year, primarily due to a decline in product revenue. Gross loss increased to $0.9 million, and operating expenses decreased by $0.853 million, driven by lower sales and marketing and general and administrative costs. Net loss remained relatively stable at approximately $6.3 million Revenue, Net (Three Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Service | $2,079 | $1,950 | $129 | 7% | | Product | $670 | $1,253 | $(583) | (47)% | | **Total Revenue, net** | **$2,749** | **$3,203** | **$(454)** | **(14)%** | Gross Loss (Three Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Gross loss | $(918) | $(558) | $(360) | 65% | | Gross loss as % of revenue | (33)% | (17)% | (16)pp | 94% | Operating Expenses (Three Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Research and development | $2,099 | $1,637 | $462 | 28% | | Sales and marketing | $1,068 | $1,537 | $(469) | (31)% | | General and administrative | $2,172 | $2,734 | $(562) | (21)% | | Restructuring charges | $11 | $295 | $(284) | (96)% | | **Total Operating Expenses** | **$5,350** | **$6,203** | **$(853)** | **(14)%** | Net Loss (Three Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Net loss | $(6,329) | $(6,271) | $(58) | (1)% | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) For the six months ended June 30, 2025, total revenue increased slightly by $0.2 million, driven by service revenue growth despite a product revenue decrease. Gross loss improved by $0.417 million, and total operating expenses decreased by $1.528 million, primarily due to lower sales and marketing and general and administrative costs. Net loss decreased by $0.637 million to $13.226 million Revenue, Net (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Service | $4,187 | $3,641 | $546 | 15% | | Product | $1,479 | $1,816 | $(337) | (19)% | | **Total Revenue, net** | **$5,666** | **$5,457** | **$209** | **4%** | Gross Loss (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Gross loss | $(1,586) | $(2,003) | $417 | (21)% | | Gross loss as % of revenue | (28)% | (37)% | 9pp | (24)% | Operating Expenses (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Research and development | $4,224 | $3,206 | $1,018 | 32% | | Sales and marketing | $2,343 | $3,043 | $(700) | (23)% | | General and administrative | $4,932 | $6,375 | $(1,443) | (23)% | | Restructuring charges | $11 | $414 | $(403) | (97)% | | **Total Operating Expenses** | **$11,510** | **$13,038** | **$(1,528)** | **(12)%** | Net Loss (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--------- | :--- | :--- | :--------- | :--------- | | Net loss | $(13,226) | $(13,863) | $637 | (5)% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Knightscope's operations are primarily financed through securities sales and borrowings, with cash and cash equivalents at $8.2 million as of June 30, 2025. The company continues to incur significant losses and negative cash flows, necessitating additional financing to support growth initiatives and address substantial doubt about its ability to continue as a going concern - Cash and cash equivalents were **$8.2 million** as of June 30, 2025, down from **$11.1 million** at December 31, 2024[170](index=170&type=chunk) - The company has an accumulated deficit of approximately **$206.4 million** and has generated significant losses and negative cash flows from operations and investing activities[170](index=170&type=chunk)[171](index=171&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern, requiring additional financing through debt or equity, which may not be available on favorable terms[172](index=172&type=chunk)[173](index=173&type=chunk) - For the six months ended June 30, 2025, net cash provided by financing activities was **$10.0 million**, primarily from ATM offerings and direct registration offerings, offset by debt repayments[185](index=185&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--------- | :--- | :--- | | Net cash used in operating activities | $(11,865) | $(12,642) | | Net cash used in investing activities | $(1,186) | $(1,763) | | Net cash provided by financing activities | $10,036 | $14,749 | | **Net change in cash, cash equivalents and restricted cash** | **$(3,015)** | **$344** | [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) - There have been no material changes to the company's critical accounting estimates from what was reported in the Annual Report on Form 10-K[186](index=186&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Knightscope, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this quarterly report - Knightscope, Inc. is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[187](index=187&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discusses the effectiveness of Knightscope's disclosure controls and procedures, noting that while management recognizes inherent limitations, the controls were deemed effective at a reasonable assurance level as of June 30, 2025. No material changes to internal control over financial reporting occurred during the period - Management acknowledges that controls and procedures provide only reasonable assurance and involve judgment in balancing benefits and costs[188](index=188&type=chunk) - As of June 30, 2025, the company's disclosure controls and procedures were evaluated and concluded to be effective at the reasonable assurance level[189](index=189&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[190](index=190&type=chunk) [Part II — Other Information](index=39&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Knightscope, Inc. is not currently a party to any material legal proceedings and is unaware of any pending or threatened litigation that would have a material adverse effect on its business, operating results, financial condition, or cash flows - The company is not a party to any material litigation and is unaware of any pending or threatened litigation that could materially adversely affect its business[192](index=192&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the comprehensive discussion of risk factors in the company's 2024 Annual Report on Form 10-K, noting that there have been no material changes to these risks in the current reporting period - There have been no material changes to the risk factors previously discussed in the company's 2024 Annual Report on Form 10-K[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Knightscope, Inc. reports no unregistered sales of equity securities or use of proceeds during the period covered by this report - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[194](index=194&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to Knightscope, Inc. for the current reporting period - This item is not applicable[195](index=195&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Knightscope, Inc. for the current reporting period - This item is not applicable[196](index=196&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section confirms no disclosures in lieu of a Form 8-K, no material changes to procedures for recommending Board nominees, and no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the quarter - No disclosures were made in lieu of a Current Report on Form 8-K[197](index=197&type=chunk) - There were no material changes to the procedures by which security holders may recommend nominees to the Board of Directors[197](index=197&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[197](index=197&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including various amendments to the Certificate of Incorporation, bylaws, and certifications from the Chief Executive Officer and Chief Financial Officer - The exhibits include amendments to the Amended and Restated Certificate of Incorporation and Bylaws, as well as certifications from the CEO and CFO as required by the Sarbanes-Oxley Act[198](index=198&type=chunk) [Signatures](index=41&type=section&id=SIGNATURES) [Report Signatures](index=41&type=section&id=Report%20Signatures) This section contains the official signatures of Knightscope, Inc.'s authorized officers, William Santana Li (Chairman, CEO, and President) and Apoorv Dwivedi (Executive Vice President, CFO, and Secretary), certifying the submission of the Form 10-Q report on August 12, 2025 - The report was signed on August 12, 2025, by William Santana Li, Chairman, Chief Executive Officer and President, and Apoorv Dwivedi, Executive Vice President and Chief Financial Officer and Secretary[202](index=202&type=chunk)[203](index=203&type=chunk)

Company Overview - Knightscope, Inc. (KSCP) shares increased by 8.7% to $8 in the last trading session, with a notable trading volume and a total gain of 32.9% over the past four weeks, driven by the company's focus on operational excellence and innovation in public safety technologies [1] - The company is expected to report a quarterly loss of $1.09 per share, reflecting a year-over-year change of +56.4%, with revenues projected at $2.82 million, down 11.9% from the previous year [2] Earnings Estimates - The consensus EPS estimate for Knightscope has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - AppLovin (APP), another company in the same industry, has a consensus EPS estimate of $1.97, representing a year-over-year change of +121.4%, with its stock closing 6.2% higher at $355.9 [4] Industry Context - Knightscope operates within the Zacks Technology Services industry, which includes other companies like AppLovin, highlighting the competitive landscape and performance trends within the sector [3][4]

Group 1 - Knightscope, Inc. (KSCP) closed at $6.06, with a 25.7% gain over the past four weeks, and a mean price target of $17 suggests an upside potential of 180.5% [1] - The mean estimate includes three short-term price targets with a standard deviation of $11.36, indicating variability; the lowest estimate of $9 suggests a 48.5% increase, while the highest estimate of $30 indicates a potential surge of 395.1% [2] - Analysts show strong agreement on KSCP's ability to report better earnings, with a positive trend in earnings estimate revisions correlating with potential stock upside [4][11] Group 2 - The Zacks Consensus Estimate for the current year has increased by 5.3% over the past month, with one estimate rising and no negative revisions [12] - KSCP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for near-term upside [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for price movement [10][13]

Summary of Key Points Core Viewpoint - Knightscope, Inc. (KSCP) has seen a significant stock price increase of 26.4% over the past four weeks, closing at $5.84, with analysts suggesting a potential upside of 191.1% based on a mean price target of $17 [1]. Price Targets and Analyst Consensus - The average price target for KSCP ranges from a low of $9 to a high of $30, with a standard deviation of $11.36, indicating variability in analyst estimates. The lowest estimate suggests a 54.1% increase, while the highest points to a 413.7% upside [2]. - A low standard deviation among price targets suggests a strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9]. Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about KSCP's earnings prospects, as evidenced by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [11]. - Over the past 30 days, one earnings estimate has increased, leading to a 4.7% rise in the Zacks Consensus Estimate for the current year [12]. Zacks Rank and Investment Potential - KSCP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside in the near term [13].

Financial Performance - Knightscope, Inc. reported a quarterly loss of $1.28 per share, which is better than the Zacks Consensus Estimate of a loss of $1.47, and an improvement from a loss of $4 per share a year ago, indicating a significant reduction in losses [1] - The company achieved revenues of $2.92 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.84% and showing an increase from $2.25 million in the same quarter last year [2] - Over the last four quarters, Knightscope has exceeded consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance and Outlook - Knightscope shares have declined approximately 58.2% since the beginning of the year, contrasting with the S&P 500's slight gain of 0.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$1.22 on revenues of $2.93 million, and for the current fiscal year, it is -$4.84 on revenues of $12.99 million [7] Industry Context - The Technology Services industry, to which Knightscope belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable environment for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Filing Information [Registrant Information](index=1&type=section&id=Registrant%20Information) Knightscope, Inc., a Delaware corporation headquartered in Mountain View, CA, is filing its Quarterly Report on Form 10-Q for the period ended March 31, 2025 - Knightscope, Inc. is a Delaware corporation with its principal executive offices in Mountain View, CA[1](index=1&type=chunk)[2](index=2&type=chunk) - The company's Class A Common Stock trades on The Nasdaq Capital Market under the symbol KSCP[3](index=3&type=chunk) [Filer Status and Stock Information](index=1&type=section&id=Filer%20Status%20and%20Stock%20Information) Knightscope is classified as a non-accelerated filer and a smaller reporting company, and it is not a shell company - The registrant is a non-accelerated filer and a smaller reporting company, and is not a shell company[4](index=4&type=chunk) Outstanding Common Stock as of May 9, 2025 | Class of Stock | Shares Outstanding | | :------------- | :----------------- | | Class A Common Stock | 6,564,466 | | Class B Common Stock | 336,759 | Cautionary Note on Forward-Looking Statements [Forward-Looking Statements and Associated Risks](index=4&type=section&id=Forward-Looking%20Statements%20and%20Associated%20Risks) This report contains forward-looking statements regarding future operations, financial position, business strategy, and market growth, subject to significant risks and uncertainties - Forward-looking statements in this report cover future operating results, financial position, business strategy, market growth, and product development, and are subject to various known and unknown risks and uncertainties[9](index=9&type=chunk)[10](index=10&type=chunk) - Key risks include the need for significant capital resources, market acceptance of products, ability to protect intellectual property, limited operating history, and the ability to continue as a going concern[11](index=11&type=chunk) - The company has not yet generated profits or significant revenues, anticipates continued losses, and its independent registered public accounting firm expresses substantial doubt about its ability to continue as a going concern without securing additional funding[11](index=11&type=chunk) PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Knightscope's unaudited condensed financial statements, showing increased assets and equity, reduced net loss, and improved cash flow from operations [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20and%20December%2031%2C%202024%20(Unaudited)) Condensed Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :----------------------------- | :------------- | :---------------- | :----- | | Total Assets | $29,810 | $28,185 | +$1,625 | | Total Liabilities | $11,647 | $12,404 | -$757 | | Total Stockholders' Equity | $18,163 | $15,781 | +$2,382 | | Cash and Cash Equivalents | $12,661 | $11,124 | +$1,537 | | Accounts Receivable, net | $2,014 | $1,731 | +$283 | | Inventory | $1,607 | $1,797 | -$190 | | Total Current Assets | $17,072 | $15,099 | +$1,973 | | Total Current Liabilities | $7,513 | $8,265 | -$752 | [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :------------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | Total Revenue, net | $2,917 | $2,254 | +$663 | +29.4% | | Total Cost of Revenue, net | $3,585 | $3,699 | -$114 | -3.1% | | Gross Loss | $(668) | $(1,445) | +$777 | -53.8% | | Total Operating Expenses | $6,160 | $6,835 | -$675 | -9.9% | | Loss from Operations | $(6,828) | $(8,280) | +$1,452 | -17.5% | | Net Loss | $(6,897) | $(7,592) | +$695 | -9.2% | | Basic and Diluted Net Loss per Common Share | $(1.28) | $(3.99) | +$2.71 | -67.9% | [Condensed Statements of Preferred Stock and Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Statements%20of%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Stockholders' Equity Changes (in thousands) | Metric | Balance as of Dec 31, 2024 | Stock-based compensation | Proceeds from Equity Sale, net | Proceeds from Direct Registration Offering | Net Loss | Balance as of Mar 31, 2025 | | :----------------------------- | :------------------------- | :----------------------- | :----------------------------- | :--------------------------------------- | :------- | :------------------------- | | Total Stockholders' Equity | $15,781 | $422 | $7,411 | $1,436 | $(6,897) | $18,163 | - All preferred stock was converted into Class A or Class B Common Stock on May 15, 2024, resulting in no preferred stock remaining outstanding[96](index=96&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Condensed Statements of Cash Flows Highlights (in thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | | :-------------------------------------- | :---------------------------- | :---------------------------- | :----- | | Net cash used in operating activities | $(6,375) | $(8,611) | +$2,236 | | Net cash used in investing activities | $(449) | $(894) | +$445 | | Net cash provided by financing activities | $8,259 | $9,710 | -$1,451 | | Net change in cash, cash equivalents and restricted cash | $1,435 | $205 | +$1,230 | - The decrease in net cash used in operating activities was primarily due to a lower net loss and favorable changes in assets and liabilities, partially offset by a decrease in the change in fair value of warrant and derivative liabilities and a loss on disposal of ASRs[158](index=158&type=chunk) [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) [NOTE 1: The Company and Summary of Significant Accounting Policies](index=10&type=section&id=NOTE%201%3A%20The%20Company%20and%20Summary%20of%20Significant%20Accounting%20Policies) Knightscope, Inc. is a public safety innovator building AI-driven Autonomous Security Robots (ASR) and Emergency Communication Devices (ECD) for the U.S. market - Knightscope, Inc. is a public safety innovator that builds Autonomous Security Robots (ASR) and Emergency Communication Devices (ECD), providing AI-driven solutions to the U.S. public safety market[31](index=31&type=chunk)[32](index=32&type=chunk) - The company's financial statements are prepared on a going concern basis, but historical losses and negative cash flows raise substantial doubt about its ability to continue as a going concern without additional fundraising[37](index=37&type=chunk)[38](index=38&type=chunk) - A **1-for-50 reverse stock split** for Class A and Class B Common Stock became effective on September 13, 2024, with all share and per-share amounts retroactively adjusted[39](index=39&type=chunk) [NOTE 2: Revenue and Deferred Revenue](index=17&type=section&id=NOTE%202%3A%20Revenue%20and%20Deferred%20Revenue) Revenue is generated from ASR leases and ECD sales, with deferred revenue primarily from Machine-as-a-Service subscriptions - Revenue is derived from ASR leases (operating leases, recognized ratably over 12-month terms) and ECD sales (recognized upon completion of services or product delivery)[72](index=72&type=chunk)[74](index=74&type=chunk) Revenue by Product Line (in thousands) | Product Line | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :----------- | :---------------------------- | :---------------------------- | :----- | :------- | | ASRs | $1,182 | $990 | +$192 | +19.4% | | ECDs | $1,735 | $1,264 | +$471 | +37.3% | | Total | $2,917 | $2,254 | +$663 | +29.4% | - Deferred revenue, primarily from Machine-as-a-Service (MaaS) subscriptions billed annually in advance, decreased from **$1.88 million** at December 31, 2024, to **$1.34 million** at March 31, 2025[75](index=75&type=chunk)[78](index=78&type=chunk) [NOTE 3: Fair Value Measurement](index=18&type=section&id=NOTE%203%3A%20Fair%20Value%20Measurement) Fair Value of Cash Equivalents (in thousands) | Asset Category | March 31, 2025 | December 31, 2024 | Level | | :------------- | :------------- | :---------------- | :---- | | Money market funds | $11,034 | $10,638 | Level 1 | - As of March 31, 2025, there were no Level 3 liabilities measured at fair value on a recurring basis, as preferred stock warrant liabilities were reclassified to equity in 2024[86](index=86&type=chunk)[149](index=149&type=chunk) [NOTE 4: Debt Obligations](index=20&type=section&id=NOTE%204%3A%20Debt%20Obligations) Debt Obligations (in thousands) | Debt Type | March 31, 2025 | December 31, 2024 | Change | | :------------------------------------------------- | :------------- | :---------------- | :----- | | Bonds, net | $3,971 | $3,952 | +$19 | | August 2024 Note | $909 | $1,364 | -$455 | | Insurance Notes | $458 | $0 | +$458 | | Total Debt | $5,338 | $5,316 | +$22 | | Less: current portion of debt obligations | $(1,367) | $(1,364) | -$3 | - The August 2024 Note, a **$3.0 million** senior secured promissory note, had an outstanding balance of **$0.9 million** as of March 31, 2025, down from **$1.4 million** at December 31, 2024[93](index=93&type=chunk)[95](index=95&type=chunk) - The company financed **$371 thousand** in additional business insurance premiums in February 2025, with an outstanding balance of **$458 thousand** as of March 31, 2025[94](index=94&type=chunk)[95](index=95&type=chunk) [NOTE 5: Capital Stock and Warrants](index=21&type=section&id=NOTE%205%3A%20Capital%20Stock%20and%20Warrants) - All outstanding preferred stock was automatically converted into Class A or Class B Common Stock on May 15, 2024, and preferred warrants were reclassified from liabilities to equity[96](index=96&type=chunk)[97](index=97&type=chunk) - The company's authorized Class A Common Stock was doubled to **228 million shares**, and **40 million shares** of 'blank check' preferred stock were authorized by stockholders[98](index=98&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) Outstanding Warrants as of March 31, 2025 | Class of shares | Number of Warrants | Exercise Price | Expiration Date | | :----------------------------------------- | :----------------- | :------------- | :-------------- | | Class A Common Stock (previously Series m-3 Preferred Stock) | 28,656 | $200.00 | Dec 31, 2027 | | Class A Common Stock (previously Series S Preferred Stock) | 121,455 | $93.87 | Dec 31, 2027 | | Class A Common Stock (Vendor Warrants) | 2,929 | $0.001 | 6 years from each issuance | | Class A Common Stock (Underwriter Warrants) | 36,300 | $18.29 | Nov 21, 2029 | [NOTE 6: Stock-Based Compensation](index=23&type=section&id=NOTE%206%3A%20Stock-Based%20Compensation) Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | | :--------------- | :---------------------------- | :---------------------------- | :----- | | Cost of revenue, net | $46 | $57 | -$11 | | Research and development | $148 | $122 | +$26 | | Sales and marketing | $21 | $48 | -$27 | | General and administrative | $207 | $107 | +$100 | | Total | $422 | $334 | +$88 | - The weighted average grant date fair value of options granted during the three months ended March 31, 2025, was **$2.28 per share**[111](index=111&type=chunk) - As of March 31, 2025, unamortized stock-based compensation expense was **$2.1 million**, to be recognized over a weighted average remaining vesting term of **1.4 years**[112](index=112&type=chunk) [NOTE 7: Commitments and Contingencies](index=25&type=section&id=NOTE%207%3A%20Commitments%20and%20Contingencies) Operating Lease Liabilities (in thousands) | Lease Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $265 | $407 | | Total operating lease liabilities | $268 | $412 | | Operating lease costs (Q1) | $190 | $989 | - The company has a purchase commitment of **$0.8 million** for ASR raw materials, with **$80,000** paid in the three months ended March 31, 2025[116](index=116&type=chunk) - A use tax liability of **$0.4 million** has been recorded as of March 31, 2025, for potential sales tax exposure on its MaaS product offering[119](index=119&type=chunk) [NOTE 8: Segment Information](index=26&type=section&id=NOTE%208%3A%20Segment%20Information) - Knightscope operates as a single reportable segment, with its Chief Executive Officer (CODM) reviewing financial information at a company level for resource allocation and performance evaluation[40](index=40&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - All long-lived assets are located in the United States, and substantially all revenue is attributed to sellers and buyers based in the United States[40](index=40&type=chunk) [NOTE 9: Subsequent Events](index=26&type=section&id=NOTE%209%3A%20Subsequent%20Events) - On April 9, 2025, Knightscope entered into a sublease agreement for **33,355 square feet** of office space in Sunnyvale, California, to serve as its new corporate headquarters[115](index=115&type=chunk)[122](index=122&type=chunk) - The sublease term commenced on April 16, 2025, and expires on June 30, 2030, with total lease payments of approximately **$5.27 million**[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Knightscope's financial condition and results, highlighting its mission, capital structure changes, operational improvements, and ongoing liquidity challenges [Overview](index=27&type=section&id=Overview) - Knightscope is dedicated to transforming public safety through AI-driven robotics (ASRs), emergency communication solutions (ECDs), and real-time monitoring via cloud-based platforms like KSOC, KEMS, and KNOC[125](index=125&type=chunk)[126](index=126&type=chunk) - The company's products are manufactured in the United States and provide scalable, 24/7 autonomous monitoring and proactive threat deterrence[125](index=125&type=chunk)[126](index=126&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) - The company completed a **1-for-50 reverse stock split** on September 13, 2024, and doubled authorized Class A Common Stock to **228 million shares** on April 5, 2024[127](index=127&type=chunk)[129](index=129&type=chunk) - All outstanding preferred stock was converted to common stock on May 15, 2024, and **40 million shares** of 'blank check' preferred stock were authorized[130](index=130&type=chunk)[131](index=131&type=chunk) - Warrants with anti-dilution features were extinguished on August 1, 2024, in exchange for a **$3.0 million** senior secured promissory note[132](index=132&type=chunk)[133](index=133&type=chunk) - Operational efficiency efforts are showing promise, including streamlined field services for ECD clients and improved ASR K5 v5 performance, leading to higher install base and customer retention[134](index=134&type=chunk)[135](index=135&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Key Financial Results (in thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :------------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | Total Revenue, net | $2,917 | $2,254 | +$663 | +29.4% | | Gross Loss | $(668) | $(1,445) | +$777 | -53.8% | | Total Operating Expenses | $6,160 | $6,835 | -$675 | -9.9% | | Net Loss | $(6,897) | $(7,592) | +$695 | -9.2% | - Total revenue increased by approximately **$0.7 million**, driven by a **$0.4 million** increase in service revenue and a **$0.2 million** increase in product revenue[140](index=140&type=chunk) - General and administrative expenses decreased by approximately **$0.9 million (24%)**, primarily due to **$1.0 million** lower investor relations fees and **$0.3 million** lower third-party professional fees[147](index=147&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Position (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :----------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $12,661 | $11,124 | | Total stockholders' equity | $18,163 | $15,781 | | Working capital | $9,559 | $6,834 | - Despite increased cash and equity, the company's ability to continue as a going concern is in substantial doubt due to historical losses and dependence on additional financing, which may dilute existing stockholders[150](index=150&type=chunk) - In Q1 2025, the company generated approximately **$7.4 million** in net proceeds from its at-the-market (ATM) offering program and **$1.7 million** in gross proceeds from a registered direct offering[153](index=153&type=chunk)[154](index=154&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) - There have been no material changes to the company's critical accounting estimates from what was reported in the Annual Report on Form 10-K[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Knightscope is exempt from providing quantitative and qualitative disclosures about market risk - The company is not required to provide information under this item as it is a smaller reporting company[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Knightscope's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025[165](index=165&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended March 31, 2025[166](index=166&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) Knightscope is not currently a party to any material legal proceedings and is unaware of any pending or threatened litigation that could materially affect its business - The company is not presently a party to any material litigation and is unaware of any pending or threatened litigation that could materially adversely affect its business or financial condition[169](index=169&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously discussed in the company's 2024 Annual Report on Form 10-K - No material changes in risk factors were reported compared to the 2024 Annual Report on Form 10-K[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds were reported[171](index=171&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - This item is not applicable to the company[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[173](index=173&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No disclosures in lieu of Form 8-K, material changes to director nominee procedures, or insider trading arrangement adoptions/terminations were reported during Q1 2025 - No disclosures in lieu of Form 8-K, material changes to director nominee procedures, or insider trading arrangement adoptions/terminations were reported during Q1 2025[174](index=174&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, operational agreements, and regulatory certifications - The exhibits include corporate governance documents (Certificate of Incorporation amendments, Bylaws), operational agreements (Sublease, Consent to Subletting), and regulatory certifications (CEO/CFO certifications, XBRL documents)[175](index=175&type=chunk) Signatures [Report Signatures](index=36&type=section&id=Report%20Signatures) The Quarterly Report on Form 10-Q was duly signed on May 14, 2025, by William Santana Li and Apoorv Dwivedi - The report was signed on May 14, 2025, by William Santana Li, Chairman, Chief Executive Officer and President, and Apoorv Dwivedi, Executive Vice President and Chief Financial Officer and Secretary[179](index=179&type=chunk)[180](index=180&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $2.9 billion, a 29% increase from $2.3 billion in Q1 2024, driven by growth in both service and product revenue [6][12] - Service revenues grew to approximately $2.1 billion, up 25% from $1.7 billion the previous year, primarily due to strong ASR subscriptions and full-service maintenance agreements [6][12] - Product revenues increased by 44% to about $809,000 compared to $563,000 in the prior year, attributed to successful distribution partnerships [6][12] - Gross loss improved to approximately $700,000 from a loss of $1.4 million a year ago, reflecting savings in total cost of revenue [8][12] - Operating expenses decreased by 9% year-over-year to $6.2 million from $6.8 million in 2024 [10][12] - Net loss after accounting for other income and expenses was about 11% lower than the prior year's loss of $7.6 million [12] Business Line Data and Key Metrics Changes - Research and development expenses were about $2.1 million, a 35% increase year-over-year, reflecting continued investment in product innovation [10][12] - Sales and marketing expenses decreased by 15% to $1.3 million, due to strategic changes in the go-to-market strategy [11][12] - General and administrative expenses were $2.8 million, down from $3.6 million the previous year, primarily due to cost discipline [11][12] Market Data and Key Metrics Changes - The company reported a total backlog of approximately $2.5 million, consisting of $1.9 million in ECDs and $600,000 in ASR-related orders [51] Company Strategy and Development Direction - The company is focused on achieving positive gross margins, scaling services and product footprint, and operating with increased efficiency and discipline [14][12] - Management emphasized the importance of executing long-term goals while navigating external uncertainties, such as tariffs and macroeconomic factors [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress and the effectiveness of recent changes made over the past fifteen months [15][17] - The company is navigating macro uncertainties but believes that opportunities exist, particularly in the context of national security and safety [21][25] - Management highlighted the importance of focusing on long-term shareholder value rather than short-term profitability [32][56] Other Important Information - The company is in the process of moving to a new facility, which is expected to enhance collaboration and efficiency, although some disruption risks are anticipated during the transition [47][49] - The company has made significant changes to its management structure, including the termination of 40% of the management team to improve efficiency [39][56] Q&A Session Summary Question: How is macro uncertainty impacting customer conversations? - Management noted that while political uncertainty has less direct impact, financial factors like tariffs could affect component pricing and lead times [21][22] Question: Is the per-share loss improvement due to the reverse split? - The reverse stock split occurred in September 2024, and the per-share price reflects this adjustment [28][29] Question: When will the company report positive EBITDA and earnings? - Management indicated that while they are focused on achieving positive earnings and EBITDA, the timing is still uncertain [30][31] Question: What is the impact of the Doge program on federal security customers? - The program has created some challenges due to personnel changes but also presents opportunities for more efficient security solutions [34][35] Question: What are the biggest obstacles in ramping up the customer base? - Management cited funding as a significant challenge, impacting the ability to scale operations and grow the customer base [60][62] Question: How does the order book look? - The company reported a backlog of approximately $2.5 million, indicating a healthy order pipeline [51] Question: What are the plans for the new headquarters? - The new facility is expected to enhance operational efficiency, with some anticipated costs and disruptions during the move [74][75]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $2.9 million, a 29% increase from $2.3 million in Q1 2024, driven by growth in both service and product revenue [6][12] - Service revenues grew to approximately $2.1 million, up 25% from $1.7 million the previous year, primarily due to strength in ASR subscriptions and full-service maintenance agreements [6][12] - Product revenues increased by 44% to about $809,000 compared to $563,000 in the prior year, attributed to distribution partnerships and expanding deployments [6][12] - Gross loss improved to approximately $700,000 from $1.4 million a year ago, with cost of revenue slightly lower at $3.6 million compared to $3.7 million in Q1 2024 [8][12] - Operating expenses decreased by 9% year-over-year to $6.2 million, with R&D expenses up 35% to $2.1 million, while sales and marketing expenses were down 15% to $1.3 million [9][10][12] - Net loss for the quarter was about $7.6 million, an improvement from $8.3 million in Q1 2024, with earnings loss per share improving to $1.29 from nearly $4 per share last year [11][12] Business Line Data and Key Metrics Changes - The company is focused on achieving positive gross margins, scaling services and product footprint, and operating with increased efficiency [13] - The ASR (Autonomous Security Robots) and ECD (Emergency Communication Devices) segments are showing growth, with a backlog of approximately $2.5 million, including $1.9 million in ECDs and $600,000 in ASR-related orders [48] Market Data and Key Metrics Changes - The company is navigating macroeconomic uncertainties, particularly regarding tariffs, which may impact component pricing and lead times [18][20][21] - The management believes that the focus on national safety and security could provide tailwinds for the business despite the uncertainties [19][22] Company Strategy and Development Direction - The company is committed to long-term growth and shareholder value, focusing on scaling operations and investing in new technologies [28][55] - The management is actively pursuing government contracts and has established a Washington office to foster relationships with federal agencies [86][88] - The company is moving to a new facility to consolidate operations and improve efficiency, with plans for enhanced production capabilities [67][70] Management's Comments on Operating Environment and Future Outlook - Management expresses a positive outlook, emphasizing the importance of execution and the progress made in the past year [15][16] - The company acknowledges the challenges faced in the past, particularly related to funding, but is optimistic about the changes implemented [58][60] Other Important Information - The company is undergoing a significant transition, including moving to a new facility and restructuring its management team [34][52] - The management is focused on maintaining operational efficiency while scaling revenue and minimizing costs [39][40] Q&A Session Summary Question: How is macro uncertainty impacting customer conversations? - Management noted that while political uncertainty has less direct impact, financial aspects like tariffs could affect component pricing and lead times [18][20] Question: When will the company report positive EBITDA and earnings? - Management indicated that while they are focused on achieving positive earnings, the timing is yet to be determined [26][32] Question: What happened to Stacy Stevens? - The position was eliminated as part of a broader restructuring to improve efficiency [34] Question: How quickly will additional cost infrastructure be needed as revenue scales? - Management stated that they are cautious about adding costs and will scale revenue first before increasing infrastructure [35][36] Question: What is the status of the new facility? - The new facility is expected to be operational by August, with some anticipated disruptions during the move [43][46] Question: How does the order book look? - The current backlog is approximately $2.5 million, with significant orders in both ECDs and ASRs [48] Question: What are the plans for government contracts? - The company is actively pursuing additional government contracts and has already won a phase one contract with the Air Force [86][88]

Company Overview - Knightscope, Inc. (KSCP) is expected to report a year-over-year increase in earnings driven by higher revenues for the quarter ended March 2025, with a consensus estimate indicating a quarterly loss of $1.47 per share, reflecting a change of +63.3% year-over-year [1][3] - Revenues are projected to be $2.68 million, which represents a 19.1% increase from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly reassessed their initial estimates [4] - The Most Accurate Estimate for Knightscope is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -11.95%, suggesting a bearish outlook from analysts [10] Historical Performance - In the last reported quarter, Knightscope was expected to post a loss of $1.88 per share but actually reported a loss of $0.78, resulting in a positive surprise of +58.51% [12] - Over the past four quarters, the company has only beaten consensus EPS estimates once [13] Industry Context - In the Zacks Technology Services industry, Bitfarms Ltd. (BITF) is expected to report a loss of $0.04 per share for the same quarter, indicating a year-over-year change of -100%, with revenues expected to be $65.47 million, up 30.1% from the previous year [17] - Bitfarms has seen a 16.7% downward revision in its consensus EPS estimate over the last 30 days, resulting in an Earnings ESP of -36.36% [18]