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