Knightscope(US:KSCP)2023-05-12 21:13Financial Performance - Total revenue for the three months ended March 31, 2023, was $2.897 million, a significant increase from $0.944 million in the same period of 2022 [124]. - Service revenue increased by approximately $0.8 million to $1.748 million, primarily due to maintenance and service revenue from installed Blue Light Towers, E-Phones, and Call Boxes [126]. - The company reported a gross loss of approximately $0.213 million for Q1 2023, an improvement from a gross loss of $0.549 million in Q1 2022 [129]. - Total other income (expense) increased by approximately $5.5 million, or 392%, for the three months ended March 31, 2023, resulting in other income of approximately $4.1 million compared to other expense of approximately $1.4 million for the prior year period [134]. Expenses - Research and development expenses decreased by approximately $0.441 million, or 24%, to $1.397 million, primarily due to reduced personnel costs following a workforce reduction [130]. - Sales and marketing expenses decreased by approximately $2.362 million, or 68%, to $1.128 million, attributed to lower advertising costs related to a previous offering [131]. - General and administrative expenses increased by approximately $1.313 million, or 56%, to $3.639 million, driven by higher legal and financial service costs [132]. - The company incurred restructuring charges of $0.144 million for Q1 2023 due to workforce reduction [133]. Cash Flow and Financing - As of March 31, 2023, the company had $2.4 million in cash and cash equivalents, an accumulated deficit of approximately $141.8 million, and a working capital deficit of $0.6 million [135]. - Net cash used in operating activities was approximately $6.5 million for the three months ended March 31, 2023, a decrease of approximately $1.9 million compared to the prior year period [140]. - Net cash provided by financing activities was approximately $4.9 million for the three months ended March 31, 2023, a decrease of approximately $14.6 million compared to the prior year period [144]. - The company issued 3,573,536 shares of Class A Common Stock under the at-the-market offering program for net proceeds of approximately $3.4 million during the three months ended March 31, 2023 [146]. - The company sold 851,109 shares of Class A Common Stock under the Purchase Agreement, generating net proceeds of $1.3 million during the three months ended March 31, 2023 [153]. - The outstanding principal balance of the 2022 Convertible Notes was approximately $3.0 million as of March 31, 2023, with 2,893,824 shares of Class A Common Stock issued in connection with conversions representing an aggregate principal amount of approximately $3.1 million [150]. - The company has the capacity to issue up to approximately $16.5 million of Class A Common Stock under the at-the-market offering program as of March 31, 2023 [146]. Operational Outlook - The company is focused on scaling its business to meet increasing client demand and has implemented operational efficiencies to reduce backlog [117]. - The company aims to maintain compliance with Nasdaq listing requirements, including regaining a minimum market value of $50 million by September 25, 2023 [113]. - The company has projected operating losses and negative cash flows of approximately $1.0 million per month for the next several months, raising substantial doubt about its ability to continue as a going concern [136]. Accounting Changes - The company implemented Accounting Standards Update No 2016-13, which revises the impairment model for financial instruments, effective the first quarter of fiscal year 2023 [156].