# Knightscope, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Knightscope, Inc.](/companies/kscp.md) (CIK 1600983)
- Form: 10-Q
- Filed: 2025-05-14
- Accepted by EDGAR: May 14, 2025, 17:21 ET
- Period: 2025-03-31
- Accession: 0001558370-25-007781
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1600983/000155837025007781/kscp-20250331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1600983/000155837025007781/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $3.6m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | −$668.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $2.1m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$6.8m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$6.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.28 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.28 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 5,404,552 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$6.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $12.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $17.1m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $29.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $7.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $11.6m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $4.0m | us-gaap:LongTermDebtNoncurrent |
| Short-term borrowings | at 2025-03-31 | $1.4m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $18.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 21,484 characters.

*The following discussion of our financial condition and results of operations should be read in conjunction with the (1) unaudited condensed financial statements and the related notes thereto included elsewhere in this report, and (2) the audited financial statements and the related notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report on Form 10-K.*

*The historical results presented below are not necessarily indicative of the results that may be expected for any future period. Forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties, and assumptions, and other important factors. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K, as updated by our other filings with the SEC, and the section titled “Cautionary Note on Forward-Looking Statements” included elsewhere herein.*

### Overview

Knightscope is dedicated to transforming public safety through AI-driven robotics, emergency communication solutions, and real-time monitoring. Our comprehensive suite of solutions includes Autonomous Security Robots (“ASR”), advanced AI-powered detection, emergency communication devices (“ECD”), and the cloud-based Knightscope Security Operations Center (“KSOC”), providing organizations with scalable, 24/7 autonomous monitoring. Our products are manufactured in the United States and are designed to protect people and assets across various environments, including workplaces, schools, and public areas.

Our core technologies are a unique combination of autonomy, robotics, artificial intelligence and electric vehicle technology:

- **ASRs:** AI-powered autonomous security robots that are designed to provide continuous monitoring, real-time incident detection, and proactive threat deterrence through a strong physical presence.
- **ECDs:** Blue light emergency communication systems, including towers, e-phones, and call boxes, designed to provide instant connectivity to emergency services.
- **Knightscope Security Operations Center (KSOC):** A cloud-based platform for real-time security monitoring, data analysis, and event management driven by autonomous security robots.
- **Knightscope Emergency Management System (KEMS):** A diagnostics tool designed to keep emergency communication devices operational and reliable.
- **Knightscope Network Operations Center (KNOC)**: The Company has built a custom set of tools that enables our employees to manage and monitor the network of ASRs and other Knightscope technologies operating in the field nationwide.
- **Knightscope's Risk & Threat Exposure (RTX)**: RTX analysts provide proactive monitoring by verifying alerts triggered by Knightscope devices.

### Recent Developments

### Reverse Stock Split

On August 16, 2024, stockholders approved a reverse stock split at a ratio between 1-for-5 and 1-for-50. On September 4, 2024, the Board set the final ratio at 1-for-50 for both Class A and Class B Common Stock. The split became effective on September 13, 2024, following the filing of an amendment to the Certificate of Incorporation in Delaware. No fractional shares were issued; instead, affected stockholders received a cash payment based on the September 13 closing price on Nasdaq, totaling approximately $78. All outstanding stock options were adjusted accordingly, and all share and per-share amounts in financial statements were retroactively updated to reflect the split.

### Capital Structure

The Company has prioritized restructuring its capital structure to better align with its public company peers. Below is a summary of actions taken, which we believe, set up the Company for long term success.

**Increase in Authorized Shares -** On April 5, 2024, stockholders approved an amendment to double the authorized shares of Class A Common Stock from 114 million to 228 million. The increase provides flexibility for corporate purposes such as financings, stock splits or dividends, equity awards, conversions, and strategic initiatives, without needing further stockholder approval.

**Preferred Stock Conversion -** On May 15, 2024, all outstanding Super Voting and Ordinary Preferred Stock automatically converted into Class B and Class A Common Stock, respectively, per the Company’s Certificate of Incorporation. No preferred stock remains outstanding. The conversion supports Nasdaq compliance by aiding stockholder equity requirements.

**Authorization of Blank Check Preferred Stock -** On August 16, 2024, stockholders approved the authorization of 40 million shares of "blank check" preferred stock, allowing the Board of Directors to issue new preferred shares in one or more series with terms it sets, without further stockholder approval. Provisions related to previously issued preferred stock were removed, as they are no longer outstanding.

**Extinguishment of Warrants with Anti-Dilution Features -** On October 10, 2022, the Company issued senior secured convertible notes and warrants to purchase 22,768 Class A shares under a Securities Purchase Agreement with Alto Opportunity Master Fund. The warrants included anti-dilution provisions adjusting the exercise price and share quantity if lower-priced stock was later issued. A related registration rights agreement granted the holder registration rights under the Securities Act.

On August 1, 2024, the Company and the holder entered into a waiver agreement, canceling the 2022 warrants in exchange for a $3.0 million senior secured promissory note due July 1, 2025. The note is payable in two installments: $2.5 million in 11 equal monthly payments starting September 1, 2024, and $500,000 on the earlier of October 15, 2024, or upon a qualifying issuance of equity or debt. The note bears no interest unless an event of default occurs, in which case a 10% annual interest applies. As of May 13, 2025, approximately $0.5 million remains outstanding.

### Operational Efficiency

The Company is focused on scaling its business and on implementing strategies to decrease gross margin loss over time.

Although the disruptions from restructuring changes we made in the first half of the prior year continue to impact operations, we are beginning to see benefits, primarily as we work closely with our third-party partners to streamline field services for our ECD clients and renegotiate some long-term services contracts.

Additionally, we believe our efforts to improve the ASR K5 v5 are showing promise in higher install base and increased customer retention. The Company continues to invest in revenue-generating activities such channel partnerships, lead generation, marketing and programs aimed at increasing our engagement with the federal government.

Our strategy is to try to keep fixed costs low while minimizing variable costs in conjunction with pursuing our growth objectives; however given the global nature of our supply chain, our business is subject to the imposition of tariffs and other trade barriers, which may make it more costly for us to import raw materials and components for our products.

As of May 7, 2025, the Company had a total backlog of approximately $2.5 million, comprised of $1.9 million related to orders for ECDs and $0.6 million related to ASR orders.

### Results of Operations

### Comparison of the Three Months Ended March 31, 2025 and 2024

The following table sets forth selected Condensed Statements of Operations data (in thousands) and such data as a percentage of total revenue.

| ​ ​ ​ Revenue, net | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 ​ ​ | ​ ​ | ​ ​ % of Revenue ​ ​ | ​ ​ 2024 ​ ​ | ​ ​ | ​ ​ % of Revenue ​ ​ |
| --- | --- | ---: | --- | ---: | ---: | --- | ---: |
| Service | ​ | $2,108 | ​ | 72% | $1,691 | ​ | 75% |
| Product | ​ | ​ 809 | ​ | 28% | ​ 563 | ​ | 25% |
| Total revenue, net | ​ | ​ 2,917 | ​ | 100% | ​ 2,254 | ​ | 100% |
| Cost of revenue, net | ​ | ​ ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ |
| Service | ​ | ​ 2,756 | ​ | 94% | ​ 3,083 | ​ | 137% |
| Product | ​ | ​ 829 | ​ | 28% | ​ 616 | ​ | 27% |
| Total cost of revenue, net | ​ | ​ 3,585 | ​ | 123% | ​ 3,699 | ​ | 164% |
| Gross loss | ​ | (668) |  | (23)% | (1,445) |  | (64)% |
| Operating expenses: | ​ | ​ ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ |
| Research and development | ​ | 2,125 |  | 73% | 1,569 |  | 70% |
| Sales and marketing | ​ | 1,275 |  | 44% | 1,506 |  | 67% |
| General and administrative | ​ | 2,760 |  | 95% | 3,641 |  | 162% |
| Restructuring charges | ​ | ​ — | ​ | —% | ​ 119 | ​ | 5% |
| Total operating expenses | ​ | 6,160 |  | 211% | 6,835 |  | 303% |
| Loss from operations | ​ | (6,828) |  | (234)% | (8,280) |  | (367)% |
| Other income (expense): | ​ | ​ ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ |
| Change in fair value of warrant and derivative liabilities | ​ | — |  | —% | 770 |  | 34% |
| Interest income (expense), net | ​ | ​ (81) | ​ | (3)% | ​ (65) | ​ | (3)% |
| Other income (expense), net | ​ | 12 |  | —% | (17) |  | (1)% |
| Total other income (expense) | ​ | (69) |  | (2)% | 688 |  | 31% |
| Net loss before income tax expense | ​ | (6,897) |  | (236)% | (7,592) |  | (337)% |
| Income tax expense | ​ | — |  | —% | — |  | —% |
| Net loss | ​ | $(6,897) |  | (236)% | $(7,592) |  | (337)% |

### Revenue, net

Total revenue, net for the three months ended March 31, 2025 increased by approximately $0.7 million compared to the same period in the prior year due to a $0.4 million increase in service revenue and $0.2 million increase in product revenue.

### Cost of revenue, net

Total cost of revenue, net of $3.6 million for the three months ended March 31, 2025 decreased approximately $0.1 million compared to the same period in the prior year. This decrease was primarily due to lower cost of revenue in services of $0.3 million partially offset by higher costs of revenues in product of $0.2 million.

Service cost of revenue, net came in $0.3 million lower as compared to the same period in 2024 due to $0.8 million in savings from one-time scrap fees in 2024 and $0.1 million in lower cellular fees partially offset by $0.5 million in higher third-party expenses.

Product cost of revenue, net for the three months ended March 31, 2025 of $0.8 million was $0.2 million higher than prior year due to $0.3 million in increased costs of materials partially offset by $0.1 million in lower payroll and $0.1 million in lower rent and utilities costs.

### Gross Loss

The revenue and cost of revenue described above resulted in a gross loss for the three months ended March 31, 2025 of approximately $0.7 million, net, compared to $1.4 million for the three months ended March 31, 2024.

### Research and Development

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2025 | ​ ​ ​ ​ 2024 ​ | ​ ​ ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ ​ % Change |
| --- | --- | ---: | ---: | ---: | ---: |
| Research and development | ​ | $2,125 ​ | $1,569 ​ | $556 | 35% |
| Percentage of total revenue | ​ | 73% | 70% |  | ​ |

Research and development expenses increased by approximately $0.6 million, or approximately 35% for the three months ended March 31, 2025, as compared to the same period in the prior year. The increase is primarily due to third-party engineering services as the Company continues to invest in the development of new products.

### Sales and Marketing

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2025 | ​ ​ ​ ​ 2024 ​ | ​ ​ ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ ​ % Change |
| --- | --- | ---: | ---: | ---: | ---: |
| Sales and marketing | **​** | $1,275 **​** | $1,506 ​ | $(231) | (15)% |
| Percentage of total revenue | **​** | 44% | 67% |  | ​ |

Sales and marketing expenses decreased by approximately $0.2 million, or approximately 15%, for the three months ended March 31, 2025, as compared to the same period in the prior year. The decrease was primarily due to a decline in advertising and promotional costs compared to the same period in the prior year.

### General and Administrative

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2025 | ​ ​ ​ ​ 2024 ​ | ​ ​ ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ ​ % Change |
| --- | --- | ---: | ---: | ---: | ---: |
| General and administrative | **​** | $2,760 ​ | $3,641 **​** | $(881) | (24)% |
| Percentage of total revenue | **​** | 95% | 162% |  | ​ |

General and administrative expenses decreased by approximately $0.9 million or approximately 24% for the three months ended March 31, 2025, as compared to the same period in the prior year. The decrease was primarily due to $1.0 million lower investor relations fees that the Company spent in prior year to support its Public Infrastructure Bond Offering and $0.3 million lower third-party professional fees, primarily legal and finance services. These decreases were partially offset by $0.2 million higher costs across corporate insurance, franchise taxes and other items.

### Restructuring Charges

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Three Months Ended March 31, 2025 | ​ ​ ​ ​ ​ 2024 | ​ ​ ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ ​ ​ % Change |
| --- | --- | ---: | ---: | ---: | ---: |
| Restructuring Charges | ​ | $— ​ | $119 ​ | $(119) | 100% |
| Percentage of total revenue | ​ | —% | 5% |  | ​ |

Restructuring charges were $0 for the three month period ended March 31, 2025 compared to $119 for the same period in the prior year.

### Other Income (expense)

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31 2025 | ​ | ​ ​ 2024 | ​ ​ ​ | ​ ​ ​ ​ ​ ​ $ Change | ​ ​ ​ | ​ ​ ​ ​ % Change |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Change in fair value of warrant and derivative liability | **​** | $— | **​** | $770 | **​** | $(770) |  | (100)% |
| Interest income (expense), net | ​ | ​ (81) | ​ | ​ (65) | ​ | ​ (16) | ​ | (25)% |
| Other income (expense), net | ​ | ​ 12 | ​ | ​ (17) | ​ | ​ 29 | ​ | 171% |
| Total other income (expense) | ​ | $(69) | ​ | $688 | ​ | $(757) | ​ | (110)% |

Total other income (expense) decreased by approximately $0.8 million, or 110% for the three months ended March 31, 2025 as compared to the same period in the prior year as non-cash income from change in the fair value of warrant and derivative liabilities in 2024 was not repeated in 2025. The Company extinguished its outstanding warrant liability in 2024.

### Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, we had $12.7 million and $11.1 million, respectively, of cash and cash equivalents. As of March 31, 2025, the Company had additional paid-in capital of $218.2 million, partially offset by an accumulated deficit of approximately $200.1 million, working capital of approximately $9.6 million and total stockholders’ equity of approximately $18.2 million. These factors raise substantial doubt about our ability to continue as a going concern. There can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its future operations. Management’s plans include seeking additional financing, such as issuances of equity and issuances of debt and/or convertible debt instruments. Sales of additional equity securities, convertible debt and/or warrants by the Company could result in the dilution of the interests of existing stockholders. The Company will require significant additional financing to meet its planned capital and operational needs and is pursuing opportunities to obtain additional financing through equity and/or debt alternatives. However, there can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company may have to significantly reduce its operations, delay, scale back or discontinue the development of one or more of its platforms or discontinue operations completely.

### At-the-Market Offering Program

In February 2023, we commenced an at-the-market offering program with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, in connection with our filing of a prospectus supplement filed on February 9, 2023 (the “February Prospectus Supplement”), allowing us to offer and sell from time to time of up to $20.0 million in shares of Class A Common Stock, subject to, and in accordance with, SEC rules. Pursuant to General Instruction I.B.6 of Form S-3, our prospectus supplement provided that in no event would we sell any securities in a public primary offering with a value exceeding one-third of our non-affiliated public float in any 12-month period unless our non-affiliated public float subsequently rose to $75.0 million or more.

On November 14, 2024, after our non-affiliated public float rose to an amount greater than $75.0 million, we filed a new prospectus supplement (the “November Prospectus Supplement”) providing for the offer and sale from time to time of up to $25.0 million in shares of Class A Common Stock, in addition to the shares of Class A Common Stock previously sold, subject to, and in accordance with, SEC rules.

For the three months ended March 31, 2025, we issued 1,247,836 shares of Class A Common Stock under the at-the-market offering program for net proceeds of approximately $7.4 million, net of brokerage and placement fees of approximately $0.2 million.

### Securities Purchase Agreement

On March 27, 2025, the Company entered into a securities purchase agreement with a certain institutional investor, pursuant to which the Company agreed to issue and sell in a registered direct offering, 625,000 shares of the Company’s Class A Common Stock, par value $0.001 per share, at a purchase price of $2.75 per share. The gross proceeds to the Company from the offering were approximately $1.7 million before deducting placement agent fees and other offering expenses payable by the Company.

### Cash Flow

The table below, for the periods indicated, provides selected cash flow information:

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: |
| Net cash used in operating activities | ​ | $(6,375) | ​ | $(8,611) |
| Net cash used in investing activities | ​ | (449) | ​ | (894) |
| Net cash provided by financing activities | ​ | 8,259 | ​ | 9,710 |
| Net change in cash, cash equivalents and restricted cash | ​ | $1,435 | ​ | $205 |

### Net Cash Used in Operating Activities

Net cash used in operating activities is influenced by the amount of cash we invest in personnel, marketing, and infrastructure to support the anticipated growth of our business, the number of clients to whom we lease our ASRs, the amount and timing of accounts receivable collections, inventory procurement, as well as the amount and timing of disbursements to our vendors.

Net cash used in operating activities was approximately $6.4 million for the three months ended March 31, 2025. Net cash used in operating activities resulted from a net loss of approximately $6.9 million and changes in working capital and non-cash charges.

Net cash used in operating activities for the three months ended March 31, 2025 decreased by approximately $2.2 million as compared to the same period of the prior year. This was primarily a result of a decrease in the net loss of approximately $0.7 million, changes in assets and liabilities of approximately $1.4 million, an increase in stock-based compensation of approximately $0.1 million partially offset by a decrease in the change in fair value of warrant and derivative liabilities of approximately $0.8 million, and a loss on disposal of ASRs and related inventory of approximately $0.8 million.

### Net Cash Used in Investing Activities

Our primary investing activities have consisted of capital expenditures and investment in ASRs. As our business grows, we expect our capital expenditures to continue to increase.

Net cash used in investing activities for the three months ended March 31, 2025 and 2024 was approximately $0.4 million and $0.9 million, respectively.

### Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $8.3 million for the three months ended March 31, 2025, a decrease of approximately $1.5 million as compared to the same period of the prior year. Our financing activities for the three months ended March 31, 2025, consisted primarily of net proceeds from the issuance of Class A Common Stock under our at-the-market offering program with Wainwright and the registered direct offering of approximately $7.4 million, proceeds from the issuance of common stock and pre-funded warrants of approximately $1.4 million, offset by repayments of debt obligations of $0.6 million. In the prior year period, our financing activities consisted primarily of net proceeds resulting from our at-the-market agreement with Wainwright of approximately $7.1 million and the issuance of our Public Safety Infrastructure Bonds of approximately $2.6 million.

### Critical Accounting Estimates

There have been no material changes to our critical accounting estimates from what was reported in the Annual Report on Form 10-K. Please see Note 1 to our condensed financial statements elsewhere in this Quarterly Report on Form 10-Q.

## Market risk

As filed, 143 characters.

As we are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide information under this item.

## Controls and procedures

As filed, 1,530 characters.

#### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

#### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 611 characters.

You should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K which could materially affect our business, financial condition, cash flows or future results. There have been no material changes in our risk factors included in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Filed May 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-007781. Last ingested by Listed: Nov 6, 2026, 18:28 ET. No prices; not investment advice.