Knightscope Inc.
11/12/2025 | Press release | Distributed by Public on 11/12/2025 16:17
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
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:
Business Environment
Knightscope operates in a dynamic and evolving trade environment that can impact both material sourcing and manufacturing costs. Knightscope strongly supports efforts to revitalize domestic manufacturing and is committed to scaling U.S.-based engineering and production operations. While we strive to manufacture our ASRs and ECDs domestically, global material availability and supplier delivery performance may present challenges. These supply chain constraints have, at times, impacted the timing of equipment production and delivery to our clients.
In addition, the evolving global tariff environment continues to influence input costs for certain components and materials. While the overall financial impact to date has been deemed immaterial, we remain vigilant and proactive in mitigating future cost pressures.
To address these challenges, we are actively investing in our new, larger production facility in Sunnyvale, California, and taking targeted actions to enhance throughput, strengthen yield, and improve overall delivery performance. We are optimizing our procurement and production strategies, leveraging existing supplier relationships, and evaluating alternative sourcing options where appropriate. Additionally, Knightscope continues to maintain disciplined cost controls and may implement selective pricing adjustments as needed to offset residual tariff-related pressures while preserving value for our clients.
Recent Developments
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. 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.
On June 30, 2025, the senior secured promissory note was paid in full.
Strengthened Liquidity - As of September 30, 2025, cash and cash equivalents of approximately $20.4 million, represent a $15.2 million year-over-year increase. This improvement is largely attributable to disciplined expense management and strategically executed financing.
Investment in growth and innovation
New, Larger Facility - In April 2025, Knightscope signed a lease for a newly expanded corporate headquarters at 305 North Mathilda Avenue, Sunnyvale, California, securing approximately 33,355 square feet-more than double our former facility. This expanded footprint establishes a strategic hub for enhanced engineering, manufacturing, and client support efforts while the consolidation enables improved internal collaboration and streamlined deployment workflows.
Focused Investment in Innovation - Consistent with our long-term growth strategy, research and development ("R&D") investments remain strategically directed toward development of the K7 platform and ECD products, advancements in autonomous navigation, and integration of AI-powered analytics. These efforts are designed to drive sustainable, high-margin growth as we enhance our product roadmap and competitive differentiation.
Operational Efficiency
The Company is focused on scaling its business and on implementing strategies to decrease net loss over time.
Production Improvements - The Company's continued investment in continuous improvements of our production processes have yielded overtime labor cost reduction, improved capacity utilization, and shorter delivery timelines. Our attention remains focused on converting backlog into billings and cash receipts in the coming periods.
Cost Discipline - Despite continued investment in R&D for the next-generation technology platforms, overall operating expense growth remains tightly managed, aligning with our financial strategy of controlling overhead while investing in innovation.
Facility Consolidation and Inventory Assessment - As part of our transition to the new, larger Sunnyvale facility, we completed a comprehensive review of our inventory, manufacturing processes, and legacy systems. This effort is expected to enhance operational efficiency and support long-term scalability; in connection with these efforts, we identified obsolete, slow-moving, or excess inventory and recorded a non-cash inventory write-off of approximately $0.6 million during the three months ended September 30, 2025. This cost is recognized in the Company's Statements of Operations in Cost of revenue, net - service. These actions are part of a broader initiative to streamline operations and align inventory with current and future product roadmaps.
Supply Chain Challenges
During the third quarter of 2025, the Company experienced improved availability of key electronic components used in its ECD product assemblies as a result of the supply chain mitigation measures implemented earlier in the year. These actions - including supplier diversification and proactive material replenishment mechanisms - enabled the Company to fulfill certain delayed orders and increase product revenue during the period.
While overall supply conditions have improved relative to the prior quarter, the Company continues to monitor potential volatility in the global electronics and logistics markets that could affect lead times, component pricing, and production schedules. The Company believes that its current procurement and inventory management processes have positioned it to better respond to potential disruptions; however, the timing and magnitude of future supply constraints remain uncertain and could continue to impact operating results in the near term.
As of November 10, 2025, the Company had a total backlog of approximately $2.8 million, comprised of $2.3 million related to orders for ECDs and $0.5 million related to ASR orders.
Legislative and Regulatory Developments
On July 4, 2025, President Trump signed the tax law referred to as One-Big-Beautiful-Bill-Act ("OBBBA"), which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and extension of prior tax law under the Tax Cuts and Jobs Act and the introduction of new provisions. Examples include the extension of so-called permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent expensing of domestic research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. The Company has done a preliminary analysis of the changes impacting its business and has determined that the aggregate impact, assuming various state tax legislation conforms to the OBBBA, would not have a material impact to the Company.
Results of Operations
Comparison of theThree Months Ended September 30, 2025 and 2024
The following table sets forth selected condensed statements of operations data and such data as a percentage of total revenue.
|
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|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
||||||||||
|
(in thousands, except percentages) |
|
2025 |
% of Revenue |
2024 |
% of Revenue |
||||||
|
Revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
$ |
1,906 |
|
61 |
% |
$ |
1,861 |
|
73 |
% |
|
Product |
|
|
1,225 |
|
39 |
% |
|
674 |
|
27 |
% |
|
Total revenue, net |
|
|
3,131 |
|
100 |
% |
|
2,535 |
|
100 |
% |
|
Cost of revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
|
3,505 |
|
112 |
% |
|
2,382 |
|
94 |
% |
|
Product |
|
|
1,196 |
|
38 |
% |
|
659 |
|
26 |
% |
|
Total cost of revenue, net |
|
|
4,701 |
|
150 |
% |
|
3,041 |
|
120 |
% |
|
Gross loss |
|
(1,570) |
(50) |
% |
(506) |
(20) |
% |
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
3,773 |
121 |
% |
1,770 |
70 |
% |
||||
|
Sales and marketing |
|
1,089 |
35 |
% |
1,000 |
39 |
% |
||||
|
General and administrative |
|
3,076 |
98 |
% |
4,432 |
175 |
% |
||||
|
Restructuring charges |
|
|
- |
|
- |
% |
|
33 |
|
1 |
% |
|
Total operating expenses |
|
7,938 |
254 |
% |
7,235 |
285 |
% |
||||
|
Loss from operations |
|
(9,508) |
(304) |
% |
(7,741) |
(305) |
% |
||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant and derivative liabilities |
|
- |
- |
% |
(2,966) |
(117) |
% |
||||
|
Interest income (expense), net |
|
|
59 |
|
2 |
% |
|
(130) |
|
(5) |
% |
|
Other income (expense), net |
|
(90) |
(3) |
% |
(67) |
(3) |
% |
||||
|
Total other income (expense) |
|
(31) |
(1) |
% |
(3,163) |
(125) |
% |
||||
|
Net loss before income tax expense |
|
(9,539) |
(305) |
% |
(10,904) |
(430) |
% |
||||
|
Income tax expense |
|
- |
- |
% |
- |
- |
% |
||||
|
Net loss |
|
$ |
(9,539) |
(305) |
% |
$ |
(10,904) |
(430) |
% |
||
Revenue, net
Total revenue, net for the three months ended September 30, 2025 increased by approximately $0.6 million compared to the same period in the prior year primarily due to a $0.6 million increase in product revenue. Service revenue was relatively flat for the quarter. The increase in product revenue was largely attributable to the timing of deliveries, as the Company was able to fulfill orders delayed from the second quarter of 2025 following the resolution of certain material shortages that had previously constrained production.
Cost of revenue, net
Total cost of revenue, net of $4.7 million for the three months ended September 30, 2025, increased approximately $1.7 million compared to the same period in the prior year. This was due to $1.1 million higher service cost and $0.5 million higher product cost than prior year. Cost of revenue, net - service includes a $0.6 million write-off of obsolete ASR raw materials, $0.4 million in higher materials and labor costs, and $0.1 million higher compensation expense. The increase in cost of revenue, net - product was due to $0.5 million higher materials cost.
Gross Loss
The revenue and cost of revenue described above resulted in a gross loss for the three months ended September 30, 2025 of approximately $1.6 million, compared to $0.5 million for the three months ended September 30, 2024.
As a percentage of net revenue, gross loss increased to approximately 50% from 20% for the three months ended September 30, 2025 and 2024 respectively. The increase in loss was primarily due to the previously mentioned write-off of ASR raw materials and lower ASR revenue.
Research and Development
|
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|
Three Months Ended |
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|
September 30, |
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|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
Research and development |
|
$ |
3,773 |
|
$ |
1,770 |
|
$ |
2,003 |
113 |
% |
|
|
Percentage of total revenue |
|
121 |
% |
70 |
% |
|
||||||
Research and development expenses increased by approximately $2.0 million, or approximately 113%, for the three months ended September 30, 2025, as compared to the same period in the prior year. The increase reflects the Company's continued investment in advancing product innovation, primarily in the development of the K7 four-wheeled autonomous robot designed to patrol large, outdoor areas.
Sales and Marketing
|
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|
|
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|
Three Months Ended |
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|||||||||
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|
September 30, |
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|
|
|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
Sales and marketing |
|
$ |
1,089 |
|
$ |
1,000 |
|
$ |
89 |
9 |
% |
|
|
Percentage of total revenue |
|
35 |
% |
39 |
% |
|
||||||
Sales and marketing expenses increased by approximately $0.1 million, or approximately 9%, for the three months ended September 30, 2025, as compared to the same period in the prior year. The increase over the prior year was primarily due to increased payroll costs associated with our additional sales and marketing personnel.
General and Administrative
|
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|
|
|
|
|
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|
|
|
|
|
|
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Three Months Ended |
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|||||||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
General and administrative |
|
$ |
3,076 |
|
$ |
4,432 |
|
$ |
(1,356) |
(31) |
% |
|
|
Percentage of total revenue |
|
98 |
% |
175 |
% |
|
||||||
General and administrative expenses decreased by approximately $1.4 million, or approximately 31%, for the three months ended September 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $0.2 million lower investor relations fees, $0.3 million lower stock-based compensation expenses, $0.3 million lower consumable supplies costs, $0.2 million lower credit loss expense and $0.5 million lower third-party professional fees, primarily legal and finance services. These decreases were partially offset by $0.2 million higher rent expense.
Restructuring Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
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|
|||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
2025 |
2024 |
$ Change |
% Change |
||||||||
|
Restructuring Charges |
|
$ |
- |
|
$ |
33 |
|
$ |
(33) |
(100) |
% |
|
|
Percentage of total revenue |
|
- |
% |
1 |
% |
|
||||||
Restructuring charges were immaterial for both the three-month periods ended September 30, 2025 and 2024.
Other Income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
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|
|||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
2025 |
2024 |
$ Change |
% Change |
||||||||
|
Change in fair value of warrant and derivative liability |
|
$ |
- |
|
$ |
(2,966) |
|
$ |
2,966 |
100 |
% |
|
|
Interest expense, net |
|
|
59 |
|
|
(130) |
|
|
189 |
|
145 |
% |
|
Other income (expense), net |
|
|
(90) |
|
|
(67) |
|
|
(23) |
|
(34) |
% |
|
Total other income (expense) |
|
$ |
(31) |
|
$ |
(3,163) |
|
$ |
3,132 |
|
(99) |
% |
Total other income (expense) decreased by approximately $3.1 million, or 99%, for the three months ended September 30, 2025 as compared to the same period in the prior year as non-cash expense 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.
Comparison of theNine Months Ended September 30, 2025 and 2024
The following table sets forth selected condensed statements of operations data and such data as a percentage of total revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
||||||||||
|
(in thousands, except percentages) |
|
2025 |
% of Revenue |
2024 |
% of Revenue |
||||||
|
Revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
$ |
6,093 |
|
69 |
% |
$ |
5,502 |
|
69 |
% |
|
Product |
|
|
2,704 |
|
31 |
% |
|
2,490 |
|
31 |
% |
|
Total revenue, net |
|
|
8,797 |
|
100 |
% |
|
7,992 |
|
100 |
% |
|
Cost of revenue, net |
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
|
9,105 |
|
104 |
% |
|
8,256 |
|
103 |
% |
|
Product |
|
|
2,848 |
|
32 |
% |
|
2,169 |
|
27 |
% |
|
Total cost of revenue, net |
|
|
11,953 |
|
136 |
% |
|
10,425 |
|
130 |
% |
|
Gross loss |
|
(3,156) |
(36) |
% |
(2,433) |
(30) |
% |
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
7,997 |
91 |
% |
4,976 |
62 |
% |
||||
|
Sales and marketing |
|
3,432 |
39 |
% |
4,043 |
51 |
% |
||||
|
General and administrative |
|
8,008 |
91 |
% |
10,883 |
136 |
% |
||||
|
Restructuring charges |
|
|
11 |
|
- |
% |
|
447 |
|
6 |
% |
|
Total operating expenses |
|
19,448 |
221 |
% |
20,349 |
255 |
% |
||||
|
Loss from operations |
|
(22,604) |
(257) |
% |
(22,782) |
(285) |
% |
||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant and derivative liabilities |
|
- |
- |
% |
(1,515) |
(19) |
% |
||||
|
Interest income (expense), net |
|
|
(95) |
|
(1) |
% |
|
(323) |
|
(4) |
% |
|
Other income (expense), net |
|
(66) |
(1) |
% |
(147) |
(2) |
% |
||||
|
Total other income (expense) |
|
(161) |
(2) |
% |
(1,985) |
(25) |
% |
||||
|
Net loss before income tax expense |
|
(22,765) |
(259) |
% |
(24,767) |
(310) |
% |
||||
|
Income tax expense |
|
- |
- |
% |
- |
- |
% |
||||
|
Net loss |
|
$ |
(22,765) |
(259) |
% |
$ |
(24,767) |
(310) |
% |
||
Revenue, net
Total revenue, net for the nine months ended September 30, 2025 increased by approximately $0.8 million compared to the same period in the prior year due to a $0.6 million increase in service revenue and a $0.2 million increase in product revenue. Service revenue increased across both product lines as ASR deployments increased $0.2 million year-over-year and ECD services revenue grew $0.4 million over the same period due to pricing changes and the increased adoption of full-service maintenance plans by our clients.
Cost of revenue, net
Total cost of revenue, net of $12.0 million for the nine months ended September 30, 2025 increased by approximately $1.5 million compared to the same period in the prior year. This increase was due to higher cost of revenue in services of $0.8 million, and higher costs of revenues in product of $0.7 million.
Service cost of revenue, net for the nine months ended September 30, 2025 increased by approximately $0.8 million as compared to the same period in 2024 primarily due to $0.5 million in higher third-party expenses and approximately $0.3 million in higher materials costs. Third party expenses are related to the strategic decision we made in March 2024 to outsource field services to third party partners. The higher expense in 2025 reflects three full quarters of expenses compared to only two quarters of expenses in 2024.
Product cost of revenue, net for the nine months ended September 30, 2025 of $2.8 million was $0.7 million higher than the prior year due to higher material costs.
Gross Loss
The revenue and cost of revenue described above resulted in a gross loss for the nine months ended September 30, 2025 of approximately $3.2 million, compared to $2.4 million for the nine months ended September 30, 2024.
As a percentage of net revenue, gross loss increased to 36% from 30% for the nine months ended September 30, 2025 and 2024, respectively.
Research and Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|||||||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
Research and development |
|
$ |
7,997 |
|
$ |
4,976 |
|
$ |
3,021 |
61 |
% |
|
|
Percentage of total revenue |
|
91 |
% |
62 |
% |
|
||||||
Research and development expenses increased by approximately $3.0 million, or approximately 61%, for the nine months ended September 30, 2025, as compared to the same period in the prior year. The increase is primarily attributable to the Company's investment in the development of its next-generation K7 autonomous security robot platform - a four-wheeled vehicle designed to operate at higher patrol speeds, traverse multi-terrain surfaces, cover expanded ranges and larger site footprints, and enable enhanced remote monitoring capabilities. While the K7 has not been commercially deployed yet, the Company believes this investment positions it for future growth opportunities in larger environments.
Sales and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
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|
|||||||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
Sales and marketing |
|
$ |
3,432 |
|
$ |
4,043 |
|
$ |
(611) |
(15) |
% |
|
|
Percentage of total revenue |
|
39 |
% |
51 |
% |
|
||||||
Sales and marketing expenses decreased by approximately $0.6 million, or approximately 15%, for the nine months ended September 30, 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|||||||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
|
2025 |
2024 |
|
$ Change |
|
% Change |
|||||
|
General and administrative |
|
$ |
8,008 |
|
$ |
10,883 |
|
$ |
(2,875) |
(26) |
% |
|
|
Percentage of total revenue |
|
91 |
% |
136 |
% |
|
||||||
General and administrative expenses decreased by approximately $2.9 million, or approximately 26%, for the nine months ended September 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $1.6 million lower investor relations fees that the Company spent in the prior year to support its funding efforts, including the Public Safety Infrastructure Bonds, $1.5 million lower third-party professional fees, primarily legal and finance services, and $0.2 million in lower credit loss expense. These decreases were partially offset by $0.2 million higher consulting costs and $0.5 million higher rent expense related to our new, larger facility in Sunnyvale, CA.
Restructuring Charges
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Nine Months Ended |
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|
|
|
|
|||||
|
|
|
September 30, |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
2025 |
2024 |
$ Change |
% Change |
||||||||
|
Restructuring Charges |
|
$ |
11 |
|
$ |
447 |
|
$ |
(436) |
(98) |
% |
|
|
Percentage of total revenue |
|
- |
% |
6 |
% |
|
||||||
Restructuring charges were immaterial for the nine months ended September 30, 2025 compared to $0.4 million for the same period in the prior year.
Other Income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
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|||||
|
|
|
September 30 |
|
|
|
|
|
|||||
|
(in thousands, except percentages) |
2025 |
2024 |
$ Change |
% Change |
||||||||
|
Change in fair value of warrant and derivative liabilities |
|
$ |
- |
|
$ |
(1,515) |
|
$ |
1,515 |
100 |
% |
|
|
Interest expense, net |
|
|
(95) |
|
|
(323) |
|
|
228 |
|
71 |
% |
|
Other income (expense), net |
|
|
(66) |
|
|
(147) |
|
|
81 |
|
55 |
% |
|
Total other income (expense) |
|
$ |
(161) |
|
$ |
(1,985) |
|
$ |
1,824 |
|
(92) |
% |
Total other income (expense) decreased by approximately $1.8 million, or 92%, for the nine months ended September 30, 2025 as compared to the same period in the prior year as non-cash expense 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
Our operations have been financed primarily through net proceeds from the sale of securities and from borrowings.
As of September 30, 2025 and December 31, 2024, we had $20.4 million and $11.1 million, respectively, of cash and cash equivalents. As of September 30, 2025, the Company had additional paid-in capital of $242.8 million, partially offset by an accumulated deficit of approximately $216.0 million, working capital of approximately $18.7 million and total stockholders' equity of approximately $26.9 million.
We have generated significant losses from operations as reflected in our accumulated deficit. Additionally, we have generated negative cash flows from operations and investing activities as we continue to support the growth of our business. We anticipate continuing to make significant capital investments over the next several years to focus on ramping up production to support anticipated growth. We also anticipate continuing to make investments in future growth initiatives, including new product development across ASRs and ECDs as well as other technology and software.
Our future operating losses and capital needs may differ materially from current plans and will depend on factors such as revenue growth, R&D and growth-related spending, manufacturing scale-up, cost-reduction efforts, product launch timing, customer adoption, and broader economic conditions. We may require additional financing through debt or equity. Equity sales could dilute existing stockholders, while debt could impose repayment obligations and restrictive covenants. There is no assurance we can obtain financing on favorable terms or at all, and failure to do so could adversely impact our business objectives.
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. 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
On February 1, 2023, we entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC ("Wainwright"), pursuant to which we may offer and sell from time-to-time shares of Class A Common Stock through or to Wainwright acting as sales agent or principal (the "ATM Facility"). We initially filed a prospectus supplement on February 9, 2023, for sales under the ATM Facility up to $20.0 million, which was further supplemented on April 8, 2024, June 7, 2024, October 11, 2024, and November 14, 2024.
On April 4, 2025, we filed a new shelf registration statement on Form S-3, pursuant to which we may, from time to time in one or more offerings, offer and sell up to $100.0 million in the aggregate of Class A common stock, preferred stock, debt securities, warrants and/or units, in any combination. The new shelf registration statement was declared effective on April 11, 2025. On July 18, 2025, we filed a new prospectus supplement for additional sales under the ATM Facility up to $50.0 million of shares of Class A Common Stock. As of November 7, 2025, we have approximately $35.6 million remaining to be sold pursuant to the new prospectus supplement and the accompanying prospectus related to the ATM Facility.
For the three months ended September 30, 2025, we have sold an aggregate of 2,967,130 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $20.9 million, after deducting sales agent fees and expenses of approximately $0.5 million.
For the nine months ended September 30, 2025, we have sold an aggregate of 4,746,850 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $31.2 million, after deducting sales agent fees and expenses of approximately $0.9 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 paid by the Company.
Cash Flow
The table below, for the periods indicated, provides selected cash flow information:
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|
|
|
|
|
|
|
|
|
Nine Months Ended |
|||||
|
|
|
September 30, |
||||
|
(in thousands) |
|
2025 |
2024 |
|||
|
Net cash used in operating activities |
|
$ |
(19,735) |
|
$ |
(17,377) |
|
Net cash used in investing activities |
|
(1,892) |
|
(2,480) |
||
|
Net cash provided by financing activities |
|
30,790 |
|
22,776 |
||
|
Net change in cash, cash equivalents and restricted cash |
|
$ |
9,163 |
|
$ |
2,919 |
Net Cash Used in Operating Activities
Net cash used in operating activities represents use of cash to pay our suppliers, employees and local, state and federal government organizations. This is partially offset by customer-related activities, primarily cash collections from product or service sales.
Net cash used in operating activities was approximately $19.7 million for the nine months ended September 30, 2025. Net cash used in operating activities resulted from a net loss of approximately $22.8 million and changes in assets and liabilities and non-cash charges.
Net cash used in operating activities for the nine months ended September 30, 2025 increased by approximately $2.4 million as compared to the same period of the prior year. This was primarily a result of a change in assets and liabilities of approximately $2.5 million, a decrease in the change in fair value of warrant and derivative liabilities of approximately $1.5
million, decreased loss on the disposal of ASR of $0.3 million, and a decrease in stock-based compensation of approximately $0.1 million, partially offset by a decrease in the net loss of approximately $2.0 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 nine months ended September 30, 2025 and 2024 was approximately $1.9 million and $2.5 million, respectively.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was approximately $30.8 million for the nine months ended September 30, 2025, an increase of approximately $8.0 million as compared to the same period of the prior year. Our financing activities for the nine months ended September 30, 2025 consisted primarily of net proceeds from the issuance of Class A Common Stock under our at-the-market offering program with Wainwright of approximately $31.2 million, net proceeds from the issuance of common stock under a direct registration offering of approximately $1.4 million, partially offset by repayments of debt obligations of $1.9 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 $20.4 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.
Knightscope Inc. published this content on November 12, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 12, 2025 at 22:18 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]