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What changed in Knightscope, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Knightscope, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+218 added−264 removedSource: 10-K (2026-03-27) vs 10-K (2025-03-31)

Top changes in Knightscope, Inc.'s 2025 10-K

218 paragraphs added · 264 removed · 136 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThey engage in live streaming and review of all ASR camera feeds upon receiving alerts, which may include detecting suspicious individuals, unauthorized vehicles identified through license plate recognition, or other predefined security breaches. In the event of an incident, RTX analysts can perform digital talk-downs to intervene directly, conduct virtual public safety tours, and generate detailed incident reports for clients.
Biggest changeOnce operational for a client, RTX analysts provide proactive monitoring by verifying alerts triggered by Knightscope devices. They engage in live streaming and review of all ASR camera feeds upon receiving alerts, which may include detecting suspicious individuals, unauthorized vehicles identified through license plate recognition, or other predefined security breaches.
The information provided on, or accessible through, our website is not a part of, or incorporated into, this Annual Report on Form 10-K. You may also access this information, free of charge, at the SEC’s website at http://www.sec.gov. ​ 11 Table of Contents
The information provided on, or accessible through, our website is not a part of, or incorporated into, this Annual Report on Form 10-K. You may also access this information, free of charge, at the SEC’s website at http://www.sec.gov. ​ 12 Table of Contents
The human capital strategy includes the attraction, acquisition, engagement, and development of the Company’s employees as resources allow. ​ Available Information ​ We file reports and other information with the SEC, which are accessible on the SEC’s website at www.sec.gov.
The executive management team is responsible for developing and executing the Company’s human capital strategy. The human capital strategy includes the attraction, acquisition, engagement, and development of the Company’s employees as resources allow. ​ Available Information ​ We file reports and other information with the SEC, which are accessible on the SEC’s website at www.sec.gov.
The Company relies and expects to continue to rely on a combination of confidentiality agreements with its employees, consultants, and third parties with whom it has relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights. ​ Manufacturing and Suppliers ​ Knightscope manufactures all its products at its Mountain View, California headquarters from components produced by more than 100 suppliers.
The Company relies and expects to continue to rely on a combination of confidentiality agreements with its employees, consultants, and third parties with whom it has relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights. ​ Manufacturing and Suppliers ​ We manufacture and assemble our products at our facility in Sunnyvale, California using components sourced from a network of domestic and international suppliers.
The Company owns a trademark registration for its name “Knightscope” in the U.S. On August 10, 2021, the Company filed two trademark applications.
The Company owns a trademark registration for its name “Knightscope” in the U.S.
Compliance with enhanced data protection laws requires additional resources and efforts, and noncompliance with personal data protection regulations could result in increased regulatory enforcement and significant monetary fines and costs. ​ Backlog and Seasonality ​ As of December 31, 2024, the Company had a total backlog of approximately $1.7 million, comprised of $0.4 million related to ASR orders and $1.3 million relates to orders for ECD. ​ We have not experienced any significant effects relating to seasonality for our products and services. ​ Human Capital ​ As of December 31, 2024, the Company had 71 full-time employees working out of our combined headquarters and production facility in Mountain View, California as well as remotely.
Regulatory changes, enforcement actions, or noncompliance could result in fines, penalties, operational restrictions, reputational harm, or increased costs. ​ Backlog and Seasonality ​ As of December 31, 2025, the Company had a total backlog of approximately $2.8 million, comprised of $0.7 million related to ASR orders and $2.1 million related to orders for ECD. ​ We have not experienced any significant effects relating to seasonality for our products and services. ​ Human Capital ​ As of December 31, 2025, the Company had 90 full-time employees working out of our combined headquarters and manufacturing facility in Sunnyvale, California as well as remotely.
This integrated approach is intended for clients to benefit from advanced technological surveillance complemented by human expertise, leading to a more robust and responsive security posture.
In the event of an incident, RTX analysts can perform digital talk-downs to intervene directly, conduct virtual security tours, and generate detailed incident reports for clients. This integrated approach is intended for clients to benefit from advanced technological monitoring complemented by human expertise, leading to a more robust and responsive security posture.
We are not a party to any collective bargaining agreements. ​ The Company believes that our future growth and success will depend in part on our ability to attract and retain highly skilled employees. The executive management team is responsible for developing and executing the Company’s human capital strategy.
As a result of the Event Risk Acquisition, which was completed on February 27, 2026, our workforce has increased significantly to over 400 employees. ​ We are not a party to any collective bargaining agreements. ​ The Company believes that our future growth and success will depend in part on our ability to attract and retain highly skilled employees.
Additionally, the Company has been awarded a Phase 1 contract from the U.S. Air Force in 2025. ​ 9 Table of Contents Intellectual Property ​ The Company holds twelve patents collectively related to its ASRs, the security data analysis and display features of the KSOC and its parking monitor feature that will begin to expire starting January 16, 2035.
Product development and release timing is subject to, among other things, engineering, regulatory, capital and supply chain constraints, component availability, testing outcomes, and certification requirements. ​ Intellectual Property ​ The Company holds twelve patents collectively related to its ASRs, the security data analysis and display features of the KSOC and its parking monitor feature that will begin to expire starting January 16, 2035.
By combining autonomous monitoring with professional oversight, Knightscope's RTX service enhances threat detection, reduces response times, and provides clients with actionable intelligence to maintain safer environments. ​ ECDs ​ In addition to ASRs, Knightscope provides a range of emergency communication solutions. ​ ● The K1 Blue Light Towers are solar-powered, highly visible emergency communication stations that provide immediate access to emergency response personnel or law enforcement.
By combining autonomous monitoring with professional oversight, Knightscope's RTX service enhances threat detection, reduces response times, and provides clients with actionable intelligence to maintain safer environments. ​ Market Opportunity Based on third-party industry reports and internal analysis, management estimates that the combined U.S. addressable opportunity for private security services, public safety and security technology, emergency communication systems, and related autonomous solutions is significant.
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Item 1. Business Overview Our mission is to make the United States of America the safest country in the world by helping to protect the people, places, and assets where we live, work, study and visit. Through strategic market expansion, increased ASR adoption, and continued innovation, we aim to redefine public safety with a comprehensive, technology-driven approach.
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Item 1. Business Overview Our mission is to make the United States of America the safest country in the world. We serve clients across commercial, government, healthcare, education, transportation, and residential markets. ​ We are a security technology company headquartered in Sunnyvale, California.
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As we execute on our growth strategy, we remain committed to delivering scalable, effective solutions that enhance safety, deter crime, and provide peace of mind to organizations and communities nationwide. ​ Knightscope, Inc. is a Silicon Valley based, public safety innovator that builds Autonomous Security Robots and Emergency Communication Devices.
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We provide integrated, technology-enabled security solutions designed to improve safety outcomes for our clients across the United States. ​ Our strategy is centered on building and delivering outcomes-driven safety through the integration of three core components that encompass our Knightscope Autonomous Security Force: ​ 1. Hardware – ASRs, ECDs, and a variety of sensing technologies; ​ 2.
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We design, manufacture, and deploy our technologies to improve public safety and to protect the places people live, work, study and visit.
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Software – cloud-based platform for real-time security monitoring, data analysis and event management, diagnostics tools designed to keep ECDs operational and reliable, and tools that enable the management and monitoring of ASRs in the field; and ​ 3.
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We provide our cutting-edge capabilities, including remote monitoring capabilities, to both the private sector and to government clients including law enforcement. ​ With Federal Risk and Authorization Management Program (“FedRAMP”) Authority to Operate (“ATO”) obtained in January 2024, Knightscope can be listed on the FedRAMP Marketplace as an approved provider for federal agencies and is therefore positioned to expand into federal contracts.
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Human– on premise licensed security personnel and remote monitoring with human-in-the-loop verification, escalation, and response. ​ We deliver these components as an integrated managed service. By combining hardware, software, and human personnel into a unified operational framework, we seek to provide clients with end-to-end accountability rather than fragmented security tools. ​ Our capabilities currently focus on deterrence, detection, and reporting.
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We have already deployed a pilot program under a contract with the U.S. Department of Veteran Affairs for our first K5 GOV, which is an ASR exclusively developed for the U.S. federal government. Additionally, we have been awarded a Phase 1 contract from the U.S. Air Force in 2025.
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We are in the process of evolving our service model to “Deter, Detect, Respond” including response capabilities, where appropriate and legally permissible.
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We believe FedRAMP ATO positions us to seek federal contracts with other federal departments including the U.S. Army, Transportation Security Administration (TSA), Federal Protective Service (FPS), General Services Administration (GSA), U.S. Department of Homeland Security (DHS), Customs and Border Protection (CBP), Federal Bureau of Investigation (FBI), Federal Emergency Management Agency (FEMA), United States Postal Service (USPS) and the U.S.
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Response capabilities, when provided, are intended to be conducted by properly licensed personnel and subject to applicable federal, state, and local laws. ​ We believe that integrating humans as a delivery and operational mechanism for our autonomous systems enables our product suites to operate in a more multi-modal manner, consistent with how many clients structure security procurement with a multi-layer approach.
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We believe that the initiatives of the Department of Government Efficiency (DOGE) may provide us with an expansion opportunity as federal entities seek efficiencies through automation and robotics. ​ 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 manage ment 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. ​ Knightscope operates in a highly fragmented U.S. public safety market that is experiencing strong demand for automation and artificial intelligence-driven solutions due to rising labor costs, security staffing shortages, and challenging crime rates.
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Security buyers frequently expect the presence of licensed personnel as part of a comprehensive security program, and our model is designed to align with those expectations while incorporating automation and AI-driven technologies. ​ Recent Developments ​ On February 27, 2026, we completed the acquisition (the “Event Risk Acquisition”) of all the issued and outstanding membership interest of Event Risk LLC, an Indiana limited liability company (“Event Risk”) pursuant to a Securities Purchase Agreement (the “Event Risk Agreement”).
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Our solutions combine proactive physical deterrence with critical emergency response tools and remote monitoring, offering an integrated approach to public safety. ​ We are a Delaware corporation founded in April 2013 and headquartered in Mountain View, California, in the heart of Silicon Valley. 5 Table of Contents Market Opportunity & Competitive Positioning The public safety industry in the United States is undergoing rapid transformation, driven by labor constraints, evolving threats of perimeter intrusion to large facilities, and advancements in artificial intelligence (AI) and automation.
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As a result of the transaction, Event Risk became a wholly owned subsidiary of the Company.
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The demand for scalable, technology-driven public safety solutions is increasing as organizations seek more cost-effective and proactive methods to enhance safety. ​ Key Market Trends Driving Demand ​ ● In the United States, as of 2024, there are over 11,000 private security firms [per IBISWorld Industrial Reports] and 18,000 law enforcement agencies [per the International Association of Chief of Police] that rely on outdated, labor-intensive security methods. ● Per Amarok Ultimate Perimeter Security, out of a recent survey of 400 security guard firms in the United States, 34% responded that their staff numbers were still well below pre-pandemic levels. ● Rising costs to implement public safety have driven businesses and municipalities to invest in technology-driven solutions that offer 24/7 surveillance at a lower operational cost. ● Over the last three years, there has been a growing investment in public safety and emergency communication systems by corporate, municipal, and federal agencies. ​ Key Challenges with Traditional Public Safety Solutions ​ ● Rising labor costs - The U.S. security guard industry has faced wage inflation, making it increasingly expensive to maintain 24/7 human patrols. ● Workforce shortages – Per Security Magazine, security firms struggle to recruit and retain personnel, with turnover rates that range from 100% to 400% annually. ● Limited real-time response capabilities - Human guards and passive surveillance cameras often fail to prevent incidents before they occur. ● Increased liability risks - Organizations are facing greater legal and financial exposure due to security lapses. ​ Market Opportunity ​ ● Per Horizon Grand View Research, the U.S. physical security market is projected to reach $56.8 billion by 2030, driven by technological advancements and heightened public safety concerns. ● Per Market Research Future, AI-powered surveillance and autonomous security solutions are expected to grow at a compound annual growth rate of 15.3% during the forecast period 2025- 2034, outpacing traditional security services. ● Government investment in security technology has expanded significantly, with U.S. federal agencies allocating billions to enhance public safety initiatives in 2024. ​ Our Market Positioning ​ Knightscope is well-positioned to capitalize on these trends by providing a cost-effective, scalable alternative to traditional public safety solutions.
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The aggregate purchase consideration consisted of (i) a $5.0 million cash payment at closing, (ii) repayment of Event Risk’s outstanding indebtedness of $1.1 million, (iii) the issuance of 1,724,418 shares of the Company’s Class A Common Stock, (iv) $4.0 million of deferred cash payments, payable in quarterly installments beginning March 31, 2027 through December 31, 2028 and (v) any post-closing purchase price adjustments. ​ See Note 11 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report for additional information on the Event Risk Acquisition and “Item 1A.
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Our combination of autonomous security robots, ECDs, and AI-driven analytics offers: ​ 6 Table of Contents ● 24/7 security solution that delivers greater effectiveness at lower cost than traditional security guards—combining machine-driven insights with human-in-the-loop operations to enhance safety, responsiveness, and decision. ● Real-time threat detection and response to improve incident prevention. ● Compliance-ready solutions for federal, state, and municipal security requirements. ● With growing adoption across corporate, educational, healthcare, transportation, and government sectors, Knightscope is driving the next generation of public safety innovation in the United States. ​ Our Competitive Advantage ​ Knightscope’s technology provides a cost-effective, scalable alternative to traditional security solutions.
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Risk Factors—Risks Related to the Event Risk Acquisition” of this Annual Report for a discussion of the associated risks.
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Our ASRs and ECDs enhance public safety through conspicuous presence, automated routine monitoring, and improved response times. ​ ● ASRs can operate 24/7 with no downtime, reducing reliance on expensive security personnel. ● AI-powered analytics provide real-time data for faster, more informed decision-making. ● Emergency communication solutions are integrated into a cloud-based system, ensuring reliability in crisis situations. ​ Our Technologies ASRs ​ Knightscope offers a comprehensive suite of public safety technologies designed to enhance safety and support security personnel in various environments.
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The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Event Risk Agreement filed as an exhibit to this Annual Report on Form 10-K. ​ 7 Table of Contents ​ Industry Background ​ The U.S. security services and public safety market is large and fragmented, consisting of traditional guarding companies, hardware manufacturers, monitoring providers, and software vendors.
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These solutions integrate advanced robotics, AI, and real-time monitoring to provide a proactive approach to public safety. We use AI to continuously monitor security feeds across our product portfolio. Real-team AI-powered alerts can be configured to trigger when people or vehicles matching a certain description are observed.
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Security coverage has historically been labor-intensive and scales proportionally with headcount. ​ The security services industry continues to face significant structural challenges that impact operating performance and service delivery. Rising labor costs and ongoing wage inflation have increased the cost of personnel, while persistent workforce shortages and high turnover rates create staffing instability and elevate recruiting and training expenses.
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Knightscope also offers AI-powered search tools, intended to make finding relevant security footage captured by our products, quick and easy. ​ ● The K3 Indoor Autonomous Security Robot is a compact, self-navigating unit designed for enclosed spaces such as corporate offices, hospitals, and shopping centers.
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At the same time, customers are demanding enhanced real-time monitoring, detailed reporting, and comprehensive documentation, increasing operational complexity. Regulatory requirements and liability considerations continue to expand, requiring greater compliance oversight and risk management.
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Equipped with 360-degree high-definition cameras, thermal imaging, LiDAR-based obstacle detection, and two-way communication capabilities, the K3 provides continuous AI-driven monitoring and real-time threat detection.
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Additionally, the proliferation of cameras, devices, and other sensors has led to rapidly growing volumes of data that often require human interpretation, creating inefficiencies and increasing the burden on personnel. Collectively, these factors are reshaping industry economics and driving demand for more efficient, technology-enabled solutions.
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Its ability to patrol autonomously allows organizations to reduce reliance on human guards while increasing surveillance coverage. ● The K5 Outdoor Autonomous Security Robot is a larger, more robust unit built for external environments like parking lots, logistics facilities, and corporate campuses.
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Security buyers increasingly seek integrated solutions capable of combining physical presence, automated detection, real-time monitoring, and structured escalation protocols under a single accountable provider. ​ Knightscope Autonomous Security Force ​ We are developing a multi-modal security platform consisting of hardware, software, and human operations that function together as a single unified system.
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This model features advanced AI-powered analytics, including license plate recognition, thermal imaging, and anomaly detection, providing a visible deterrent against crime.
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Hardware ​ Our current hardware offerings include: ● K1 Hemisphere (K1H) – Fixed-location presence equipped with license plate recognition, where permitted, ideal for high-traffic areas of vehicles or pedestrians ● K5 ASR – A high-visibility deterrent with rugged weatherproof capabilities, ideal for patrolling outdoor environments ● K1 Blue Light Towers (BLT) – traditional blue light emergency towers typically found on school campuses and healthcare facilities ● K1 Blue Light Emergency Phone (BLEP) – typically found in parking structures and transportation hubs ● K1 Call Box – used along highways for emergency roadside assistance ​ We are developing next-generation hardware platforms, including: ● K7 ASR – Designed for larger and more complex environments ● K1 Capsule (K1C) – next generation blue light technology ● K1 Super Tower (K1ST) – next generation blue light technology in tower format including area lighting ​ Our hardware platforms are designed to support deterrence through visible presence, detection through integrated sensors and analytics, and reporting through data capture and event documentation. ​ Software ​ We currently deploy the following software throughout our platform: ● Knightscope Security Operations Center (“KSOC”) – browser-based user interface utilized to gain real time and historical data from the network of ASRs ● Knightscope Emergency Management System (“KEMS”) – A diagnostics tool designed to monitor the health and status of deployed ECDs. ​ 8 Table of Contents Human Operations ​ Our Risk and Threat Exposure (“RTX”) analysts provide our clients with a comprehensive, human-in-the-loop remote monitoring service that enhances the capabilities of their ASRs running 24/7.
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Its integration with the KSOC enables public safety teams to receive real-time alerts, access recorded footage, and coordinate incident responses more effectively. ● The K1 Hemisphere , with its smaller profile, is a stationary unit designed for both indoor and outdoor use.
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They include the deployment of such services and technology in the following industries and settings: ● Public safety and government ● Enterprise and corporate campuses ● Critical infrastructure ● Retail and hospitality ● Healthcare ● Education ● Transit and smart cities ● Residential and community ​ For context, we estimate the U.S. security services industry, which term for Knightscope encompasses a number of direct and related industry categories, such as public safety infrastructure, transportation safety, education security, digital security, and critical infrastructure, among others, to have a total addressable market worth upwards of $230 billion in 2026.
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The Hemisphere can easily be mounted to a variety of surfaces or objects and has 3 cameras that provide up to 210-degrees of eye-level, high-definition video, a strobe light, automatic license plate recognition, facial recognition (optional), automated broadcast announcements, and intercom capability running on a wired or wireless network. ● Central to Knightscope's ASR offerings is the KSOC , a browser-based user interface that enables clients to monitor and manage their ASRs in real-time.
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Additional spending on public safety technology, emergency communication infrastructure, AI-powered analytics, and associated services contribute to the size of the broader opportunity.
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The KSOC provides access to live 360-degree high-definition video streaming, recorded video storage, and downloadable files for evidence collection. It also features capabilities such as people detection, thermal anomaly detection for identifying heat irregularities, and automatic license plate recognition for vehicle monitoring.
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These estimates are derived from industry research and internal assumptions and may not reflect actual revenue potential and are not indicative of our future performance or market penetration. ​ Business Strategy ​ Our strategy is focused on scaling an integrated Knightscope Autonomous Security Force through: ● Expansion of licensed guarding capabilities, including organic growth and potential acquisitions; ● Deployment of autonomous systems within guarding contracts; ● Expansion of software-driven orchestration; and ● Integrating enforcement services to our deterrence, detection, and reporting capabilities. ​ Security procurement processes frequently require licensed guarding providers capable of assuming contractual accountability.
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This integrated platform ensures that security teams have immediate access to actionable intelligence, enhancing situational awareness and response times. 7 Table of Contents ● 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, which it refers to as KNOC .
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By operating licensed guarding services, we are able to compete for comprehensive contracts and deploy automation within those engagements. ​ We believe that integrating humans and autonomous systems enables a multi-modal operating model that more closely aligns with client expectations for security delivery. ​ Over time, increased software integration may alter site-level economics.
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These tools allow our team to monitor the health of the ASRs down to the millisecond, with dozens of alerts related to critical indicators and statistics, including charging, software, navigation and temperatures. We also use the KNOC to execute over-the-air software upgrades, patches and other related items.
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However, such outcomes depend on operational execution, customer adoption, labor conditions, regulatory compliance, and technological performance. 9 Table of Contents ​ Research and Development ​ Our research and development activities are focused on advancing next-generation hardware platforms and core software capabilities that support our integrated Knightscope Autonomous Security Force platform.
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The KNOC is staffed 24/7 by the Company in the United States. ● Knightscope's RTX team offers clients a comprehensive, human-in-the-loop monitoring service that enhances the capabilities of their ASRs running 24/7. Once operational for a client, RTX analysts provide proactive monitoring by verifying alerts triggered by Knightscope devices.
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These efforts are directed primarily toward the development of the following: ​ ● K7 ASR – Designed to address the security needs of large, complex environments such as airports, industrial zones, and university campuses. ● K1 Capsule and Super Tower – Defining the next generation of blue light technologies and capabilities into a comprehensive offering designed to provide multiple features to enhance security within a single unit, making it a valuable addition to high-risk or remote areas. ​ These efforts are intended to expand deployment flexibility and improve operational reliability across commercial, institutional, and government environments.
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Equipped with cellular and satellite connectivity, integrated cameras, and public announcement system capabilities, these towers are designed to enhance safety in parking lots, public parks, and college campuses. ● The K1 Blue Light E-Phone is a compact emergency phone system that delivers one-touch connectivity and features a high-visibility blue strobe light, making it suitable for areas where larger tower designs may not fit.
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Our supply chain includes mechanical components, electronic assemblies, batteries, imaging systems, communication modules, and other specialized parts. ​ During 2025, we experienced significant supply chain constraints, including increased lead times, limited component availability, higher logistics costs, and pricing volatility. These challenges were driven in part by global supply chain disruptions, electronic component shortages, inflationary pressures, and tariff-related cost increases.
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Its durable, tamperproof, and weatherproof construction is intended to provide reliable operation in harsh conditions, while the illuminated front call panel facilitates nighttime use. The K1 Blue Light E-Phone supports two-way communications over various networks, including Verizon, AT&T, and Iridium® Satellite, providing flexibility and reliability in diverse settings.
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As a result, we experienced intermittent interruptions in production schedules and increased bill-of-material costs, particularly affecting our ECD product line. ​ Certain components used in our ECD products and other platforms are sourced from single suppliers or from a limited number of qualified suppliers. In some cases, these components require certification, customization, or regulatory compliance that limits short-term substitution.
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This device is designed for locations such as parking lots, building interiors, college campuses, electric vehicle charging stations, transit stations, and office spaces, where space constraints require a streamlined yet effective emergency communication solution. ● The K1 Call Box is Knightscope's smallest emergency call box system, offering a simple housing and interface for one-touch connection to emergency services.
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During 2025, extended lead times from certain single-source or limited-source suppliers materially affected our ability to meet production schedules and customer delivery timelines.
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Designed for both indoor and outdoor use, with features and functionalities similar to our E-phones, the K1 Call Box is suitable for remote locations where traditional communication infrastructure may be lacking.
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These disruptions contributed to higher input costs, inconsistent production cadence, and reduced sales in certain periods. ​ While we maintain relationships with multiple suppliers across our broader component base and seek to diversify sourcing where feasible, alternative suppliers for certain specialized components may not be immediately available or may require additional engineering validation and qualification.
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This device is particularly beneficial in areas such as bridges, highways, parks, metro stations, military installations, and remote parking lots, where immediate access to emergency assistance is crucial. ● Complementing the ECD products is the KEMS , a cloud-based application that monitors the health and status of deployed emergency communication devices.
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Transitioning to alternative suppliers can require testing, redesign, certification, and incremental cost. ​ Tariffs and trade policy changes affecting imported components have also increased input costs for certain materials and subassemblies.
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KEMS provides system owners with automated daily email reports, real-time error detection, and diagnostics, eliminating the need for manual testing of each device. Immediate text and email notifications are sent whenever a help button is pressed, in order to provide prompt responses to emergencies.
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We may be unable to fully offset such increases through pricing adjustments or supplier negotiations. ​ We continue to evaluate supply chain resilience initiatives, including supplier diversification, inventory management strategies, and longer-term procurement agreements.
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This system enhances the reliability and effectiveness of emergency communication networks, providing peace of mind to clients and users alike. ​ Additionally, through a partnership with Verizon, all ASR and ECD are now able to be equipped with Verizon Frontline, an exclusive network used for priority communications by first responders.
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However, global supply chain volatility, component shortages, geopolitical factors, inflation, and transportation constraints may continue to impact production timelines, margins, and our ability to meet customer demand. 10 Table of Contents ​ Next-generation hardware platforms, including the K7 and K1 configurations, may require additional supplier qualification, tooling, and component sourcing efforts, which could further expose us to supply chain risks and capital requirements. ​ See Item 1A.
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Through this growing product portfolio, Knightscope continues to redefine security and public safety by merging robotics, AI, and emergency communication into an integrated, technology-driven ecosystem.
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Risk Factors—Risks Related to Our Business and the Global Economy for additional discussion of supply chain, tariff, and component availability risks. ​ Competition ​ We operate in a competitive and fragmented market and compete across multiple segments of the physical security and public safety industries.
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By offering both proactive security monitoring through ASRs and reactive emergency communication through ECDs, the Company provides a holistic approach to modern public safety challenges. ​ 8 Table of Contents Business Strategy ​ Knightscope is focused on driving growth through two key strategic initiatives: expanding our market penetration in Emergency Communication Devices and increasing the installed base of our Autonomous Security Robots.
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Our competitors include: ● Traditional security guard providers, including national and regional firms delivering on-site personnel-based services; ● Security system integrators that design, install, and maintain surveillance and access control systems; ● Surveillance hardware manufacturers offering cameras, sensors, and ECDs; ● Remote monitoring service providers; and ● Robotics and autonomous systems companies developing ground-based or aerial patrol technologies. ​ Some competitors focus on a single component of the security value chain, while others offer bundled services.
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Additionally, we continue to innovate with new product introductions that enhance our value proposition and provide comprehensive safety solutions to our clients. ​ Scaling ASR Deployment and Recurring Revenue Growth ​ Knightscope’s ASR business model is centered on increasing our installed base, leveraging our Machine-as-a-Service (MaaS) subscription framework to drive cumulative recurring revenue.
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Many have longer operating histories, larger customer bases, greater brand recognition, broader geographic reach, and significantly greater financial and operational resources than we do. ​ Competition is based on factors including service reliability, pricing and total cost of ownership, regulatory compliance and licensing, technological performance, integration capabilities, reputation, and financial stability.
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Each new subscription enhances long-term revenue streams while providing clients with advanced public safety solutions that are designed to operate 24/7. Our ASRs, including the K3 indoor robot, K5 outdoor robot, and upcoming K7 ASR, serve as force multipliers, augmenting human security teams and providing real-time monitoring through the KSOC.
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In certain cases, customers may elect to perform security functions internally rather than engage third-party providers. ​ Our operating model integrates licensed security personnel with autonomous hardware and software within a managed service framework. This structure allows us to compete for contracts that require licensed guarding capabilities while incorporating technology-enabled monitoring and detection systems.
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We believe the ability to scale ASR installations across diverse environments—including corporate campuses, logistics hubs, hospitals, and public infrastructure—positions us for sustained growth. ​ Expanding Market Presence in Emergency Communication ​ We are committed to strengthening our leadership in ECDs by increasing market penetration across colleges, corporate campuses, parking facilities, public parks, and other high-traffic environments where reliable emergency response solutions are essential.
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Moreover, with the completion of the Event Risk Acquisition and integrating licensed response services with autonomous machines and AI-driven orchestration software, we are building a unified operating model designed to deliver deterrence, detection, and response as one coordinated system that we believe will expand our competitive footprint.
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Our K1 Blue Light Towers, K1 Blue Light Emergency Phones, and K1 Call Boxes provide mission-critical, always-available communication for individuals in distress, providing immediate connectivity to security personnel and emergency responders.
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Our ability to compete effectively depends on continued product development, operational execution, cost management, regulatory compliance, and customer adoption. ​ Government Regulation ​ Our operations are subject to extensive federal, state, and local laws and regulations that govern security services, technology deployment, data handling, labor practices, and trade compliance.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we experience difficulties with the integration process or if the business of any acquired company or business deteriorates, the anticipated cost savings, growth opportunities and other synergies of any acquired company and business may not be realized fully or at all, or may take longer to realize than expected. 28 Table of Contents If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result. ​ Increasing attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business. ​ Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG practices.
Biggest changeIf we experience difficulties with the integration process or if the business of any acquired company or business deteriorates, the anticipated cost savings, growth opportunities and other synergies of any acquired company and business may not be realized fully or at all, or may take longer to realize than expected.
A breach of any of the restrictive covenants under such debt arrangements may cause us to be in default under our debt arrangements, and our lenders could foreclose on our assets. ​ We issued unsecured Public Safety Infrastructure Bonds (the “Bonds”) bearing interest at 10% per annum, payable annually on December 31 each year, starting on December 31, 2024, in the fourth quarter of 2023 with a principal amount totaling approximately $1.4 million.
A breach of any of the restrictive covenants under such debt arrangements may cause us to be in default under our debt arrangements, and our lenders could foreclose on our assets. ​ In the fourth quarter of 2023, we issued unsecured Public Safety Infrastructure Bonds (the “Bonds”) bearing interest at 10% per annum, payable annually on December 31 each year, starting on December 31, 2024, with a principal amount totaling approximately $1.4 million.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
Additionally, we have a limited operating history with the current scale of our business, which makes it difficult to forecast future results. As a result, you should not rely upon the Company’s past financial results as indicators of future performance. You should take into account the risks and uncertainties frequently encountered by rapidly growing companies in evolving markets.
Additionally, we have a limited operating history with the current scale of our business, which makes it difficult to forecast future results. As a result, you should not rely upon our past financial results as indicators of future performance. You should take into account the risks and uncertainties frequently encountered by rapidly growing companies in evolving markets.
For example, an advisory commission, the “Department of Government Efficiency” was announced to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential change in budgetary priorities could adversely affect individual programs and delay purchasing or payment decisions by certain of our existing or targeted customers.
For example, an advisory commission, the “Department of Government Efficiency” was announced in 2025 to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential change in budgetary priorities could adversely affect individual programs and delay purchasing or payment decisions by certain of our existing or targeted customers.
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), contemplating that we will continue to operate as a going concern. However, we cannot assure you that the Company will be successful in acquiring additional funding at levels sufficient to fund future operations.
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), contemplating that we will continue to operate as a going concern. We cannot assure you that the Company will be successful in acquiring additional funding at levels sufficient to fund future operations.
We cannot assure you that we will be profitable in the next several years or at all, or that we will generate any revenues in the future or sufficient revenues to meet our debt servicing and payment obligations. ​ The report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going concern, and we may not be able to continue to operate the business if we are not successful in securing additional funding. ​ The report of our independent registered public accounting firm on our financial statements as of and for the years ended December 31, 2024 and 2023, which is included in this Annual Report, includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to our recurring losses from operations, available cash and cash used in operations.
We cannot assure you that we will be profitable in the next several years or at all, or that we will generate any revenues in the future or sufficient revenues to meet our debt servicing and payment obligations. ​ The report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going concern, and we may not be able to continue to operate the business if we are not successful in securing additional funding. ​ The report of our independent registered public accounting firm on our financial statements as of and for the years ended December 31, 2025 and 2024, which is included in this Annual Report, includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to our recurring losses from operations, available cash and cash used in operations.
Because our decision to issue debt or preferred securities in any future offering, or to borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. 26 Table of Contents We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A Common Stock less attractive to investors. ​ We are an “emerging growth company” as defined in the Jumpstart Our Business Startups (“JOBS”) Act.
Because our decision to issue debt or preferred 28 Table of Contents securities in any future offering, or to borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. ​ We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A Common Stock less attractive to investors. ​ We are an “emerging growth company” as defined in the Jumpstart Our Business Startups (“JOBS”) Act.
Likewise, potential customer turnover in the future, or costs we incur to retain our existing customers, could materially and adversely affect our financial performance. ​ Our success depends on our ability to acquire new customers in new and existing markets, and in new and existing geographic markets.
Likewise, potential customer turnover in the future, or costs we incur to retain our existing customers, could materially and adversely affect our financial performance. ​ Our success depends on our ability to acquire new customers in new and existing markets, including new and existing geographic markets.
The inability to comply with applicable listing requirements or standards of The Nasdaq Stock Market LLC (“Nasdaq”) could result in the delisting of our Class A Common Stock, which could have a material adverse effect on our financial condition and could cause the value of our Class A Common Stock to decline. ​ In the event that our Class A Common Stock is delisted and not eligible for quotation on another market or exchange, trading of our Class A Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
The inability to comply with applicable listing requirements or standards of Nasdaq could result in the delisting of our Class A Common Stock, which could have a material adverse effect on our financial condition and could cause the value of our Class A Common Stock to decline. ​ In the event that our Class A Common Stock is delisted and not eligible for quotation on another market or exchange, trading of our Class A Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
For other 14 Table of Contents risks associated with our U.S. government customers, see “ We have a government customer and are seeking additional government customers, which subject us to risks including early termination, audits, investigations, sanctions, or penalties. ” ​ The occurrence of any of the above and any unanticipated obstacles may hinder the execution of our business plan and adversely affect or materially adversely affect our operating results. ​ Changes in global economic conditions, including, but not limited to, those driven by inflation, international trade restrictions and interest rates, may adversely affect customer spending and the financial health of our customers and others with whom we do business, which may adversely affect our financial condition, results of operations, and cash resources. ​ Uncertainty about current and future global economic conditions may cause our customers and partners to cancel agreements with us, or potential customers and partners to hesitate to enter into agreements with us.
For other risks associated with our U.S. government customers, see “ We have a government customer and are seeking additional government customers, which subject us to risks including early termination, audits, investigations, sanctions, or penalties. ” ​ The occurrence of any of the above and any unanticipated obstacles may hinder the execution of our business plan and adversely affect or materially adversely affect our operating results. ​ Changes in global economic conditions, including, but not limited to, those driven by inflation, international trade restrictions and interest rates, may adversely affect customer spending and the financial health of our customers and others with whom we do business, which may adversely affect our financial condition, results of operations, and cash resources. ​ Uncertainty about current and future global economic conditions may cause our customers and partners to cancel agreements with us, or potential customers and partners to hesitate to enter into agreements with us.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development of one or more of its platforms, seek alternative financing arrangements, declare bankruptcy or terminate its operations entirely. ​ Our stock price may be volatile. ​ The market price of our Class A Common Stock may be thinly traded, highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ​ ● Fluctuations in and unpredictability of our sales cycle; ● Changes to the physical security and technology industries; ● Current and future competition; 25 Table of Contents ● Additions or departures of key personnel; ● Additional sales of our Class A Common Stock and other securities; ● Our ability to execute our business plan; ● Operating results that fall below expectations; ● Loss of any strategic relationship; ● Continued access to working capital funds; ● Economic and other external factors; and ● The threat of terrorism, geopolitical tensions, and general disruptions in the global economy, including the impacts of military action, financial and economic sanctions, and increasing geopolitical tensions related to the ongoing conflicts between Russia and Ukraine and Israel and its surrounding areas. ​ In addition, the public safety markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development of one or more of its platforms, seek alternative financing arrangements, declare bankruptcy or terminate its operations entirely. ​ Our stock price may be volatile. ​ The market price of our Class A Common Stock may be thinly traded, highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ​ ● Fluctuations in and unpredictability of our sales cycle; 27 Table of Contents ● Changes to the physical security and technology industries; ● Current and future competition; ● Additions or departures of key personnel; ● Additional sales of our Class A Common Stock and other securities; ● Our ability to execute our business plan; ● Operating results that fall below expectations; ● Loss of any strategic relationship; ● Continued access to working capital funds; ● Economic and other external factors; and ● The threat of terrorism, geopolitical tensions, and general disruptions in the global economy, including the impacts of military action, financial and economic sanctions, and increasing geopolitical tensions related to the ongoing conflicts between Russia and Ukraine, Iran and U.S. and Israel and its surrounding areas. ​ In addition, the public safety markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
Additionally, existing private security firms may also compete on price by lowering their operating costs, developing new business models or providing other incentives. 18 Table of Contents Our ability to operate and collect digital information on behalf of our clients is dependent on the privacy laws of jurisdictions in which our ASRs operate, as well as the corporate policies of our clients, which may limit our ability to fully deploy our technologies in various markets.
Additionally, existing private security firms may also compete on price by lowering their operating costs, developing new business models or providing other incentives. 20 Table of Contents ​ Our ability to operate and collect digital information on behalf of our clients is dependent on the privacy laws of jurisdictions in which our ASRs operate, as well as the corporate policies of our clients, which may limit our ability to fully deploy our technologies in various markets.
Increased competitiveness may result in reductions in the prices of our products and services, lower-than-expected gross margins or loss of market share, any of which would harm our business. ​ We have a government customer and are seeking additional government customers, which would subject us to risks including early termination, audits, investigations, sanctions, or penalties. ​ The Company is actively seeking to secure a material amount of business from the U.S. federal government.
Increased competitiveness may result in reductions in the prices of our products and services, lower-than-expected gross margins or loss of market share, any of which would harm our business. ​ We have a government customer and are seeking additional government customers, which would subject us to risks including early termination, audits, investigations, sanctions, or penalties. ​ We are actively seeking to secure a material amount of business from the U.S. federal government.
All of these uncertainties may individually or in the aggregate materially and adversely affect our business, results of operations or financial condition. ​ 24 Table of Contents We are dependent on the global supply chain and have experienced supply chain constraints, as well as increased costs on components and shipping. ​ We are dependent on a complex global supply chain and continue to face challenges such as raw material constraints and extended lead times on key components.
All of these uncertainties may individually or in the aggregate materially and adversely affect our business, results of operations or financial condition. ​ 26 Table of Contents We are dependent on the global supply chain and have experienced supply chain constraints, as well as increased costs on components and shipping. ​ We are dependent on a complex global supply chain and continue to face challenges such as raw material constraints and extended lead times on key components.
Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content. 19 Table of Contents We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions.
Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content. 21 Table of Contents We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ​ ● Fluctuations in and the unpredictability of our sales cycle; ● Our ability to maintain and grow our client base; ● Downturns or financial instability in the business of our customers and partners; ● Development and introduction of new products by us or our competitors; ● Adverse changes affecting our suppliers and other third-party service providers, and any disruption in the supply of materials necessary for our business; ● Increases in marketing, sales, service and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● Our ability to achieve profitable gross margins and operating margins; ● Periodic litigation and related legal proceedings, which could result in unexpected expenditures of time and resources; and ● Changes in global geopolitical, business or macroeconomic conditions including regulatory changes. ​ Additionally, we expect to have U.S. government customers in the future.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ​ ● Fluctuations in and the unpredictability of our sales cycle; ● Our ability to maintain and grow our client base; ● Downturns or financial instability in the business of our customers and partners; ● Development and introduction of new products by us or our competitors; ● Adverse changes affecting our suppliers and other third-party service providers, and any disruption in the supply of materials necessary for our business; ● Increases in marketing, sales, service and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● Our ability to achieve profitable gross margins and operating margins; ● Periodic litigation and related legal proceedings, which could result in unexpected expenditures of time and resources; and ● Changes in global geopolitical, business or macroeconomic conditions including regulatory changes. ​ Additionally, we currently have one U.S. government customer and expect to have additional U.S. government customers in the future.
Such restrictions could, for example, limit our ability to, among other things: ​ ● Incur certain additional indebtedness; ● Pay dividends on, repurchase or make distributions in respect our capital stock; ● Make certain investments; ● Sell or dispose of certain assets; ● Grant liens on our assets; and ● Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. ​ Restrictions posed by any future debt arrangements could impede our ability to operate and negatively affect our ability to respond to business and market conditions, which could have an adverse effect on our business and operating results. 17 Table of Contents The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business. ​ The loss of one or more key executives, the lack of a succession plan, or our inability to attract and retain qualified professionals in critical areas such as finance, legal, engineering, and production could negatively impact our operations and growth.
Such restrictions could, for example, limit our ability to, among other things: ​ ● Incur certain additional indebtedness; ● Pay dividends on, repurchase or make distributions in respect our capital stock; ● Make certain investments; ● Sell or dispose of certain assets; ● Grant liens on our assets; and ● Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. ​ Restrictions posed by any future debt arrangements could impede our ability to operate and negatively affect our ability to respond to business and market conditions, which could have an adverse effect on our business and operating results. 19 Table of Contents The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business. ​ The loss of one or more key executives, the lack of a succession plan, or our inability to attract and retain qualified professionals in critical areas such as finance, legal, engineering, and manufacturing could negatively impact our operations and growth.
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition. ​ Our products, especially the ASRs, collect, store and may analyze certain types of personal or identifying information regarding individuals that interact with the ASRs.
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition. ​ Our products, including the ASRs, may collect, store and analyze certain types of personal or identifying information regarding individuals that interact with the ASRs.
Such additional regulations may impact our ability to develop, use and commercialize AI technologies in the future. 20 Table of Contents In Europe, on August 1, 2024, the EU Artificial Intelligence Act (the “EU AI Act”) entered into force, and establishes a comprehensive, risk-based governance framework for AI in the EU market.
Such additional regulations may impact our ability to develop, use and commercialize AI technologies in the future. 22 Table of Contents In Europe, on August 1, 2024, the EU Artificial Intelligence Act (the “EU AI Act”) entered into force, and establishes a comprehensive, risk-based governance framework for AI in the EU market.
Relatedly, trade policies could lead to an increasing number of competitors entering the United States, thereby creating more competition. 15 Table of Contents Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations. ​ Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future adversely affect our liquidity.
Relatedly, trade policies could lead to an increasing number of competitors entering the United States, thereby creating more competition. ​ Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations. ​ Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future adversely affect our liquidity.
If we are found to have violated laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and financial condition. ​ 27 Table of Contents Substantial future sales or issuances of our securities, or the perception in the public markets that these sales may occur, may depress our stock price. ​ Sales of substantial amounts of our Class A Common Stock in the public market, the conversion of the securities convertible into Class A Common Stock and subsequent sale of the underlying securities, or the perception that these sales or conversion could occur, could adversely affect the price of our Class A Common Stock and could impair our ability to raise capital through the sale of additional shares.
If we are found to have violated laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and financial condition. ​ Substantial future sales or issuances of our securities, or the perception in the public markets that these sales may occur, may depress our stock price. ​ Sales of substantial amounts of our Class A Common Stock in the public market, the conversion of the securities convertible into Class A Common Stock and subsequent sale of the underlying securities, or the perception that these sales or conversion could occur, could adversely affect the price of our Class A Common Stock and could impair our ability to raise capital through the sale of additional shares.
If we are unable to mitigate the impact of supply chain constraints and inflationary pressure through price increases or other measures, our results of operations and financial condition could be negatively impacted. ​ Similarly, global conflicts including the ongoing wars between Russia and Ukraine and Israel and Hamas have created volatility in the global capital markets and are expected to continue to have further global economic consequences, such as disruptions of the global supply chain and energy markets.
If we are unable to mitigate the impact of supply chain constraints and inflationary pressure through price increases or other measures, our results of operations and financial condition could be negatively impacted. ​ Similarly, global conflicts including the ongoing wars between Russia and Ukraine, Iran and U.S. and Israel and Hamas have created volatility in the global capital markets and are expected to continue to have further global economic consequences, such as disruptions of the global supply chain and energy markets.
Further, as additional competitors enter our market, we expect an increased pressure on production costs and margins. ​ Any debt arrangements that we enter into may impose significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities.
Further, as additional competitors enter our market, we expect an increased pressure on manufacturing costs and margins. ​ Any debt arrangements that we enter into may impose significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities.
The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of products or raw materials, could harm our ability to obtain necessary raw materials and product components or sell our products and services at prices customers are willing to pay, which could have a material adverse effect on our business, prospects, results of operations, and cash flows.
The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of products or raw materials, could harm our ability to obtain necessary raw materials and product components or sell our products and services at prices customers are willing to pay, which could have a material adverse 17 Table of Contents effect on our business, prospects, results of operations, and cash flows.
If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source. 23 Table of Contents In addition, government contracts normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions.
If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source. ​ In addition, government contracts normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions.
Such lawsuits or adverse publicity would negatively affect our brand and harm our business, prospects, financial condition and operating results. 22 Table of Contents Our brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of our products, infrastructure, and employees. ​ Our brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of, and the ability of our existing customers and new customers to access and use, our products solutions, including pursuant to our pilot programs.
Such lawsuits or adverse publicity would negatively affect our brand and harm our business, prospects, financial condition and operating results. ​ Our brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of our products, infrastructure, and employees. ​ Our brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of, and the ability of our existing customers and new customers to access and use, our products solutions, including pursuant to our pilot programs.
These actions may expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief, and criminal and civil fines and penalties. ​ We may face additional competition. ​ We are aware of a number of other companies that are developing physical security technology in the USA and abroad that may potentially compete with our technology and services.
These actions may expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief, and criminal and civil fines and penalties. ​ We may face additional competition. ​ We are aware of a number of other companies that are developing physical security technology in the U.S. and abroad that may potentially compete with our technology and services.
We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information. ​ The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information. 23 Table of Contents ​ The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Item 1A. Risk Factors Risks Related to the Business and the Global Economy ​ We have not yet generated any profits or significant revenues, anticipate that we will incur continued losses for the foreseeable future, and may never achieve profitability. ​ The Company was formed in 2013 and made its first pilot sales in 2015.
Item 1A. Risk Factors Risks Related to the Business and the Global Economy ​ We have not yet generated any profits and anticipate that we will incur continued losses for the foreseeable future and may never achieve profitability. ​ The Company was formed in 2013 and made its first pilot sales in 2015.
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 or delay, scale back or discontinue the development of additional products and services, seek alternative financing arrangements, declare bankruptcy or otherwise terminate its operations entirely. 12 Table of Contents The Company expects to experience future losses as it implements its business strategy and will need to generate significant revenues to achieve profitability, which may not occur. ​ We have incurred net losses since our inception, and we expect to continue to incur net losses for the foreseeable future.
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 or delay, scale back or discontinue the development of additional products and services, seek alternative financing arrangements, declare bankruptcy or otherwise terminate its operations entirely. 13 Table of Contents We expect to experience future losses as we implement our business strategy and will need to generate significant revenues to achieve profitability, which may not occur. ​ We have incurred net losses since our inception, and we expect to continue to incur net losses for the foreseeable future.
If we are unable to attract a sufficient number of new customers outside the USA, we may be unable to generate future revenue growth at desired rates in the long term. 13 Table of Contents We are subject to the loss of contracts, due to terminations, non-renewals or competitive re-bids, which could adversely affect our results of operations and liquidity, including our ability to secure new contracts from other customers. ​ We are exposed to the risk that we may lose our contracts primarily due to the termination by a customer with or without cause at any time, the failure by a customer to exercise its option to renew a contract with us upon the expiration of the then current term, or our failure to win the right to continue to operate.
If we are unable to attract a sufficient number of new customers outside the U.S., we may be unable to generate future revenue growth at desired rates in the long term. ​ We are subject to the loss of contracts, due to terminations, non-renewals or competitive re-bids, which could adversely affect our results of operations and liquidity, including our ability to secure new contracts from other customers. ​ We are exposed to the risk that we may lose our contracts primarily due to the termination by a customer with or without cause at any time, the failure by a customer to exercise its option to renew a contract with us upon the expiration of the then current term, or our failure to win the right to continue to operate.
Furthermore, because the 21 Table of Contents techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
As we grow, and implement more complex organizational and management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our current team’s efficiency and expertise, which could negatively affect our business performance. ​ 16 Table of Contents Our costs may grow more quickly than our revenues, harming our business and profitability. ​ Providing our products is costly because of our research and development expenses, production costs, operating costs and need for employees with specialized skills.
As we grow, and implement more complex organizational and management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our current team’s efficiency and expertise, which could negatively affect our business performance. ​ Our costs may grow more quickly than our revenues, harming our business and profitability. ​ Providing our products is costly because of our research and development expenses, manufacturing costs, operating costs and need for employees with specialized skills.
If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected. ​ The Company is subject to potential fluctuations in operating results due to its sales cycle. ​ Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected. ​ We are subject to potential fluctuations in operating results due to our sales cycle. ​ Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
We expect our expenses to continue to increase in the future as we expand our product offerings, expand production capabilities and hire additional employees.
We expect our expenses to continue to increase in the future as we expand our product offerings, expand manufacturing capabilities and hire additional employees.
Additionally, recent and future changes in our board of directors and senior management may disrupt our business, create uncertainty among investors, employees, and customers, and adversely impact our financial condition and stock price. ​ If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished and our business may be adversely affected. ​ The Company relies and expects to continue to rely on a combination of confidentiality agreements with its employees, consultants, and third parties with whom it has relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights.
Additionally, future changes in our Board of Directors and senior management may disrupt our business, create uncertainty among investors, employees, and customers, and adversely impact our financial condition and stock price. ​ If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished and our business may be adversely affected. ​ We rely and expect to continue to rely on a combination of confidentiality agreements with our employees, consultants, and third parties with whom we have relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights.
The issuance and sale of substantial amounts of shares of our Class A Common Stock, or announcement that such issuances and sales may occur, could adversely affect the market price of our Class A Common Stock.
The issuance and sale 29 Table of Contents of substantial amounts of shares of our Class A Common Stock, or announcement that such issuances and sales may occur, could adversely affect the market price of our Class A Common Stock.
Historically, our costs have increased each year due to these factors and the Company expects to continue to incur increasing costs, in particular for working capital to purchase inventory, marketing and product deployments as well as costs of client support in the field.
Historically, our costs have increased each year due to these factors and we expect to continue to incur increasing costs, in particular for working capital to purchase inventory, marketing and product deployments as well as costs of client support in the field.
Our financial success is sensitive to changes in general economic and financial conditions, including tariffs or other trade restrictions, interest rates, energy costs, labor costs, inflation, commodity prices, unemployment levels, consumer debt levels, tax rates and other changes in tax laws, public health issues like the COVID-19 pandemic, or other economic factors, certain of which effects, including cost inflation, we experienced in 2022, 2023 and 2024 and expect to continue to experience in 2025. ​ Global inflation, elevated interest rates, and global industry-wide logistics challenges have impacted, and we expect will continue to impact, our business.
Our financial success is sensitive to changes in general economic and financial conditions, including tariffs or other trade restrictions, interest rates, energy costs, labor costs, inflation, commodity prices, unemployment levels, consumer debt levels, tax rates and other changes in tax laws, public health issues like the COVID-19 pandemic, or other economic factors, certain of which effects, including cost inflation, we experienced the last four years and expect to continue to experience in 2026. ​ Global inflation, elevated interest rates, and global industry-wide logistics challenges have impacted, and we expect will continue to impact, our business.
In addition, the publication of misinformation may also result in lawsuits, the uncertainty and expense of which could adversely impact our business, financial condition, and reputation.
In addition, the publication of misinformation may also result in lawsuits, the uncertainty 30 Table of Contents and expense of which could adversely impact our business, financial condition, and reputation.
The Company listed on the Nasdaq Stock Market in January 2022. Accordingly, the Company has a limited history upon which to evaluate its performance and future prospects. ​ The Company has incurred net losses since inception. Our net loss was $31.7 million for the year ended December 31, 2024 and $22.1 million for the year ended December 31, 2023.
The Company listed on the Nasdaq Stock Market in January 2022. Accordingly, the Company has a limited history upon which to evaluate its performance and future prospects. ​ The Company has incurred net losses since inception. Our net loss was $33.8 million for the year ended December 31, 2025 and $31.7 million for the year ended December 31, 2024.
The potential difficulties we may face in integrating the operations of our acquisitions include, among others: ​ ● Failure to implement our business plan for the combined businesses; ● Unexpected losses of key employees, customers or suppliers of acquired companies and businesses; ● Unanticipated issues in conforming our acquired companies’ and businesses’ standards, processes, procedures and internal controls with our operations; ● Coordinating new product and process development; ● Increasing the scope, geographic diversity and complexity of our operations; ● Diversion of management’s attention from other business concerns; ● Adverse effects on our or acquired companies’ and businesses’ existing business relationships; ● Unanticipated changes in applicable laws and regulations; ● Unanticipated expenses and liabilities; and ● Other difficulties in the assimilation of acquired companies and businesses operations, technologies, products and systems. ​ We may not be able to maintain or increase the levels of revenue, earnings or operating efficiency that any acquired company and business and us had historically achieved or might achieve separately.
The potential difficulties we may face in integrating the operations of our acquisitions include, among others: ​ ● Failure to implement our business plan for the combined businesses; ● Unexpected losses of key employees, customers or suppliers of acquired companies and businesses; ● Unanticipated issues in conforming our acquired companies’ and businesses’ standards, processes, procedures and internal controls with our operations; ● Coordinating new product and process development; ● Increasing the scope, geographic diversity and complexity of our operations; ● Diversion of management’s attention from other business concerns; ● Adverse effects on our or acquired companies’ and businesses’ existing business relationships; ● Unanticipated changes in applicable laws and regulations; ● Unanticipated expenses and liabilities; and ● Other difficulties in the assimilation of acquired companies and businesses operations, technologies, products and systems. 15 Table of Contents ​ We may maintain, achieve or increase revenue, from companies that we acquire.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to address the ESG profile of our company and/or offerings or to respond to stakeholder demands, such initiatives may be costly and may not have the desired effect.
We may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to address the ESG profile of our company and/or offerings or to respond to stakeholder demands.
If customers in other countries do not perceive the threat of security, or of firearms and weapons to be significant enough to justify the purchase of our products, we will be unable to establish a meaningful business outside the USA.
If customers in other countries do not perceive the threat of security to be significant enough to justify the purchase of our products, we will be unable to establish a meaningful business outside the U.S.
The Company has filed in the USA various applications for protection of certain aspects of its intellectual property, and currently holds twelve patents. However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved.
We have filed in the U.S. various applications for protection of certain aspects of our intellectual property, and we currently hold twelve patents. However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved.
As of December 31, 2024, we had an accumulated deficit of $193.2 million. Cash and cash equivalents on hand were $11.1 million as of December 31, 2024, compared to $2.3 million as of December 31, 2023. These factors raise substantial doubt about our ability to continue as a going concern.
As of December 31, 2025, we had an accumulated deficit of $227.0 million. Cash and cash equivalents on hand were $20.6 million as of December 31, 2025, compared to $11.1 million as of December 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern.
While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss, corruption or unauthorized disclosure of our trade secrets, personal information or other proprietary or sensitive information or other similar disruptions.
To date, we have not identified any cybersecurity incidents that we believe have materially affected our business, However, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss, corruption or unauthorized disclosure of our trade secrets, personal information or other proprietary or sensitive information or other similar disruptions.
If our revenues grow more slowly than we anticipate or if our operating expenses exceed our expectations or cannot be adjusted accordingly, our business, operating results and financial condition will be materially and adversely affected. ​ Investment in new business strategies could disrupt our ongoing business, present risks not originally contemplated and materially adversely affect our business, reputation, results of operations and financial condition. ​ We have invested, and in the future may invest, in new business strategies.
If our revenues grow more slowly than we anticipate or if our operating expenses exceed our expectations or cannot be adjusted accordingly, our business, operating results and financial condition will be materially and adversely affected. ​ Investment in new products and services may not achieve expected returns and could disrupt our ongoing business, present risks not originally contemplated and materially adversely affect our business, reputation, results of operations and financial condition. ​ We have invested, and in the future may invest, in the research, development and marketing of new products and services, including the K7 ASR and the K1 Capsule and Super Tower.
Any penalties, damages, fines, suspension, or damages could adversely affect our ability to operate our business and our financial results. ​ Additionally, although the Company has received its Authority to Operate from the FedRAMP, any change to our moderate cloud solution FedRAMP status could impede our ability to enter into contracts with government entities.
Any penalties, damages, fines, suspension, or damages could adversely affect our ability to operate our business and our financial results. ​ Additionally, although the Company has obtained an Authority to Operate under the Federal Risk And Authorization Management Program (“FedRAMP”) program, any change to our moderate cloud solution FedRAMP status could impede our ability to enter into contracts with government entities.
These factors raise substantial doubt about our ability to continue as a going concern. See Liquidity and Capital Resources . We will require additional funds to maintain our operations and respond to business challenges and opportunities, including the need to develop new products or enhance our existing products, enhance our operating infrastructure or acquire complementary businesses and technologies.
See Liquidity and Capital Resources . We will require additional funds to maintain our operations and respond to business challenges and opportunities, including the need to develop new products or enhance our existing products, enhance our operating infrastructure or acquire complementary businesses and technologies.
In the event that additional liquidity is required from outside sources, we may not be able to raise the capital on terms acceptable to us or at all.
These transactions may impose additional restrictions on our ability to operate and/or may be dilutive to you. In the event that additional liquidity is required from outside sources, we may not be able to raise the capital on terms acceptable to us or at all.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information, and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information, and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf Additional comprehensive state privacy laws have become effective in recent years, and more states continue to enact or consider similar legislation, increasing the complexity of compliance for companies operating nationwide.
In addition, it may be difficult for us to raise additional capital if we are not listed on a major exchange. ​ The Company will need to seek additional funds in the future. ​ The Company projects operating losses and negative cash flows for the foreseeable future.
In addition, it may be difficult for us to raise additional capital if we are not listed on a major exchange. ​ We will need to seek additional funds in the future. ​ We project operating losses and negative cash flows for the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern.
Expectations around companies’ management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
Such initiatives may be costly and may not have the desired effect. ​ Expectations around companies’ management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
The Company has entered into its first government contract with the VA as well as a Phase 1 contract from the U.S. Air Force. These types of agreements may subject the Company to statutes, regulations and contract obligations applicable to companies doing business with the government.
We have entered into our first government contract with the U.S. Department of Veterans Affairs as well as a Phase 1 contract with the U.S. Air Force. These types of agreements subject us to statutes, regulations and contract obligations applicable to companies doing 25 Table of Contents business with the government.
If the U.S. government does not complete its budget process before its fiscal year-end, government operations may be funded by means of a continuing resolution. Under a continuing resolution, the government essentially authorizes agencies of the U.S. government to continue to operate and fund programs at the prior year end but does not authorize new spending initiatives.
Under a continuing resolution, the government essentially authorizes agencies of the U.S. government to continue to operate and fund programs at the prior year end but does not authorize new 16 Table of Contents spending initiatives.
Nonetheless, real-life environments, especially those in crowded areas, are unpredictable and situations have in the past arisen and may in the future arise in which the ASRs may not perform as intended. Infrequent, but highly publicized incidents of autonomous vehicle and human interactions, including involving our ASRs, have focused consumer attention on the safety of our and other systems.
Nonetheless, real-life environments, especially those in crowded areas, are unpredictable and situations have in the past arisen and may in the future arise in which the ASRs may not perform as intended. Incidents 24 Table of Contents involving autonomous systems, including those involving third parties, have received public attention.
The growth and expansion of our business and products create significant challenges for our management, operational, and financial resources, including managing multiple relationships and interactions with users, distributors, vendors, and other third parties. As the Company grows, our information technology systems, internal management processes, internal controls and procedures and production processes may not be adequate to support our operations.
The growth and expansion of our business and products create significant challenges for our management, operational, and financial resources, including managing multiple relationships and interactions with users, distributors, vendors, and other third parties.
In addition, our clients have separate internal policies, procedures and controls regarding privacy and data security with which we may be required to comply.
In addition, our clients have separate internal policies, procedures and controls regarding privacy and data security with which we may be required to comply. In many deployments, our customers determine the manner and purposes for which our technologies are configured and used, which may affect the applicability of certain legal requirements.
We cannot predict or estimate the amount of additional costs we will incur as a listed public company or the timing of such costs. ​ We are subject to complex and changing laws and regulations, which exposes us to potential liabilities, increased costs and other adverse effects on our business. ​ We are subject to complex and changing laws, regulations, and executive orders, and compliance with these laws and regulations and executive orders, as well as changing interpretations, policies, and enforcement priorities related to such laws, regulations, and executive orders, is onerous and expensive.
Investors may find our Class A Common Stock less attractive because we will rely on these exemptions, which could result in a less active trading market for our Class A Common Stock, increased price fluctuation, and a decrease in the trading price of our Class A Common Stock. ​ ​ We are subject to complex and changing laws and regulations, which expose us to potential liabilities, increased costs and other adverse effects on our business. ​ We are subject to complex and changing laws, regulations, and executive orders, and compliance with these laws and regulations and executive orders, as well as changing interpretations, policies, and enforcement priorities related to such laws, regulations, and executive orders, is onerous and expensive.
As a result, it may be difficult for us to add new customers to our customer base. Competition in the marketplace may also lead us to win fewer new customers or result in us providing discounts and other commercial incentives.
As a result, it may be difficult for us to add new customers to our customer base.
The loss by us of contracts due to terminations, non-renewals or competitive re-bids could materially adversely affect our financial condition, results of operations and/or liquidity, including our ability to secure new contracts from other customers. ​ The Company’s future operating results are difficult to predict and may be affected by a number of factors, many of which are outside of the Company’s control. ​ The market for advanced physical security technology is relatively new and unproven and is subject to a number of risks and uncertainties.
In addition, many of these factors are outside of our control, and any one of these factors could result in additional or unforeseen costs, decreases in the amount of expected revenues and additional diversion of management’s time and energy, which could adversely impact our business, financial condition, and results of operations and cash flows may be materially and adversely impacted. ​ Our future operating results are difficult to predict and may be affected by a number of factors, many of which are outside of our control. ​ The market for advanced physical security technology is relatively new and unproven and is subject to a number of risks and uncertainties.
While our immediate focus is on the U.S. market, our long-term success will in part depend on our ability to acquire new customers outside the USA.
Competition in the marketplace may also lead us to win fewer new customers or result in us providing discounts and other commercial incentives. 14 Table of Contents ​ Our immediate focus is on the U.S. market, and our long-term success will in part depend on our ability to acquire new customers outside the U.S.
To ensure success, we must continue to improve our operational, financial, and management processes and systems and to effectively expand, train, and manage our employee base.
As the Company grows, our 18 Table of Contents information technology systems, internal management processes, internal controls and procedures and manufacturing processes may not be adequate to support our operations. To ensure success, we must continue to improve our operational, financial, and management processes and systems and to effectively expand, train, and manage our employee base.
If there are more shares of Class A Common Stock offered for sale than buyers are willing to purchase, then the market price of our Class A Common Stock may decline to a market price at which buyers are willing to purchase the offered shares of Class A Common Stock and sellers remain willing to sell the shares. ​ In the future, we may also issue additional securities given our need to raise capital, which could constitute a material portion of our then-outstanding shares of common stock. ​ We may be unable to successfully integrate the businesses and personnel of acquired companies and businesses, and may not realize the anticipated synergies and benefits of such acquisitions. ​ From time to time, we may complete acquisitions of companies and certain businesses of companies, and we may not realize the expected benefits from such acquisitions because of integration difficulties or other challenges. ​ The success of any acquisition will depend, in part, on our ability to realize all or some of the anticipated synergies and other benefits from integrating the acquired businesses with our existing business.
If there are more shares of Class A Common Stock offered for sale than buyers are willing to purchase, then the market price of our Class A Common Stock may decline to a market price at which buyers are willing to purchase the offered shares of Class A Common Stock and sellers remain willing to sell the shares. ​ In the future, we may also issue additional securities given our need to raise capital, which could constitute a material portion of our then-outstanding shares of common stock. ​ Increasing attention to, and evolving expectations for, ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business. ​ Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG practices.
In addition, any new business strategies or new investments may require us to raise additional capital, including debt or equity securities. These transactions may impose additional restrictions on our ability to operate and/or may be dilutive to you.
We could experience significant delays in new releases or significant problems in creating new products or services, which could adversely affect our business, financial condition and results of operations. In addition, the capital required for our investment in any new products or services may require us to raise additional capital, including debt or equity securities.
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Similar laws have been passed in other states and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the USA. Additional compliance investment and potential business process changes may also be required.
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Additionally, if customers do not perceive our new products and software as providing significant value, they may not readily adopt them and we may not achieve returns on our investment. Developing new technologies is complex and can require long development and testing periods.
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In the United States, the Trump administration has rescinded an executive order relating to AI Technologies that was previously implemented by the Biden administration. The Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies, or may implement new executive orders and/or other rule making relating to AI Technologies in the future.
Added
The loss by us of contracts due to terminations, non-renewals or competitive re-bids could materially adversely affect our financial condition, results of operations and/or liquidity, including our ability to secure new contracts from other customers. ​ The failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions could adversely affect our growth and our business, financial condition, and results of operations. ​ We periodically evaluate selective acquisitions in connection with our growth strategy.
Removed
Investors may find our Class A Common Stock less attractive because we will rely on these exemptions, which could result in a less active trading market for our Class A Common Stock, increased price fluctuation, and a decrease in the trading price of our Class A Common Stock. ​ We will continue to incur significant costs as a result of operating as a listed public company and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices. ​ As a listed public company, and particularly in the future when we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we have not incurred in the past.
Added
The success of our growth strategy is dependent, in part, on our ability to identify suitable acquisitions, prevail against competing potential acquirers and negotiate and consummate acquisitions on terms attractive to us.
Removed
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to comply with these requirements.
Added
It is also dependent on our ability to effectively integrate and realize the expected benefits from acquisitions. ​ The combination of independent businesses is a complex, costly, and time-consuming process that requires significant management attention and resources.
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Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
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Any or all of these factors could adversely affect our ability to maintain relationships with customers, suppliers, and employees, or achieve the anticipated benefits of the acquisition.
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For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors.
Added
If the U.S. government does not complete its budget process before its fiscal year-end, government operations may be funded by means of a continuing resolution.
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The integration process may be complex, costly and time-consuming.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeMercedes Soria, EVP and Chief Intelligence Officer / Chief Information Security Officer (“CISO”) has primary responsibility for our overall cybersecurity program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Ms.
Biggest changeMercedes Soria, EVP and Chief Intelligence Officer / Chief Information Security Officer (“CISO”) has primary responsibility for our overall cybersecurity program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Ms. Soria has over four years of cyber risk management experience, and is primarily responsible for assessing and managing our material risks from cybersecurity threats. Ms.
For more information, see the section titled “Risk Factor — Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.” ​ Cybersecurity Governance ​ Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program. ​ The Committee receives periodic reports from management on our cybersecurity risks.
For more information, see the section titled “Risk Factor — Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.” ​ Cybersecurity Governance ​ Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program. ​ The Committee receives periodic reports from management on our cybersecurity risks.
In addition, management updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant, as well as any incidents with lesser impact potential. ​ The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
In addition, management updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant, as well as any incidents with lesser impact potential. ​ The Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity.
The full Board also receives briefings from management on our cyber risk management program. ​ Our management team takes steps to stay informed about and supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents.
The full Board of Directors also receives briefings from management on our cyber risk management program. ​ Our management team takes steps to stay informed about and supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents.
Key elements of our cybersecurity risk management program include but are not limited to the following: ​ ● Risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information. ● A cybersecurity leader principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents. ● The use of external service providers , where appropriate, to assess, test or otherwise assist with aspects of our security processes. ● Cybersecurity awareness training for all our employees, including incident response personnel, and senior management. ● A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. ● A third-party risk management evaluation process for key service providers based on our assessment of their criticality to our operations and respective risk profile, suppliers, and vendors with access to our information systems or data. ​ We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Key elements of our cybersecurity risk management program include but are not limited to the following: ​ ● Risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information. ● A cybersecurity leader principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents. 31 Table of Contents ● The use of external service providers , where appropriate, to assess, test or otherwise assist with aspects of our security processes. ● Cybersecurity awareness training for all our employees, including incident response personnel, and senior management. ● A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. ● A third-party risk management evaluation process for key service providers based on our assessment of their criticality to our operations and respective risk profile, suppliers, and vendors with access to our information systems or data. ​ We are not currently aware of any cybersecurity incidents that have materially affected the Company, including our operations, business strategy, results of operations, or financial condition.
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. Our cybersecurity risk environment includes risks associated with cloud-based systems, distributed devices deployed in customer environments, and third-party service providers.
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Soria has over four years of cyber risk management experience, and is primarily responsible for assessing 30 Table of Contents and managing our material risks from cybersecurity threats. Ms.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease for the Company’s headquarters expires in August 2025, and we are actively looking for a new, bigger space. The Company wholly owns its ASRs and typically builds in batches based on client demand, refraining where possible in stocking inventory or finished products. ​
Biggest changeThe Company wholly owns its ASRs and typically builds in batches based on client demand, refraining where possible in stocking inventory or finished products. ​ 32 Table of Contents
Item 2. Properties Knightscope currently leases its premises and owns no significant plant or equipment. The Company’s approximately 15,000 square foot facility in Mountain View, California serves as its headquarters, where it designs, engineers, tests, manufactures and supports all of its ECDs and ASR technologies.
Item 2. Properties Knightscope currently leases its premises and owns no significant plant or equipment. The Company’s approximately 33,000 square foot facility in Sunnyvale, California serves as its headquarters, where it designs, engineers, tests, manufactures and supports all of its ECDs and ASR technologies. The lease for the Company’s headquarters expires in June 2030.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company is not presently a party to any litigation that it believes to be material and the Company is not aware of any pending or threatened litigation against the Company that it believes could have a material adverse effect on its business, operating results, financial condition or cash flows.
Biggest changeThe Company is not presently a party to any litigation that it believes to be material and the Company is not aware of any pending or threatened litigation against the Company that it believes could have a material adverse effect on its business, operating results, financial condition or cash flows. Item 4.
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Mine Safety Disclosures Not applicable. ​ ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFuture declarations of dividends will depend on, among other things, our results of operations, financial condition, cash flows and capital requirements, and on such other factors as the board of directors may in its discretion consider relevant and in the best long-term interest of stockholders. ​ Recent Sales of Unregistered Securities ​ On January 6, 2025, we issued unregistered warrants to The Washington Office, LLC, a consultant hired for advisory services, strategic communications, national security consulting, and government engagement support related to the Company’s products and services.
Biggest changeFuture declarations of dividends will depend on, among other things, our results of operations, financial condition, cash flows and capital requirements, and on such other factors as the Board of Directors may in its discretion consider relevant and in the best long-term interest of stockholders. ​ Purchases of Equity Securities By the Issuer and Affiliated Purchasers. ​ None. Item 6.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction ​ The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and notes thereto included herein as Item 8. This discussion contains forward-looking statements.
Reserved Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction ​ The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and notes thereto included herein as Item 8. This discussion contains forward-looking statements.
For a discussion and analysis of the year ended December 31, 2023 as compared to the year ended December 31, 2022, please refer to
For a discussion and analysis of the year ended December 31, 2024 as compared to the year ended December 31, 2023, please refer to
Refer to “Forward-Looking Statements” and “Risk Factors” herein, for a discussion of the uncertainties, risks, assumptions, and other important factors associated 33 Table of Contents with these statements.
Refer to “Forward-Looking Statements” and “Risk Factors” herein, for a discussion of the uncertainties, risks, assumptions, and other important factors associated with these statements.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information and Holders ​ Our Class A Common Stock is listed and traded on The Nasdaq Capital Market under the symbol “KSCP.” As of March 31, 2025, we had (i) 27,540 holders of record of our Class A Common Stock and (ii) 17 holders of our Class B Common Stock. ​ Dividends ​ To date, we have not paid any cash dividends on our Class A Common Stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information and Holders ​ Our Class A Common Stock is listed and traded on The Nasdaq Capital Market under the symbol “KSCP.” As of March 25, 2026, we had (i) 24,120 holders of record of our Class A Common Stock and (ii) 18 holders of our Class B Common Stock. ​ Dividends ​ To date, we have not paid any cash dividends on our Class A Common Stock.
The historical results presented below are not necessarily indicative of the results that may be expected for any future period. ​ Our MD&A discusses our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The historical results presented below are not necessarily indicative of the results that may be expected for any future period. ​ Our Management’s Discussion and Analysis discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
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The warrants are exercisable for such number of shares of our Class A Common Stock which equals $15,000 per month (for an annual total of $180,000) divided by the 30-day weighted average trading price per share, and have a term of 6 years.
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The offer and issuance of the warrants was made in reliance on an exemption from registration pursuant to, and in accordance with the procedures set forth in, Rule 144A, under the Securities Act. ​ Purchases of Equity Securities By the Issuer and Affiliated Purchasers. ​ None. Item 6. Reserved Item 7.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThis was driven by $1.6 million in higher third-party service costs due to outsourcing our field services, $1.2 million in higher scrap costs primarily related to our ASR hot-swap program, and $0.4 million in increased depreciation and amortization expenses; partially offset by a $0.8 million decrease in headcount expense, $0.4 million lower cellular and other software costs, and $0.2 million savings in rent, utilities and vehicle maintenance expenses compared to the same period in the prior year. ​ Product cost of revenue, net of approximately $2.9 million and $4.9 million for the years ended December 31, 2024 and 2023, respectively, decreased by $2.1 million or 42% primarily due to $1.8 million in lower volume of sales and $0.4 million in lower warranty costs, which were partially offset by $0.1 million in higher third-party installation fees. ​ Gross loss ​ Gross loss for the year ended December 31, 2024 was approximately $3.7 million, as compared to $2.0 million for the year ended December 31, 2023, representing a year-over-year increase of approximately $1.7 million. ​ Research and development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ $ Change ​ % Change Research and development ​ $ 7,061 ​ $ 6,351 ​ $ 710 11 % Percentage of total revenue ​ 65 % 50 % ​ ​ Research and development (“R&D”) expense for the year ended December 31, 2024 was approximately $7.1 million, or 65% of revenue, compared to R&D expense of $6.4 million, or 50% of revenue, for the year ended December 31, 2023.
Biggest changeThis was driven by $0.4 million in higher third-party outsourced field service costs, $0.2 million in higher consulting fees, $0.4 million in higher headcount related costs, $0.1 million increased supplies and materials expenses, partially offset by $0.3 million in lower scrap costs and $0.2 million lower communication and cellular costs. ​ Product cost of revenue, net of $3.8 million and $2.9 million for the years ended December 31, 2025 and 2024, respectively, increased by $0.9 million or 32% primarily due to $1.4 million in higher material costs, partially offset by $0.2 million in decreased headcount related expenses, $0.2 million in lessor rent and utilities expense, and $0.1 million in lower scrap costs. ​ Gross loss ​ Gross loss for the year ended December 31, 2025 was $4.8 million, as compared to $3.7 million for the year ended December 31, 2024, representing a year-over-year increase of approximately $1.1 million.
The preparation of these financial statements requires us to make estimates, assumptions and judgments that can have significant impact on the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of assets and liabilities at the date of our financial statements.
GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that can have significant impact on the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of assets and liabilities at the date of our financial statements.
The Company has agreed to pay the Principal in two separate installments: the first installment in an amount equal to $2,500,000 payable in 11 equal consecutive monthly installments beginning on September 1, 2024, and the second installment in an amount equal to $500,000, payable on the earlier of (x) October 15, 2024, and (y) upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (other than pursuant to a customary at-the-market offering program and equity lines of credit).
The Company has agreed to pay the Principal in two separate installments: the first installment in an amount equal to $2,500,000 payable in 11 equal consecutive monthly installments beginning on September 42 Table of Contents 1, 2024, and the second installment in an amount equal to $500,000, payable on the earlier of (x) October 15, 2024, and (y) upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (other than pursuant to a customary at-the-market offering program and equity lines of credit).
Capitalized terms not defined herein have the meaning assigned to them in the 2022 Purchase Agreement. 45 Table of Contents ​ On August 1, 2024 (the “Issuance Date”), the Company and the Holder entered into an Agreement and Waiver (the “Waiver”) pursuant to which, on the Issuance Date, the Company issued to the Holder a Senior Secured Promissory Note due on July 1, 2025, in an aggregate amount equal to $3.0 million (the “Principal”), in exchange for the cancellation of the Holder’s 2022 Warrants (the “August 2024 Note”).
Capitalized terms not defined herein have the meaning assigned to them in the 2022 Purchase Agreement. ​ On August 1, 2024 (the “Issuance Date”), the Company and the Holder entered into an Agreement and Waiver (the “Waiver”) pursuant to which, on the Issuance Date, the Company issued to the Holder a Senior Secured Promissory Note due on July 1, 2025, in an aggregate amount equal to $3.0 million (the “Principal”), in exchange for the cancellation of the Holder’s 2022 Warrants (the “August 2024 Note”).
Actual results could differ from those estimates. We base our estimates, assumptions and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
We base our estimates, assumptions and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
ASRs in progress and finished ASRs include materials, labor and other direct and indirect costs used in their production. Finished ASRs are valued using a discrete bill of materials, which includes an allocation of labor and direct overhead based on assembly hours.
ASRs in progress and finished ASRs include materials, labor and other direct and indirect costs used in their manufacturing. Finished ASRs are valued using a discrete bill of materials, which includes an allocation of labor and direct overhead based on assembly hours.
Overall, we issued Bonds totaling a principal amount of approximately $4.3 million, in aggregate, generating net proceeds to the Company of approximately $3.9 million, net of issuance costs of approximately $0.4 million during the life of the offering. ​ Item 7A.
Overall, we issued Bonds totaling a principal amount of approximately $4.3 million, in aggregate, generating net proceeds to the Company of approximately $3.9 million, net of issuance costs of approximately $0.4 million during the life of the offering.
At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis. ​ 37 Table of Contents Autonomous Security Robots, net (“ASRs”) ​ ASRs consist of materials, ASRs in progress and finished ASRs.
At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis. ​ Autonomous Security Robots, net (“ASRs”) ​ ASRs consist of materials, ASRs in progress and finished ASRs.
Depreciation expense on ASRs is recorded using the straight-line method over their estimated expected lives, which currently ranges from 3 to 5 years. Depreciation expense of finished ASRs is included in research and development expense, sales and marketing expense, and cost of revenue, net on the Company’s Statements of Operations.
Depreciation expense on ASRs is recorded using the straight-line method over their estimated expected lives, which currently ranges from 3 to 5 years. Depreciation expense of finished ASRs is included in research and development expense, sales, general and administrative expense, and cost of revenue, net on the Company’s Statements of Operations.
None of the Company’s ASRs, property, equipment and software or intangible assets were determined to be impaired during the years ended December 31, 2024 and 2023. 38 Table of Contents ​ Convertible Preferred Warrant Liability and Common Stock Warrants ​ Freestanding warrants to purchase shares of the Company’s preferred stock were classified as liabilities on the balance sheets at their estimated fair value because the underlying shares of preferred stock were contingently redeemable and, therefore, may have obligated the Company to transfer assets at some point in the future.
None of the Company’s ASRs, property, equipment and software or intangible assets were determined to be impaired during the years ended December 31, 2025 and 2024. ​ Convertible Preferred Warrant Liability and Common Stock Warrants ​ Freestanding warrants to purchase shares of the Company’s preferred stock were classified as liabilities on the Balance Sheets at their estimated fair value because the underlying shares of preferred stock were contingently redeemable and, therefore, may have obligated the Company to transfer assets at some point in the future.
The pre-funded warrants were immediately exercisable at a nominal price of $0.001 per share and remained exercisable until fully utilized. As of February 11, 2025, the pre-funded warrants were fully exercised.
The pre-funded warrants were immediately exercisable at a nominal price of $0.001 per share and as of February 11, 2025, the pre-funded warrants were fully exercised.
As our business grows, we expect our capital expenditures to continue to increase. ​ Net cash used in investing activities for the year ended December 31, 2024 was $3.2 million compared to $5.1 million for the year ended December 31, 2023, a decrease of $1.9 million.
As our business grows, we expect our capital expenditures to continue to increase. ​ Net cash used in investing activities for the year ended December 31, 2025 was $2.5 million compared to $3.2 million for the year ended December 31, 2024, a decrease of $0.7 million.
For the Company, these estimates include, but are not limited to: deriving the useful lives of ASRs, determination of the cost of ASRs, assessing assets for impairment, accounts receivable – estimated credit losses, determination of deferred tax valuation allowances, the valuation of convertible preferred stock warrants, estimating fair values of the Company’s share-based awards, and derivative liabilities.
These estimates include, but are not limited to: deriving the useful lives of ASRs, determination of the cost of ASRs, assessing assets for impairment, accounts receivable – estimated credit losses, determination of deferred tax valuation allowances and estimating fair values of the Company’s share-based awards.
Inventory in excess of salable amounts and inventory which is considered obsolete based upon changes in existing technology is fully expensed to the cost of revenue service line item in our Statement of Operations.
Inventory in excess of salable amounts and inventory which is considered obsolete based upon changes in existing technology is fully expensed to the cost of revenue, net product line item in our Statements of Operations.
If the Company is unable to raise additional capital 42 Table of Contents 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. ​ We executed a purchase agreement on September 13, 2024 in order to secure the acquisition of raw materials essential to ASR production.
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. ​ The Company executed a purchase agreement on September 13, 2024, which was modified in September 2025, in order to secure the acquisition of raw materials essential to ASR manufacturing.
Changes in operating assets and liabilities, net of $5.3 million, also contributed to the decrease in cash used in operating activities for the year ended December 31, 2024 compared to the prior year.
Changes in operating assets and liabilities, net of $3.7 million, also contributed to the increase in cash used in operating activities for the year ended December 31, 2025 compared to the prior year.
The offering comprised the sale of 393,659 shares of Class A Common Stock and pre-funded warrants to purchase 816,341 shares of Class A Common Stock, at a public offering price of $10.00 per share and $9.999 per pre-funded warrant, respectively, before underwriting discounts and commissions.
The offering was conducted under an effective shelf registration statement previously filed with the SEC and was comprised of the sale of 393,659 shares of Class A Common Stock and pre-funded warrants to purchase 816,341 shares of Class A Common Stock, at a public offering price of $10.00 per share and $9.999 per pre-funded warrant, respectively, before underwriting discounts and commissions.
Our net loss was $31.7 million for the year ended December 31, 2024 and $22.1 million for the year ended December 31, 2023. As of December 31, 2024, we had an accumulated deficit of $193.2 million. Cash and cash equivalents on hand were $11.1 million as of December 31, 2024, compared to $2.3 million as of December 31, 2023.
Our net loss was $33.8 million for the year ended December 31, 2025 and $31.7 million for the year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $227.0 million. Cash and cash equivalents on hand were $20.6 million as of December 31, 2025, compared to $11.1 million as of December 31, 2024.
The change in fair value of warrant and derivative liabilities accounted for a decrease in cash used in operating activities of $6.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The change in fair value of warrant and derivative liabilities accounted for an increase in cash used in operating activities of $1.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Our financing activities for the year ended December 31, 2024, consisted primarily of the issuance and sale of shares of Class A Common Stock pursuant to our at-the-market offering program for net proceeds of approximately $22.7 million, net proceeds from issuance of common stock and pre-funded warrants of approximately $10.8 million and net proceeds from the issuance of Regulation A bonds of approximately $2.6 million, partially offset by a $1.6 million repayment of debt obligations.
Our financing activities for the year ended December 31, 2025, consisted primarily of the issuance and sale of shares of Class A Common Stock pursuant to our at-the-market offering program for net proceeds of $42.8 million, net proceeds from our direct registration offering of $1.4 million, partially offset by a $2.1 million repayment of debt obligations.
These decreases were partially offset by an increase in net loss of $9.6 million, a decrease in stock compensation expense of $1.0 million and an increase in the loss on disposal of ASR of $1.2 million in 2024 compared to the prior year. ​ Net Cash Used in Investing Activities ​ Our primary investing activities have consisted of capital expenditures and investment in ASRs.
In addition, an increase in net loss of $2.1 million, a decrease in stock compensation expense of $0.2 million and a decrease in the loss on disposal of ASR of $0.2 million in 2025 contributed to this increase in cash used in operating activities. ​ Net Cash Used in Investing Activities ​ Our primary investing activities have consisted of capital expenditures and investment in ASRs.
The decrease was primarily a result of lower investments in ASRs and equipment of $1.5 million. 43 Table of Contents Net Cash Provided by Financing Activities ​ Net cash provided by financing activities was approximately $34.5 million for the year ended December 31, 2024, an increase of approximately $7.6 million as compared to the prior year.
The decrease was primarily a result of lower investments in ASRs of $1.2 million, partially offset by $0.6 million in additional purchases of property and equipment in 2025 for the new, larger headquarters. ​ Net Cash Provided by Financing Activities ​ Net cash provided by financing activities was $42.2 million for the year ended December 31, 2025, an increase of $7.7 million as compared to the prior year.
The term “blank check” preferred stock refers to preferred stock, the creation and issuance of which is authorized in advance by a company’s stockholders and the terms, rights and features of which are determined by the Board of Directors of a company without seeking further actions or vote of the stockholders. ​ Extinguishment of Warrants with Anti-Dilution Features ​ On October 10, 2022, the Company entered into a Securities Purchase Agreement (the “2022 Purchase Agreement”) with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B (the “Holder”), pursuant to which the Company issued and sold to the Holder in a private placement (i) senior secured convertible notes (the “2022 Notes”), and (ii) warrants (the “2022 Warrants”) to purchase up to 22,768 shares of the Company’s Class A common stock.
These underwriter warrants are exercisable at a price of $18.29 per share. ​ Extinguishment of Warrants with Anti-Dilution Features ​ On October 10, 2022, the Company entered into a Securities Purchase Agreement (the “2022 Purchase Agreement”) with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B (the “Holder”), pursuant to which the Company issued and sold to the Holder in a private placement (i) senior secured convertible notes (the “2022 Notes”), and (ii) warrants (the “2022 Warrants”) to purchase up to 22,768 shares of the Company’s Class A common stock.
Depreciation expense on finished ASRs was $2.0 million and $1.6 million for the years ended December 31, 2024 and 2023, respectively.
Depreciation expense on 36 Table of Contents finished ASRs was $2.0 million for each of the years ended December 31, 2025 and 2024.
Our financing activities for the year ended December 31, 2023, consisted primarily of the issuance and sale of shares of Class A Common Stock for net proceeds of approximately $25.9 million, net proceeds from the issuance of Regulation A bonds of approximately $1.2 million, and Class A Common Stock issued as a result of option exercises of approximately $0.3 million, partially offset by a note repayment of approximately $0.6 million. ​ At-the-Market Offering Program ​ In February 2023, we commenced an at-the-market offering program with H.C.
Our financing activities for the year ended December 31, 2024, consisted primarily of the issuance and 41 Table of Contents sale of shares of Class A Common Stock for net proceeds of $22.7 million, net proceeds for the issuance of common stock and pre-funded warrants sold for cash of $10.8 million and net proceeds from the issuance of Regulation A bonds of $2.6 million, partially offset by a note repayment of $1.6 million. ​ At-the-Market Offering Program ​ On February 1, 2023, we entered into an At-the-Market Agreement with H.C.
The increase was primarily driven by an increase of approximately $1.2 million in investor relations expense and $1.1 million in higher professional services fees, partially offset by $1.7 million compensation expense savings due to lower headcount. ​ 41 Table of Contents ​ Restructuring charges ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2024 2023 $ Change % Change Restructuring Charges ​ $ 510 ​ $ 149 ​ $ 361 242 % Percentage of total revenue ​ 5 % 1 % ​ ​ We incurred restructuring charges for the year ended December 31, 2024, of $0.5 million as a result of operational changes made to the ECD portfolio.
The decrease was primarily driven by $2.8 million in lower investor relations and advertising expenses, and $1.2 million in lower professional services fees, partially offset by a $1.4 million increase in compensation expenses largely due to increased headcount in our sales and marketing teams and a $0.8 million increase in rent related costs associated with our new larger headquarters. ​ ​ Restructuring charges ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ (in thousands, except percentages) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change Restructuring Charges ​ $ 11 ​ $ 510 ​ $ (499) (98) % Percentage of total revenue ​ — % 5 % ​ ​ ​ ​ 39 Table of Contents In 2024, we incurred restructuring charges as a result of operational changes made to the ECD portfolio.
Having an increased number of authorized but unissued shares of Class A Common Stock allows the Company to take prompt action with respect to corporate. ​ Public Safety Infrastructure Bonds ​ We filed an Offering Circular dated September 29, 2023 (the “Offering Circular”) for the issuance of up to $10.0 million in Public Safety Infrastructure Bonds (the “Bonds”) pursuant to Regulation A of the Securities Act, as amended.
As of June 30, 2025, this note was paid in full. ​ Public Safety Infrastructure Bonds ​ We filed an Offering Circular dated September 29, 2023 (the “Offering Circular”) for the issuance of up to $10.0 million in Public Safety Infrastructure Bonds (the “Bonds”) pursuant to Regulation A of the Securities Act, as amended.
The Company recognizes forfeitures as they occur when calculating stock-based compensation for its equity awards. 39 Table of Contents Results of Operations ​ The following table sets forth certain historical statements of operations data (in thousands) and such data as a percentage of revenue for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 % of Revenue 2023 % of Revenue Revenue, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ $ 7,474 ​ 69 % $ 7,169 ​ 56 % Product ​ ​ 3,331 ​ 31 % ​ 5,628 ​ 44 % Total revenue, net ​ ​ 10,805 ​ 100 % ​ 12,797 ​ 100 % Cost of revenue, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ ​ 11,626 ​ 108 % ​ 9,874 ​ 77 % Product ​ ​ 2,878 ​ 27 % ​ 4,947 ​ 39 % Total cost of revenue, net ​ ​ 14,504 ​ 134 % ​ 14,821 ​ 116 % Gross loss ​ (3,699) (34) % (2,024) (16) % Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 7,061 65 % 6,351 50 % Sales and marketing ​ 5,142 48 % 5,179 40 % General and administrative ​ 13,266 123 % 12,585 98 % Restructuring charges ​ ​ 510 ​ 5 % ​ 149 ​ 1 % Total operating expenses ​ 25,979 240 % 24,264 190 % Loss from operations ​ (29,678) (275) % (26,288) (205) % Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of warrant and derivative liabilities ​ (1,515) (14) % 4,910 38 % Interest income (expense), net ​ ​ (423) ​ (4) % ​ (551) ​ (4) % Other income (expense), net ​ (118) (1) % (189) (1) % Total other income (expense) ​ (2,056) (19) % 4,170 33 % Net loss before income tax expense ​ (31,734) (294) % (22,118) (173) % Income tax expense ​ — — % — — % Net loss ​ $ (31,734) (294) % $ (22,118) (173) % ​ Revenue, net ​ Total revenue, net, of $10.8 million for the year ended December 31, 2024 decreased by $2.0 million compared to the year ended December 31, 2023, primarily in Product revenue due to the company’s decision to restructure its ECD product line, which resulted in significant business disruption as the Company outsourced field services, eliminated positions and consolidated its ECD operations from Irvine, CA to Mountain View, CA.
The Company recognizes forfeitures as they occur when calculating stock-based compensation for its equity awards. 37 Table of Contents Results of Operations ​ The following table sets forth certain historical Statements of Operations data (in thousands) and such data as a percentage of revenue for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands, except percentages) ​ 2025 ​ ​ ​ % of Revenue ​ ​ ​ 2024 ​ ​ ​ % of Revenue Revenue, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ $ 7,968 ​ 70 % $ 7,474 ​ 69 % Product ​ ​ 3,367 ​ 30 % ​ 3,331 ​ 31 % Total revenue, net ​ ​ 11,335 ​ 100 % ​ 10,805 ​ 100 % Cost of revenue, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ ​ 12,324 ​ 109 % ​ 11,626 ​ 108 % Product ​ ​ 3,786 ​ 33 % ​ 2,878 ​ 27 % Total cost of revenue, net ​ ​ 16,110 ​ 142 % ​ 14,504 ​ 134 % Gross loss ​ (4,775) (42) % (3,699) (34) % Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 12,486 110 % 7,061 65 % Sales, general and administrative ​ 16,619 147 % 18,408 170 % Restructuring charges ​ ​ 11 ​ — % ​ 510 ​ 5 % Total operating expenses ​ 29,116 257 % 25,979 240 % Loss from operations ​ (33,891) (299) % (29,678) (275) % Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of warrant and derivative liabilities ​ — — % (1,515) (14) % Interest expense, net ​ ​ (39) ​ — % ​ (423) ​ (4) % Other income (expense), net ​ 115 1 % (118) (1) % Total other income (expense) ​ 76 1 % (2,056) (19) % Net loss before income tax expense ​ (33,815) (298) % (31,734) (294) % Income tax expense ​ — — % — — % Net loss ​ $ (33,815) (298) % $ (31,734) (294) % ​ Revenue, net ​ Total revenue, net, of $11.3 million for the year ended December 31, 2025 increased by $0.5 million or 5% compared to the year ended December 31, 2024. ​ Service revenue, net, which includes revenue generated through MaaS agreements for our ASRs and maintenance and support contracts for our portfolio of ECDs, increased by $0.5 million, or 7%, to $8.0 million, for the year ended December 31, 2025, from $7.5 million for the year ended December 31, 2024.
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. There can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its future operations.
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.
However, there can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all.
Sales of additional equity securities, convertible debt and/or warrants by the Company could result in the dilution of the interests of existing stockholders. However, there can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all.
Please see Note 1 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report. ​ Inventory ​ Inventory, principally purchased components, is stated at the lower of cost or net realizable value. Cost is determined using an average cost, which approximates actual cost on a first-in, first-out basis.
In certain cases, deferred revenue is recognized to account for unfinished contracts. Inventory ​ Inventory, principally purchased components, is stated at the lower of cost or net realizable value. Cost is determined using an average cost, which approximates actual cost on a first-in, first-out basis.
These changes, primarily driven by our decision to exit our production facilities in Irvine, CA and consolidate all operations in Mountain View, CA, included costs related to headcount reduction across production and field services, lease termination, and other relocation, consolidation and exit costs. ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31 ​ ​ ​ ​ ​ ​ 2024 2023 $ Change % Change Change in fair value of warrant and derivative liabilities ​ $ (1,515) ​ $ 4,910 ​ $ (6,425) (131) % Interest income (expense), net ​ ​ (423) ​ ​ (551) ​ ​ 128 ​ 23 % Other income (expense), net ​ ​ (118) ​ ​ (189) ​ ​ 71 ​ 38 % Total other income (expense) ​ $ (2,056) ​ $ 4,170 ​ $ (6,226) ​ (149) % ​ Change in fair value of warrant and derivative liability ​ The change in the fair value of warrant and derivative liability for the year ended December 31, 2024 resulting in other income (expense) of approximately ($1.5) million compared to other income of approximately $4.9 million for the year ended December 31, 2023.
These changes, primarily driven by our decision to consolidate all operations at our headquarters, included costs related to headcount reduction across manufacturing and field services, lease termination, and other relocation, consolidation and exit costs. ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31 ​ ​ ​ ​ ​ (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 ​ ​ (39) ​ ​ (423) ​ ​ 384 ​ 91 % Other income (expense), net ​ ​ 115 ​ ​ (118) ​ ​ 233 ​ 197 % Total other income (expense) ​ $ 76 ​ $ (2,056) ​ $ 2,132 ​ 104 % ​ Change in fair value of warrant and derivative liability ​ The change in the fair value of warrant and derivative liability is attributable to the change in stock prices.
This agreement stipulates monthly purchases of $40,000 commencing in January 2025 and concluding in August 2026, culminating in a total expenditure of $0.8 million . ​ Cash Flow ​ The table below, for the periods indicated, provides selected cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 2023 Net cash used in operating activities ​ $ (22,453) ​ $ (24,155) Net cash used in investing activities ​ (3,178) ​ (5,122) Net cash provided by financing activities ​ 34,475 ​ 26,849 Net change in cash, cash equivalents and restricted cash ​ $ 8,844 ​ $ (2,428) ​ 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, sell and service ECDs, the amount and timing of accounts receivable collections, as well as the amount and timing of disbursements to our vendors. ​ Net cash used in operating activities for the year ended December 31, 2024 decreased by $1.7 million to $22.5 million, compared to $24.2 million for the year ended December 31, 2023.
While no assurance can be given that additional financing will be available on acceptable terms, management believes the Event Risk acquisition improves the Company’s path toward stronger cash generation, enhances overall capital efficiency, and supports the Company’s broader strategy to improve liquidity and capital resources over time. ​ Cash Flow ​ The table below, for the periods indicated, provides selected cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (in thousands) ​ 2025 ​ ​ ​ 2024 Net cash used in operating activities ​ $ (30,345) ​ $ (22,453) Net cash used in investing activities ​ (2,522) ​ (3,178) Net cash provided by financing activities ​ 42,207 ​ 34,475 Net change in cash, cash equivalents and restricted cash ​ $ 9,340 ​ $ 8,844 ​ 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, sell and service ECDs, the amount and timing of accounts receivable collections, as well as the amount and timing of disbursements to our vendors. ​ Net cash used in operating activities for the year ended December 31, 2025 increased by $7.9 million to $30.3 million, compared to $22.5 million for the year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024. ​ Overview ​ Knightscope is dedicated to transforming public safety through AI-driven robotics, emergency communication solutions, and real-time monitoring.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025. ​ Overview ​ Knightscope is a security technology company providing technology-enabled security solutions through ASRs, ECDs, and real-time monitoring capabilities supported by our cloud-based KSOC and our RTX remote monitoring team.
Risk Factors—Risks Related to the Business and the Global Economy—We have not yet generated any profits, anticipate that we will incur continued losses for the foreseeable future, and may never achieve profitability . ​ Our strategy is to try to keep driving a decrease in our overall costs while achieving our overall growth objectives. ​ As of March 27, 2025, the Company had a total backlog of approximately $1.8 million, comprised of $0.5 million related to ASR orders and $1.3 million related to orders for ECDs. ​ 2024 Developments ​ In 2024, the Company made strategic decisions that impacted its operations and its capital structure with the goal to establish a foundation to pursue long-term profitable growth and to simplify its corporate structure.
Risk Factors—Risks Related to the Business and the Global Economy—We have not yet generated any profits, anticipate that we will incur continued losses for the foreseeable future, and may never achieve profitability . ​ As of March 24, 2026, the Company had a total backlog of approximately $3.1 million, comprised of $0.6 million related to ASR orders and $2.5 million related to orders for ECDs. 35 Table of Contents ​ Critical Accounting Estimates ​ The discussion and analysis of our financial condition and results of operations is based upon our accompanying financial statements, which have been prepared in accordance with U.S.
The change in the fair value of the warrant and derivative liability is attributable to the extinguishment of warrants with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B which occurred on August 1, 2024. ​ Interest income (expense), net ​ Interest income (expense), net for the year ended December 31, 2024 was approximately ($0.4) million, compared to interest income (expense), net of approximately ($0.6) million for the year ended December 31, 2023.
Due to the extinguishment of warrants with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B which occurred on August 1, 2024 this liability was zero at December 31, 2024.
The decrease in interest income (expense), net resulted from paying off the convertible notes in 2023, partially offset by interest and issuance costs on the Bonds that were issued in 2023 and 2024. ​ Other income (expense), net ​ Other income (expense), net for the year ended December 31, 2024 was approximately ($0.1) million, as compared to other income (expense), net of ($0.2) million for the year ended December 31, 2023 mainly attributable to the Referral Agreement with Dimension Funding LLC. ​ Liquidity and Capital Resources ​ As of December 31, 2024 and 2023, we had $11.1 million and $2.3 million, respectively, of cash and cash equivalents.
The decrease in interest expense, net was due to increased interest received from interest bearing cash accounts offsetting interest expense from our debt obligations. ​ Other income (expense), net ​ Other income, net for the year ended December 31, 2025 was approximately $0.1 million, as compared to other expense, net of $0.1 million for the year ended December 31, 2024 mainly attributable to reduced third party accounts receivable collection fees. ​ Liquidity and Capital Resources ​ As of December 31, 2025 and 2024, we had $20.6 million and $11.1 million, respectively, of cash and cash equivalents.
The year-over-year increase was due to the Company’s continued investment in the development of new products and in cybersecurity capabilities in support of federal contracts through the use of third-party engineering firms which drove an increase of $0.5 million in professional fees and approximately $0.5 million in increased headcount expense partially offset by $0.3 million in general cost savings. ​ Sales and marketing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ $ Change ​ % Change Sales and marketing ​ $ 5,142 ​ $ 5,179 ​ $ (37) (1) % Percentage of total revenue ​ 48 % 40 % ​ ​ Sales and marketing expense for the year ended December 31, 2024 was approximately $5.1 million and remained relatively flat compared to sales and marketing expense of $5.2 million, for the year ended December 31, 2023. ​ General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ $ Change ​ % Change General and administrative ​ $ 13,266 ​ $ 12,585 ​ $ 681 5 % Percentage of total revenue ​ 123 % 98 % ​ ​ General and administrative (“G&A”) expense for the year ended December 31, 2024 was approximately $13.3 million, compared to G&A expense of approximately $12.6 million, for the year ended December 31, 2023.
The year-over-year increase was due to the Company’s continued investment in new product development through the use of third-party engineering firms which drove an increase of $4.1 million in consulting fees, $0.3 million in supplies and materials, and $0.7 million in increased headcount related expenses and $0.3 million in other general costs. ​ Sales, general and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ (in thousands, except percentages) ​ 2025 ​ ​ ​ 2024 ​ $ Change ​ % Change Sales, general and administrative ​ $ 16,619 ​ $ 18,408 ​ $ (1,789) (10) % Percentage of total revenue ​ 147 % 170 % ​ ​ ​ ​ Sales, general and administrative expense for the year ended December 31, 2025 was $16.6 million, a decrease of $1.8 million from the year ended December 31, 2024.
ASRs, net, consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Raw materials ​ $ 2,465 ​ $ 3,841 ASRs in progress ​ 322 ​ 1,575 Finished ASRs ​ 11,790 ​ 12,130 ​ ​ 14,577 ​ 17,546 Accumulated depreciation on Finished ASRs ​ (5,812) ​ (8,701) ASRs, net ​ $ 8,765 ​ $ 8,845 ​ The components of the Finished ASRs, net at December 31, 2024 and 2023 are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 ASRs on lease or available for lease $ 10,553 $ 10,804 Demonstration ASRs ​ 587 ​ 607 Research and development ASRs ​ 102 ​ 194 Charge boxes ​ 548 ​ 525 ​ ​ 11,790 ​ 12,130 Less: accumulated depreciation ​ (5,812) ​ (8,701) Finished ASRs, net ​ $ 5,978 ​ $ 3,429 ​ Impairment of Long-Lived Assets ​ The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use or eventual disposition.
ASRs, net, were $7.7 million and $8.8 million as of December 31, 2025 and 2024, respectively. ​ Impairment of Long-Lived Assets ​ The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use or eventual disposition.
The increase was driven by an increase in the ASR installed base, lower downtime credits and higher revenue from ECD maintenance and support contracts. ​ Product revenue, net, was $3.3 million for the year ended December 31, 2024, a decrease of $2.3 million or 41% from prior year, primarily from decreased sales of ECDs due to disruptions in production and operations caused by restructuring initiatives. ​ Cost of revenue, net ​ Total cost of revenue, net of $14.5 million for the year ended December 31, 2024 declined by $0.3 million or 2% compared to the year ended December 31, 2023 as $1.8 million higher Service cost of revenue was offset by $2.1 million year-over-year decline in Product cost of revenue during the same period. ​ Service cost of revenue, net, representing the cost of supporting ASR MaaS and maintenance and support agreements related to ECD installations, for the year ended December 31, 2024, was approximately $11.6 million, as compared to approximately $9.9 million for 40 Table of Contents the year ended December 31, 2023, representing an increase of approximately $1.8 million, or 18%.
Although ECD product sales increased year-over-year, supply chain disruptions during 2025, including extended lead times for certain electronic components and reliance on certain limited-source suppliers, resulted in production constraints and delayed shipments that impacted revenue timing. ​ While total revenue increased, growth was constrained by global supply chain disruptions, electronic component shortages, tariff-related cost increases, and inconsistent production scheduling. ​ Cost of revenue, net ​ Total cost of revenue, net of $16.1 million for the year ended December 31, 2025 increased by $1.6 million or 11% compared to the year ended December 31, 2024 as a result of $0.7 million higher service cost of revenue, net and by $0.9 million higher product cost of revenue, net during the same period. ​ 38 Table of Contents Service cost of revenue, net, representing the cost of supporting ASR MaaS deployments and maintenance and support agreements related to ECD installations, for the year ended December 31, 2025 increased by $0.7 million, or 6% to $12.3 million, as compared to $11.6 million for the year ended December 31, 2024.
The decrease in Product revenue was partially offset by an increase in Service revenue. ​ Service revenue, net, which includes revenue generated through MaaS agreements for our ASRs and maintenance and support contracts for our portfolio of ECDs, increased by approximately $0.3 million, or approximately 4%, to $7.5 million, for the year ended December 31, 2024, from $7.2 million for the year ended December 31, 2023.
The increase was driven primarily by higher maintenance and service contracts associated with ECD deployments and higher ASR subscription revenue. ​ Product revenue, net, was $3.4 million for the year ended December 31, 2025, an increase of 1% compared to the year ended December 31, 2024.
Wainwright & Co., LLC, as sales agent, in connection with which we filed 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.
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”). ​ 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.
As of December 31, 2024, the Company also had an accumulated deficit of $193.2 million, working capital of $6.8 million and stockholders’ equity of $15.8 million. These factors raise substantial doubt about our ability to continue as a going concern.
As of December 31, 2025, the Company also had an accumulated deficit of $227.0 million, working capital of $19.8 million, and stockholders’ equity of $27.8 million. For the year ended December 31, 2025, the Company had a net loss of $33.8 million and cash used in operating activities of $30.3 million.
In the event that our public float increases above $75.0 million, we will no longer be subject to the limits in General Instruction I.B.6 of Form S-3. ​ On October 11, 2024, the Company filed a prospectus supplement (the “October Prospectus Supplement”) to amend the June Prospectus Supplement to increase the issuance and sale from time to time to up to $1.347 million in shares of Class A Common Stock subject to, and in accordance with, SEC rules. ​ On November 14, 2024, after our non-affiliated public float subsequently 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 year ended December 31, 2024, we issued 1,716,419 shares of Class A Common Stock under the at-the-market offering program for net proceeds of approximately $22.7 million, net of brokerage and placement fees of approximately $0.9 million. ​ November 2024 Public Offering ​ On November 21, 2024, Knightscope announced the pricing of a public offering of Class A Common Stock and pre-funded warrants, projected to generate gross proceeds of approximately $12.1 million.
As of March 25, 2026, we have approximately $21.7 million remaining to be sold pursuant to the new prospectus supplement and the accompanying prospectus related to the ATM Facility. ​ During the year ended December 31, 2025, the Company issued 6,877,113 shares of Class A Common Stock under the ATM offering program for net proceeds of approximately $42.8 million, net of brokerage and placement fees of approximately $1.2 million. ​ November 2024 Public Offering ​ On November 25, 2024, the Company closed the public offering of its Class A Common Stock and pre-funded warrants for total gross proceeds of $12.1 million.
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Our comprehensive suite of solutions includes Autonomous Security Robots (ASRs), advanced AI-powered detection, emergency communication devices (ECDs), and the cloud-based Knightscope Security Operations Center (KSOC), providing organizations with scalable, 24/7 autonomous protection. ​ Autonomous Security Robots (ASRs) ​ Knightscope’s ASRs deliver proactive public safety solutions for diverse environments.
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During 2025, we continued to operate and refine this integrated platform while investing in next-generation technologies. 33 Table of Contents ​ Total revenue increased to approximately $11.3 million in 2025 from approximately $10.8 million in 2024, driven primarily by growth in service-related revenue and ECD product sales.
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Each model is purpose-deployed to enhance deterrence, situational awareness and threat detection: ​ ● K1 Hemisphere Stationary ASR – Fixed-location presence equipped with license plate, where permitted, ideal for high-traffic areas. ● K3 Indoor Patrol ASR – Compact and quiet, designed for autonomous indoor security in offices, malls, and commercial buildings . ● K5 Outdoor Patrol ASR – A high-visibility deterrent with rugged weatherproof capabilities, ideal for patrolling large perimeters. ● K7 Multi-Terrain ASR – A future product, the K7 ASR is being designed for complex terrains such as large commercial or industrial sites and critical infrastructure. ​ Each mobile ASR is equipped with LiDAR, thermal imaging, high-definition cameras, and real-time AI-driven threat detection to provide comprehensive safety and security intelligence. ​ Knightscope Security Operations Center (KSOC) ​ KSOC serves as the command hub for our ASR fleet, leveraging AI-powered video analytics, automated threat detection, and 24/7 remote monitoring to enhance response times.
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However, significant supply chain constraints, particularly affecting electronic components and certain single-source suppliers within our ECD product line, resulted in extended lead times, intermittent production interruptions, higher input costs, and delivery delays that impacted revenue timing and margin performance during the year. ​ Recent Developments ​ On February 27, 2026, we completed the Event Risk Acquisition of all the issued and outstanding membership interest of Event Risk pursuant to the Event Risk Agreement.
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Key features include: ​ ● AI-driven incident detection for loitering, trespassing, and anomalies. ● Automated reporting and analytics to optimize security planning. ● Integrated emergency communication allowing direct connection between ASRs and human security teams. ​ Emergency Communication Devices (ECDs) and Solutions ​ Knightscope is committed to providing comprehensive public safety solutions, including enhanced emergency communication capabilities.
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As a result of the transaction, Event Risk became a wholly owned subsidiary of the Company.
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Our solar powered K1 Blue Light Towers, Ephones and Emergency Call Boxes offer an immediate lifeline to security personnel, law enforcement, and emergency responders. These systems are strategically deployed in universities, corporate campuses, transit stations, and other public areas to ensure rapid response in critical situations.
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The aggregate purchase consideration consisted of (i) a $5.0 million cash payment at closing, (ii) repayment of Event Risk’s outstanding indebtedness of $1.1 million, (iii) the issuance of 1,724,418 shares of the Company’s Class A Common Stock, (iv) $4.0 million of deferred cash payments, payable in quarterly installments beginning March 31, 2027 through December 31, 2028 and (v) any post-closing purchase price adjustments. ​ See Note 11 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report for additional information on the Event Risk Acquisition and “Item 1A.
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The Knightscope Emergency Monitoring System (“KEMS”), integrated into our ECDs, includes a self-diagnostic, alarm monitoring software solution that provides system owners with 34 Table of Contents daily reports on the operational status of their emergency devices.
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Risk Factors—Risks Related to the Event Risk Acquisition” of this Annual Report for a discussion of the associated risks.
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The cloud-based application monitors the overall system's health, alerts users to operational issues, provides real-time error detection and diagnostics, and generates system performance reports. ​ In addition to our physical communication devices, our ASRs are equipped with emergency call buttons, allowing individuals to establish a direct connection with our 24/7 Security Operations Center (SOC).
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The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Event Risk Agreement filed as an exhibit to this Annual Report on Form 10-K. ​ Autonomous Security Robots (ASRs) ​ Our ASR portfolio includes: ● K1 Hemisphere ● K1 Tower ● K5 ASR ​ Service revenue associated with ASR deployments remained a significant component of our recurring revenue base in 2025.
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This feature provides a critical communication link during emergencies, enhancing presence and responsiveness. ​ We continue to advance our autonomous response capabilities, enabling ASRs to navigate to specific locations, assess threats, and relay real-time information to human operators.
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The K5 platform continued to represent the majority of mobile robot deployments. Revenue from Machine-as-a-Service (“MaaS”) subscriptions remained relatively stable year-over-year, reflecting both ongoing deployments and downtime credits associated with service-level performance. ​ The K7 ASR remains in development and did not contribute revenue in 2025.
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These systems can broadcast pre-recorded messages, provide live two-way audio communication, and integrate with existing infrastructure to facilitate coordinated response efforts. ​ We derive our revenue from two primary sources: a) subscription based Machines-as-a-Service (MaaS) offering which includes the ASRs as well as maintenance, service, support, data transfer, KSOC access, charging stations, and unlimited software, firmware and select hardware upgrades and b) the sale of ECD products and related recurring revenues from KEMS and full-service maintenance contracts. ​ The Company has incurred net losses since inception.
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Engineering resources continued to be allocated toward mechanical design refinement, sensor integration, durability testing, and software integration. Commercial production is not expected until late 2026 or early 2027, subject to development milestones and supply chain readiness. ​ Each deployed ASR integrates light detection and ranging, imaging systems, and AI-based detection capabilities designed to enhance deterrence, situational awareness, and reporting.
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In the short-term, our strategic operational initiatives resulted in unfavorable impacts, including a reduction in revenue and an increase in operational costs.
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Throughout 2025, development efforts focused on improving overall performance. ​ Knightscope Security Operations Center ​ KSOC remains the operational command platform for our deployed fleet.
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However, we firmly believe they are essential investments in our future growth and market positioning and although these decisions have led to lower revenues in the near term, we remain confident in their long-term potential to enhance our competitive advantage, drive sustainable value creation, and position the company for long-term success. ​ Operational changes ​ In the first quarter of 2024, Knightscope undertook significant leadership and governance enhancements to better align the Company with its long-term strategic objectives.
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It supports: ● Real-time monitoring and alert review; ● AI-driven detection for defined events and anomalies; ● Incident documentation and reporting; and ● Integration with emergency communication systems. ​ In 2025, we continued incremental enhancements to KSOC functionality, including alert prioritization improvements and workflow optimization. ​ 34 Table of Contents Emergency Communication Devices and Solutions ​ Our ECD portfolio includes ● K1 Blue Light Towers ● Blue Light Emergency Phones ● Call Boxes ​ ECD revenue increased in 2025, particularly in product sales; however, the segment experienced significant supply chain pressures during the year. ​ Global electronic component shortages, tariff-related cost increases, and extended lead times from certain suppliers - some of which are single-source for specialized components - constrained production schedules and contributed to inconsistent shipment timing.
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We appointed a new Chief Financial Officer and appointed independent board members with extensive industry and financial expertise, strengthening oversight and strategic direction.
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These constraints resulted in higher bill-of-material costs and intermittent production shortfalls, which negatively impacted both revenue timing and gross margin performance. ​ The KEMS continues to support remote monitoring and diagnostics for deployed ECD systems.
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Additionally, throughout the year, we streamlined our management structure by reducing approximately 40% of executive and senior leadership roles, fostering greater efficiency in decision-making and operational execution. ​ Early in 2024, the Company discovered that quality issues plaguing our K5 ASRs in the field would cost too much to resolve and likely have a negative impact on our client experience.
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KEMS functionality remained stable in 2025, with ongoing refinements to monitoring and reporting capabilities. ​ Strategic Resource Allocation in 2025 ​ While 2025 operating performance remained primarily driven by existing ASR and ECD platforms, we allocated capital and engineering resources toward: ● Development of the K7 platform; ● Development of the next generation K1 platform; and ● Evaluation and execution of strategic initiatives, including acquisitions intended to support our evolving hybrid human-and-autonomy operating model. ​ These investments increased research and development activity and were made with the objective of supporting long-term scalability and integration across our hardware, software, and human operations. ​ Operational Considerations ​ During 2025, production schedules and margin performance were affected by: ● Extended supplier lead times; ● Limited availability of certain electronic components; ● Tariff-related input cost increases; and ● Inventory adjustments and absorption variability. ​ We continue to evaluate supplier diversification, procurement strategies, and production planning improvements; however, global supply chain volatility and cost pressures may continue to impact operating performance. ​ We derive our revenue from two primary sources: a) subscription MaaS offering which includes the ASRs as well as maintenance, service, support, data transfer, KSOC access, charging stations, and unlimited software, firmware and select hardware upgrades and b) the sale of ECD products and related recurring revenues from KEMS and full-service maintenance contracts. ​ The Company has incurred net losses since inception.
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Management made the strategic decision to swap out all impacted ASRs with new ones at no cost to our clients. ​ As part of our ongoing commitment to operational excellence, we conducted a comprehensive restructuring of the Emergency Communication Division (ECD), which we acquired through the CASE acquisition in 2022.
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Please see Note 1 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report. ​ Revenue Recognition ASR related revenues The Company derives its revenues from lease of proprietary ASRs along with access to the browser-based interface KSOC through contracts under the lease accounting that typically have a twelve (12)-month term.
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Upon review, it became evident that legacy CASE business processes lacked modern processes, were largely manual, and led to inefficiencies, excessive costs, and financial underperformance.
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In addition, the Company derives non-lease revenue items such as professional services related to ASRs’ deployments, special decals, shipping costs and training if any, recognized when control of these services is transferred to the clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.
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We took decisive action in furtherance of our goal to achieving profitability in the long-term. ​ To address these challenges, we implemented a series of strategic and structural changes, including: 35 Table of Contents ​ ● Outsourcing non-core field services to specialized third-party providers to optimize resources and reduce costs. ● Relocating production from Irvine, CA, to our headquarters in Mountain View, CA, consolidating operations for improved oversight and efficiency. ● Eliminating redundant and inefficient roles, ensuring that our workforce is optimized for streamlined execution. ● Reducing real estate footprint by consolidating operations across fewer locations, enhancing cost efficiency. ● Renegotiating long-term client contracts to align pricing structures with sustainable profitability. ​ Focus on Innovation ​ Throughout the year, the Company also expanded its focus on innovation by investing in new product development and enhancing its technological capabilities.
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ECD related revenues The Company also derives revenues from sales of its ECDs and related services, such as installation, maintenance, and upgrades. Revenue is recognized when clients sign full or partial certificate of completion, at which point, Knightscope can generate an invoice for its products and services.
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To support these initiatives, we increased our R&D headcount and engaged specialized consultants to accelerate the development of key projects such as the K7 ASR. We also invested in advancing our cybersecurity to ensure compliance with federal contract requirements.
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Clients also have the option to sign up for ongoing preventative and maintenance agreements. The maintenance revenue is recognized in the period the service is performed and the Company has determined that term of the contracts has been fulfilled. Installation or upgrades revenue are recognized upon completion of the project/contracts.
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These strategic investments reflect our commitment to strengthening our product portfolio, meeting evolving customer needs, and positioning the Company for success in the public safety technology industry. ​ We believe that these transformative measures will deliver long-term operational and financial benefits, even though they have resulted in temporary disruptions to revenue while increasing short-term costs.
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As discussed above, this was primarily the result of higher material costs, consulting costs and headcount related costs. ​ Research and development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ (in thousands, except percentages) ​ 2025 ​ ​ ​ 2024 ​ $ Change ​ % Change Research and development ​ $ 12,486 ​ $ 7,061 ​ $ 5,425 77 % Percentage of total revenue ​ 110 % 65 % ​ ​ ​ ​ Research and development (“R&D”) expense for the year ended December 31, 2025 was $12.5 million, or 110% of revenue, compared to R&D expense of $7.1 million, or 65% of revenue, for the year ended December 31, 2024.
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We anticipate that these impacts will continue into 2025 as we complete the transition and drive further efficiencies across the entire business.
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There was no such expense for the year ended December 31, 2025. ​ Interest expense, net ​ Interest expense, net for the year ended December 31, 2025 was $39 thousand, compared to interest expense, net of $0.4 million for the year ended December 31, 2024.

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