What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-28 compared with 2022-03-29 · 753 added, 779 removed, 10 unchanged (99% of the section changed)

We are a blank check company

incorporated on June 18, 2020 as a Delaware corporation and formed for the purpose of effectuating a merger, capital stock exchange, asset

acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout

this Annual Report on Form 10-K as our “initial business combination”.

We intend to effectuate our initial business combination

using cash from the proceeds of our initial public offering (the “IPO”) and the private placement of the private warrants

(as defined below), the proceeds of the sale of our shares in connection with our initial business combination (pursuant to any forward

purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other

lenders or the owners of the target, or a combination of the foregoing.

On July 19, 2021, we consummated

the IPO of 15,000,000 units (the “units”).

Each Unit consists of one share of common stock, $0.0001 par value (“common

stock”), one right entitling the holder thereof to receive one-twentieth (1/20) of one share of common stock upon the consummation

of an initial business combination, and one-half of one warrant entitling the holder thereof to purchase one share of Common Stock at

a price of $11.50 per whole share.

The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $150,000,000.

The Company granted the underwriters a 45-day option to purchase up to 2,250,000 additional units to cover over-allotments, if any.

July 28, 2021, the underwriters exercised the over-allotment option in full and purchased an additional 2,250,000 private warrants, generating

gross proceeds of $22,500,000, for an aggregate total of $172,500,000 in gross proceeds from the IPO and closing of the exercise of the

over-allotment option.

Simultaneously with the closing

of the IPO, we consummated the private placement (the “private placement”) with initial stockholders of the Company of 6,500,000

warrants (the “private warrants”), generating total proceeds of $6,500,000.

Simultaneously with the closing of the exercise

of the over-allotment option, the Company consummated the sale of 675,000 private warrants at a purchase price of $1.00 per warrant in

a private placement, generating gross proceeds of $675,000, for an aggregate total of $7,175,000 in gross proceeds from the sale of the

private warrants.

The private warrants are identical to the warrants sold as part of the public Units in the IPO except that the private

warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial

purchasers or their permitted transferees, as further described in the Registration Statement.

Such initial purchasers were granted certain

demand and piggyback registration rights in connection with the purchase of the private warrants.

Following the closing of the

IPO and the over-allotment, an amount of $174,500,000 of the net proceeds from the IPO and the Private Placement (as defined below) were

deposited in a trust account established for the benefit of the Company’s public stockholders.

None of the funds held in trust will

be released from the trust account, other than interest income to pay any tax obligations, until the earlier of (i) the consummation of

our initial business combination and (ii) our failure to consummate a business combination within 12 months (or up to 18 months, if we

extend the time to complete a business combination) of the closing of the IPO.

As of December 31, 2021, there

was $174,230,428 in investments held in the trust account, which includes interest income available to us for franchise and income tax

obligations of $0 and $0 of cash held outside the trust account.

As of December 31, 2021, we have not withdrawn any interest earned from

the trust account to pay taxes.

Recent Developments

Nauticus is a developer of ocean robots, autonomy

software, and services delivered to the marine industries.

Nauticus was initially incorporated as Houston Mechatronics, Inc.

2014, in the State of Texas.

Nauticus is transforming from a business where revenue was primarily generated through engineering service

contracts, with both government and commercial customers, to a company that performs subsea robotic services through various technology-based

Nauticus’ products and services will be primarily delivered to commercial and government-facing customers through a Robotics

as a Service (“RaaS”) business model and direct product sales for both hardware platforms and software licenses.

standalone service offering and forward-facing products, Nauticus’ approach to ocean robotics has also resulted in the development

of a range of technology products for retrofit/upgrading legacy systems and other third-party vehicle platforms.

Nauticus’ services

provide customers with the necessary data collection, analytics, and subsea manipulation capabilities to support and maintain assets while

reducing their operational footprint, operating cost, and greenhouse gas emissions, to improve offshore health, safety, and environmental

The RaaS revenue model emulates

the Software as a Service (“SaaS”) revenue model, which is commonly used for consumer and business software licensing, but

extends the model to include robots.

In the SaaS model, the end user pays a fixed fee for a set period of time in order to use of the

In the case of Nauticus’ RaaS model, clients will be charged a flat fee for performing the service over a period of time

as required to complete the task.

This fixed fee supports full use of Aquanaut, Hydronaut, ToolKITT, the communication infrastructure,

and the personnel required to support the servicing mission.

The RaaS fee approach encompasses the complete technology stack that is required

to complete the contracted work.

This can be contrasted with the industry’s current commercial approach, which bills clients based

on the individual elements for performing the servicing mission (e.g., an itemized invoice for deployment of the equipment, tooling, crew,

boat fuel, vessel, etc.).

With the RaaS model, a flat rate, currently estimated to be $30,000-$50,000/day, will be billed to cover all

equipment and personnel required to perform the service, irrespective of exactly which tasks are being performed.

In Nauticus’ RaaS

model, the subscriber pays for the service and not the rolled-up costs individually, as is frequently done today via an a la carte menu

All other costs are covered in the subscription fee, including the long-term maintenance and servicing of the robots.

stage, Nauticus proposes the use of a RaaS business model for delivering services to commercial clients only.

In contrast to the other robotics

systems, Argonaut is handled differently and does not currently fall under the RaaS business model.

The client base for Argonaut purchases

the platform outright.

There is longer-term service revenue associated with each platform around maintenance and add-on enhancements and

Nauticus’ near-term objective

is to disrupt the current ocean services paradigm through the introduction and integration of advanced robotic technologies.

technologies are supervised autonomy control software, novel robotic platforms capable of implementing autonomous behaviors, acoustic

communications networking protocols, force/torque controllable electric manipulation, perception, artificial intelligence and machine

learning software, and multimodal 3-D workspace sensors.

Implementation of these technologies enables substantially improved operations

at significantly reduced costs and greenhouse gas emissions over conventional methods based on the size of legacy surface support vessels,

their crew, and required communications and power links.

Legacy surface support vessels are typically 75-meter vessels, requiring a large

crew and substantial equipment.

Further, using a tethered remotely operated vehicle (“ROV”), the surface support vessel must

support large spools of communication and power cable that can link the surface to the ROV, for example, down to 3,000m.

This outfit can

cost upwards of $100,000 per day, based on the size of the crew and the cost of the surface support vessel and equipment.

In comparison,

Nauticus’ cost estimates, which it validated through testing of the Hydronaut and Aquanaut, show that these costs can be reduced

significantly when the full complement of Nauticus technologies are deployed.

This is because the cost to outfit and hire the vessel are

reduced, as Hydronaut is an 18-meter vessel, requiring fewer crew and resources.

And the reduced crew and vessel size lead to large reductions

in greenhouse gases emitted during these operations.

Further, because the Aquanaut is an untethered ROV, it does not require the amounts

of communication and power cables that a tethered ROV requires, reducing the cost of operations.

Products, Services and Revenue:

Nauticus is in an industry

that operates on a service-based daily rate model, often with very lengthy master service agreements.

These master service agreements

can span from two to four years, or more, for each device dedicated to one customer, resulting in low utilization per asset.

differentiates itself by employing a more opportunistic view which expands across different customers for shorter periods of time, thus

facilitating higher utilization rates.

However, similar to the current

service model, our RaaS business model (planned for future commercial services but yet to be implemented) is characterized by a recurring

revenue stream granted in exchange for services provided, in this case through usage of our Nauticus robotic vehicles.

The RaaS model

should be considered within a range of revenue models that have this recurring characteristic.

The RaaS model, as described in this prospectus,

covers a range of conventional service contracts through an ongoing contract to provide services in a local area.

As Nauticus deploys

its initial service fleet, we anticipate that the initial services will be paid through conventional contracting methods, directly with

the customer or in regional partnerships with an in-country service entity.

These conventional contracting methods typically

revolve around a long-term master service agreement (MSA) with an end client and service company.

As a go-to-market strategy, Nauticus

Robotics aligned interests with regional partners (e.g., Stinger Technology AS in Norway) to offer this conventional method within already

awarded frame agreements.

This allows Nauticus Robotics to shorten the adoption time of the service technology solution to an end client

without having the end client fully adopt the entire RaaS model.

There is, however, nothing that would prevent the end client from contracting

directly with Nauticus Robotics under the RaaS offering.

This use of the conventional contracting method does not exclude the providing

of such services through the RaaS business model.

Nonetheless, this conventional contracting method provides a quicker alternative if

the RaaS business model is initially undesirable — a prominent reason being that the current contract is not up for rebid until

This allows Nauticus Robotics to provide its technology and enables the client to access it sooner.

This in turn also allows

Nauticus Robotics to rapidly expand into new regions, since it will use the in-country facilities and business resources of the regional

Nauticus’ RaaS business model accommodates

this type of contracting mechanism.

However, as the new service paradigm matures and this technology is utilized by more customers, increased

fleet assets will create a network effect in specific market regions (e.g., the North Sea, Gulf of Mexico, etc.).

These assets will provide

a continuous virtual residency of vehicles that serve the customer base.

This ‘residency’ of available assets will enable

a new approach to services at a further reduced cost, as customers share the operational overhead of supporting this new type of service

infrastructure through ongoing subscription-based contracting.

The RaaS business model will be applied to the

commercial fleet services aspect of our business.

These services will be deployed through various RaaS contracting mechanisms as the market

The ToolKITT software platform is intended to be licensed on a SaaS basis or, in some cases, sold to end customers through a

perpetual license.

In the latter case, end users will be contracted for software support and maintenance.

New versions and upgrades will

be sold to customers set to retain the recurring revenue nature of the SaaS/RaaS model.

Although the sale of Nauticus’ products may

occur on either point sales or RaaS/SaaS models, the fleet services and software (“ToolKITT”) are targeted for this type of

recurring revenue sales.

Other products such as Argonaut (US Defense) and Olympic Arms (for existing ROVs) are anticipated to be sold

through conventional sales contracts with accompanying software licenses.

Aquanaut, the commercial subsea vehicle, may also be sold to

selective customers, when those sales are not expected to cannibalize or compete with other Nauticus fleet services.

To date, Nauticus has generated revenue through

defense contracts utilizing Aquanaut, Hydronaut, Argonaut, ToolKITT and commercial contracts for engineering services and vehicle

The Argonaut has completed final assembly in our facility and is has undergone commissioning testing in the Pacific Ocean, leading

to its acceptance by the customer, a Large Confidential Government Contractor, for further use in US government applications.

intends to continue to support the U.S.

Department of Defense as a contract performer, both on its own and with a Large Confidential Government

These contracts support further technology development for Nauticus and further opportunities to migrate aspects of this work

to the commercial sector.

Both Nauticus and our partner, a Large Confidential Government Contractor, plan to actively pursue sales and

services in the U.S.

defense and intelligence communities through the Argonaut vehicle.

Currently, Nauticus has not completed any material

product sales, and many of its core products are still under development.

Nauticus provided service and support for HaloGuard products,

a red zone monitoring solution.

As of June 2022, Nauticus Robotics Holdings and Transocean negotiated an end to Nauticus Robotics Holdings’

support on the product line in order to focus more on the mainline revenue generating items for Nauticus Robotics Holdings.

The RaaS model is anticipated to commence in late

2023 or 2024 with the Hydronaut and Aquanaut units currently under construction at the expected market rate of $30,000-$50,000 per day.

Since the vehicles will have limited calendar space to generate revenue in 2023, the RaaS service model is expected to account for just

a small portion of 2023 revenues.

Evolution of Aquatic Robotics

The modern ocean robotic vehicles

known as unmanned underwater vehicles (“UUVs”) can be traced to work performed by the U.S.

Navy in the 1960’s.

technology developed through the 1970’s and 1980’s, the oil and gas industry began to utilize this technology to support exploration

projects in water depths that exceeded the capability of human divers.

Since these beginnings, remotely operated vehicles and autonomous

underwater vehicles (“AUVs”) have expanded their reach into many fields beyond the ocean energy marketplace.

These robotic

vehicles have played a key role in exploration and discovery as well as ocean rescue missions.

Today, these vehicles are routinely used

to perform a wide variety of tasks in support of many fields of use, including offshore wind energy and aquaculture.

UUVs generally have two missions:

data gathering or manipulation.

They are operated in two distinct classifications — remotely operated or autonomous.

current vehicle designs are optimized and limited to performing one mission or the other.

The long-range observation and data gathering

missions are often oceanographic data, communication cable inspections, or subsea topographical surveys.

These vehicles are usually AUVs

and are non-hovering, tetherless, ’submarine shaped’ hulls optimized for long range cruising.

Not only do these platforms

neglect any manipulation, they are also less than ideally suited for tasks requiring high maneuverability.

There are some hovering AUVs

and even some that offer limited manipulation.

However, these hydraulic arms are very rudimentary add-on features incapable of complex

coordination or more advanced concepts like goal directed, impedance-force control.

On the other hand, most manipulation

missions are performed by ROV designs.

These tethered robots, which are specifically aimed at subsea manipulation, are attached

to topside support vessels for power and communication.

As such, they take advantage of high data rates and the power-rich environment

afforded by the tether.

Although operator fatigue is a notorious problem, most ROV operators are paid by the hour, and that has unfortunately

held down advancing the state of the art in operational efficiency, control, and manipulation sophistication.

And it is these exact technological

advancements that are required in a communication-poor, power-limited environment.

There is an emerging need for

the hybrid operation:

a highly maneuverable platform that can perform manipulation work and also travel efficiently for tens of kilometers.

This might include deployment from shore or from some other vehicle and then traveling large distances to then perform manipulation or

observation work or both.

Market Opportunity

Although AUV and ROV technology

have progressed over the years, the fundamental solution architecture has not changed from its beginning.

Servicing missions at depth

requires a large surface ship and for intervention tasks, tether spooling systems to be mounted and controlled from the vessel.

the obvious mobilization/demobilization and operating costs of the ship, the tether system introduces its own set of operational challenges

and constraints to account for entanglement and sea current-induced disturbances.

The size and complexity of the tether system contribute

to the size requirements of the vessel.

The current paradigm typically includes onboard crew to operate the ROV, further increasing the

vessel requirements.

The current architecture drives the high cost of this service through the large size of the surface vessel combined

with the encumbrance of the connecting cable between the surface vessel and the ROV.

The Nauticus solution addresses

the primary factors that drive the cost of the current servicing paradigm.

Eliminating the need for the several thousand meters of cable

and therefore the onsite vessel and people using acoustic communications substantially reduces the cost of operations.

In addition to

removing the cost and maintenance of the cable, the surface vessel does not need to accommodate the size and complexity of this system,

reducing its size and associated cost.

Reducing the size of the surface vessel yields cost savings through reduced crew and vessel operating

Importantly, reducing the size of the surface vessel also substantially reduces the carbon expression during servicing operations.

Removing the cable, which provides

high-bandwidth communications between the surface and the ROV, while still performing dexterous manipulation tasks has been a central

technical achievement of Nauticus.

Increasing the autonomy of the ROV through artificial intelligence enables the full set of capabilities

required by the market but achieved through low-bandwidth data links.

In this new control paradigm, high-bandwidth teleoperation gives

way to low-bandwidth supervised autonomy.

Taking the responsibility for robotic interventions from a real-time operator and placing it

with the robot itself also improves performance of the system by reducing task completion times.

This benefit results when the robot,

not the operator, compensates for local disturbances while completing tasks in the workspace.

Another key benefit provided

by Nauticus’ Aquanaut is its unique ability to transform its hull to optimize performance during different phases of the mission.

The AUV-style, hydrodynamically efficient hull configuration enables the robot to traverse long distances when performing subsea pipe

or cable inspections.

After this transit, the vehicle can transform its shape to expose workclass-capable manipulators to interact with

its environment.

This ability to transit long distances and then perform manipulation tasks is enabled by both the vehicle design as well

as the freedom from a cabled surface connection.

This unique capability of the Aquanaut brings new capacity to subsea robotic interventions

and further disrupts the status quo.

Nauticus believes that these

new technical advances will redefine how ocean intervention services are performed.

However, it is possible that these beliefs will prove

For additional discussion of risks relating to operational and financial projections, please see “ Risk Factors — Our

operating and financial projections rely on management assumptions and analyses.

If these assumptions or analyses prove to be incorrect,

our actual operating results may be materially different from its forecasted results .”

The new and unique capabilities

of the Aquanaut represent a significant market opportunity for Nauticus to disrupt the ocean services marketplace, especially given the

lack of comparable systems.

The market for this technology

is vast and covers several independent market segments including offshore renewables, oil & gas, telecommunications, aquaculture,

mining, defense, ports, and shipping, just to name a few.

The worldwide energy (O&G & Wind) IMR services market is projected

to grow based on aging assets with O&G, and asset growth with Offshore Windfarms.

Over the next 4 years, there will be tremendous growth of wind farm infrastructure installed into the global offshore

2 Currently, 25GW of offshore renewables are installed

off the coast of Europe with expectations to double by 2030.

The Biden administration announced the installation of 30GW of offshore

renewables to be installed off American shores by 2030.

In total, this would imply around 15,000 more wind turbines to be installed in

just the United States and Europe.

Today, these markets are served by service companies offering Vessel-based services with the

cost of these services being split substantially on the cost to operate the vessel over the ROV.

https://www.westwoodenergy.com/reports/world-rov-operations-market-forecast-2019-2023 .

https://gwec.net/global-offshore-wind-report-2021/ .

Overall, the Defense market

is expected to perform strongly in the next 5 years as geopolitical tensions continue to indicate that peer competitor and near-peer

competitor engagements are likely in the ocean domain.

Unmanned systems, especially in the maritime domain, will be front and center and

see heavy investment.

Due to the inherent stealth that the undersea domain presents, we believe this area will see a sharp increase in

development spending and acquisitions.

In general, geopolitical tension drives defense spending for reconnaissance and covert littoral

battlefield and deepwater assets such as Argonaut, and agencies that sponsor these developments have affirmed this belief.

had a minimal effect on defense spending on our products.

We have seen some increase in discretionary spending even while COVID-19 has

caused a decrease in government spending in other areas.

We do not expect a reduction in spending from supporting agencies.

The use of technology like

Aquanaut is a significant topic in port security and management but is difficult to properly assess through industry reports alone.

findings through target customer interactions indicate that the size of the port and security market and expected adoption of such technology

in the next three to five years will be substantial.

As a point of reference, there are over 100 major ports worldwide and where

Aquanaut can address the work required to assess port seabed conditions, vessel hull anomalies, sensor placements and retrievals, change

detection monitoring and unauthorized vessel detection.

We plan to have multiple service offerings for the port and harbor security market

through vehicle sales and leases to the customer, including all equipment necessary to conduct Aquanaut missions.

This will lead to Autonomy-

as- a- Service, using the ToolKITT and behavior development license agreements for our customer base.

Aquanaut is an excellent multi-tool,

but many of the ‘tools’ required for the vehicle are software based.

Due to the specific nature of security requests, we believe

that custom development will be a requirement.

We plan to provide over-the-air updates from our Houston-based engineering team to ensure

that vehicles are equipped and qualified with the latest alogrithms in our autonomy framework.

We believe we will have a residual revenue

opportunity through a long-term license for the autonomy updates.

A longer-term market where

Nauticus could expand is Aquaculture, and that segment is expected to increase significantly.

With the world’s population on course

to reach 9.7 billion by 2050, the global demand for protein is expected to grow by 40%.

One way to meet our protein needs is to sustainably maintain both wild fish reserves and farmed fish.

Furthermore, the rising trend of

smart fishing and the increase in seafood trade is also propelling the demand for aquaculture products.

Major factors driving the growth

of the market include rising demand for protein-rich aqua food across the world, rapid adoption of advanced technologies — IoT,

artificial intelligence (“AI”), feeding robots, and underwater remotely operated vehicles on aquaculture farms;

investment and rising R&D expenditure in aquaculture technology worldwide;

and the growing popularity of land-based recirculating

aquaculture systems.

The most addressable portion

of this market today is associated with salmon farming in both Norway and Chile.

Regular net cleaning is important to maintaining the

health of the fish and the current man in the loop semi-automated cleaners damage the netting over time and nets break.

When the nets

break, the fish are lost, but the farmers are also fined for allowing farm fish to escape into the wild population of fish.

Aquanaut-type

vehicles and Aquanaut technologies could reside within the farm and clean the nets more regularly.

The robot could also use its machine

vision technology to measure and classify the net wear characteristics over time, which would trigger preventative maintenance in order

to avoid net breaks, and by doing so, avoid the fine.

The Nauticus Solution

We are developing a portfolio

of ocean robotic vehicles and manipulators controlled by our multi-layered software suite.

This software provides sensed perception of

the environment combined with guidance, navigation, and control of the vehicle.

Additionally, the software suite provides cutting-edge

intelligence to control the dual arm manipulators to perform dexterous tasks.

Complex task execution without a high-bandwidth tether to

the robot necessitates a command-and-control architecture that permits local command authority as well as a level of self-sufficiency

to execute high-level, human-directed tasks.

Many studies have demonstrated that naive implementation of autonomy can result in opaque

systems—meaning that it is difficult to explain their outcomes—unless a focus of the system architecture is the interdependence

between human and robotic systems.

Besides basing our success metrics on operator mental burden, advances in three key areas will differentiate

this architecture.

Those areas are automatic task planning, probabilistic-based perception, and novel data compression.

Our technological innovations

also include:

● A subsea vehicle that can transform its hull shape from a hydrodynamic

transit vehicle to a working ROV mode that exposes two workclass manipulators

● A multi-layered software subsystem that handles vehicle control,

perception, and manipulation supported through machine learning paradigms

● An acoustic-based mesh network communication system that provides

multi-point communication capabilities between multiple subsea vehicles and the sea surface

Henchion M, Hayes M, Mullen AM, Fenelon M, Tiwari B.

Future Protein Supply and Demand:

Strategies and Factors Influencing a Sustainable Equilibrium.

2017;6(7):53.

Published 2017 Jul 20.

doi:10.3390/foods6070053.

We believe the primary drivers

towards the adoption of Nauticus’ products include:

● Substantial reduction in the cost to deliver subsea inspection,

maintenance, and repair services to customers

● Reduced carbon footprint provided by the reduction in size of

the surface vessels required to perform work

● Reduced number of crew exposed to offshore work hazards

● Additional cost savings from fewer vessel days due to improved

operational efficiencies

● Reduction of hydraulic fluid leaks

We believe the benefits of

our robotic systems will have clear implications across many industries, including offshore wind, port security, aquaculture, traditional

energy, subsea mining, and telecommunications.

Strategic Collaborators

We collaborate with market

leaders in complementary technologies such as energy storage and sensors while nurturing market relationships with key customers.

collaborations with high-profile industry leaders provide valuable feedback that we believe will enhance our early mover advantage.

also expect that these relationships will provide us enhanced credibility and better lead generation and conversion of additional potential

Growth Strategy

The key elements of our growth

strategy include:

Accelerate the Development

of our Robotic Systems

Nauticus is committed to the

development of a complete ocean eco-system of robotic technologies.

Each product is developed from an advanced automation perspective

with focus on increased performance, lower cost, and environmentally friendly operations.

The Nauticus product portfolio includes a new

archetype of subsea vehicle, the AURV we call Aquanaut, that can change its configuration to optimize performance during various transit

and manipulation phases of the mission.

Our expertise in dexterous manipulation supports the deployment of electric, subsea manipulators

that will be used by Nauticus for its own vehicles, but may also address a market need to retrofit existing ROV’s with manipulators

that have both workclass strength and reach envelopes.

ToolKITT integrates total robot and vehicle functions that simplify operational

control through ‘mouse clicks’, not joysticks.

This superior approach to operational control of robots reduces both task times

and mission cost.

The Nauticus acoustic communication technology serves as a many-to-many data connection between multiple mobile assets

in the marine environment.

This technology enables multiple robotic actors to participate in complex servicing activities with over-the-horizon

control by remote operators.

These products combine to minimize mission execution cost, enhance safety, and enable the application of

state-of-the-art robotic technologies to the needs of the ocean customer.

Continued Investment

in Innovation

We will continue to invest

significant resources in developing proprietary technologies across hardware, firmware, software, and controls to commercialize our robotic

We expect our research and development activities to focus on various sizes of vehicles and manipulators to meet different market

Improving network data communication to include both acoustic and optical modalities that optimize bandwidth over the near and

far range is also a part of the development roadmap.

Our Product Platforms

We expect to offer a range

of robotic systems that draw on our intellectual property, years of expertise, and innovative core technologies.

The Aquanaut represents a new

type of subsea vehicle that takes advantage of new subsystem technologies to bring best-in-class performance to the ocean realm.

We believe the following to

be the key capabilities of the Aquanaut:

● Transformable hull design that enables efficient operations

in transit (AUV mode) and at the worksite (ROV mode)

● All-electric design for both propulsion and manipulation

● Capable of operating under supervised autonomy and fully autonomous

vehicle control modes

● Multi-modal sensor suite capable of creating a high resolution

3-D map of the near-space environment to support manipulation

● Onboard navigation that enables extended transit to a worksite

Argonaut is a derivative of

the Aquanaut vehicle Argonaut, which has enhanced capabilities for transit and autonomous operations.

This vehicle has been orchestrated

to provide Nauticus’ government-facing customers with the capabilities to perform their specialized mission scenarios.

has completed final assembly in our facility and has undergone commissioning testing in the Pacific Ocean, leading to its acceptance by

the customer, a large confidential government contractor (a “Large Confidential Government Contractor”), for further use in

government applications.

Specifically, this vehicle will be used by a Large Confidential Government Contractor, in conjunction with

Nauticus, to perform under a current contract.

This product and other variants are currently available for direct sales to U.S.

of Defense entities or contractors and will be available in the future for commercial services through a RaaS contract for ongoing services.

An 18m-long, optionally crewed

vessel that will support the real-time operations of Aquanaut in commercial applications.

Hydronaut will ferry Aquanaut to and from the

worksite and support battery recharging and the over-the-horizon communication link to shore.

ToolKITT is a cloud software

platform consisting of interrelated products for ocean sensing, manipulation, autonomous behaviors, survey, search & recovery,

and manual intervention.

This functionality encompasses robotic controls, user interfaces, sensor integration, simulation, data analysis,

and communication frameworks purposely built to enable work subsea.

This software unifies all of Nauticus’ products into a single

control architecture.

This system includes a communications middleware that orchestrates vehicle activities, performs updates, and enables

multi-agent interaction and mission planning.

However, the software platform can also be used across other robotic platforms in the ocean

space and, theoretically, outside of the ocean domain as well.

This product embodies a complete

command and control suite of software components that provide the intelligence necessary to transit and perform work with minimal interventions.

Although the entire suite is comprised of the following components, each one is capable of existing independently, being seamlessly integrated

into existing customer platforms and systems:

● Helmsman — Safe, efficient, reactive,

on-board control system for maritime robotic platforms

● Commander — Mission planning,

autonomy, and direct commanding of maritime robotic platforms

● Wayfinder — Perception-based mapping

and world modelling

● Wavelink — Disruption-tolerant,

secure, communication network for maritime robotic platforms

● Loggerhead — Data collection and

analysis for customer data products and diagnostics

Current Solutions:

Ocean Services utilizing AUVs/ROVs

are based on vessel companies contracting two ways with clients — Long Term Annual Contracts and Spot Market Contracts.

For ROV Vessels, the price can range from $40K/day to $100K/day depending upon specification of vessel with ROVs at $8K/day to $10K/day.

These vessel companies either own their own fleet of AUV/ROVs or they subcontract with an AUV/ROV services providers.

The mobilization

and demobilization costs of the equipment are an additional service fee the majority of the time.

AUVs are utilized within the market

differently than ROVs with smaller survey vessels used that do not have crane systems or DP2 position control classification.

of vessels will cost up to $60K/day with the AUV related costs being between $10 – $20K/day.

Sample of Traditional Energy

Market Service Providers:

● Oceaneering*

● C-Innovations

(*build their own ROVs and

some buy Hugin AUVs from Kongsberg).

Sample of Platform Manufacturers

(Product Sales):

● TechnipFMC (now moving into services)

(Products are sold to service

providers with a margin rate ranging from 30 – 50%.)

Sample of Autonomous Surface

Vessel coupled to Subsea Platform Assets:

● Ocean Infinity

● Reach Subsea

Drawbacks to the current business model:

Contracting is based on discrete

services being rendered, and value gets converted into a day rate.

There is an emphasis on how the job is done and not what job is

done, and it is billable accordingly.

For example, the entire work process is broken down into steps and phases and the service contactor

bills for each step.

There are mobilization costs, trip costs, stand by costs, actual onsite costs, costs for tooling, demobilization

Customers and Partners

Nauticus is actively engaged

in the development of specialized ocean vehicles for U.S.

government interests.

In this work, we are teaming with a Large Confidential

Government Contractor to deliver ocean vehicles that meet the challenging objectives of the U.S.

In the past we have been funded

directly by DARPA to develop our advanced ocean capabilities, and currently, we are partnered with a major defense prime to deliver a

classified system that leverages that technology.

For the go-to-market strategy

in commercial ocean services, Nauticus has teamed with local service providers in the North Sea to leverage their relationships with customers

operating in this active region for ocean energy services.

Through our investment relationships with both Transocean and Schlumberger,

we have in place a global footprint of opportunities to pursue and an infrastructure that can be leveraged to expedite service deployments.

Nauticus currently has developed

two models of subsea robots — Aquanaut and Argonaut.

The vehicles both exhibit the ability to traverse long distances, transform

their hull to expose dual robotic manipulators, perform robotic tasks, and then return to the launch site or other predetermined location.

The Aquanaut is designed to meet commercial requirements related to performing inspection, maintenance, and repair work in subsea oil

& gas and offshore wind energy applications.

Its capabilities could also satisfy the needs for port security and maintenance, aquaculture,

telecommunications, and subsea mining markets.

In this setting, the vehicle performs a variety of tasks, including inspection, maintenance,

and repair of customer assets.

The Argonaut is designed for a different mission set that is driven by the needs of the U.S.

The Argonaut is distinguished from the Aquanaut in several ways, but most importantly, this vehicle is capable of extended

range during transit.

Other distinguishing features include a different sensor complement and improved autonomous behaviors.

has created two separate vehicles for two important markets in order to allow each vehicle to evolve to meet the requirements of its respective

But more importantly, the Argonaut contains technology that makes it International Traffic in Arms Regulations (“ITAR”)

restricted whereas the Aquanaut does not contain such technology.

The initial Aquanaut commercial unit is planned to be delivered in the

second quarter of 2023.

The two remaining Aquanauts are to be delivered in the second and third quarters of 2023.

Nauticus has executed

nonexclusive Memorandums of Understanding (“MOU”) with Norwegian operators, Ramfjord Technologies and Stinger Technology,

to pursue opportunities in the region.

The company also plans to pursue direct contracting opportunities in the North Sea.

In addition, Transocean, Inc.,

the world leader in offshore drilling for oil exploration and production, has been an invested partner with Nauticus since 2018.

Opportunities

to deploy Aquanauts off Transocean drilling rigs have already been extensively discussed between Nauticus and Transocean.

The first Argonaut is in testing

for potential full acceptance in 2023 by a Large Confidential Government Contractor.

The Argonaut is outfitted with special sensors and

equipment to support its deployment on specialized missions for various U.S.

Nauticus has also developed

a full-featured software stack, called ToolKITT, that provides autonomous and semi-autonomous control modes covering all aspects of subsea

vehicle missions.

This software, although indigenous to Nauticus’ own subsea vehicles, can also be deployed in existing ROV’s

to enhance and expand their operational capabilities.

This software is currently showcased in the Defense Innovative Unit contract as

the intelligent machine driving the VideoRay Defender ROV.

At the conclusion of this contract, if Nauticus meets all the program objectives,

it is envisioned that Nauticus will have the opportunity to deploy this software system under license to the U.S.

Navy for use on their

existing Defender ROVs.

Manufacturing and Suppliers

As part of the original development

of engineering prototypes, Nauticus has established supplier relationships with key commercial-off-the-shelf (“COTS”) and

custom part manufacturers.

Consideration is given within our international supply chain for redundancy, where possible.

In cases of limited

supplier options, Nauticus initiates procurement early in the manufacturing schedule to mitigate risk of supply interruption.

Currently, Nauticus manages

a supply chain with many suppliers that specialize in parts aimed toward subsea vehicles.

A shared and key component of Aquanaut and Argonaut

subsea vehicles is the energy storage system — a Li-ion battery.

There are a variety of suppliers available to provide this battery

One battery, in particular, that Nauticus uses is from SubCTech, a German company.

The batteries are a long-lead-time item

and are ordered well in advance of the time they are required to be integrated into the vehicle.

A copy of the most recent SubCTech battery

contract is included as Exhibit 10.20.

However, there are alternative batteries (although not direct replacement and would require integration

work e.g., Kracken), and Nauticus is not necessarily dependent on SubCTech.

In the most extreme event that battery suppliers are unable

to produce battery packs for Nauticus, Nauticus could resort to pulling that subsystem vertical and producing batteries for the subsea

vehicles in house.

Nauticus has tremendous battery design, manufacturing, and assembly expertise, and former NASA energy systems division

experts are on staff.

For parts and fabricated components,

Nauticus is using an outsourced manufacturing strategy to fabricate Aquanauts (subsea vehicle) and Hydronauts (optionally crewed surface

This strategy reduces in-house manufacturing and allows Nauticus to perform the final integration and functional acceptance test

of the Aquanaut prior to shipping.

Two (2) Hydronauts are under construction with Diverse Marine in the United Kingdom, and three (3)

Aquanauts are being fabricated by with International Submarine Engineering in Canada.

Copies of the contracts are included here as Exhibits

10.21 and 10.22, respectively.

Nauticus also has a purchase

contract with iXBlue (France) to purchase a Drix unmanned surface vessel.

This vessel also pairs with the subsea Aquanaut as a communications

node in place of the Hydronaut.

A copy of the contract is included here as Exhibit 10.23.

As we progress toward more

production of our ocean vehicles, trade studies will be conducted to identify subassembly outsourcing options that will reduce the number

of parts required in-house for final assembly at our facility.

We recognize that the outsourcing trades may have advantages in limiting

required lease space, tooling, and personnel requirements, but these benefits may be offset by quality control or other issues leading

to full in-house assembly of the vehicles.

Nauticus is committed to exploring the options that will lead to the most capital-efficient

manufacturing process and support our sales-driven build schedule.

Government Regulation

In addition to our compliance

regarding federal regulations affecting businesses of this type, Nauticus also maintains compliance with the ITAR and Export Administration

Regulations (“EAR”) governing the sale of our technology products.

In addition to these commercial regulations, compliance

with the U.S.

Department of Defense requirements for safeguarding data and other sensitive information is a main focus of the organization.

Intellectual Property

The ability to obtain and maintain

intellectual property protection through patent and trademark filings is important to our business.

Nauticus utilizes a combination of

the protections afforded to the owners of patents, copyrights, trade secrets, and trademarks to secure its intellectual property.

In addition, Nauticus requires employment agreements which stipulate IP protections for the company.

For external relationships, non-disclosure

agreements and other contractual restrictions are used to establish and protect our intellectual property.

Nauticus will file for patent

protection if the invention is believed to be patentable and the resulting patent will be beneficial in protecting the invention in the

marketplaces.

Consideration is also given, particularly with respect to software, as to the benefits of seeking a patent against the associated

market risks of providing public exposure of the invention.

In many cases with our software, Nauticus holds this code and algorithms as

trade secrets.

Nauticus has patented its reconfigurable

hull design for subsea vehicles.

This approach protects the Company’s vehicle configuration that enables it to transit long distances

and then transform into a working robot once at the worksite.

This capability is key to exploiting the vehicle architecture and its tetherless

operational modes.

Similarly, Nauticus has applied for patent protection for its all-electric, workclass robotic manipulators.

These manipulators

are the first in their market class and utilize specialized actuation systems to achieve the strength performance necessary for workclass

This patent was granted on January 24, 2023 under USPTO Number 11559905.

Nauticus has also filed for

protection of our Company name and brand under trademark registration in the United States.

Legal Proceedings

Nauticus is not engaged in

any legal proceedings and there is no legal action anticipated by the company.

We had 93 employees as of December 31,

2022, including our named executive officers.

None of our employees are covered by collective bargaining agreements, and we have not experienced

any strikes or work stoppages related to labor relations issues.

We believe we have good relations with our employees.

Merger Agreement

On December 16, 2021, we entered into an Agreement and Plan of Merger

(as amended by Amendment No.

1 thereto, the “Merger Agreement,” and together with the other agreements and transactions contemplated

by the Merger Agreement, the “Business Combination”) with CleanTech Merger Sub, Inc., a Delaware corporation and a wholly

owned subsidiary of CleanTech (“Merger Sub”), and Nauticus Robotics, Inc., a Texas corporation (“Nauticus”).

to the terms of the Merger Agreement, a business combination between CleanTech and Nauticus will be effected through the merger of Merger

Sub with and into Nauticus, with Nauticus surviving the merger as a wholly owned subsidiary of CleanTech (the “Merger”).

Board of Directors of CleanTech (the “Board”) has unanimously (i) approved and declared advisable the Merger Agreement, the

Merger and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related matters

by the stockholders of CleanTech.

Treatment of Nauticus Securities

Preferred Stock.

prior to the effective time of the Merger (the “Effective Time”) and subject to the consent of the holders of Nauticus’

preferred stock, par value $0.01 per share (the “Nauticus Preferred Stock”), each issued and outstanding share of Nauticus

Preferred Stock shall be converted into shares of the common stock, par value $0.01 per share, of Nauticus (the “Nauticus Robotics

Common Stock”) in accordance with the Nauticus Certificate of Incorporation (collectively, the “Nauticus Preferred Stock Conversion”).

All of the shares of Nauticus Preferred Stock converted into shares of Nauticus Common Stock shall no longer be outstanding and shall

cease to exist, and each holder of Nauticus Preferred Stock shall thereafter cease to have any rights with respect to such securities.

Convertible Notes.

prior to Nauticus Preferred Stock Conversion and prior to the Effective Time, each issued and outstanding convertible promissory note

of Nauticus (the “Nauticus Convertible Notes”) will be automatically converted into shares of Nauticus Common Stock in accordance

with the terms of such Converting Convertible Note (collectively, the “Nauticus Convertible Note Conversion”).

Each Converting

Convertible Note converted into shares of Nauticus Common Stock shall no longer be outstanding and shall cease to exist, and each holder

of a Converting Convertible Note shall thereafter cease to have any rights with respect to such securities.

Common Stock.

At the Effective

Time, by virtue of the Merger and without any action on the part of any Nauticus Stockholder, subject to and in consideration of the terms

and conditions set forth in the Merger Agreement, each share of Nauticus Common Stock that is issued and outstanding immediately prior

to the Effective Time (other than the Dissenting Shares (as defined in the Merger Agreement)), shall be converted into the right to receive

the applicable Per Share Merger Consideration and the Earnout Shares (as defined below).

All of the shares of Nauticus Common Stock converted

into the right to receive consideration shall no longer be outstanding and shall cease to exist, and each holder of Nauticus Common Stock

shall thereafter cease to have any rights with respect to such securities, except the right to receive the applicable consideration into

which such share of Nauticus Common Stock shall have been converted into in the Merger.

Stock Options.

As of the Effective

Time, each option to purchase shares of the Nauticus Common Stock (a “Nauticus Option”) granted under any Nauticus Stock Plan

that is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested or exercisable, shall be assumed

by CleanTech and shall be converted into a stock option (a “CleanTech Option”) to acquire shares of CleanTech’s Common

Stock in accordance with the Merger Agreement.

As of the Effective Time, each such CleanTech Option as so assumed and converted shall

be for that number of shares of CleanTech’s Common Stock determined by multiplying the number of shares of the Nauticus Common Stock

subject to such Nauticus Option immediately prior to the Effective Time by the Exchange Ratio (as defined in the Merger Agreement), which

product shall be rounded down to the nearest whole number of shares, at a per share exercise price determined by dividing the per share

exercise price of such Nauticus Option immediately prior to the Effective Time by the Exchange Ratio.

Earn-Out Shares.

Following the

closing of the merger, former holders of shares of Nauticus Common Stock (including shares received as a result of the Nauticus Preferred

Stock conversion and the Nauticus Convertible Notes conversion) and, former holders of Nauticus stock options, shall each be entitled

to receive their pro rata share of up to 7,500,000 additional shares of CleanTech Common Stock (the “Earn-Out Shares”) if,

within a 5-year period following the signing date of the Merger Agreement, the closing share price of the CleanTech Common Stock equals

or exceeds any of three thresholds over any 20 trading days within a 30-day trading period (each, a “Triggering Event”) and,

in respect of a former holder of Nauticus stock options, the holder continues to provide services to CleanTech or one of its subsidiaries

at the time of such Triggering Event.

Certain Related Agreements

Support Agreements .

connection with the execution of the Merger Agreement, the co-sponsors entered into a support agreement with Nauticus pursuant to which

the co-sponsors have agreed to vote all shares of common stock beneficially owned by them in favor of the Merger.

In addition, in connection

with the execution of the Merger Agreement, certain stockholders of Nauticus owning approximately 88.8% of the voting power of Nauticus

entered into a support agreement with CleanTech and Nauticus pursuant to which the stockholders agreed to vote all shares of Nauticus

beneficially owned by them in favor of the Merger.

On the Closing Date, Nauticus

consummated its previously announced Business Combination pursuant to the Merger Agreement, as amended, by and among Nauticus’ predecessor

CleanTech, Merger Sub and Nauticus Robotics Holdings.

Pursuant to the terms of the Merger Agreement, the Business Combination was effected

through the merger of Merger Sub with and into Nauticus Robotics Holdings, with Nauticus Robotics Holdings surviving the merger as a wholly

owned subsidiary of CleanTech.

On the Closing Date, CleanTech was renamed “Nauticus Robotics, Inc.,” and Nauticus Robotics

Holdings was renamed “Nauticus Robotics Holdings, Inc.”

As a result of the Closing,

among other things, (a) each share of Nauticus Robotics Holdings preferred stock, par value $0.01 per share, that was issued and outstanding

immediately prior to the Closing converted into Old Nauticus Common Stock, in accordance with the certificate of incorporation of Nauticus

Robotics Holdings (the “Preferred Stock Conversion”);

(b) each of the Old Nauticus Convertible Notes was converted into shares

of Old Nauticus Common Stock in accordance with the terms of each such note (the “Convertible Note Conversion”);

share of Old Nauticus Common Stock (including shares of Old Nauticus Common Stock outstanding as a result of the Preferred Stock Conversion

and Convertible Notes Conversion, but excluding shares of the holders who perfected rights of appraisal under Delaware law) was converted

into the right to receive (i) the Per Share Merger Consideration and (ii) Earnout Shares.

In addition, each outstanding

option to purchase shares of Old Nauticus Common Stock (an “Old Nauticus Option”), whether or not then vested and exercisable,

was assumed by CLAQ and converted automatically (and without any required action on the part of such holder of outstanding Old Nauticus

Option) into an option to purchase shares of the CLAQ’s Common Stock equal to the number of shares determined by multiplying the

number of shares of the Old Nauticus Common Stock subject to such Old Nauticus Option immediately prior to the Closing by the Exchange

As a result of the Closing, an aggregate of 3,970,266 shares of Common Stock were reserved for issuance upon exercise of these

Earnout Shares.

Following the closing of the

Merger, former holders of shares of Old Nauticus Common Stock (including shares received as a result of the Preferred Stock Conversion

and the Convertible Notes Conversion, the “Stockholder Earnout Group”) shall be entitled to receive their pro rata share of

up to 7,499,993 additional shares of Common Stock (the “Earnout Shares”).

The Earnout Shares will be released and delivered

to the Stockholder Earnout Group upon occurrence of the following (each, a “Triggering Event”):

one-half of the Earnout Shares will be released if, within a 5-year period following the signing date

of the Merger Agreement, the volume-weighted average price of our Common Stock equals or exceeds $15.00 per share over any 20 trading

days within a 30-day trading period;

one-quarter of the Earnout Shares will be released if, within a 5-year period following the signing date

of the Merger Agreement, the volume-weighted average price of our Common Stock equals or exceeds $17.50 per share over any 20 trading

days within a 30-day trading period;

one-quarter of the Earnout Shares will be released if, within a 5-year period following the signing date

of the Merger Agreement, the volume-weighted average price of our Common Stock equals or exceeds $20.00 per share over any 20 trading

days within a 30-day trading period.

Subscription Agreements.

connection with the execution of the Merger Agreement, CleanTech entered into subscription agreements (collectively, the “Subscription

In connection with the execution of the Merger Agreement, CleanTech entered into subscription agreements (collectively, the “Subscription

Agreements”) with certain parties subscribing for shares of Common Stock (the “Subscribers”) pursuant to which the Subscribers

have agreed to purchase, and CleanTech has agreed to sell to the Subscribers, an aggregate of 3,530,000 shares of common stock, for a

purchase price of $10.00 per share and an aggregate purchase price of $35.3 million.

The obligations to consummate the transactions contemplated

by the Subscription Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the transactions

contemplated by the Merger Agreement.

Securities Purchase

In connection with the execution of the Merger Agreement, CleanTech and Nauticus entered into Securities Purchase Agreement

with certain parties purchasing up to an aggregate of $40,000,000 in principal amount of secured debentures (the “Debentures”)

and warrants (the “Warrants”) equal to 100% of the aggregate issued amount of the Debentures divided by the then conversion

price, with an exercise price equal to $20 per share of Common Stock, subject to adjustment.

The obligations to consummate the transactions

contemplated by the Securities Purchase Agreement are conditioned upon, among other things, customary closing conditions and the consummation

of the transactions contemplated by the Merger Agreement.

purchased, and CleanTech agreed to sell to the Subscribers, an aggregate of 3,100,000 shares of Common Stock, for a purchase price of

$10.00 per share and an aggregate purchase price of $31 million (the “Equity Financing”).

Of the Subscribers, Transocean

and Material Impact II, L.P.

respectively purchased 750,000 and 250,000 shares of Common Stock in the Equity financing at a price

of $10.00 per share and at aggregate respective purchase prices of $7,500,000 and $2,500,000.

Securities Purchase Agreement.

In connection with the execution of the Merger Agreement, Nauticus and Nauticus Robotics Holdings entered into the Securities

Purchase Agreement with certain investors purchasing up to an aggregate of $40.0 million in principal amount of Debentures and warrants

(the “Securities Purchase Agreement”).

The number of shares of Common Stock into which the Debentures are convertible is equal

to 120% of the outstanding principal amount of the Debentures divided by the conversion price of $15.00, and the number of shares of Common

Stock into which the associated warrants are exercisable is equal to 120% of the outstanding principal amount of the Debentures divided

by the conversion price, with an exercise price equal to $20, subject to adjustment (the “Debt Financing,” and together with

the Equity Financing, the “PIPE Investment”).

The exercise price of the associated warrant is subject to (i) customary anti-dilution

and (ii) in the case of a subsequent equity sale at a per share price below the exercise price, the exercise price of the

associated warrant will be adjusted to such lower price, and the number of shares underlying the warrant will increase proportionately.

In the event of a rights offering or dividend, the warrant holder will be treated as though the shares underlying the warrant he/she holds

were outstanding.

These warrants can be exercised on a cashless basis.

There is an original issue discount of 2% from the issued amount

of the Debentures.

Interest accrues on all outstanding principal amount of the Debentures at 5% per annum, payable quarterly.

The Debentures

are secured by first priority interests, and liens on, all present and after-acquired assets of the Company and will mature on the fourth

anniversary of the date of issuance.

ATW, Material Impact Fund II, L.P., and the SLS Family Trust have subscribed for Debentures in the

aggregate principal amount of $36,530,320 (out of the aggregate $40.0 million) which is convertible into 2,922,425 shares of our Common

Stock and associated warrants for an additional 2,922,425 shares.

ATW is managed by ATW Partners Opportunities Management, LLC, which

is an affiliate of Chardan Capital Markets, LLC (“Chardan”), and our former director, Mr.

Jonas Grossman, is the Managing

Partner and President of Chardan.

In addition, our director, Adam Sharkawy, is the managing partner of Material Impact II, L.P.

Amended and Restated

Registration Rights Agreement.

In connection with the Closing, Nauticus, CleanTech and certain stockholders of each of Nauticus

and CleanTech who will receive shares of common stock pursuant to the Merger Agreement, will enter into an amended and restated registration

rights agreement mutually agreeable to CleanTech and Nauticus, which will become effective upon the consummation of the Merger.

Lock-up Agreement and Arrangements .

In connection with the Closing, the Sponsors and certain Nauticus stockholders will enter into a lock-up agreement (the “Sponsor

Lock-Up Agreement” and “Company Stockholder Lock-up Agreement) with Nauticus and CleanTech, pursuant to which each will agree,

subject to certain customary exceptions, not to:

In connection with the Closing, Nauticus Robotics Holdings, CleanTech and certain stockholders

of each of Nauticus Robotics Holdings and CleanTech who received shares of Common Stock pursuant to the Merger Agreement, entered into

an amended and restated registration rights agreement (“Registration Rights Agreement”).

Lock-up Agreement and

Arrangements.

In connection with the Closing, the Sponsors and certain Nauticus Robotics Holdings stockholders entered into

a lock-up agreement (the “Sponsor Lock-Up Agreement” and “Company Stockholder Lock-up Agreement”) with Nauticus

Robotics Holdings and CleanTech, pursuant to which each has agreed, subject to certain customary exceptions, not to:

(i) offer, sell, contract to sell, pledge or otherwise dispose of,

directly or indirectly, any shares of common stock received as merger consideration and held by it immediately after the Effective Time

(the “Lock-Up Shares”), or enter into a transaction that would have the same effect;

(ii) enter into transaction that would have the

same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences

of ownership of any of such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise;

(iii) publicly disclose the

intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage

in any “Short Sales” (as defined in the Sponsor Lock-Up Agreement and Company Stockholder Lock-up Agreement) with respect

to any security of CleanTech;

during a “Lock-Up Period” under their respective agreements.

Under the Sponsor Lock-up Agreement, the Lock-Up

period means the period commencing on the Closing Date and ending on the earlier of (x) the one year anniversary of the Closing Date;

(y) the date on which the volume weighted average price of shares of common stock equals or exceeds $13.00 per share for twenty (20) of

any thirty (30) consecutive trading days commencing after the Closing on Nasdaq, and (z) the date specified in a written waiver duly executed

provided that the restrictions set forth in the Sponsor Lock-up Agreement do not apply to (1) transfers or distributions

to such stockholder’s current or former general or limited partners, managers or members, stockholders, other equity holders or

direct or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as amended) or to the estates

of any of the foregoing;

(2) transfers by bona fide gift to a member of the stockholder’s immediate family or to a trust, the beneficiary

of which is the stockholder or a member of the stockholder’s immediate family for estate planning purposes;

(3) by virtue of the

laws of descent and distribution upon death of the stockholder;

or (4) pursuant to a qualified domestic relations order, in each case

where such transferee agrees to be bound by the terms of the Sponsor Lock-up Agreement.

Under the Company Lock-up Agreement, the Lock-Up

period means the period commencing on the Closing Date and ending on the earlier of (x) the date that is 180 calendar days after the consummation

of the Business Combination, (y) the date on which the volume weighted average price of shares of common stock equals or exceeds $13.00

per share for twenty (20) of any thirty (30) consecutive trading days commencing after the Closing on Nasdaq, and (z) the date specified

in a written waiver duly executed by the Sponsors and CleanTech;

provided that the restrictions set forth in the Company Lock-up Agreement

do not apply to (1) transfers or distributions to such stockholders current or former general or limited partners, managers or members,

stockholders, other equityholders or other direct or indirect affiliates (within the meaning of Rule 405 under the Securities

Act of 1933, as amended) or to the estates of any of the foregoing;

directly or indirectly, any shares of CleanTech Common Stock received as merger consideration and held by it immediately after the Effective

Time (the “Lock-Up Shares”), or enter into a transaction that would have the same effect;

(ii) enter into transaction that would have the same effect, or enter

into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of

such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise;

(iii) publicly disclose the intention to make any offer, sale, pledge

or disposition, or to enter into any transaction, swap, hedge, or other arrangement, or engage in any “Short Sales” (as defined

in the Sponsor Lock-Up Agreement and Company Stockholder Lock-up Agreement) with respect to any security of CleanTech;

during a “Lock-Up

Period” under their respective agreements.

Under the Sponsor Lock-up Agreement,

the Lock-Up Period means the period commencing on the Closing Date and ending on the earlier of (x) the one year anniversary of the

Closing Date;

(y) the date on which the volume weighted average price of shares of Common Stock equals or exceeds $13.00 per share

for twenty (20) of any thirty (30) consecutive trading days commencing after the Closing on Nasdaq, and (z) the date

specified in a written waiver duly executed by Nauticus Robotics Holdings;

provided that the restrictions set forth in the Sponsor Lock-up

Agreement do not apply to (1) transfers or distributions to such stockholder’s current or former general or limited partners,

managers or members, stockholders, other equity holders or direct or indirect affiliates (within the meaning of Rule 405 under the

Securities Act , as amended) or to the estates of any of the foregoing;

(2) transfers by bona fide gift to a member of the stockholder’s

2 unchanged sentences

(3) by virtue of the laws of descent and distribution upon death of the stockholder;

(4) pursuant to a qualified

domestic relations order, in each case where such transferee agrees to be bound by the terms of this Agreement;

(5) transfers or distributions

of, or other transactions involving, securities other than the Lock-up Shares (including, without limitation, securities acquired in the

PIPE or in open market transactions);

or (6) in the case of Angela Berka (or Reginald Berka with respect to any community, marital or

similar interest he may have in the following shares), the transfer of up to 1,000,000 shares of Lock-up Shares in a privately negotiated

sale to another company stockholder, who shall enter into a Lock-Up Agreement (or amend an existing Lock-Up Agreement) containing the

same terms and conditions as this Agreement with respect to such shares, or the entry into any agreement with respect to such a sale entered

into before, at or after the Effective Time.

Director Nomination Agreement.

In connection with the Closing, CleanTech, the Sponsors and Nauticus

entered into a Director Nomination Agreement pursuant to which CleanTech agreed to nominate an individual designated by the Sponsors to

the Board of Directors of the combined company, effective as of immediately prior to the Closing.

Director Designation Agreement .

In connection with the execution of the Merger Agreement, CleanTech,

Nauticus and certain Nauticus stockholders entered into a director designation agreement with Transocean, Inc.

(“Transocean”)

to take all necessary action to cause a member designated by Transocean to remain on, or otherwise be appointed to, the Board, from and

after the effective time of the Merger, as a Class III member of the Board, for an initial term expiring at the third annual meeting following

the date of the Second Amended and Restated Certificate of Incorporation to be adopted in connection with the Merger.

Indemnification Agreements.

connection with the Closing, CleanTech has agreed to enter into customary indemnification agreements, in form and substance reasonably

acceptable to CleanTech and Nauticus, with the individuals who will be nominated and, subject to stockholder approval, elected to CleanTech’s

board of directors effective as of the Closing.

Business Strategy

If the Business Combination

with Nauticus does not close, our business strategy is to identify and acquire a rapidly growing operating company on the cutting edge

of the CleanTech or ClimateTech sectors.

Our management team, along with our board of directors and advisers will bring unique, attractive

opportunities for us to analyze and ultimately acquire.

Once selected, we will leverage our team’s vast experience to help said

company grow and achieve additional unrealized value for stockholders.

The climate problem requires mobilization of both private and public

sectors, and our team’s varied experience in the public, governmental, private, and corporate sectors gives us an ideal combination

and balance of perspectives, resources, and expertise.

Acquisition Criteria

If the Business Combination

with Nauticus does not close, we have identified the following general criteria and guidelines that we believe are critical to evaluating

prospective companies within our targeted sub-sector:

● Disruptive mission driven technology companies in the CleanTech

and ClimateTech sectors positioned to capitalize on changing macroeconomic forces.

● Strong business case for high growth and high impact;

● Sustainable competitive advantages including a strong intellectual

property portfolio.

● Opportunities for growth, organically or through follow-on acquisitions;

● Positioned to benefit from our team’s deep network and

subject matter expertise;

● Best in class management team with a unique vision;

● A robust existing investor base who are aligned with management

on the long-term goals and vision of the company

● Ability to benefit from access to the public markets.

Notwithstanding the foregoing,

these criteria and guidelines are not intended to be exhaustive.

Any evaluation relating to the merits of a particular initial business

combination may or may not be based, to the extent relevant, on these general criteria and guidelines as well as other considerations,

factors, benchmarks and guidelines that our management may deem relevant.

Our Acquisition Process

If the Business Combination

with Nauticus does not close, our team’s network will give us exclusive access to a strong pipeline of opportunities in the cleantech

Our acquisition process will

involve an extensive due diligence, valuation and analysis which will consist of multiple discussions with current management, financial

projection reviews, review of the prospective targets’ intellectual property portfolio among other items.

The process will consist

of financial and operational due diligence, on site walkthroughs and a full legal diligence.

We will retain third-party advisors

as necessary to advise us during the due diligence process as well.

Our evaluation will focus on

finding mission driven CleanTech and ClimateTech companies with strong market positions poised to capitalize on changing macroeconomic

We will look for a business with a strong intellectual property portfolio or a significant competitive advantage in its sector

either through brand recognition or a meaningful first mover advantage.

The final step of our acquisition

process will be approval by our board of directors.

Our board of directors, a majority of whom are independent directors and each of whom

has considerable experience and expertise in the sector, will review the proposed combination and reach a decision on its merits consistent

with their fiduciary responsibilities to the stockholders.

We are not prohibited from

pursuing an initial business combination with a company that is affiliated with our sponsor, co-sponsor, officers or directors.

event we seek to complete our initial business combination with a company that is affiliated with our sponsor, co-sponsor or any

of our officers or directors, we, or a committee of our independent directors, if required by applicable law or based upon the decision

of our board of directors or a committee thereof, will obtain an opinion that our initial business combination is fair to us from a financial

point of view from either an independent investment banking firm or an independent accounting firm.

Our co-sponsors, directors and members of our management team may directly

or indirectly own our founder shares, common stock and/or private placement warrants, and, accordingly, may have a conflict of interest

in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination

if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with

respect to our initial business combination.

Each of our officers and directors

presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which

such officer or director is or will be required to present a business combination opportunity.

Accordingly, if any of our officers or

directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she then has fiduciary or

contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity.

We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors will materially affect

our ability to complete our business combination.

In addition, our co-sponsors,

officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to

completion of our initial business combination.

As a result, our co-sponsors, officers or directors could have conflicts of interest in

determining whether to present business combination opportunities to us or to any other blank check company with which they may become

Initial Business Combination

Nasdaq rules require that we

must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held

in the trust account (excluding taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement

in connection with our initial business combination.

Our co-sponsors and board of directors will make the determination as to the

fair market value of our initial business combination.

If our co-sponsor or board of directors is not able to independently determine

the fair market value of our initial business combination, we may obtain an opinion from an independent investment banking or accounting

firm as to the fair market value of the target business.

Each business combination will be approved by our co-sponsors and a majority

of our independent directors.

If the Business Combination

with Nauticus does not close, we anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company

in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses,

or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the

target business in order to meet certain objectives of the target management team or stockholders, or for other reasons.

However, we will

only complete our initial business combination only if the post-transaction company in which our public stockholders own shares will

own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target

sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or

the “Investment Company Act.” Even if the post-transaction company owns 50% or more of the voting securities of the target,

our stockholders prior to the business combination may collectively own a minority interest in the post-business combination company,

depending on valuations ascribed to the target and us in the business combination transaction.

If less than 100% of the equity

interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such

business or businesses that is owned or acquired is what will be valued for purposes of the 80% test, provided that in the event that

the business combination involves more than one target business, the 80% test will be based on the aggregate value of all of the target

Effecting a Business Combination

We are not presently engaged in, and we will not engage in, any operations

for an indefinite period of time.

We intend to effectuate our initial business combination using cash from the proceeds of the IPO and

the private placement of the private warrants, our shares, new debt, or a combination of these, as the consideration to be paid in our

initial business combination.

We may seek to consummate our initial business combination with a company or business that may be financially

unstable or in its early stages of development or growth (such as a company that has begun operations but is not yet at the stage of commercial

manufacturing and sales), which would subject us to the numerous risks inherent in such companies and businesses, although we will not

be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

If our initial business combination

is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase

price in connection with our business combination or used for redemptions of purchases of our common stock, we may apply the cash released

to us from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion

of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business

combination, to fund the purchase of other companies or for working capital.

Subject to the requirement

that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at

least 80% of the value of the trust account (excluding any taxes payable on the income earned on the trust account) at the time of the

agreement to enter into such initial business combination, we have virtually unrestricted flexibility in identifying and selecting one

or more prospective target businesses.

Accordingly, there is no current basis for investors in the IPO to evaluate the possible merits

or risks of the target business with which we may ultimately complete our initial business combination.

Although our management will assess

the risks inherent in a particular target business with which we may combine, this assessment may not result in our identifying all risks

that a target business may encounter.

Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to

control or reduce the chances that those risks will adversely impact a target business.

We may seek to raise additional

funds through a private offering of debt or equity securities in connection with the consummation of our initial business combination,

and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust

Subject to compliance with applicable securities laws, we would consummate such financing only simultaneously with the consummation

of our business combination.

In the case of an initial business combination funded with assets other than the trust account assets, our

tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required

by law or Nasdaq, we would seek stockholder approval of such financing.

There are no prohibitions on our ability to raise funds privately

or through loans in connection with our initial business combination.

At this time, we are not a party to any arrangement or understanding

with any third party with respect to raising any additional funds through the sale of securities or otherwise.

Sources of Target Businesses

If the Business Combination with Nauticus does not close, we anticipate

that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture

capital funds, private equity groups, leveraged buyout funds, management buyout funds and other members of the financial community.

businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings.

These sources also may introduce us to target businesses in which they think we may be interested on an unsolicited basis.

and directors, as well as their affiliates, also may bring to our attention target business candidates that they become aware of through

their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or

In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be

available to us as a result of the business relationships of our officers and directors.

While we do not presently anticipate engaging

the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these

firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined

in an arm’s length negotiation based on the terms of the transaction.

We will engage a finder only to the extent our management

determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us

on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue.

Payment of finder’s

fees is customarily tied to completion of a transaction, in which case any such fee may be paid out of the funds held in the trust account.

Although some of our officers and directors may enter into employment or consulting agreements with the acquired business following our

initial business combination, the presence or absence of any such arrangements will not be used as a criterion in our selection process

of an acquisition candidate.

We are not prohibited from

pursuing an initial business combination with a company that is affiliated with our co-sponsors, officers or directors.

In the event we

seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion

from an independent investment banking firm or another independent entity that commonly renders valuation opinions on the type of target

business we seek to acquire that such an initial business combination is fair to our stockholders from a financial point of view.

Selection of a Target Business and Structuring

of a Business Combination

Subject to the requirement

that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at

least 80% of the value of the trust account (excluding any taxes payable on the income earned on the trust account) at the time of the

agreement to enter into such initial business combination, our management will have virtually unrestricted flexibility in identifying

and selecting one or more prospective target businesses.

In any case, we will only consummate an initial business combination in which

we become the majority shareholder of the target (or control the target through contractual arrangements in limited circumstances for

regulatory compliance purposes as discussed below) or are otherwise not required to register as an investment company under the Investment

Company Act, or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than

a majority of the voting rights in such entity, but in which we are the primary beneficiary.

There is no basis for investors in the IPO

to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages

of development or growth (such as a company that has begun operations but is not yet at the stage of commercial manufacturing and sales),

we may be affected by numerous risks inherent in such company or business.

Although our management will endeavor to evaluate the risks

inherent in a particular target business, we may not properly ascertain or assess all significant risk factors.

In evaluating a prospective

target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent

management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial

and other information made available to us.

The time required to select

and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,

are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification and evaluation of

a prospective target business with which a business combination is not ultimately completed will result in our incurring losses and will

reduce the funds we can use to complete another business combination.

We will not pay any finders or consulting fees to members of our

management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.

Fair Market Value of Target Business or

The target business or businesses

or assets with which we effect our initial business combination must have a collective fair market value equal to at least 80% of the

value of the trust account (excluding any taxes payable on the income earned on the trust account) at the time of the agreement to enter

into such initial business combination.

If we acquire less than 100% of one or more target businesses in our initial business combination,

the aggregate fair market value of the portion or portions we acquire must equal at least 80% of the value of the trust account at the

time of the agreement to enter into such initial business combination.

However, we will always acquire at least a controlling interest

in a target business.

The fair market value of a portion of a target business or assets will likely be calculated by multiplying the fair

market value of the entire business by the percentage of the target we acquire.

We may seek to consummate our initial business combination

with an initial target business or businesses with a collective fair market value in excess of the balance in the trust account.

to consummate such an initial business combination, we may issue a significant amount of debt, equity or other securities to the sellers

of such business and/or seek to raise additional funds through a private offering of debt, equity or other securities.

If we issue securities

in order to consummate such an initial business combination, our stockholders could end up owning a minority of the combined company’s

voting securities as there is no requirement that our stockholders own a certain percentage of our company (or, depending on the structure

of the initial business combination, an ultimate parent company that may be formed) after our business combination.

Because we have no

specific business combination under consideration, we have not entered into any such arrangement to issue our debt or equity securities

and have no current intention of doing so.

The fair market value of a

target business or businesses or assets will be determined by our board of directors based upon standards generally accepted by the financial

community, such as actual and potential gross margins, the values of comparable businesses, earnings and cash flow, book value, enterprise

value and, where appropriate, upon the advice of appraisers or other professional consultants.

Investors will be relying on the business

judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market

value of a particular target business.

If our board of directors is not able to independently determine that the target business or assets

has a sufficient fair market value to meet the threshold criterion, we will obtain an opinion from an unaffiliated, independent investment

banking firm or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire

with respect to the satisfaction of such criterion.

Notwithstanding the foregoing, unless we consummate a business combination with an

affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or another independent entity

that commonly renders valuation opinions on the type of target business we seek to acquire, that the price we are paying is fair to our

stockholders.

Lack of Business Diversification

For an indefinite period of

time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance

of a single business.

Unlike other entities that have the resources to complete business combinations with multiple entities in one or

several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in

a single line of business.

By consummating our initial business combination with only a single entity, our lack of diversification may:

● subject us to negative economic, competitive and regulatory

developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial

business combination, and

● cause us to depend on the marketing and sale of a single product

or limited number of products or services.

Limited Ability to Evaluate the Target’s

Management Team

Although we intend to closely

scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination

with that business, our assessment of the target business’ management may not prove to be correct.

The future role of members of

our management team, if any, in the target business cannot presently be stated with any certainty.

Consequently, members of our management

team may not become a part of the target’s management team, and the future management may not have the necessary skills, qualifications

or abilities to manage a public company.

Further, it is also not certain whether one or more of our directors will remain associated in

some capacity with us following our initial business combination.

Moreover, members of our management team may not have significant experience

or knowledge relating to the operations of the particular target business.

Our key personnel may not remain in senior management or advisory

positions with the combined company.

The determination as to whether any of our key personnel will remain with the combined company will

be made at the time of our initial business combination.

Following our initial business

combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.

We may not have

the ability to recruit additional managers, or to ascertain that additional managers will have the requisite skills, knowledge or experience

necessary to enhance the incumbent management.

Stockholders May Not Have the Ability to

Approve an Initial Business Combination

In connection with any proposed

business combination, we will either (1) seek stockholder approval of our initial business combination at a meeting called for such

purpose at which public stockholders may seek to convert their public shares, regardless of whether they vote for or against the proposed

business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of

taxes payable) or (2) provide our public stockholders with the opportunity to sell their public shares to us by means of a tender

offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate

amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein.

Notwithstanding

the foregoing, our initial stockholders have agreed, pursuant to written letter agreements with us, not to convert any public shares held

by them into their pro rata share of the aggregate amount then on deposit in the trust account.

In order for a public stockholder

to have his, her or its shares redeemed for cash in connection with any proposed business combination, we may require that the public

stockholders vote either in favor of or against a proposed business combination.

If required to vote pursuant to the procedures specified

in our proxy statement to stockholders relating to the business combination, and a public stockholder fails to vote in favor of or against

the proposed business combination, whether that stockholder abstains from the vote or simply does not vote, that stockholder would not

be able to have his, her or its shares of common stock redeemed to cash in connection with such business combination.

we determine to engage in a tender offer, such tender offer will be structured so that each stockholder may tender any or all of his,

her or its public shares rather than some pro rata portion of his, her or its shares.

The decision as to whether we

will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer

will be made by us based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would

otherwise require us to seek stockholder approval.

If we so choose and are legally permitted to do so, we have the flexibility to avoid

a stockholder vote and allow our stockholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange

Act which regulate issuer tender offers.

In that case, we will file tender offer documents with the SEC which will contain substantially

the same financial and other information about the initial business combination as is required under the SEC’s proxy rules.

will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and,

solely if we seek stockholder approval, a majority of the issued and outstanding shares of common stock voted are voted in favor of the

business combination.

chose our net tangible asset threshold of $5,000,001 to ensure that we are not subject to Rule 419 promulgated under the Securities

However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital

closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial

business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may

be required to have a lesser number of shares converted or sold to us), and may force us to seek third party financing which may not

be available on terms acceptable to us or at all.

As a result, we may not be able to consummate such initial business combination and

we may not be able to locate another suitable target within the applicable time period, if at all.

Public stockholders may therefore

have to wait 12 months (or up to 18 months, as applicable) from the closing of the IPO in order to be able to receive a pro

rata share of the trust account.

initial stockholders and our officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of

any proposed business combination, (2) not to convert any shares of common stock in connection with a stockholder vote to approve

a proposed initial business combination and (3) not sell any shares of common stock in any tender in connection with a proposed

initial business combination.

As a result, if we sought stockholder approval of a proposed transaction, we would need only (i) 937,501

of our public shares (or approximately 6.25% of our public shares) to be voted in favor of the transaction in order to have such transaction

approved (assuming that only a quorum was present at the meeting, that the over-allotment option is not exercised and that the initial

stockholders do not purchase any units in the IPO or units or shares in the after-market), or (ii) 5,625,001 of our public shares (or

approximately 37.5% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming

that all outstanding shares were present at the meeting, that the over-allotment option is not exercised and that the initial stockholders

do not purchase any units in the IPO or units or shares in the after-market).

we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention

to vote, against such proposed business combination, our officers, directors, initial stockholders or their affiliates could make such

purchases in the open market or in private transactions in order to influence the vote.

Notwithstanding the foregoing, our officers,

directors, initial stockholders and their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2)

or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.

Conversion/Tender

connection with any meeting called to approve an initial business combination, public stockholders may seek to convert their public shares,

regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate

amount then on deposit in the trust account, less any taxes then due but not yet paid.

A public stockholder may be required to vote for

or against a proposed business combination in order to have his, her or its shares of common stock redeemed for cash.

If required to

do so, and the stockholder fails to vote for or against a proposed business combination, that stockholder would not be able to have his,

her or its shares of common stock redeemed.

Notwithstanding the foregoing, our initial stockholders have agreed, pursuant to written

letter agreements with us, not to convert any public shares held by them into their pro rata share of the aggregate

amount then on deposit in the trust account.

If we hold a meeting to approve an initial business combination, a holder will always have

the ability to vote against a proposed business combination and not seek conversion of his, her or its shares.

Alternatively,

if we engage in a tender offer, each public stockholder will be provided the opportunity to sell its public shares to us in such tender

The tender offer rules require us to hold the tender offer open for at least 20 business days.

Accordingly, this is the minimum

amount of time we would need to provide holders to determine whether they want to sell their public shares to us in the tender offer

or remain an investor in our company.

initial stockholders, officers and directors will not have conversion rights with respect to any shares of common stock owned by them,

directly or indirectly, whether acquired prior to the IPO or purchased by them in the IPO or in the aftermarket.

may also require public stockholders, whether they are a record holder or hold their shares in “street name,” to either tender

their certificates (if any) to our transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust

Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, at any time at or prior to the vote on the

business combination.

The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed

business combination will indicate whether we are requiring stockholders to satisfy such delivery requirements.

Accordingly, a stockholder

would have from the time our proxy statement is mailed through the vote on the business combination to deliver his, her or its shares

if the holder wishes to seek to exercise his conversion rights.

Under Delaware law, we are required to provide at least 10 days’

advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to

exercise conversion rights.

As a result, if we require public stockholders who wish to convert their shares of common stock into the

right to receive a pro rata portion of the funds in the trust account to comply with the foregoing delivery requirements,

holders may not have sufficient time to receive the notice and deliver their shares for conversion.

Accordingly, investors may not be

able to exercise their conversion rights and may be forced to retain our securities when they otherwise would not want to.

The conversion

rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.

is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC

The transfer agent will typically charge the tendering broker $45, and it would be up to the broker whether or not to pass this

cost on to the converting holder.

However, this fee would be incurred regardless of whether or not we require holders seeking to exercise

conversion rights.

The need to deliver shares is a requirement of exercising conversion rights regardless of the timing of when such

delivery must be effectuated.

However, in the event we require stockholders seeking to exercise conversion rights to deliver their shares

prior to the consummation of the proposed business combination and the proposed business combination is not consummated, this may result

in an increased cost to stockholders.

request to convert or tender such shares, once made, may be withdrawn at any time up to the vote on the proposed business combination

or expiration of the tender offer.

Furthermore, if a holder of a public share delivered its certificate in connection with an election

of their conversion or tender and subsequently decides prior to the vote on the business combination or the expiration of the tender

offer not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their

conversion or tender rights would not be entitled to convert their shares for the applicable pro rata share of the trust

In such case, we will promptly return any shares delivered by public holders.

of Trust Account if No Business Combination

If we do not complete a business

combination within 12 months from the closing of the IPO, we will (i) cease all operations except for the purpose of winding

up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public

shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders

and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware

law to provide for claims of creditors and the requirements of other applicable law.

However, if we anticipate that we may not be able

to consummate our initial business combination within 12 months, our initial stockholders or their affiliates may, but are not obligated

to, extend the period of time to consummate an initial business combination 2 times by an additional three months each time (for a total

of up to 18 months to complete an initial business combination) without the need for a separate stockholder vote.

Pursuant to the

terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between us and Continental Stock

Transfer & Trust Company, the only way to extend the time available for us to consummate our initial business combination without

the need for a separate stockholder vote is for our initial stockholders or their affiliates or designees, upon five days’ advance

notice prior to the applicable deadline, to deposit into the trust account $1,725,000 ($0.10 per public share, or an aggregate of $3,450,000

if extended for each of the full three months), on or prior to the date of the applicable deadline.

Pursuant to our amended and restated

certificate of incorporation and the trust agreement, if such funds are not deposited, the time to complete an initial business combination

cannot be extended unless our stockholders otherwise approve an extension on different terms.

In the event that they elected to extend

the time to complete our initial business combination and deposited the applicable amount of money into trust, the initial stockholders

would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in

the event that we are unable to close a business combination unless there are funds available outside the trust account to do so.

note would be paid upon consummation of our initial business combination.

There will be no redemption rights or liquidating distributions

with respect to our rights or warrants, which will expire worthless if we fail to complete our business combination within the time period.

the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent

of distributions received by them in a dissolution.

The pro rata portion of our trust account distributed to our public stockholders

upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within

the required time period may be considered a liquidation distribution under Delaware law.

If the corporation complies with certain procedures

set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims

against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a

90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any

redemptions are made to stockholders, any liability of stockholders with respect to a redemption is limited to the lesser of such stockholder’s

pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after

the third anniversary of the dissolution.

if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares

in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution

under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General

Corporation Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,

instead of three years, as in the case of a liquidation distribution.

It is our intention to redeem our public shares as soon as reasonably

possible following the 15 th month (or up to the 18 th month, as applicable) from the closing of the IPO

and, therefore, we do not intend to comply with the above procedures.

As such, our stockholders could potentially be liable for any claims

to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third

anniversary of such date.

we will not be complying with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation

Law requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending

claims or claims that may be potentially brought against us within the subsequent 10 years.

However, because we are a blank check

company, rather than an operating company, and our operations will be limited to seeking to complete an initial business combination,

the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.

will seek to have all third parties (including any vendors or other entities we engage after the IPO) and any prospective target businesses

enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind they may have in or to any

monies held in the trust account.

The underwriters in the IPO will execute such a waiver agreement.

a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any

liability extending to the trust.

We therefore believe that any necessary provision for creditors will be reduced and should not have

a significant impact on our ability to distribute the funds in the trust account to our public stockholders.

Nevertheless, there is no

guarantee that vendors, service providers and prospective target businesses will execute such agreements.

In the event that a potential

contracted party refuses to execute such a waiver, we will execute an agreement with that entity only if our management first determines

that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing

to execute such a waiver.

Examples of instances where we may engage a third party that refuses to execute a waiver would be the engagement

of a third party consultant who cannot sign such an agreement due to regulatory restrictions, such as our auditors who are unable to

sign due to independence requirements, or whose particular expertise or skills are believed by management to be superior to those of

other consultants that would agree to execute a waiver, or a situation in which management does not believe it would be able to find

a provider of required services willing to provide the waiver.

There is also no guarantee that, even if third parties execute such agreements

with us, they will not seek recourse against the trust account.

Certain of our insiders have agreed that they will be jointly and severally

liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business

with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below $10.10 per

public share, except as to any claims by a third party who executed a valid and enforceable agreement with us waiving any right, title,

interest or claim of any kind they may have in or to any monies held in the trust account and except as to any claims under our indemnity

of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Our board of directors

has evaluated such insiders’ financial net worth and believes they will be able to satisfy any indemnification obligations that

However, these insiders may not be able to satisfy their indemnification obligations, as we have not required them to retain

any assets to provide for their indemnification obligations, nor have we taken any further steps to ensure that they will be able to

satisfy any indemnification obligations that arise.

Moreover, these insiders will not be liable to our public stockholders, and instead

will only have liability to us.

As a result, if we liquidate, the per-share distribution from the trust account could be less than

the estimated $10.10 due to claims or potential claims of creditors.

We will distribute to all of our public stockholders, in proportion

to their respective equity interests, an aggregate sum equal to the amount then held in the trust account, inclusive of any interest

not previously released to us, subject to our obligations under Delaware law to provide for claims of creditors.

we are unable to consummate an initial business combination and are forced to redeem 100% of our outstanding public shares for a portion

of the funds held in the trust account, we anticipate notifying the trustee of the trust account to begin liquidating such assets promptly

after such date, and anticipate it will take no more than 10 business days to effectuate the redemption of our public shares.

have waived their rights to participate in any redemption with respect to their insider shares.

We will pay the costs of any subsequent

liquidation from our remaining assets outside of the trust account.

If such funds are insufficient, our insiders have agreed to pay the

funds necessary to complete such liquidation (currently anticipated to be no more than approximately $50,000), and have agreed not to

seek repayment of such expenses.

Each holder of public shares will receive a pro rata portion of the amount then in the trust account,

plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes.

The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims

of public stockholders.

public stockholders shall be entitled to receive funds from the trust account only in the event of our failure to complete our initial

business combination in the required time period or if the stockholders seek to have us convert their respective shares of common stock

upon a business combination which is actually completed by us.

In no other circumstances shall a stockholder have any right or interest

of any kind to or in the trust account.

we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held

in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims

of third parties with priority over the claims of our stockholders.

To the extent any bankruptcy claims deplete the trust account, the

per share redemption or conversion amount received by public stockholders may be less than $10.10.

after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy

petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor

and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy

court could seek to recover all amounts received by our stockholders.

In addition, our board of directors may be viewed as having breached

its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by

paying public stockholders from the trust account prior to addressing the claims of creditors.

Claims may be brought against us for these

certificate of incorporation contains certain requirements and restrictions relating to the IPO that will apply to us until the consummation

of our initial business combination.

If we hold a stockholder vote to amend any provisions of our certificate of incorporation relating

to stockholder’s rights or pre-business combination activity (including the substance or timing within which we have to complete

a business combination), we will provide our public stockholders with the opportunity to redeem their shares of common stock upon approval

of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,

including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number

of then outstanding public shares, in connection with any such vote.

Our insiders have agreed to waive any conversion rights with respect

to any insider shares and any public shares they may hold in connection with any vote to amend our certificate of incorporation.

Specifically,

our certificate of incorporation provides, among other things, that:

to the consummation of our initial business combination, we shall either (1) seek stockholder

approval of our initial business combination at a meeting called for such purpose at which

public stockholders may seek to convert their shares of common stock, regardless of whether

they vote for or against the proposed business combination, into a portion of the aggregate

amount then on deposit in the trust account, or (2) provide our stockholders with the

opportunity to sell their shares to us by means of a tender offer (and thereby avoid the

need for a stockholder vote) for an amount equal to their pro rata share of the aggregate

amount then on deposit in the trust account, in each case subject to the limitations described

will consummate our initial business combination only if public stockholders do not exercise

conversion rights in an amount that would cause our net tangible assets to be less than $5,000,001

and a majority of the outstanding shares of common stock voted are voted in favor of the

business combination;

our initial business combination is not consummated within 12 months (or up to 18 months,

as applicable) of the closing of the IPO, then our existence will terminate and we will distribute

all amounts in the trust account to all of our public holders of shares of common stock;

may not consummate any other business combination, merger, capital stock exchange, asset

acquisition, stock purchase, reorganization or similar transaction prior to our initial business

to our initial business combination, we may not issue additional shares of capital stock

that would entitle the holders thereof to (i) receive funds from the trust account or

(ii) vote on any initial business combination.

If the Business Combination with Nauticus does not close, in identifying,

evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities

having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds,

and operating businesses seeking strategic acquisitions.

Many of these entities are well established and have significant experience identifying

and effecting business combinations directly or through affiliates.

Moreover, many of these competitors possess greater financial, technical,

human and other resources than us.

Our ability to acquire larger target businesses will be limited by our available financial resources.

This inherent limitation gives others an advantage in pursuing the acquisition of a target business.

Furthermore, the requirement that

we acquire a target business or businesses having a fair market value equal to at least 80% of the value of the trust account (excluding

any taxes payable on the income earned on the trust account) at the time of the agreement to enter into the business combination, our

obligation to pay cash in connection with our public stockholders who exercise their redemption rights and the number of our outstanding

warrants and the future dilution they potentially represent may not be viewed favorably by certain target businesses.

Any of these factors

may place us at a competitive disadvantage in successfully negotiating our initial business combination.

We pay Chardan Capital Markets, LLC, an affiliate of CleanTech Investments,

a fee of $10,000 per month for use of office space and certain office and secretarial services.

The office space is located at 207 West

25 th Street, 9 th Floor, New York, NY 10001.

currently have 4 executive officers.

These individuals are not obligated to devote any specific number of hours to our matters but they

intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.

The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial

business combination and the stage of the business combination process we are in.

We do not intend to have any full time employees prior

to the consummation of our initial business combination.

Available Information

We are required to file Annual Reports on Form 10-K and Quarterly Reports

on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current Report on Form 8-K.

SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that

file electronically with the SEC.

The SEC’s Internet website is located at www.sec.gov.

In addition, the Company will provide copies

of these documents without charge upon request from us in writing at 207 West 25th Street, 9th Floor, New York, NY 10001 or by telephone

at (212) 494-9005.

or (4) pursuant

to a qualified domestic relations order, in each case where such transferee agrees to be bound by the terms of the Sponsor Lock-up Agreement.

At the latest, the Sponsor Lock-up Agreement will expire on September 9, 2023.

Under the Company Lock-up Agreement,

the Lock-Up period means the period commencing on the Closing Date and ending on the earlier of (x) the date that is 180 calendar days

after the consummation of the Business Combination, (y) the date on which the volume weighted average price of shares of Common Stock

equals or exceeds $13.00 per share for twenty (20) of any thirty (30) consecutive trading days commencing after the Closing

on Nasdaq, and (z) the date specified in a written waiver duly executed by the Sponsors and CleanTech;

provided that the restrictions

set forth in the Company Lock-up Agreement do not apply to (1) transfers or distributions to such stockholders, current or former

general or limited partners, managers or members, other equity holders or other direct or indirect affiliates (within the meaning of Rule 405

under the Securities Act, as amended) or to the estates of any of the foregoing;

(2) transfers by bona fide gift to a member of the

stockholder’s immediate family or to a trust, the beneficiary of which is the stockholder or a member of the stockholder’s

immediate family for estate planning purposes;

(3) by virtue of the laws of descent and distribution upon death of the stockholder;

(4) pursuant to a qualified domestic relations order, in each case where such transferee agrees to be bound by the terms of this

(5) transfers or distributions of, or other transactions involving, securities other than the Lock-up Shares (including,

without limitation, securities acquired in the PIPE Investment or in open market transactions);

or (6) in the case of Angela Berka

(or Reginald Berka with respect to any community, marital or similar interest he may have in the following shares), the transfer of up

to 1,000,000 shares of Lock-up Shares in a privately negotiated sale to another company stockholder, who shall enter into a Lock-Up Agreement

(or amend an existing Lock-Up Agreement) containing the same terms and conditions as this Agreement with respect to such shares, or the

entry into any agreement with respect to such a sale entered into before, at or after the Effective Time.

The Company Lock-up Agreement

expired on March 8, 2023.

Where You Can Find More Information

The Company’s Annual

Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections

13(a) and 15(d) of the Exchange Act are filed with the SEC.

Such reports and other information filed by the Company with the SEC are available

free of charge on our website at https://www.nauticusrobotics.com as soon as reasonably practicable after they are electronically filed

with or furnished to the SEC.

Our SEC filings are also available to the public from the SEC’s internet site at https://www.sec.gov.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business