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Item 1. Business

2025-04-15 compared with 2024-04-10 · 199 added, 293 removed, 46 unchanged (91% of the section changed)

Nauticus Robotics, Inc.

develops autonomous robots for the ocean industries.

Autonomy requires the extensive use of sensors, artificial intelligence, and effective algorithms for perception and decision allowing the robot to adapt to changing environments.

The company’s business model includes using robotic systems for service, selling vehicles and components, and licensing of related software to both the commercial and defense business sectors.

Nauticus has designed and is currently testing and certifying a new generation of vehicles to reduce operational cost and gather data to maintain and operate a wide variety of subsea infrastructure .

Besides a 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 traditional ROV operations 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 exposure.

Products, Services and Revenue

Nauticus is in an industry that operates on a service-based daily rate model which requires a master service agreement.

Nauticus optimizes asset utilization across different customers in the same geography by managing the scope of work with each customer to maximize asset utilization.

The service and sales business model will be applied to the commercial fleet services aspect of our business.

The ToolKITT software platform is intended to be licensed or, in some cases, sold to end customers through a perpetual license.

In the latter case, end users are expected to be contracted for software support and maintenance.

Although the sale of Nauticus’ products may occur on either point sales, rental or SaaS models, the fleet services and software (“ToolKITT”) are targeted for this type of recurring revenue sales.

Other products (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.

Currently, Nauticus has not completed any material product sales, and many of its core products are still under development.

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.

As this 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.

The 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 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.

(“Nauticus,” “Nauticus Robotics,” the "Company", "our", "us" or "we") is a technology-driven company specializing in the development of advanced fully electric autonomous robotic solutions for subsea applications.

Our portfolio includes fully autonomous underwater vehicles (AUVs), robotic manipulators, an open robotic operating system, and related consulting and prototype services with a strong alignment to offshore energy and national security interests.

Our technology solutions enable autonomous operations for both the commercial and defense sectors.

Our addressable markets include upstream, midstream, and downstream oil and gas, defense, offshore renewables, seafloor telecommunications, aquaculture, port security, oceanographic research, and subsea mining.

Currently, our primary focus is on oil and gas operations and defense applications.

We were formed in September 2022 as the result of a business combination between Nauticus Robotics, Inc.’s predecessor (CleanTech) and Nauticus Robotics Holdings Inc.

(formerly known as Houston Mechatronics, Inc.).

We completed our first successful survey utilizing our autonomous subsea vehicle, Aquanaut, in the fourth quarter of 2024.

Our principal executive offices are located at 17146 Feathercraft Lane, Suite 450, Webster, Texas 77598.

Our phone number is (281) 942-9069.

Our Common Stock trades on the Nasdaq Stock Market (“Nasdaq”) under the ticker symbol “KITT.”

We maintain a website on the Internet with the address of https://ir.nauticusrobotics.com.

Copies of this Annual Report, previous and subsequent copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments thereto, are or will be available free of charge at our website as soon as reasonably practicable after they are filed with, or furnished to, the SEC.

In addition, the “Governance Documents” section of our website contains copies of our Code of Business Ethics and Conduct Policy and other corporate policies and board committee charters.

We make our website content available for informational purposes only.

Information contained on our website is not part of this Annual Report and should not be relied upon for investment purposes.

The SEC maintains an Internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

Competitive Differentiation & Technology

To effectively enter markets dominated by legacy solutions, Nauticus has developed innovative, value-driven technologies.

Our flagship autonomous fully electric vehicle, Aquanaut, provides advantages over conventional tethered Remotely Operated Vehicles (ROVs) and untethered Autonomous Underwater Vehicles (AUVs), including:

• Enhanced capability to operate in deep and complex environments without the limitations of tether management.

• Fully electric seven degrees of freedom patent protected manipulators.

• Reduction in operational costs and carbon footprint using smaller deployment vessels and elimination of onboard generators.

lower greenhouse gas emissions, and quieter operations to minimize ecological impact.

• Increased mission efficiency through autonomous execution versus manual control, reducing crew requirements and improving safety.

• Enhanced data collection, with higher fidelity providing actionable insight.

• Capable of collecting physical samples, providing valuable data for regulatory compliance, asset integrity, and damage assessments.

• Stealth capabilities in defense scenarios by eliminating surface vessel presence.

Aquanaut represents the next generation of subsea robotics integrating eight inde pendent thrusters to precisely propel and position a hull design to maximize efficiency and speed high-resolution data collection, and autonomous fully electric manipulation comparable to traditional ROV operations.

Product Portfolio

Aquanaut Autonomous Vehicles

Nauticus Robotics has three autonomous vehicles.

One vehicle is currently operational, a second vehicle is undergoing certification for operations and the third vehicle is still to be assembled.

Aquanaut has demonstrated superior capabilities in safety assurance, operational efficiency, asset integrity, and regulatory compliance through its ability to collect high-resolution subsea data.

Aquanaut is engineered to operate to a depth of 3000 meters.

ToolKITT Software Suite

ToolKITT is a sophisticated software platform that governs Nauticus’ suite of robotic products.

It enables robots to perceive their environment, navigate in three dimensions, make autonomous decisions, and execute tasks with minimal human intervention.

ToolKITT relies on the Robot Operating System (ROS), leveraging an open-source framework to accelerate development and deployment.

The software is hardware-agnostic, enabling adaptation across various robotic platforms.

ToolKITT has been deployed on third party commercial ROVs and competing robotic platform s, enhancing Nauticus’ ability to offer advanced inspection and intervention services.

This software also plays a critical role in next-generation inspection services, a key industry need for ensuring the integrity of subsea pipelines and offshore infrastructure.

Olympic Arm Electric Manipulator

The Olympic Arm is a fully electric subsea manipulator designed for complex intervention tasks on both work-class ROVs and Aquanaut.

Its patented electric actuators replace traditional hydraulic systems, offering:

• Greater precision and control for delicate operations.

• An environmentally friendly design utilizing biodegradable oil.

• Simplified deck-side repairs and extended operational reliability.

• Engineered to work to a depth of 3000 meters.

The next-generation Olympic Arm is currently in development with an emphasis on improving repair efficiency and durability.

The Company intends to license the innovative design for external production.

Defense Solutions

Nauticus is a specialized technology and engineering services company focused on delivering innovative solutions to the defense sector including the Defense Innovation Unit (DIU) and Defense Advanced Research Agency (DARPA).

As a nimble and highly adaptive firm, the Company can bridge the gap between emerging commercial technologies and mission-critical ocean centric defense applications, ensuring that the U.S.

military and government agencies stay ahead of global threats.

Our core capabilities include:

• Advanced R&D & Prototyping – Rapid development of next-generation technologies, from AI-driven analytics to autonomous systems.

• Systems Integration – Adapting and integrating commercial technologies into existing defense infrastructure.

• Unmanned Systems & Robotics – Developing and enhancing autonomous systems for defined mission applications.

• Agility & Innovation – As a small business, the Company operate with unmatched flexibility, rapidly pivoting to meet evolving defense needs and are unencumbered by legacy solutions.

Our team has experience executing successful projects within DIU’s commercial technology initiatives and DARPA’s high-risk, high-reward programs.

Nauticus announced on January 30, 2025, a Strategic Subsea Alliance with Leidos Holdings, Inc (NYSE:

The alliance builds on a successful prior collaboration between the two organizations, which was praised by their mutual customer for its seamless execution and constructive collaboration.

This new alliance aims to combine the companies’ complementary expertise to develop next-generation autonomous underwater systems capable of tackling increasingly complex missions.

SeaTrepid ROV Services

On March 5, 2025, we entered into an Asset Purchase Agreement to acquire substantially all of the assets and business of SeaTrepid International LLC and its affiliates ("Seatrepid").

SeaTrepid provides subsea robotic services to customers with ROVs.

The ability of SeaTrepid’s ROVs and our Aquanaut to seamlessly communicate at depth unlocks new service opportunities, enabling two autonomous systems to collaborate in delivering cutting edge underwater solutions.

The SeaTrepid acquisition closed on March 20, 2025.

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.

Beyond 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 cost.

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 incorrect.

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.

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

2 Currently, 25GW of offshore renewables are installed off the coast of Europe with expectations to double by 2030.

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

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

e 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.

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, and agencies that sponsor these developments have affirmed this belief.

COVID-19 has 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.

Our 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.

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 algorithms 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%.

3 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;

increasing 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

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.

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 network communication system that provides multi-point communication capabilities between subsea vehicles and the sea surface.

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.

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

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

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, which 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 could 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 "intuitive, platform-agnostic user interface".

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 systems.

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

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 providing the required perception of the near-space environment to support manipulation

• Onboard navigation that enables extended transit to a worksite

ToolKITT is a 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

The Olympic Arm is an all-electric subsea manipulator designed for a variety of intervention tasks on work class ROVs.

The patented design consists of electric actuators, replacing the conventional hydraulic variants.

This allows for precise and accurate control of the manipulator, which enables ROV operators to perform complex and delicate tasks.

The manipulator also uses biodegradable oil instead of hydraulic fluid, which is a more environmentally friendly solution.

When fully utilizing ToolKitt, the arm can provide the ROV operator autonomous and semi-autonomous task completion.

This is due to a combination of resolute positioning sensors, force feedback capability, precise actuation, and behavioral and perception capabilities provided by ToolKitt.

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.

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.

Sample of Traditional Energy Market Service Providers:

• Oceaneering

• C-Innovations

Sample of Platform Manufacturers (Product Sales):

• TechnipFMC (now moving into services)

Sample of Autonomous Surface Vessel coupled to Subsea Platform Assets:

• Ocean Infinity

• Reach Subsea

Sample of ToolKITT competitors

• Greensea IQ

Customers and Partners

Nauticus has been 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.

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 one subsea robot — Aquanaut.

The vehicle exhibits the ability to traverse long distances, transform its hull to expose dual robotic manipulators, perform robotic tasks, and then return to the launch site or other predetermined location.

It 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 initial Aquanaut commercial unit is planned to be operational in the second quarter of 2024.

The second Aquanaut is to be completed towards the end of 2024, with the third unit expected to be completed in the first half of 2025.

Nauticus has also developed a full-featured software stack, called ToolKITT, that provides autonomous and semi-autonomous control modes covering many aspects of subsea vehicle missions.

This software, although indigenous to Nauticus’ own subsea vehicles, can and has been deployed in existing ROV’s and other company's AUV's to enhance and expand their operational capabilities and ability to integrate multirobot missions in the future.

According to Research and Markets, published in October 2024, the global Offshore AUV & ROV Market grew from $1.39 billion in 2023 to $1.53 billion in 2024, with a projected compound annual growth rate (CAGR) of 10.18%, reaching $2.75 billion by 2030.

Nauticus Robotics is posit ioned to capitalize on this expanding market by offering disruptive technology solutions that improve data quality, safety, emissions reduction, and cost efficiency.

Our autonomous systems and AI-driven analytics provide a competitive advantage as industries shift toward automation and sustainability in subsea operations.

Each of our product lines is complementary to the others working together as a system, and also can be marketed independently.

The ToolKITT software is platform agnostic, and can be installed on third party ROVs.

Similarly, the Olympic Arm can be installed and operate on third party ROVs.

International Operations

The potential addressable market for Nauticus Robotics products and services is global.

While current operations are concentrated in the United States, Nauticus Robotics is also actively pursuing business opportunities outside the United States, including opportunities in Brazil.

All of the products and services provided by Nauticus Robotics operate in a highly competitive environment.

As a new market entrant, Nauticus Robotics generally faces competition from well-established competitors.

Vehicle & Services Competitors

Current ROV manufacturers and ROV services companies are the primary competitors to Nauticus inspection services conducted by Aquanaut.

These companies include large multinational product manufacturers and service providers, as well as smaller local ROV service providers.

Subsea Autonomy Software Competitors

Competitors to ToolKITT include both ROV manufacturers supplying proprietary software operating systems for their ROVs, as well as independent software suppliers providing software solutions to enhance the capabilities of ROVs and other robotic systems.

Competitors also include companies that offer data processing capabilities for data gathered in ROV operations.

Electric Manipulators Competitors

Several companies specialize in the design and manufacture of subsea manipulators and robotic arms for ROVs and other underwater applications.

These competitive products include both traditional hydraulic manipulators, as well as electric manipulators like the Olympic Arm.

Maritime Defense Project Competitors

Several companies specialize in subsea technology consulting for the defense industry.

In addition, our alliance collaborator, Leidos, operates in a highly competitive environment with many large and well established defense contractors.

Offshore Energy Producers

Offshore activity in the energy sector drives a material amount of the demand for ROV services, which are critical for the inspection, maintenance, and development of subsea infrastructure in the Gulf of America, also know as the Gulf of Mexico (the "Gulf").

The Bureau of Safety and Environmental Enforcement (BSEE) reported that, as of November 2024, there were 371 manned production platforms in the Gulf.

The Gulf is a significant hub for U.S.

oil and gas production, with federal offshore areas accounting for approximately 14% of total U.S.

crude oil production and 5% of total U.S.

dry natural gas production.

We are currently engaged with four offshore producers to manage the introduction of our modern technology, Aquanaut.

Oil and gas customers can at their convenience extend or terminate a contract.

The offshore energy sector is a global market.

We have engaged with a customer in Brazil to develop and test our autonomous robotic systems, and expect to continue to engage with international customers in Brazil and elsewhere as our business develops.

Defense Related Customers

On January 30, 2025, we announced a strategic alliance with Leidos, our strategic partner for defense related pursuits.

The alliance builds on a successful prior collaboration between the two organizations, which was praised by their mutual customer for its seamless execution and constructive collaboration.

This new alliance aims to combine the companies’ complementary expertise to develop next-generation autonomous underwater systems capable of tackling increasingly complex missions.

government can terminate contracts at its convenience.

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.

As part of the original development of engineering prototypes, Nauticus Robotics 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 key component of Aquanaut subsea vehicle is the energy storage system — a Li-ion battery.

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

Currently, Nauticus Robotics manages a supply chain with many suppliers that specialize in parts aimed toward subsea vehicles.

A key component of the Aquanaut subsea vehicle is the energy storage system — a Li-ion battery.

There are a variety of suppliers available to provide this battery subsystem.

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

One battery that Nauticus Robotics 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.

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.

Nauticus Robotics is committed to exploring the options that will lead to the most capital-efficient manufacturing process and support our sales-driven build schedule.

As a consequence of our use of third party suppliers for a substantial portion of our product manufacturing process, the direct purchase of raw materials is not material to our operations.

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.

Our business is heavily regulated and we are subject to numerous laws and regulations that govern our operations, including but not limited to the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), the Truth in Negotiations Act (TINA), the Cost Accounting Standards (CAS), the International

Traffic in Arms Regulations (ITAR), and the Export Administration Regulations (EAR).

Compliance with these regulations is critical to our ability to compete for and perform contracts with the U.S.

Specific maritime related laws and regulations include the Jones Act, Ports and Waterways Safety Act, International Convention for the Safety of Life at Sea (SOLAS), Clean Water Act (CWA), Oil Pollution Act of 1990 (OPA 90), Seaman’s Protection Act, Foreign Corrupt Practices Act (FCPA), and the Defense Production Act (DPA).

This is an example of applicable regulations but does not include all.

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.

Nauticus utilizes a combination of the protections afforded to the owners of patents, copyright s, trade secrets, and trademarks to secure its intellectual property.

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

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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.

Nauticus has patented its re-configurable 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 systems.

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

Similarly, Nauticus also obtained patent protection for its all-electric, work class robotic manipulators.

These manipulators are the first in their market class and utilize specialized actuation systems to achieve the strength performance necessary for work class systems.

Nauticus has also filed for protection of our Company name and brand under trademark registration in the United States.

Employees and Human Capital Resources

We had 72 employees as of December 31, 2023, including our named executive officers.

Our workforce plays a critical role in driving our business forward.

We had 47 employees as of December 31, 2024.

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.

Our human capital resources objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.

We endeavor to recruit the best people for the position regardless of gender, ethnicity or other protected traits and it is our policy to fully comply with all laws applicable to discrimination in the workplace.

Our diversity, equity and inclusion principles are also reflected in our employee training and policies.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants, officers and directors through the granting of stock-based compensation awards and cash-based incentive bonus awards.

Our human capital strategies focus on identifying, recruiting, retaining, rewarding, and integrating both our existing and new employees.

We endeavor to recruit the most qualified individuals for each position regardless of gender, ethnicity or other protected characteristics.

It is our policy to fully comply with all laws applicable to discrimination in the workplace.

We have successfully navigated a workforce transformation, aligning our organization to prioritize the support and advancement of existing products while balancing ongoing innovation efforts beyond early-stage research and prototyping.

Offshore ROV and AUS operations are subject to seasonal variation, and in the Gulf operations are generally more active from April through October each year.

In Brazil, operations are generally more active from November through March.

Nauticus operations are currently concentrated in the US offshore market.

To address the seasonality of the business, Nauticus may pursue a strategy of rotating operating assets between the Gulf and offshore Brazil.

Merger Agreement

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and (c) each 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 Ratio.

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

Earnout Shares

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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.

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 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 Inc.

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.

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 (on a pre Reverse Stock Split Basis) 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 (on a pre Reverse Stock Split Basis) 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 (on a pre Reverse Stock Split Basis) per share over any 20 trading days within a 30-day trading period.

Company Securities

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 adjustments;

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 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 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 trans fers, 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 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.

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;

(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 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.

On September 9, 2022, the Company 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”).

ATW Special Situations I LLC (ATW I), Material Impact Fund II, L.P.

(MIF), and the SLS Family Trust (SLS) 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.

Our director, Adam Sharkawy, is the managing partner of Material Impact II, L.P.

On January 30, 2024, the Company and certain of its subsidiaries and ATW I, MIF and SLS entered into an Amendment and Exchange Agreement pursuant to which ATW I, MIF and SLS transferred their existing 5% Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for a New Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 the "New Convertible Debenture") in the aggregate principal amount of $29,591,600, $5,102,000 and $1,836,720, respectively.

These Debentures were elected to be recorded at is estimated fair value on the Company's books.

During the year ended December 31, 2024, ATW I and SLS converted the New Convertible Debentures with a principal value of $12,869,231 and $1,836,720 and interest of $442,140 and $4,785 into 4,818,836 and 699,053 shares of Common Stock, respectively.

On November 4, 2024, the Company entered into the Second Amendment and Exchange Agreement by and among the Company and ATW I, SLS and MIF pursuant to which such investors would exchange the remaining portion of the amount outstanding under the New Convertible Debentures and certain other amounts outstanding with respect thereto, into shares of Series A preferred convertible stock.

These Debentures were elected to be recorded at its fair value.

On December 27, 2024, the Company and ATW I closed the exchange transaction, and the Company issued 27,588 shares of Series A Preferred Stock to ATW I in exchange for a principal value of $16,672,369 and other amounts outstanding of $10,915,974.

On December 31, 2024, the Company issued 2,504 and 5,342 shares of Series A Preferred Stock to SLS and

MIF in exchange for principal values of $0 and $5,102,000 and other amounts outstanding of $2,504,440 and $240,219, respectively.

This Preferred Stock was recorded at its fair value as of the date of the exchange.

On November 4, 2024, the Company entered into a Securities Purchase Agreement with ATW, pursuant to which ATW purchased, in a private placement, $1,150,000 in principal amount of Debentures, with an option to purchase up to an additional aggregate of $20,000,000 in principal amount of Original Issue Discount Senior Secured Convertible Debentures (the “November 2024 Debentures”).

On December 11, 2024, ATW purchased, in a private placement, $1,000,000 in principal amount of debentures.

During the year ended December 31, 2024, ATW I and SLS exercised on a post reverse split basis 615,589 and 38,230 SPA Warrants, respectively, in exchange for Common Stock.

The Company did not receive cash in respect of these transactions.

RCB Equities #1, LLC

On July 14, 2023, the Company issued a secured promissory note to RCB Equities #1, LLC, a related party for $5,000,000.

On July 14, 2023, the Company issued a secured promissory note to RCB Equities #1, LLC ("RCB") for $5,000,000.

The promissory note included a 2.5% original issue discount or $125,000, bears interest at 15% per annum, and matures on September 9, 2026.

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Further, the promissory note provides for an automatic rollover into the structure of certain future debt-financing transactions.

On September 18, 2023,

the RCB Equities #1, LLC promissory note was rolled into the convertible senior secured term loan discussed below bearing interest at 12.5% per annum including the $125,000 exit fee.

On September 18, 2023, the RCB promissory note was rolled into the convertible senior secured term loan discussed below bearing interest at 12.5% per annum including the $125,000 exit fee.

Convertible Senior Secured Term Loan

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement with ATW Special Situations II LLC as collateral agent (in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited, ATW Special Situations I LLC, Material Impact Fund II, L.P, and RCB Equities #1, LLC, as lenders.

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement with ATW Special Situations II LLC as collateral agent and lender, and Transocean Finance Limited, ATW I, MIF, and RCB, as lenders.

The Convertible Senior Secured Term Loan Agreement provides the Company with up to $20.0 million of secured term loans.

Any portion of the outstanding principal amount of the Loans is prepayable at the Company’s option pro rata to each Lender upon at least five days’ prior written notice to each Lender.

The initial amount funded under the Convertible Senior Secured Term Loan Agreement was $11,600,000.

The initial amount funded under the Convertible Senior Secured Term Loan Agreement was $11,600,000 (the "2023 Term Loan").

The Convertible Senior Secured Term Loan Agreement included a 2.5% exit fee of $290,000, bearing interest at 12.50% per annum, payable quarterly in arrears on the first day of each calendar quarter commencing April 1, 2024.

The exit fee is being provided for over the period of the loan.

The loan agreement included a 2.5% original issue discount of $125,000 from the RCB Equities #1, LLC promissory note.

The loan agreement included a 2.5% original issue discount of $125,000 from the RCB, promissory note.

The loan includes assumed legal fees of $577,500, and deemed interest from convertible debentures of $378,118.

The debt discount is being accreted to interest expense over the period of the loan.

The legal fees are being amortized to general and administrative expenses over the period of the loan.

The Loans will mature on the earliest of (a) the third anniversary of the date of the Term Loan Agreement of September 17, 2026, (b) 91 days prior to the maturity of the 5% Original Issue Discount Senior Secured Convertible Debentures, dated as of September 9, 2022.

Subject to the terms and conditions of the Term Loan Agreement, the Company may, upon at least two trading days’ written notice to the Lenders, elect to redeem some or all of the then outstanding principal amount of the Loans.

In connection with any such election, which shall be irrevocable, the Company shall pay each Lender, on a pro rata basis, an amount in cash equal to the greater of (x) the sum of (i) 100% of the then outstanding principal amount of the Loans, (ii) accrued but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Loans (including, without limitation, the Exit Fee (as defined in the Term Loan Agreement)) (the “Optional Redemption Amount”) and (y) the product of (i) the aggregate number of shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), then issuable upon conversion of the applicable Optional Redemption Amount (without regard to any limitations on conversion set forth in the Term Loan Agreement) multiplied by (ii) the highest closing sale price of the Common Stock on any trading day during the period commencing on the date immediately preceding the date that the applicable notice of redemption is delivered to the Lenders and ending on the trading day immediately prior to the date the Company makes the entire payment required to be made in connection with such redemption.

The Loans are convertible, in whole or in part, at the option of each Lender into shares of Common Stock until the date that the Loans are no longer outstanding, at a conversion rate equal to the outstanding principal amount of the Loans to be converted divided by a conversion price of $216 per share of Common Stock (the “Conversion Price”), subject to certain customary anti-dilution adjustments as described in the Term Loan Agreement.

First Amendment to Convertible Senior Secured Term Loan

On December 31, 2023, Nauticus Robotics, Inc., a Delaware corporation (the “Company”), entered into a First Amendment to Senior Secured Term Loan Agreement, dated as of December 31, 2023 (the “First Amendment”), by and among the Company, the subsidiary guarantors (as defined in the First Amendment) and ATW Special Situations II LLC (“ATW II”), a Delaware limited liability company, which amended that certain Senior Secured Term Loan agreement dated as of September 18, 2023 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Term Loan Agreement”) with ATW II, as collateral agent (as replaced by Acquiom Agency Services LLC, in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited (“Transocean Finance”), ATW Special Situations I LLC (“ATW I”), Material Impact Fund II, L.P.

(“MIF”), and RCB Equities #1, LLC (“RCB”), as lenders (collectively, the “Initial Lenders”).

The First Amendment provided the Company with an incremental loan in the aggregate principal amount of $695,000 (the “December 2023 Incremental Loan”), subject to the terms and conditions set forth in the Term Loan Agreement and the First Amendment.

The total loan funded under the Term Loan Agreement and First Amendment as of December 31, 2023, is $12,295,000.

The December 2023 Incremental Loan would be made on the same terms as the Additional Term Loans funded on the Closing Date and be deemed to be Additional Term Loans for all purposes under the Term Loan Agreement.

The loan assumed legal fees of $30,000 which are being amortized to general and administrative expenses over the period of the loan.

On December 31, 2023, the Company, entered into a First Amendment to Senior Secured Term Loan Agreement, dated as of December 31, 2023 (the “First Amendment”), by and among the Company, the subsidiary guarantors (as defined in the First Amendment) and ATW Special Situations II LLC (“ATW II”), a Delaware limited liability company, which amended that certain Senior Secured Term Loan agreement dated as of September 18, 2023 with ATW II, as collateral agent (as replaced by Acquiom Agency Services LLC, in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited (“Transocean Finance”), ATW I, MIF, and RCB, as lenders (collectively, the “Initial Lenders”).

First Amendment.

The December 2023 Incremental Loan would be made on the same terms as the 2023 Term Loan and be deemed to be Additional Term Loans for all purposes under the Term Loan Agreement.

Second Amendment to Convertible Senior Secured Term Loan

On January 30, 2024, the Company entered into a Second Amendment to Term Loan Agreement, dated as of January 30, 2024 (the “Second Amendment”), by and among the Company, the guarantors (as defined in the Second Amendment) and the required lenders (as defined in the Second Amendment), which amended that certain Term Loan Agreement, dated as of September 18, 2023, by and among the Company, Transocean Finance, ATW I, MIF and RCB as lenders and ATW II, as collateral agent.

In connection with the Second Amendment, the Company also entered into a Second Agreement regarding incremental loans, dated as of January 30, 2024 (the “Second Agreement”), by and among the Company, the guarantors (as defined in the Second Agreement), and ATW II and MIF, as incremental lenders.

The Second Agreement provides the Company with an incremental loan in the aggregate principal amount of $3,753,144 (the “January 2024 Incremental Loan”).

The January 2024 Incremental Loan would be made on the same terms as the 2023 Term Loan and be deemed to be Additional Term Loans for all purposes under the Term Loan Agreement.

New Senior Secured Term Loan Agreement

On January 30, 2024, the Company also entered into a senior secured term loan agreement (the “2024 Term Loan Agreement”) with ATW Special Situations Management LLC (“ATW Management”), as collateral agent (in such capacity, the “Collateral Agent”) and lender, and ATW Special Situations III LLC (“ATW III”), MIF, VHG Investments, ATW II and ATW I, as lenders.

The 2024 Term Loan Agreement provides the Company with an aggregate $9,551,856 of secured term loans (the “2024 Loans”).

The 2024 Loans bear interest at the rate of 15% per annum, payable quarterly in arrears on the first day of each calendar quarter commencing April 1, 2024.

The 2024 Loans (other than the ATW Extended Maturity Term Loan) will mature on the earliest of:

(a) the third anniversary of the date of the Term Loan Agreement, (b) the maturity of the Indebtedness under that certain Term Loan Agreement among the Company, the lenders party thereto and Acquiom Agency Services LLC, as collateral agent, dated September 18, 2023, as amended on December 31, 2023, and as further amended on January 30, 2024 (the “Term Loan Agreement”), and (c) 91 days prior to the maturity of the 5% Original Issue Discount Senior Secured Convertible Debentures, dated as of September 9, 2022 (the “Original Debentures”), iss ued by the Company pursuant to that certain Securities Purchase Agreement, dated as of December 16, 2021, as amended on January 31, 2022, and as further amended on September 9, 2022, and as further amended on January 30, 2024 (the “SPA”).

The ATW Extended Maturity Term Loan will mature on the earlier of the 30th anniversary of the date of the Term Loan Agreement or such earlier date as is required or permitted to be repaid under the Term Loan Agreement.

The 2024 Loans are convertible, in whole or in part, at the option of each Lender into shares of Common Stock until the date that the 2024 Loans are no longer outstanding, at a conversion rate equal to the outstanding principal amount of the Loans to be converted divided by a conversion price of $16.50 per share of Common Stock, subject to certain adjustments as described in the 2024 Term Loan Agreement.

Amendment to 2024 Term Loan Agreement

On May 1, 2024, the Company entered into an amendment (the “May 2024 Amendment”) to the 2024 Term Loan Agreement dated January 30, 2024 between the Company, ATW Management as collateral agent, and the lenders party thereto.

Pursuant to the Amendment, ATW I will loan an additional $1,000,000 (the “May 2024 Incremental Loan”) to the Company.

The May 2024 Incremental Loan will have the same terms as the ATW Extended Maturity Term Loan under the 2024 Term Loan Agreement and will mature on the 30th anniversary of the date of the 2024 Term Loan Agreement or such earlier date as is required or permitted to be repaid under the 2024 Term Loan Agreement.

Second Amendment and Exchange Agreement

On November 4, 2024, the Company entered into a Second Amendment and Exchange Agreement (the “Exchange Agreement”), by and among the Company and a certain institutional investor, pursuant to which such investor would

exchange (the “Exchange”) the remaining portion of the amount outstanding under the Ne w Original Issue Discount Exchanged Senior Secured Convertible Debenture (the “New Convertible Debenture”) and certain other amounts outstanding with respect thereto, into Series A preferred convertible stock (the “Series A Preferred Stock”), subject to certain adjustments.

The Exchange Agreement further amended the Securities Purchase Agreement dated as of December 16, 2021, as amended, and contained certain covenants of the Company to, among other items, hold one or more stockholder meetings in respect of the shares of the Company’s Common Stock issuable underlying the Series A Preferred Stock upon conversion.

The Company elected to measure these Debentures at the fair value on the Company's book.

In addition, on November 4, 2024, the Company entered into Exchange Agreements with two other institutional investors on substantially the same terms, pursuant to which such investors will transfer their New Convertible Debentures to the Company in exchange for a number of shares of Series A Preferred Stock.

On December 27, 2024, the Company and one institutional investor closed the exchange transaction, and the Company issued 27,588 shares of Series A Preferred Stock to such investor.

On December 31, 2024, the Company issued 2,504 and 5,342 shares of Series A Preferred Stock to two other investors, respectively.

The Preferred Stock was recorded at its fair value on the Company's book upon the exchange.

November 2024 Debentures

On November 4, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors named therein (the “Debenture Investors”), pursuant to which the Debenture Investors purchased, in a private placement, $1,150,000 in principal amount of debentures, with an option to purchase up to an additional aggregate of $20,000,000 in principal amount of Original Issue Discount Senior Secured Convertible Debentures (the “November 2024 Debentures”).

On December 11, 2024, the Debenture Investors purchased an additional $1,000,000 in principal amount of debentures, which was convertible into 975,610 shares of Common Stock of the Company calculated at a conversion price of $1.230.

At a special stockholder’s meeting on January 15, 2025, the Company's stockholders (1) approved, pursuant to Nasdaq Rule 5635, the issuance of shares of the Company’s Common Stock upon the conversion of shares of the Series A Convertible Preferred Stock, issued pursuant to the Second Amendment and Exchange Agreement dated November 4, 2024 between the Company, ATW Special Situations I, LLC, Material Impact Fund II, L.P.

and SLS Family Irrevocable Trust (the “Exchange Agreement”) and the corresponding Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock;

(2) approved, pursuant to Nasdaq Rule 5635, the issuance of shares of the Company’s Common Stock upon the conversion of debt under the November 2024 Debentures.

The Company elected to fair value these Debentures.

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.

Such reports and other information filed by the Company with the SEC are available free of charge on our website at https://www.ir.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.

Our website, the SEC’s website and the information contained therein or linked thereto are not a part of this Annual Report.

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