Nauticus Robotics, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of disclosure controls and procedures . The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures are also designed to ensure such information is accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance that control objectives are attained. Based upon this evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that our disclosure controls and processes were not effective at December 31, 2024, because of the material weaknesses in our internal control over financial reporting described below. Management’s Annual Report on Internal Control over Financial Reporting The Company’s management, including the Chief Executive Officer and the Interim Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. As of December 31, 2020, Company’s management has evaluated the effectiveness of its internal control over financial reporting under the Exchange Act. Management concluded as of December 31, 2024, that our internal control over financial reporting was not effective because of the material weaknesses described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The Company identified deficiencies in its internal control over financial reporting that represented material weaknesses. Specifically, the Company’s management determined that the Company did not, as of December 31, 2024, design and maintain effective internal controls over financial reporting related to: (1) ineffective design and operation of controls over significant complex transactions, which resulted in restatements of all interim periods of 2024, (2) failure to remediate previously reported material weakness over ineffective design and operation of user access controls. The Company believes that, notwithstanding the material weaknesses mentioned above, the consolidated financial statements contained in this Form 10-K present fairly, in all material respects, the consolidated financial positions, results of operations and cash flows of the Company in conformity with generally accepted accounting principles as of the dates and for the periods stated therein. Previously identified material weakness. In 2021, we identified a material weakness in our internal control over financial reporting, as defined in the standards established by the Sarbanes-Oxley Act of 2002. This material weakness related to a lack of qualified accounting and financial reporting personnel with an appropriate level of experience and inadequate procedures for the accounting close process including obtaining information supporting significant accounting estimates and judgments affecting the financial statements on a timely basis. As a result, our management concluded that a material weakness existed in our internal control over financial reporting. Through the year ended December 31, 2022 and 2023, we continued to implement remediation initiatives in response to the previously identified material weakness, including, but not limited to, hiring additional experienced accounting and financial reporting personnel in the late 2022 and modifying a new Enterprise Resource (ERP) System which will assist in the automation of processes, including standardizing workflows, enhancing segregation of duties, and ensuring compliance with policies. As a result of the significant turnover of key finance personnel at the end of 2023 we have concluded there was a gap in the implementation of the above remediation initiatives with certain tasks that would have to be completed to remediate the material weakness not being handed over to the new personnel. Our remediation activities are ongoing and 60 Table of Contents are subject to continued management review supported by ongoing design and testing of our framework of internal controls over financial reporting. Remediation Plan. The Company continues to implement certain remediation actions and continues to test and evaluate the elements of the remediation plan. These elements include: • Design and implementation of a Significant Complex Transaction policy which identifies transactions that should be evaluated for additional 3 rd party expert evaluation for proper accounting treatment; • Design and implementation user access controls and proper segregation of duties for all critical accounting systems, supported by formal policies and training for all Information Technology personnel. The Company believes that the actions listed above will provide appropriate remediation of the material weaknesses; however, the testing of the effectiveness of the controls has not been completed by the Company. Due to the nature of the remediation process and the need for sufficient time after implementation to evaluate and test the effectiveness of the controls, no assurance can be given as to the timing for completion of remediation. The material weaknesses will be fully remediated when the Company concludes that the controls have been operating for sufficient time and independently validated by management. Changes in internal control over financial reporting. During the fiscal year ended December 31, 2024, there were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent limitation on the effectiveness of internal control. The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting. Item 9B. Other Information Trading Plans During the year ended December 31, 2024, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosures Regarding Foreign Jurisdiction that Prevent Inspections None. 61 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated herein by reference to information contained in our Definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year pursuant to Regulation 14A in connection with our 2025 Annual Meeting of Stockholders. Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to information contained in our Definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year pursuant to Regulation 14A in connection with our 2025 Annual Meeting of Stockholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to information contained in our Definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year pursuant to Regulation 14A in connection with our 2025 Annual Meeting of Stockholders. Item 13. Certain Relationships and Related Transactions and Director Independence The information required by this Item is incorporated herein by reference to information contained in our Definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year pursuant to Regulation 14A in connection with our 2025 Annual Meeting of Stockholders. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to information contained in our Definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year pursuant to Regulation 14A in connection with our 2025 Annual Meeting of Stockholders. Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this report: (1) All financial statements: Report of Independent Registered Public Accounting Firm F- 2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 3 Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 F- 5 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2024 and 2023 F- 6 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Years Ended December 31, 2024 and 2023 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F- 8 Notes to Consolidated Financial Statements F- 10 62 Table of Contents (2) Financial statement schedules Not Applicable (3) Exhibits required by Item 601 of Regulation S-K: Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 2.1 Merger Agreement dated as of December 16, 2021, by and among CleanTech Acquisition Corp., CleanTech Merger Sub, Inc., Nauticus Robotics, Inc., and Nicolaus Radford, as amended on January 30, 2021. Form 8-K 001-40611 2.1 December 17, 2021 2.1.1 Amendment No. 1 to Underwriting Agreement dated January 27, 2023 Form 8-K 001-40611 2.1 June 6, 2022 3.1 Second Amended and Restated Certificate of Incorporation Nauticus Robotics, Inc. Form 8-K 001-40611 3.5 September 15, 2022 3.2 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Nauticus Robotics, Inc. Form 8-K 001-40611 3.1 July 18, 2024 3.3 Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock of Nauticus Robotics, Inc. Form 8- K 001-40611 3.1 December 27, 2024 3.4 Amended and Restated Bylaws of Nauticus Robotics, Inc. Form 8-K 001-40611 3.1 May 15, 2023 4.1 Specimen Warrant Certificate of CleanTech Acquisition Corp. Form S-1/A 333-256578 4.3 July 6, 2021 4.2 Warrant Agreement, dated July 14, 2021, by and between Continental Stock Transfer & Trust Company and CleanTech Acquisition Corp. Form 8-K 001-40611 4.1 July 21, 2021 4.3 Rights Agreement, dated July 14, 2021, by and between Continental Stock Transfer & Trust Company and CleanTech Acquisition Corp. Form 8-K 001-40611 4.2 July 21, 2021 4.4 Form of Warrants to be issued pursuant to the Securities Purchase Agreement dated December 16, 2021 Form S-4 Am. No. 4 333-262431 4.7 June 16, 2022 4.5 Form of Original Issue Discount Senior Secured Convertible Debenture Due 2026. Form 8-K 001-40611 10.3 November 5, 2024 4.6† Description of Registrant’s Securities 10.1 Battery Supplier Agreement, dated as of January 18, 2021. Form S-4 Am. No. 4 333-262431 10.20 June 16, 2022 10.2++ 2022 Nauticus Robotics, Inc. Omnibus Incentive Plan. Form 8-K 001-40611 10.9 September 15, 2022 10.3+** Agreement by and between Nauticus Robotics Brazil Ltda. and Petróleo Brasileiro S.A. entered into on May 23, 2023. Form 8-k 001-40611 10.1 May 30, 2023 10.4+ Senior Secured Term Loan Agreement, dated as of September 18, 2023, by and among Nauticus Robotics, Inc., ATW Special Situations II LLC, as collateral agent and lender, and the lenders party thereto. Form 8-K 001-40611 10.1 September 21, 2023 63 Table of Contents Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 10.5+ Pledge and Security Agreement, dated as of September 18, 2023, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., ATW Special Situations II LLC, as collateral agent. Form 8-K 001-40611 10.2 September 21, 2023 10.6 Intellectual Property Security Agreement, dated as of September 18, 2023, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc. and ATW Special Situations II LLC, as collateral agent. Form 8-K 001-40611 10.3 September 21, 2023 10.7 Subsidiary Guarantee, dated as of September 18, 2023, by Nauticus Robotics Holdings, Inc. and acknowledged and agreed to by Nauticus Robotics, Inc. Form 8-K 001-40611 10.4 September 21, 2023 10.8 Intercreditor Agreement, dated as of September 18, 2023, by and between ATW Special Situations II LLC, as first lien collateral agent, and ATW Special Situations I LLC, as second lien collateral agent, and acknowledged and agreed by Nauticus Robotics, Inc. and Nauticus Robotics Holdings, Inc. Form 8-K 001-40611 10.5 September 21, 2023 10.9+ Amendment to Securities Purchase Agreement, Senior Secured Convertible Debentures and Pledge and Security Agreement, dated as of September 18, 2023, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc. and ATW Special Situations I LLC, as agent and the Required Creditors. Form 8-K 001-40611 10.6 September 21, 2023 10.10+ Pledge and Security Agreement, dated as of September 9, 2022, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc. and ATW Special Situations I LLC, as agent and creditor, and the other creditors party thereto. Form 8-K 001-40611 10.7 September 21, 2023 10.11++ Offer Letter, dated September 27, 2023 Form 8-K 001-40611 10.1 October 2, 2023 10.12 Director Designation Letter Agreement, dated as of October 2, 2023, by and between Nauticus Robotics, Inc. and Schlumberger Technology Corporation Form 8-K 001-40611 10.5 October 6, 2023 10.13 First Amendment to Senior Secured Term Loan Agreement dated December 31, 2023 Form 8-K 001-40611 10.1 January 5, 2024 10.14 Securities Purchase Agreement dated December 31, 2023 Form 8-K 001-40611 10.2 January 5, 2024 10.15 Nauticus Second Lien Restructuring Agreement dated December 31, 2023 Form 8-K 001-40611 10.3 January 5, 2024 10.16+ Senior Secured Term Loan Agreement, dated as of January 30, 2024, by and among Nauticus Robotics, Inc., ATW Special Situations Management LLC, as collateral agent and lender, and the lenders party thereto Form 8-K 001-40611 10.1 February 5, 2024 10.17+ Pledge and Security Agreement, dated as of January 30, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, and ATW Special Situations Management LLC, as collateral agent Form 8-K 001-40611 10.2 February 5, 2024 64 Table of Contents Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 10.18+ Intellectual Property Security Agreement, dated as of January 30, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, and ATW Special Situations Management LLC, as collateral agent Form 8-K 001-40611 10.3 February 5, 2024 10.19 Subsidiary Guarantee, dated as of January 30, 2024, by Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, and Nauticus Robotics USA LLC, and acknowledged and agreed to by Nauticus Robotics, Inc. Form 8-K 001-40611 10.4 February 5, 2024 10.20 Pari Passu Intercreditor Agreement, dated as of January 30, 2024, by and among ATW Special Situations Management LLC, as collateral agent for the lenders under the Term Loan Agreement, Acquiom Agency Services LLC, as collateral agent for the lenders under the 2023 Term Loan Agreement, and Nauticus Robotics, Inc., and Nauticus Robotics Holdings, Inc., as grantors Form 8-K 001-40611 10.5 February 5, 2024 10.21 Intercreditor Agreement, dated as of January 30, 2024, by and between ATW Special Situations Management LLC, as 2024 first lien collateral agent, ATW Special situations I LLC, as second lien collateral agent, and acknowledged by Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC Form 8-K 001-40611 10.6 February 5, 2024 10.22 Second Amendment to Senior Secured Term Loan Agreement, dated as of January 30, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, ATW Special Situations II LLC, ATW Special Situations I LLC, and Material Impact Fund II, L.P. Form 8-K 001-40611 10.7 February 5, 2024 10.23+ Second Agreement Regarding Incremental Loans, dated as of January 30, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, ATW Special Situations II LLC, and Material Impact Fund II, L.P. Form 8-K 001-40611 10.8 February 5, 2024 10.24 Form of Amendment and Exchange Agreement Form 8-K 001-40611 10.9 February 5, 2024 10.25 Form of Original Issue Discount Exchanged Senior Secured Convertible Debenture Due September 9, 2026 Form 8-K 001-40611 10.10 February 5, 2024 10.26 Nauticus Second Lien Restructuring Agreement, entered into as of January 31, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, and SLS Family Irrevocable Trust Form 8-K 001-40611 10.11 February 5, 2024 10.27 Nauticus Second Lien Restructuring Agreement, entered into as of January 31, 2024, by and among Nauticus Robotics, Inc., Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, Nauticus Robotics USA LLC, and Material Impact Fund II, L.P. Form 8-K 001-40611 10.12 February 5, 2024 65 Table of Contents Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 10.28++ Employment Agreement dated February 21, 2024 between John W. Gibson Jr. and Nauticus Robotics, Inc. Form 8-K 001-40611 10.1 February 22, 2024 10.29 First Amendment to Senior Secured Term Loan Agreement, dated as of May 1, 2024, between the Nauticus Robotics, Inc., ATW Special Situations Management LLC as collateral agent, and the lenders party thereto Form 8-K 001-40611 10.1 May 1, 2024 10.30 At the Market Offering Agreement dated May 20, 2024, by and between Nauticus Robotics, Inc. and H.C. Wainwright & Co., LLC Form 8-K 001-40611 10.1 May 20, 2024 10.31 Nauticus Robotics, Inc. 2022 Omnibus Incentive Plan, as amended Definitive Proxy Statement 001-40611 Annex A April 29, 2024 10.32++ Offer Letter dated August 9, 2024, Between Nauticus Robotics, Inc. and John Symington. Form 10-Q 001-40611 10.1 November 12, 2024 10.33** Form of Second Amendment and Exchange Agreement dated November 4, 2024 by and among Nauticus Robotics Inc. and each of the signatories thereto. Form 8-K 001-40611 10.1 November 5, 2024 10.34** Form of Securities Purchase Agreement dated November 4, 2024, by and among Nauticus Robotics, Inc. and each of the investors listed on the Schedule of Buyers thereto. Form 8-K 001-40611 10.2 November 5, 2024 10.35 Form of Original Issue Discount Senior Secured Convertible Debenture Due 2026. Form 8-K 001-40611 10.3 November 5, 2024 10.36 Pledge and Security Agreement, dated as of November 4, 2024, by and among the Company, Nauticus Robotics Holdings Inc., Nautiworks LLC, Nauticus Robotics Fleet LLC, and Nauticus Robotics USA LLC, as Debtors, and ATW Special Situations Management LLC as the Collateral Agent Form 8-K 001-40611 10.4 November 5, 2024 10.37 IP Security Agreement, dated as of November 4 , 2024, by and among the Company, Nauticus Robotics Holdings Inc., Nautiworks LLC, Nauticus Robotics Fleet LLC, and Nauticus Robotics USA LLC, as Debtors, in favor of ATW Special Situations Management LLC as the Collateral Agent. Form 8-K 001-40611 10.5 November 5, 2024 10.38 Subsidiary Guarantee, dated as of November 4 , 2024, by Nauticus Robotics Holdings, Inc., NautiWorks LLC, Nauticus Robotics Fleet LLC, and Nauticus Robotics USA LLC, in favor of ATW Special Situations Management LLC as Collateral Agent. Form 8-K 001-40611 10.6 November 5, 2024 10.39 Intercreditor agreement, dated as of November 4 , 2024, by and among the Collateral Agent and ATW Special Situations Management LLC, in its capacity as agent for certain lenders to the Debtors, and acknowledged and agreed to by the Debtors Form 8-K 001-40611 10.7 November 5, 2024 10.40 Intercreditor agreement, dated as of November 4, 2024, by and among the Collateral Agent and Acquiom Agency Services LLC, and acknowledged and agreed to by the Debtors. Form 8-K 001-40611 10.8 November 5, 2024 66 Table of Contents Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 10.42 Intercreditor agreement, dated as of November 4 , 2024, by and among the Collateral Agent and ATW Special Situations I LLC and acknowledged and agreed to by the Debtors. Form 8-K 001-40611 10.9 November 5, 2024 14.1 Code of Business Conduct and Ethics of Nauticus Robotics, Inc. Form 8-K 001-40611 14.1 September 15, 2022 16.1 Letter from WithumSmith+Brown, PC to the Securities and Exchange Commission Form 8-K 001-40611 16.1 September 15, 2022 19.1† Insider Trading Policy 21.1† List of Subsidiaries. 23.1† Consent of Independent Registered Public Accounting Firm 31.1† Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2† Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. 32.2* Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. 97.1† Nauticus Robotics, Inc. Clawback Policy Form 10-K 001-40611 97.1 April 10, 2024 101.INS† Inline XBRL Instance Document. 101.CAL† Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.SCH† Inline XBRL Taxonomy Extension Schema Document. 101.DEF† Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB† Inline XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE† Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 † Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). † Filed herewith *This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. **Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally an unredacted copy of this Exhibit to the SEC upon request. 67 Table of Contents +Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. ++Management contract, compensatory plan or arrangement. 68 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. April 15, 2025 /s/ John W. Gibson, Jr. John W. Gibson, Jr. Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. April 15, 2025 /s/ John W. Gibson, Jr. John W. Gibson Jr. Chief Executive Officer and President, and Director (Principal Executive Officer) April 15, 2025 /s/ Victoria Hay Victoria Hay Interim Chief Financial Officer (Principal Financial and Accounting Officer) April 15, 2025 /s/ Jim Bellingham Jim Bellingham Director April 15, 2025 /s/ William H. Flores William H. Flores Director April 15, 2025 /s/ Adam Sharkawy Adam Sharkawy Director April 15, 2025 /s/ Eli Spiro Eli Spiro Director 69