What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-14 · 482 added, 636 removed, 414 unchanged (73% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2025 December 31,

2026 (Unaudited) December 31,

Current Assets:

Cash and cash equivalents $ 5,285,230 $ 7,016,610

Restricted certificate of deposit 53,411 52,151

Restricted cash 602,796 600,342

Accounts receivable, net - 378,683

1,097,224 238,531

Accounts receivable unbilled

Inventories 914,748 880,594

Prepaid expenses 1,511,810 1,055,324

Other current assets 190,533 203,025

Assets held for sale - 750

Total Current Assets 7,590,369 9,253,984

3 unchanged sentences

Goodwill 9,600,745 9,600,745

Intangible assets, net 1,228,016 1,276,916

Total Assets $ 40,209,438 $ 42,609,695

Liabilities and Stockholders’ Deficit

Liabilities and Stockholders’ Equity

Current Liabilities:

1 unchanged sentence

Accrued liabilities 9,667,067 9,807,668

Contract liability 343,493 346,279

Operating lease liabilities - current 446,572 434,200

Notes payable - current 2,873,598 2,628,234

Notes payable - current, fair value option (related party) 2,711,954 -

Notes payable - current, net of discount (related party) 11,300,828 -

Notes payable - current, net of discount 13,647,910 -

November 2024 Debentures - current, fair value option (related party) 1,298,728 163,672

Senior Secured Convertible Term Loan - current, net of discount (related party) 14,752,299 14,113,871

Senior Secured Convertible Term Loan - current, net of discount 4,974,978 4,939,247

Other liabilities 178,188 160,110

Total Current Liabilities 35,350,189 35,375,461

1 unchanged sentence

Operating lease liabilities - long-term 87,925 203,547

Notes payable - long-term, fair value option (related party) - 2,583,832

Notes payable - long-term, net of discount (related party) - 13,820,366

Notes payable - long-term, net of discount - 12,531,332

Other liabilities - 895,118

Derivative liability 515,827 -

Total Liabilities $ 35,962,203 $ 35,590,289

Stockholders’ Deficit:

Stockholders’ Equity:

Series A Convertible Preferred Stock $ 0.0001 par value;

40,000 shares authorized, 35,434 shares issued at September 30, 2025 and December 31, 2024 and 13,696 and 35,034 outstanding at September 30, 2025 and December 31, 2024, respectively.

40,000 shares authorized and 5,546 shares issued and outstanding at March 31, 2026 and December 31, 2025.

Series B Convertible Preferred Stock $ 0.0001 par value;

50,000 shares authorized, 3,000 and 0 shares issued at September 30, 2025 and December 31, 2024, respectively and 3,000 and 0 outstanding at September 30, 2025 and December 31, 2024, respectively.

50,000 shares authorized and 2,263 and 2,813 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively.

Series C Convertible Preferred Stock $ 0.0001 par value;

100,000 shares authorized and 3,777 and 2,154 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively.

Common stock, $ 0.0001 par value;

625,000,000 shares authorized, 6,427,297 and 1,084,655 shares issued at September 30, 2025 and December 31, 2024, respectively, and 6,427,297 and 1,084,655 shares outstanding at September 30, 2025 and December 31, 2024, respectively

625,000,000 shares authorized and 4,291,998 and 3,601,400 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively.*

Additional paid-in capital 337,266,475 330,581,384

Accumulated other comprehensive loss ( 42,229 ) ( 42,229 )

Accumulated other comprehensive income ( 42,229 ) ( 42,229 )

Accumulated deficit ( 332,977,441 ) ( 323,520,110 )

Total Stockholders’ (Deficit) ( 4,122,986 ) ( 20,397,413 )

Total Liabilities and Stockholders’ Deficit $ 42,813,211 $ 22,685,087

The accompanying notes are an integral part of these condensed consolidated financial statements.

Total Stockholders’ Equity 4,247,235 7,019,406

Total Liabilities and Stockholders’ Equity $ 40,209,438 $ 42,609,695

* Reflects the 1-for-9 reverse split effected September 5, 2025 and the 1-for-8 effected April 21, 2026.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

1 unchanged sentence

Three months ended

September 30, Nine months ended September 30,

2025 2024 2025 2024

Service $ 159,575 $ 165,256

2 unchanged sentences

Cost of revenue (exclusive of items shown separately below) 1,993,894 1,238,957

Depreciation 590,820 446,087 1,645,759 1,283,858

Research and development - - - 63,534

Depreciation and amortization 624,791 480,376

General and administrative 3,224,907 4,359,686

3 unchanged sentences

Other (income) expense, net ( 3,145 ) ( 137,397 )

Gain on lease termination - - - ( 23,897 )

Foreign currency transaction loss 970 3,267

Loss on extinguishment of debt 929,508 -

Change in fair value of derivative 515,827 -

Change in fair value of warrant liabilities ( 3,019 ) ( 50,888 )

Change in fair value of New Convertible Debentures - ( 24,199,071 ) - ( 36,113,800 )

Change in fair value of November 2024 Debentures 1,188,840 723,926

Interest expense, net 953,083 1,114,516

Total other (income) expense, net 762,028 ( 23,501,702 ) 3,548,403 33,234,369

Net income (loss) $ ( 6,639,948 ) $ 17,931,827 $ ( 21,661,311 ) $ ( 50,366,134 )

Basic income (loss) per share (As adjusted, see Note 18) $ ( 2.60 ) $ 60.31 $ ( 7.47 ) $ ( 237.23 )

Diluted loss per share (As adjusted, see Note 18) $ ( 2.60 ) $ ( 3.23 ) $ ( 7.47 ) $ ( 237.23 )

Basic weighted average shares outstanding (As adjusted, see Note 18) 3,878,466 297,334 3,357,726 212,307

Diluted weighted average shares outstanding (As adjusted, see Note 18) 3,878,466 1,698,797 3,357,726 212,307

The accompanying notes are an integral part of these condensed consolidated financial statements.

Total other expense, net 3,582,064 1,653,424

Net loss $ ( 9,266,081 ) $ ( 7,567,187 )

Basic and diluted loss per share* $ ( 2.46 ) $ ( 19.85 )

Basic and diluted weighted average shares outstanding* 3,840,563 381,215

* Reflects the 1-for-9 reverse split effected September 5, 2025 and the 1-for-8 effected April 21, 2026.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES OF STOCKHOLDERS’ EQUITY (DEFICIT)

Series A Preferred Stock Series B Preferred Stock Common Stock Additional Paid-in

Series A Preferred Stock Series B Preferred Stock Series C Preferred Stock Common Stock* Additional Paid-in

Capital * Accumulated Other Comprehensive Loss Accumulated

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Stockholders’ Equity

Shares Amount Shares Amount Shares Amount

Shares Amount Shares Amount Shares Amount Amount Shares Amount

(As adjusted, see Note 15)

Balance at June 30, 2024 - $ - - $ - 459,048 $ 46 $ 95,639,533 $ - $ ( 187,089,664 ) $ ( 91,450,085 )

Foreign currency translation adjustment - - - - - - - ( 26,983 ) - ( 26,983 )

Stock-based compensation - - - - - - 532,539 - - 532,539

Reverse stock split round up - - - - 14,887 1 ( 1 ) - - -

Vesting of RSUs - - - - 968 - - - - -

Exercise of warrants - - - - 4,248 - 184,094 - - 184,094

Conversion of convertible secured debentures - - - - 146,957 15 6,279,612 - - 6,279,627

Net income - - - - - - - - 17,931,827 17,931,827

Balance at September 30, 2024 - $ - - $ - 626,108 62 $ 102,635,777 $ ( 26,983 ) $ ( 169,157,837 ) $ ( 66,548,981 )

Balance at June 30, 2025 18,296 $ 2 - $ - 4,156,106 $ 416 $ 263,086,186 $ ( 42,229 ) $ ( 268,719,715 ) $ ( 5,675,340 )

Balance at December 31, 2024 35,034 $ 4 - - 135,582 $ 14 $ 233,343,150 $ ( 42,229 ) $ ( 253,698,352 ) $ ( 20,397,413 )

Stock-based compensation - - - - - - - - 312,679 - - 312,679

Conversion of Term Loan notes to Common Stock - - - - - - 25,075 3 2,870,570 - - 2,870,573

Conversion of Series A Preferred Stock to Common Stock ( 15,188 ) ( 2 ) - - - - 222,476 22 ( 20 ) - - -

Issuance of Series B Preferred Stock - - 3,000 - - - 2,855,000 - - 2,855,000

At the Market (ATM) share offering - - - - - - 104,012 10 19,438,111 - - 19,438,121

Vesting of RSUs - - - - 18,555 2 ( 2 ) - - -

Reverse stock split round up and Adj - - - - 64,144 6 ( 6 ) - - -

Deemed dividend - Series A Down-round adjustment - - - - - - 3,427,706

- ( 3,427,706 )

Net loss - - - - - - - - ( 6,639,948 ) ( 6,639,948 )

Balance at September 30, 2025 13,696 $ 1 3,000 $ - 6,427,297 $ 643 $ 274,705,968 $ ( 42,229 ) $ ( 278,787,369 ) $ ( 4,122,986 )

Series A Preferred Stock Series B Preferred Stock Common Stock Additional Paid-in

Capital Accumulated Other Comprehensive Loss Accumulated

Deficit Total

Stockholders’ Equity

Shares Amount Shares Amount Shares Amount

(As adjusted, see Note 13)

Balance at December 31, 2023 - $ - - $ - 154,432 $ 15 $ 77,004,838 $ - $ ( 118,791,703 ) $ ( 41,786,850 )

Foreign currency translation adjustment - - - - - - - ( 26,983 ) - ( 26,983 )

Stock-based compensation - - - - - - 1,872,504 - - 1,872,504

Reverse stock split round up - - - - 14,887 1 ( 1 ) - - -

Earnout shares - - - - - - - - 6,864,729 - - 6,864,729

Vesting of RSUs - - - - - - 825 - - - - -

Exercise of warrants - - - - 72,647 7 4,635,249 - - 4,635,256

Conversion of convertible secured debentures - - - - 216,839 22 9,765,250 - - 9,765,272

At the Market ("ATM") share offering - - - - 156,270 16 9,357,938 - - 9,357,954

Other - - - - - - 272 - - - - -

Net loss - - - - - - - - - - ( 7,567,187 ) ( 7,567,187 )

Balance at September 30, 2024 - $ - - $ - 626,108 $ 62 $ 102,635,777 $ ( 26,983 ) $ ( 169,157,837 ) $ ( 66,548,981 )

Balance at March 31, 2025 19,846 $ 2 0 $ - 0 $ - 488,242 $ 49 $ 262,829,219 $ ( 42,229 ) $ ( 261,265,539 ) $ 1,521,502

Balance at December 31, 2025 5,546 $ 1 2,813 - 2,154 - 3,601,400 $ 360 $ 330,581,384 $ ( 42,229 ) $ ( 323,520,110 ) $ 7,019,406

Stock-based compensation - - - - - - 225,552 - - 225,552

Conversion of notes payable to Common Stock - - - - 200,600 20 2,870,553 - - 2,870,573

Conversion of Series A Preferred Stock to Common Stock ( 21,338 ) ( 3 ) - - 3,100,383 310 ( 307 ) - - -

Issuance of Series B Preferred Stock - - 3,000 - - - 2,855,000 - - 2,855,000

Conversion of November 2024 Debentures to Common Stock - - - - - - - 27,932 3 283,788 283,791

Exchange of November 2024 Debentures for Series C Preferred Stock - - - - 2,023 - - - 3,659,502 - - 3,659,502

Conversion of Series B Preferred Stock to Common Stock - - - 550 - - - 146,781 15 ( 15 ) - - -

Conversion of Series C Preferred Stock to Common Stock - - - - - 400 - 67,320 7 ( 7 ) - - -

At the Market (ATM) share offering - - - - - - 364,264 36 2,343,108 - - 2,343,144

Earnout shares (contingent)

- - - - - - 6,864,729 - - 6,864,729

Issuance of shares for settlement of Seatrepid Earnout - - - - - - 83,944 8 ( 8 ) - - -

Vesting of RSUs - - - - - - 357 - - - - -

Reverse stock split round up and Adj - - - - 64,144 6 ( 6 ) - - -

Other - - - - 2,167 - - - - -

Deemed dividend - Series A down-round adjustment - - - - - - 3,427,706

- ( 3,427,706 )

Preferred stock dividend - - - - - - - - 173,171 - ( 191,250 ) ( 18,079 )

Net loss - - - - - - - - - - ( 9,266,081 ) ( 9,266,081 )

Balance at September 30, 2025 13,696 $ 1 3,000 $ - 6,427,297 $ 643 $ 274,705,968 $ ( 42,229 ) $ ( 278,787,369 ) $ ( 4,122,986 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

Balance at March 31, 2026 5,546 $ 1 2,263 $ - 3,777 $ - 4,291,998 $ 429 $ 337,266,475 $ ( 42,229 ) $ ( 332,977,441 ) $ 4,247,235

* Reflects the 1-for-9 reverse split effected September 5, 2025 and the 1-for-8 effected April 21, 2026.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

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Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 1,645,759 1,283,858

Depreciation and amortization 624,791 480,376

Accretion of debt discount 9,976 9,895

1 unchanged sentence

Capitalized paid-in-kind (PIK) interest 179,939 166,882

Accretion of RCB Equities #1, LLC exit fee 73,418 73,058

Accretion of exit fee 12,600 24,152

Stock-based compensation 225,552 312,679

1 unchanged sentence

Change in fair value of November 2024 Debentures 1,188,840 723,926

Change in fair value of New Convertible Debentures - ( 36,113,800 )

Loss on extinguishment of debt 929,508 -

Change in fair value of derivative 515,827 -

Non-cash lease expense 91,865 95,247

Gain on disposal of assets - ( 1,695 )

Write-off of property and equipment - 32,636

Gain on lease termination - ( 23,897 )

Changes in operating assets and liabilities:

Accounts receivable 378,683 ( 115,200 )

Inventories 41,146 ( 30,712 )

Other assets ( 424,008 ) ( 281,542 )

Accounts payable and accrued liabilities ( 1,478,833 ) ( 517,629 )

Contract liabilities ( 2,786 ) ( 2,070,095 )

Operating lease liabilities ( 103,249 ) ( 103,552 )

Other liabilities - 895,117

Net cash used in operating activities ( 7,005,769 ) ( 6,649,394 )

2 unchanged sentences

Acquisition of business, net of cash acquired - ( 3,871,992 )

Proceeds from sale of assets held for sale - 420,220

Proceeds from sale of property and equipment ( 500 ) 18,098

Net cash used in investing activities - ( 3,919,981 )

Cash flows from financing activities:

Proceeds from notes payable - 14,305,000

Payment of debt issuance costs on notes payable - ( 1,316,791 )

Proceeds from ATM offering 24,377,196 9,857,857

Payment of ATM commissions and fees - ( 499,903 )

Issuance of Series B Preferred Stock 2,855,000 -

Repayment on notes payable ( 61,108 ) -

Proceeds from At the Market (ATM) offering, net 2,343,144 19,438,121

Proceeds from November 2024 Debentures 2,960,000 -

Repayment on AmeriState Loan ( 26,301 ) -

Net cash provided by financing activities 5,276,843 19,438,121

Effects of changes in exchange rates on cash and cash equivalents - ( 26,983 )

Net change in cash and cash equivalents ( 1,728,926 ) 8,868,746

Cash and cash equivalents, beginning of period 1,186,047 753,398

Cash and cash equivalents, end of period $ 5,492,350 $ 2,915,757

Cash, cash equivalents and restricted cash, beginning of period 7,616,952 1,238,198

Cash, cash equivalents and restricted cash, end of period $ 5,888,026 $ 10,106,944

Supplemental disclosure of cash flow information:

Cash paid for interest $ 53,396 $ -

Cash paid for taxes $ - $ -

Non-cash investing and financing activities:

Conversion of Term Loan notes and interest to Common Stock $ - $ 2,870,573

Series C Preferred Stock issued in exchange for convertible debt $ 3,659,502 $ -

Conversion of November 2024 Debentures to Common Stock $ 283,790 $ -

Conversion of Series B Preferred Stock to Common Stock $ 15 $ -

Conversion of Series C Preferred Stock to Common Stock $ 7 $ -

Preferred stock dividend $ 191,250 $ -

Earnout shares for acquisition $ - $ 6,864,729

1 unchanged sentence

Accrued purchase price $ - $ 3,549,196

Deemed dividend from down-round adjustment $ 3,427,706 $ -

Operating leases at inception $ - $ 1,095,067

Exercise of warrants $ - $ 4,635,256

Fair value of conversion of convertible secured debentures to common stock $ - $ 9,765,272

Liabilities relieved through sale of asset held for sale $ - $ 1,158,609

Transfer from assets held for sale to property and equipment $ - $ 1,119,864

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

2 unchanged sentences

Nauticus Robotics, Inc.

(the “Company,” “our,” “us” or “we”) is a developer of ocean robots, cloud software and services delivered to the ocean industry.

Our principal corporate offices are located in Webster, Texas.

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

(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 autonomous underwater vehicles (AUVs), electric 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.

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 ROVs and untethered AUVs.

Aquanaut represents the next generation of subsea robotics integrating eight independent 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.

Nauticus 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.

Nauticus ToolKITT has been deployed on third party commercial ROVs and competing robotic platforms, 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.

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.

The strategic acquisition of SeaTrepid International LLC (“SeaTrepid”), finalized on March 20, 2025, intends to integrate Nauticus AI-driven autonomy software, Nauticus ToolKITT, into SeaTrepid's existing remotely operated vehicle (ROV) fleet.

The combination will showcase unprecedented advancements in power efficiency and operational performance across the industry.

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

Liquidity – The Company continues to develop its principal products and conduct research and development activities.

Currently, the Company does not generate sufficient revenue to cover operating expenses, working capital and capital expenditures.

The Company has embarked on cost-cutting measures to continue to preserve cash.

The Company may require additional liquidity to continue its operations over the next twelve months, which a current investor has continued to commit to support.

The Company believes with this investor support that there will be sufficient resources to continue as a going concern for at least one year from the date that the condensed consolidated financial statements contained in this Form 10-Q are issued.

Furthermore, during the quarter ended September 30, 2025 all of the Company's outstanding notes payable were reclassified from long-term to short-term due to maturity.

Management intends to refinance or extend these obligations prior to maturity;

however, no refinancing agreements were in place as of September 30, 2025.

The company is evaluating financing alternatives, and management believes successful refinancing or renewal will be important in maintaining adequate liquidity during the next twelve months.

Summary of Significant Accounting Policies

Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed consolidated results of operations, financial position, cash flows and changes in stockholders’ deficit for each period presented.

All intercompany balances and transactions have been eliminated in preparation of these condensed consolidated financial statements.

The condensed consolidated results for the interim periods are not necessarily indicative of results to be expected for the full year.

The 2024 year-end consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP").

These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Summary of Significant Accounting Policies – The Company’s significant accounting policies are discussed in Note 2 to Nauticus Robotics, Inc.’s consolidated financial statements included in its Annual Report on Form 10-K filed with the SEC

The Company’s 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.

Liquidity and Going Concern — The Company has incurred recurring losses each year since its inception and currently does not generate sufficient revenue to cover operating expenses, working capital and capital expenditures.

The Company continues to develop its principal products and conduct research and development activities.

The Company currently funds its operations with cash on hand, availability under the November 2024 Debentures (see Note 8 - Notes Payable) and the offer and sale of additional shares of Common Stock under the At The Market Offering Agreement (see Note 24 - Subsequent Events).

The Company may require additional liquidity to continue its operations over the next twelve months.

While a current investor has expressed an intention to provide financial support, factors such as stock price, volatility, trading volume, market conditions, demand and regulatory requirements may adversely affect the Company's ability to raise capital in an efficient manner.

Because of these factors, the Company believes that this creates substantial doubt about the Company's ability to continue as a going concern for a period of at least twelve months from the date these consolidated financial statements were issued.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Reverse Stock Split - On September 5, 2025, the Company effected a 1-for-9 reverse stock split of the shares of the Company's common stock, par value $ 0.0001 per share.

No fractional shares were issued in connection with the reverse stock split, but were instead rounded up to the nearest whole share.

The Board of Directors of the Company approved the Certificate of Amendment to meet the share bid price requirements of the NASDAQ Capital Market.

The Company’s stockholders authorized the reverse stock split and the Certificate of Amendment at a special meeting held on June 25, 2025.

On April 21, 2026, the Company effected a 1-for-8 reverse stock split of the shares of the Company's common stock, par value $ 0.0001 per share.

No fractional shares were issued in connection with the reverse stock split, but were instead rounded up to the nearest whole share.

The Board of Directors of the Company approved the Certificate of Amendment to meet the share bid price requirements of the NASDAQ Capital Market.

The Company’s stockholders authorized the reverse stock split and the Certificate of Amendment at a special meeting held on January 28, 2026.

All common shares and per common share information in these condensed consolidated financial statements have been retroactively adjusted to reflect the 1-for-9 and the 1-for-8 reverse stock splits.

All options, warrants and other convertible securities of the Company outstanding immediately prior to the splits have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

Each stockholder’s percentage ownership interest in the Company and proportional voting power remain virtually unchanged by the split, except for minor changes and adjustments that resulted from rounding fractional shares into whole shares.

The rights and privileges of the holders of shares of the Company’s Common Stock were substantially unaffected.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the year ended December 31, 2024.

There have been no significant changes to these policies which have had a material impact on the Company’s interim unaudited condensed consolidated financial statements and related notes during the three and nine months ended September 30, 2025.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

Significant items subject to such estimates and assumptions include the (i) estimates of future costs to complete customer contracts recognized over time, (ii) valuation allowances for deferred income tax assets, (iii) valuation of stock-based compensati on awards and (iv) the valuation of conversion options, warrants and earnouts, (v) fair value of the November 2024 Debentures and new convertible debentures, and (vi) the fair value of the SeaTrepid acquisition.

Ac tual results could differ from those estimates.

Summary of Significant Accounting Policies

Basis of Presentation - The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), under the rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

All intercompany balances and transactions have been eliminated in preparation of these consolidated financial statements.

Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period.

Significant items subject to such estimates and assumptions include the (i) estimates of future costs to complete customer contracts recognized over time, (ii) valuation allowances for deferred income tax assets, (iii) valuation of stock-based compensation awards, (iv) the valuation of conversion options, warrants and earnouts, (v) fair value of the November 2024 Debentures, (vi) the fair value of the SeaTrepid acquisition and (vii) fair value of Preferred Stock.

Actual results could differ from those estimates.

Cash and Cash Equivalents – The Company classifies all highly-liquid instruments with an original maturity of three months or less as cash equivalents.

1 unchanged sentence

Historically, the Company has not experienced any losses in such accounts.

There were no cash equivalents at September 30, 2025 or December 31, 2024.

Restricted Certificates of Deposit – The Company has restricted certificates of deposit of $ 53,411 and $ 52,151 , held by a bank on our behalf as of September 30, 2025 and December 31, 2024, respectively which relate to a guarantee against corporate credit cards.

Accounts Receivable, Unbilled Revenues, and Allowance for Credit Losses - With the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , accounts receivable and contract assets are recorded at the invoiced amount and do not typically bear interest.

Restricted Cash – The Company had restricted cash of $ 602,796 and $ 600,342 , held by a bank on our behalf as of March 31, 2026 and December 31, 2025, respectively, relating to a custom bond guarantee.

Accounts Receivable, Unbilled Revenues, and Allowance for Credit Losses - With the adoption of the Accounting Standards Update ("ASU") 2016-13 Financial Instruments - Credit Losses (Topic 326) , accounts receivable and contract assets are recorded at the invoiced amount and do not typically bear interest.

The Company regularly monitors and assesses its risk of not collecting amounts owed by customers.

At each balance sheet date, the Company recognizes an expected allowance for credit losses.

At each consolidated balance sheet date, the Company recognizes an expected allowance for credit losses.

In addition, at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded.

6 unchanged sentences

If any recoveries are made from any accounts previously written off, they will be recognized in income in the year of recovery, in accordance with the entity’s accounting policy election.

The total amount of write-offs and expected credit losses were $ 0 for the three and nine months ended September 30, 2025 and $ 0 and $ 39 for the three and nine months ended September 30, 2024, respectively.

The allowance for current expected credit losses was $ 0 at September 30, 2025 and December 31, 2024.

Assets Held For Sale ("AHFS") – Long-lived assets identified as assets held for sale are categorized on the balance sheet as current assets and are measured at the lower of carrying value or fair value less any costs to sell.

Any liabilities associated with the assets being sold are categorized on the condensed consolidated balance sheet as current liabilities.

AHFS are no longer depreciated or amortized.

There was no allowance for credit losses as of March 31, 2026 and December 31, 2025.

Property and Equipment – Property and equipment is recorded at cost and depreciated using the straight-line method.

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Upon disposition, the cost and accumulated depreciation are removed and any gain or loss on the disposal is reflected in the condensed consolidated statements of operations.

Goodwill – Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations.

Pursuant to Accounting Standards Codification ("ASC") Topic 350, Intangibles-Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances.

Under authoritative guidance, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment test.

The assessment considers factors such as, but not limited

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Segment Reporting – Our operations represent a single reportable segment because each revenue stream possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance.

to, macroeconomic conditions, data showing other companies in the industry and our share price.

An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount.

Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price.

Intangible Assets - Intangible assets consist primarily of trade-names/trademarks, intellectual property and non-compete agreements acquired through the SeaTrepid acquisition.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 3 to 15 years.

Impairment of Long-Lived Assets - The Company reviews long-lived assets for potential impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

In this assessment, future pre-tax cash flows (undiscounted) resulting from the use of the asset and its eventual disposal are estimated.

If the undiscounted future cash flows are less than the carrying amount of the asset, an impairment loss is recognized for the difference between its carrying value and estimated fair value.

For the three months ended March 31, 2026 and 2025 no property and equipment was impaired.

Segment Reporting - In November of 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

Operating segments refer to components of a company that engage in activities for which separate financial information is available and reviewed regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing performance.

The CODM reviews the consolidated balance sheets and consolidated statements of operations quarterly and reviews as a single reportable segment.

The CODM is the Company's Chief Executive Officer.

The CODM primarily assesses performance of the Company based upon consolidated net profit or loss, which is an appropriate measure of operating performance because it reflects ongoing profitability.

Segment assets are measured and reviewed on a consolidated basis and are presented as total consolidated assets on the face of the condensed consolidated balance sheet.

The significant expenses regularly reviewed by the CODM are limited to the line items presented in the Condensed Consolidated Statement of Operations, and no further disaggregation is provided for segment review purposes.

The CODM reviews the condensed consolidated balance sheet and condensed consolidated statement of operations on a quarterly basis as a single reportable segment and uses this financial information in deciding how to allocate resources and assessing performance.

The Company manages its operations as a single segment because each revenue stream possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance .

Revenue – Our primary sources of revenue are from providing technology, engineering services and products to the offshore industry and governmental entities.

Revenue is generated pursuant to contractual arrangements to design and develop subsea robots and software and to provide related engineering, technical, and other services according to the specifications of the customers.

These contracts can be service sales (cost plus fixed fee or firm fixed price) or product sales and typically have terms of up to 18 months.

The Company ha d no pro duct sales for the three and nine months ended September 30, 2025 and 2024, respectively.

These contracts can be service sales (cost plus fixed fee or firm fixed price) or product sales.

The Company had no product sales for the three months ended March 31, 2026 and 2025, respectively.

A performance obligation is a promise in a contract to transfer distinct goods or services to a customer.

For all contracts, we assess if there are multiple promises that should be accounted for as separate performance obligations or combined into a single performance obligation.

We generally separate multiple promises in a contract as separate performance obligations if those promises are distinct, both individually and in the context of the contract.

If multiple promises in a contract are highly interrelated or require significant integration or customization within a group, they are combined and accounted for as a single performance obligation.

Our performance obligations under service agreements generally are satisfied over time as the service is provided.

Revenue under these contracts is recognized over time using an input measure of progress (typically costs incurred to date relative to total estimated costs at completion).

This requires management to make significant estimates and assumptions to estimate contract sales and costs associated with its contracts with customers.

At the outset of a long-term contract, the Company identifies risks to the achievement of the technical, schedule and cost aspects of the contract.

Throughout the contract term, on at least a quarterly basis, we monitor and assess the effects of those risks on its estimates of sales and total costs to complete the contract.

Changes in these estimates could have a material effect on our results of operations.

Where the current estimate of total costs at completion for contracts exceeds the total consideration we expect to receive we recognize the entire expected loss in the period that becomes evident.

Estimated contract costs include costs that relate directly to the contract including direct labor, direct materials, and allocations of certain overhead costs.

Firm-fixed price contracts present the risk of unreimbursed cost overruns, potentially resulting in lower-than-expected contract profits and margins.

This risk is generally lower for cost plus fixed fee contracts which, consequently, often have a lower margin.

Inventories – The inventories comprise raw materials, work in progress, and finished goods, as applicable, and are valued at the lower of cost or net realizable value.

Work in progress and finished goods inventories include raw materials, direct labor and production overhead.

The Company periodically reviews inventories on hand and current market conditions to determine if the cost of raw materials, work in progress and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly.

The associated impairment is charged as a standalone expense on the condensed consolidated statements of operations.

Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost.

The associated write-downs or write-offs of inventory are charged to cost of sales.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventories consisted of the following:

September 30,

2025 December 31,

Raw material and supplies $ 864,548 $ 880,594

Work in progress 50,200 -

Total inventories $ 914,748 $ 880,594

Leases – The Company’s lease arrangements are operating leases which are capitalized on the balance sheet as right-of-use (“ROU”) assets and obligations.

Our service arrangements generally represent a single performance obligation.

Our performance obligations under service agreements generally are satisfied over a short period of time as the service is provided.

Revenue under these contracts is recognized using an input method based on costs incurred relative to total estimated costs.

This requires management to make estimates and assumptions to estimate contract sales and costs associated with its contracts with customers.

Changes in estimates are recognized in the period in which they become known.

Where the estimated total costs to complete a contract exceed the expected consideration to be received, the full amount of the anticipated loss is recorded in the period the loss becomes evident.

Leases – The Company’s lease arrangements are operating leases which are capitalized on the consolidated balance sheets as right-of-use (“ROU”) assets and obligations.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

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Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less ("short term leases") are not recorded on the balance sheet;

Leases with an initial term of 12 months or less ("short-term leases") are not recorded on the consolidated balance sheets;

and the lease expense on short-term leases is recognized on a straight-line basis over the lease term.

Stock-Based Compensation – The Company accounts for employee stock-based compensation using the fair value method.

Compensation cost for equity incentive awards is based on the fair value of the equity instrument generally on the date of grant and is recognized over the requisite service period.

Compensation cost for equity incentive awards is based on the fair value of the equity instrument generally on the date of

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

grant and is recognized over the requisite service period.

The Company’s policy is to issue new shares upon the exercise or conversion of options and recognize option forfeitures as they occur.

Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates.

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Changes in recognition or measurement are reflected in the period in which a change in judgment occurs.

The Company had no material uncertain income tax positions as of September 30, 2025 and December 31, 2024.

Foreign Currency Translation – Prior to January 1, 2025, all assets and liabilities in the condensed consolidated balance sheet of the Company's foreign subsidiary, whose functional currency is the Brazilian Real, were translated at period-end exchange rates.

All revenues and expenses in the condensed consolidated statements of operations, of this foreign subsidiary, were translated at average exchange rates for the period.

Translation gains and losses were not included on determining net loss but were shown in accumulated other comprehensive loss on the condensed consolidated balance sheet.

Effective January 1, 2025, the functional currency for the Company's foreign subsidiary was changed from Brazilian Real to U.S.

dollars due to changes in operational and economic circumstances.

The previously recorded cumulative translation adjustment in Accumulated Other Comprehensive Income as of the date of the change remains in equity and will not be reclassified to earnings unless the subsidiary is sold or liquidated.

The change was accounted for prospectively.

Foreign Currency Gains and Losses – Foreign currency transaction gains and losses are included on determining net loss.

The Company purchases certain materials and equipment from foreign companies and these transactions are generally denominated in the vendors’ local currency.

The Company recorded $ 48,807 and $ 52,348 of foreign currency transaction losses for the three and nine months ended September 30, 2025 respectively.

The Company recorded $ 11,833 and $ 21,276 of foreign currency transaction losses for the three and nine months ended September 30, 2024, respectively.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had no material uncertain income tax positions as of March 31, 2026 and December 31, 2025.

Fair Value Measurements - The Company categorizes financial assets and liabilities using a three-tier fair value hierarchy, based on the nature of the inputs used to determine fair value.

Inputs refer broadly to assumptions that market participants would use to value an asset or liability and may be observable or unobservable.

When determining the fair value of assets and liabilities, the Company uses the most reliable measurement available.

See Note 22, “Fair Value Measurements.”

Common Stock Warrants – We account for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance.

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This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

We have determined that the Public and Private warrants should be accounted for as liabilities.

The Public and Private Warrants were initially recorded at their estimated fair value.

They are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations.

Derivative warrant liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

We have determined that the private warrants sold in a private placement (the “Private Warrants”) and warrants sold to the public (the “Public Warrants”) should be accounted for as liabilities.

The Private Warrants and Public Warrants were initially recorded at their estimated fair value on the issuance.

They are then revalued at each reporting date thereafter, with changes in the fair value reported in the consolidated statements of operations.

Derivative warrant liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the consolidated balance sheet date.

The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement).

The Public Warrants are valued using their publicly-traded price at each measurement date (a Level 1 measurement).

We have determined that the Securities Purchase Agreement ("SPA") Warrants should be accounted for as liabilities.

The SPA Warrants were initially recorded at their estimated fair value and are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations.

Derivative warrant liabilities are classified in our balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The fair value of the Original SPA Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement).

Fair Value Election for New Co nvertible Debentures and November 2024 Debentures - The Company has elected to measure its new 5 % Original Issue Discount Senior Secured Convertible Debentures (the "New Convertible Debentures") and the 2 % Original Issue Discount Senior Secured Convertible Debentures (the "November 2024 Debentures") at fair value under the fair value option in accordance with ASC 825-10, Financial Instruments – Fair Value Option.

This election was made to provide greater transparency and to more accurately reflect the economic value of the New Convertible Debentures and November 2024 Debentures in the Company's condensed consolidated financial statements.

Under the fair value option, the New Convertible Debentures and the November 2024 Debentures are recorded at their estimated fair value at each reporting date, with changes in fair value recognized in earnings within "Other (income) expense" in the Condensed Consolidated Statements of Operations.

The fair value of the New Convertible Debentures and November 2024 Debentures are determined using a Monte Carlo simulation model that uses inputs such as the Company’s stock price (KITT), stock price volatility, risk-free interest rate and conversion terms.

As of December 31, 2024, the fair value of the New Convertible Debentures was $ 0 compared to an initial fair value of 99,195,791 as of January 30, 2024, as a result of the New Convertible Debentures being exchanged to Series A Preferred stock on December 27, 2024 and December 31, 2024.

November 2024 Debentures

The November 2024 Debentures were estimated to have a fair value of $ 2,711,954 and $ 2,583,832 as of September 30, 2025 and December 31, 2024, respectively.

The fair value option eliminates the requirement to separately account for embedded conversion features that would otherwise be bifurcated under ASC 815-15, Derivatives and Hedging – Embedded Derivatives.

Instead, all economic impacts of the New Convertible Deb entures and November 2024 Debentures—including interest, conversion features, and market fluctuations—are captured in the fair value measurement.

The Company believes that the fair value measurement provides a more relevant representation of the liability’s impact on financial position and performance, as it reflects the new convertible debentures’ current economic value and reduces potential measurement inconsistencies.

The Earnout Shares will be released upon the occurrence

We have determined that the SPA Warrants should be accounted for as liabilities.

The SPA Warrants were initially recorded at their estimated fair value on the issuance and are then revalued at each reporting date thereafter, with changes in the fair value reported in the consolidated statements of operations.

Derivative warrant liabilities are classified in our consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the consolidated balance sheet date.

Fair Value Election for November 2024 Debentures - The Company has elected to measure its 2 % Original Issue Discount Senior Secured Convertible Debentures (the "November 2024 Debentures") at fair value under the fair value option in accordance with ASC 825-10, Financial Instruments – Fair Value Option.

This election was made to provide greater transparency and to more accurately reflect the economic value of the November 2024 Debentures in the Company's condensed consolidated financial statements.

Under the fair value option, the November 2024 Debentures are recorded at their estimated fair value at each reporting date, with changes in fair value recognized in earnings within "Other (income) expense" in the Condensed Consolidated

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of a triggering event within 5 years of the issue date (see Note 13, "Equity").

The Earnout Shares are considered legally issued and outstanding shares of Common Stock subject to restrictions on transfer and potential forfeiture pending the achievement of the Earnout targets.

The Company evaluated the Earnout Shares and concluded that they meet the criteria for equity classification.

The Earnout Shares were classified in stockholders’ equity, recognized at fair value upon issuance and will not be subsequently remeasured.

A Monte Carlo valuation model (a Level 3 measurement) determined their estimated fair value upon issuance.

Capitalized Interest – The Company capitalizes interest costs incurred to work in progress during the related construction periods.

Capitalized interest is charged to cost of revenue when the related completed project is delivered to the buyer.

The Company did not capitalize interest during the nine months ended September 30, 2025 and 2024.

Earnings (Loss) per Share – Basic earnings per share is computed by dividing income by the weighted average number of shares of common stock outstanding during the period.

Statements of Operations.

The fair value of the November 2024 Debentures are determined using a Monte Carlo simulation model that uses inputs such as the Company’s stock price (KITT), stock price volatility, risk-free interest rate and conversion terms.

Instead, all economic impacts of the November 2024 Debentures—including interest, conversion features, and market fluctuations—are captured in the fair value measurement.

The Company believes that the fair value measurement provides a more relevant representation of the liability’s impact on financial position and performance, as it reflects the November 2024 Debentures current economic value and reduces potential measurement inconsistencies.

Earnout Shares – Earnout Shares that may be issued to former holders of Nauticus Robotics Holdings, Inc.’s common stock are held in escrow and will only be issued upon the occurrence of specified Triggering Events within 5 years of September 9, 2022.

As of the reporting date, the Earnout Shares have not been issued and therefore are not considered issued or outstanding shares of common stock.

The Company evaluated the earnout arrangement under ASC 815 – Derivatives and Hedging and concluded that, upon issuance, the Earnout Shares would qualify for equity classification.

Accordingly, the Earnout Shares will be recognized in stockholders’ equity at fair value on the issuance date and will not be subsequently remeasured.

The fair value will be determined using a Monte Carlo simulation model, which represents a Level 3 fair value measurement under ASC 820 – Fair Value Measurement.

Earnings (Loss) per Share – Basic earnings per share is computed by dividing income attributable to common stockholders by the weighted average number of shares of Common Stock outstanding during the period.

Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of Common Stock that could have been outstanding assuming the exercise of stock options and warrants (determined using the treasury stock method) and conversion of convertible debt.

The Earnout Shares, which are subject to forfeiture if the achievement of certain stock price thresholds is not met, are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of calculating earnings (loss) per share.

The Company’s Convertible Preferred Stock is considered a non-participating security as it does not have the right to participate in dividends with common stockholders beyond its stated dividend or share in undistributed earnings.

Accordingly, the Company does not apply the two-class method in computing earnings (loss) per share.

Dividends on preferred stock are recorded as a reduction to net income (loss) attributable to common stockholders in the calculation of basic earnings (loss) per share.

Major Customer and Concentration of Credit Risk – We have a limited number of customers.

During the nine months ended September 30, 2025, sales to four customers accounted for 64 % of total revenue.

Sales to Customer A accounted for 24 % of total revenue, sales to Customer B accounted for 14 % of total revenue, sales to Customer C accounted for 13 % of total revenue and sales to Customer D accounted for 13 % of the total revenue.

The total balance due from these customers a s of September 30, 2025, comprised 74 % of accounts receivable, net.

During the nine months ended September 30, 2024, sales to three customers accounted for 91 % of total revenue.

Sales to Customer E accounted for 36 % of total revenue, sales to Customer F accounted for 33 % of total revenue and sales to Customer G accounted for 22 % of total revenue.

The total balance due from these customers as of December 31, 2024 comprised 16 % of accounts receivable, net.

During the three months ended March 31, 2026, sales to two customers accounted for 100 % of total revenue.

Sales to Customer A accounted for 51.43 % of total revenue and sales to Customer B accounted for 48.57 % of total revenue.

The total balance due from these customers as of March 31, 2026, was zero.

During the three months ended March 31, 2025, sales to two customers accounted for 100 % of total revenue.

Sales to Customer C accounted for 75 % of total revenue and sales to Customer D accounted for 25 % of total revenue.

Total accounts receivable as of December 31, 2025 was made up of three customers.

Loss of these customers could have a material adverse impact on the Company.

Accounting Standards Issued but not adopted as of September 30, 2025 – In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, an update that improves income statement expense disclosure requirements.

Reclassifications – Consolidated f inancial statements presented for prior periods include reclassifications that were made to conform to the current year presentation.

For the three months ended March 31, 2025, we reclassified $ 50,000 of franchise tax expense from other expense to general and administrative expense in the consolidated statements of operations to conform to the current year presentation.

For the year ended December 31, 2025 we reclassified $ 331,607 of accrued insurance from accrued liabilities to notes payable in the consolidated balance sheets to conform to current year presentation.

The reclassifications did not affect net loss or cash flows as presented, and there were no other reclassifications that materially impacted the consolidated financial statements.

Distinguishing Liabilities from Equity – The Company evaluates financial instruments, including preferred stock, convertible debt, equity line of credit, and warrants to determine whether they should be classified as liabilities or equity in accordance with ASC 480 and ASC 815.

For warrants, the Company assesses whether the instrument is indexed to its own stock and meets the equity classification conditions.

Instruments that fail equity classification are recorded as liabilities and

measured at fair value, with changes recognized in earnings.

This assessment is performed at issuance and reassessed each reporting period while outstanding.

Accounting for Business Combinations – The Company accounts for acquisitions in accordance with ASC 805, using the acquisition method.

Under this method, the consideration transferred is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

Any excess of the purchase price over the fair value of net identifiable assets acquired is recorded as goodwill.

Identifiable intangible assets, are recognized separately from goodwill if they meet the separability criteria and are amortized over the estimated useful lives.

Provisional amounts are adjusted during the measurement period as new information becomes available about facts and circumstances that existed as of the acquisition date.

Accounting Standards issued but not adopted as of March 31, 2026 – In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, an update that improves income statement expense disclosure requirements.

Under ASU 2024-03 issuers will be required to incorporate new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions in the notes to their financial statements.

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The amendments are effective for fiscal years beginning after December 15, 2026 and should be applied prospectively.

The adoption of ASU 2024-03 will require us to provide additional disclosures related to certain income statement expenses, but otherwise will not materially impact our financial statements.

All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our condensed consolidated financial statements.

The adoption of ASU 2024-03 will require us to provide additional disclosures related to certain income statement expenses, but otherwise will not materially impact our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants (Topic 832) , which establishes guidance on the recognition, measurement, presentation and disclosure of government grants received by business entities.

The Company does not currently receive government grants within the scope of this guidance.

The Company is evaluating the potential impact of the adoption of this standard on its consolidated financial statements and if arrangements in the future meet the definition of a government grant, such arrangements would be evaluated under this provision.

The following table presents the components of our revenue:

Three months ended

September 30, Nine months ended September 30,

2025 2024 2025 2024

Cost plus fixed fee $ 82,075 $ 165,256

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Total $ 159,575 $ 165,256

Our performance obligations under cost plus fixed fee agreements are generally satisfied over time as services are performed.

Revenue is recognized based on daily rates for ROV operations and personnel, along with reimbursement of

Our performance obligations under service agreements are generally satisfied over time as the service is provided and, therefore, all revenue above has been recognized over time.

Contract Balances – As of March 31, 2026, accounts receivable, net totaled $ 0 .

There were no allowances for credit losses included in accounts receivable as of March 31, 2026 and December 31, 2025, respectively.

Bad debt expense was $ 0 for the three months ended March 31, 2026 and 2025.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

allowable costs as incurred.

As such, all revenue under these agreements has been recognized over time in line with the progress of service delivery.

Contract Balances – Accounts receivable, net as of September 30, 2025 totaled $ 1,097,224 due from customers for contract billings and is expected to be collected within the next three to six months .

As of December 31, 2024 and 2023, accounts receivable, net totaled $ 238,531 and $ 212,428 , respectively.

As of September 30, 2025, and December 31, 2024, allowance for current expected credit losses included in accounts receivable totale d $ 0 resp ectively.

Bad debt expense was $ 0 for the three and nine months ended September 30, 2025 respectively and $ 0 and $ 39 for the three and nine months ended September 30, 2024, respectively.

Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer.

Contract assets are recorded at the net amount expected to be billed and collected.

Contract assets were $ 0 at September 30, 2025 and December 31, 2024 respectively.

Contract liabilities include billings in excess of revenue recognized and accruals for certain contract obligations.

The Company had contract liabilities at September 30, 2025 and December 31, 2 024 of $ 343,493 and $ 346,279 , resp ectively.

Unfulfilled Performance Obligations – As of September 30, 2025, we expect to recognize approximately $ 180,000 of revenue in future periods from unfulfilled performance obligations from existing contracts with customers.

If any of our contracts were to be modified or terminated, the expected value of the unfulfilled performance obligations of such contracts would be reduced.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

September 30,

Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows to the amounts shown in the condensed consolidated balance sheets:

2026 March 31,

Cash and cash equivalents $ 5,285,230 $ 10,054,304

Restricted cash 602,796 52,640

Total cash, cash equivalents and restricted cash $ 5,888,026 $ 10,106,944

Prepaid Expenses

Prepaid expenses consisted of the following:

2026 December 31,

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Total prepaid expenses $ 1,511,810 $ 1,055,324

Other current assets 81,706 573,275

Total other current assets $ 81,706 $ 573,275

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment

Property and equipment consisted of the following:

Life (years) September 30,

Life (years) March 31,

2026 December 31,

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Total property and equipment, net $ 21,251,878 $ 21,827,769

Depreciation expense for the three months ended March 31, 2026 and March 31, 2025 was $ 575,891 and $ 480,376 , respectively.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accrued Liabilities

Accrued liabilities consisted of the following:

September 30,

2026 December 31,

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Accrued professional fees 96,252 96,786

Accrued insurance 69,912 440,562

Accrued sales and property taxes 303,641 202,638

Accrued royalties 337,500 337,500

Accrued audit fees 191,000 531,000

Accrued settlement 219,641 319,546

Other accrued expenses 186,038 233,398

Accrued interest 4,530,112 4,303,157

Accrued purchase liability 3,173,515 3,287,881

Other accrued expenses 440,563 40,000

Total accrued expenses $ 11,244,825 $ 5,602,721

On March 20, 2025, the Company completed the acquisition of SeaTrepid International LLC (“SeaTrepid”), an expert in providing subsea robotic services to customers throughout the world, for total consideration of $ 14,352,692 (see Note 10, "Business Combination").

As of September 30, 2025, a liability of $ 3,655,086 , is outstanding to SeaTrepid payable in cash on or before September 30, 2025.

This liability includes the preliminary post-closing working capital adjustment.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total accrued liabilities $ 9,667,067 $ 9,807,668

As of March 31, 2026, a liability of $ 3,173,515 , was outstanding to SeaTrepid payable in cash which was due on September 30, 2025.

During the quarter ended March 31, 2026, the Company made partial payments to the sellers and continues to accrue interest on the past due balance based on the initial Asset Purchase Agreement.

Notes Payable

Notes payable consisted of the following:

September 30,

2026 December 31,

November 2024 debentures - fair value (principal amount of $ 2,150,000 as of September 30, 2025 and December 31, 2024)

$ 2,711,954 $ 2,583,832

November 2024 Debentures - (fair value) $ 1,298,728 $ 163,672

Convertible senior secured term loan 19,824,812 19,284,709

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AmeriState loan 1,785,026 1,811,327

Insurance Financing 603,272 331,607

Total 23,997,138 22,076,615

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capitalized debt issuance costs ( 209,524 ) ( 321,004 )

Senior bridge note exit fee provision 198,719 125,302

Total notes payable – current $ 30,037,327 $ 28,935,530

2023 Term Loan Agreement exit fee provision 128,238 115,638

Total notes payable $ 23,899,603 $ 21,845,024

November 2024 Debentures (principal amount) $ 960,000 $ 100,000

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

November 2024 Debentures

On November 4, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) 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.

The November 2024 Debentures feature an original issue discount of 2 % and incurred legal fees of $ 190,000 which were expensed through the consolidated statement of operations as the debt is being fair valued.

On November 4, 2024, the Company entered into a Securities Purchase Agreement with ATW Special Situations I LLC ("ATW I"), pursuant to which ATW I 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 senior secured convertible debentures (the “November 2024 Debentures”).

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

The November 2024 Debentures provide for, among other items:

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(e) a maturity date of September 9, 2026, and (f) an option by the holder to extend the maturity date by an additional year.

The Company has elected to add the interest payable to the principal amount of the November 2024 Debentures.

In addition, the exercise price of the November 2024 Debentures is subject to customary anti-dilution adjustments, and, in the case of a subsequent equity sale at a per share price below the exercise price, the exercise price will be adjusted to such lower price.

The fair value of the November 2024 Debentures at September 30, 2025 and December 31, 2024 was estimated at $ 2,711,954 and $ 2,583,832 , respectively, using Monte Carlo simulations with the following assumptions at September 30, 2025:

stock pric e of $ 2.88 , a risk free rate of 3.70 % implied volatility of 172 % and a remaining term of 0.94 years and assumptions at December 31, 2024:

stock price of $ 13.95 , a risk free rate of 4.22 % implied volatility of 138 % and a remaining term of 1.69 years.

A gain on change in fair value of $ 407,938 and a loss of $ 128,122 was reported in the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

condensed consolidated statements of operations for the three and nine months ended September 30, 2025, respectively.

The principal amount of the November 2024 Debentures at September 30, 2025 and December 31, 2024 was $ 2,150,000 .

Convertible Secured Debentures

On September 9, 2022, we issued Debentures, secured debt instruments, which featured a 2 % original issue discount, in an aggregate principal amount of $ 36,530,320 , together with 2,922,425 associated warrants ("Original SPA Warrants"), for gross proceeds of $ 35,800,000 .

The fair value of the Original SPA Warrants was estimated to be $ 20,949,110 using a Monte Carlo valuation model incorporating future projections of the various potential outcomes and any exercise price adjustments based on future financing events.

This amount was recorded as a warrant liability and, together with the original issue discount, was recognized as a debt discount upon issuance totaling $ 21,679,716 .

The debt discount was being amortized to interest expense over the four-year term of the Debentures.

New Convertible Debentures

On January 30, 2024, the Company and certain of its subsidiaries and ATW Special Situations I LLC ("ATW I") entered into an Amendment and Exchange Agreement (the “Amendment and Exchange Agreement”), pursuant to which ATW I transferred its existing 5 % Original Issue Discount Senior Secured Convertible Debenture to the Company in exchange for a new Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 (the “New Debenture”) in the aggregate principal amount of $ 29,591,600 .

The Amendment and Exchange Agreement provides for certain amendments to the Securities Purchase Agreement dated December 16, 2021, as amended, and contains 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 underlying the New Debentures and obtain certain voting agreements related thereto.

In addition, on January 30, 2024, the Company and certain of its subsidiaries entered into additional Amendment and Exchange Agreements with Material Impact Fund II, L.P.

("MIF") and SLS Family Irrevocable Trust ("SLS") on substantially similar terms, pursuant to which MIF and SLS transferred their existing 5 % Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for New Debentures in the aggregate principal amount of $ 5,102,000 and $ 1,836,720 , respectively.

The New Debentures provide for, among other items:

(a) an interest rate of 5 % per annum, payable quarterly in shares of the Company’s common stock (if the conditions described therein are met) and/or in cash, at the Company’s option;

(b) conversion by the holder into shares of the Company’s common stock at any time (subject to limitations on conversion described therein);

(c) a conversion price of $ 0.4582 , on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) with shares of the Company’s common stock issuable on conversion determined by dividing 120 % of the applicable “conversion amount” (as defined in the New Debenture) by the conversion price;

(d) prior to the date of sale of the Company’s common stock (or equivalents) in one or in a series of transactions resulting in net cash proceeds to the Company of at least $ 30 million an alternate conversion price at the lower of (1) $ 0.4582 , on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) and (2) the greater of a floor price of $ 0.0878 , on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) and 98 % of the lowest volume-weighted average price ("VWAP") of the Company’s shares of commons stock during the applicable 10 -trading day period (subject to payment in cash if the applicable VWAP calculation is less than the floor price), and an interest conversion rate of 90 % of such alternate conversion price;

and (e) an option by the holder to extend the maturity date by an additional year.

On the closing of the Amendment and Exchange Agreement the existing 5 % Original Issue Discount Senior Secured Convertible Debentures were extinguished.

The Company has elected to measure the new convertible debentures at fair value under the fair value option in accordance with ASC 825-10, Financial Instruments – Fair Value Option which eliminates the requirement to separately account for embedded conversion features that would otherwise be bifurcated under ASC 815-15, Derivatives and Hedging – Embedded Derivatives.

The new convertible debentures were measured at a fair value of $ 99,195,791 as of January 30, 2024, estimated using Monte Carlo simulations with the following assumptions:

stock price of $ 16.52 , a risk free rate of 4.23 %, implied volatility of 121 % and a remaining term of 2.61 years.

A loss on extinguishment of debt of $ 78,734,949 was reported in the condensed consolidated statements of operations for the nine months ended September 30, 2024.

The fair value of the New Convertible Debentures at September 30, 2024 was estimated at $ 53,222,499 using Monte Carlo simulations with the following assumptions:

On February 9, 2026 and March 10, 2026, the Company issued Senior Secured Convertible Debentures Due 2026 to ATW Special Situations II LLC ("ATW II"), in aggregate principal amount of $ 1,960,000 and $ 1,000,000 , respectively, pursuant to the Securities Purchase Agreement dated November 4, 2024.

During the three months ended March 31, 2026, November 2024 Debentures with a principal value of $ 100,000 and fair value of $ 283,790 , were converted into 27,932 shares of Common Stock.

During the three months ended March 31, 2026, November 2024 Debentures with a principal value of $ 2,000,000 and fair value of $ 2,729,994 , were exchanged into 2,023 shares of Series C Preferred Stock.

The fair value of the Series C Preferred Stock was $ 3,659,502 and a loss on extinguishment of debt of $ 929,508 was reported in the condensed consolidated statements of operations for the three months ended March 31, 2026 .

The fair value of the November 2024 Debentures at March 31, 2026 and December 31, 2025 was estimated at $ 1,298,728 and $ 163,672 , respectively, using Monte Carlo simulations with the following assumptions at March 31, 2026:

stock price of $ 4.00 , a risk free rate of 3.72 % implied volatility of 196 % and a remaining term of 0.44 years and assumptions at December 31, 2025:

stock price of $ 6.16 , a risk free rate of 3.55 % implied volatility of 154 % and a remaining term of 0.69 years.

A gain on change in fair value $ 24,199,071

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and $ 36,113,800 was reported in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024.

Second Amendment and Exchange Agreement

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 Stock (see Note 13 - "Equity").

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.

A loss on change in fair value of $ 1,188,840 and $ 723,926 was reported in the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.

The principal amount of the November 2024 Debentures at March 31, 2026 and December 31, 2025 was $ 960,000 and $ 100,000 , respectively.

RCB Equities #1, LLC

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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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Convertible Senior Secured Term Loan

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement, the "2023 Term Loan Agreement", with ATW Special Situations II LLC ("ATW II") as collateral agent (in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited, ATW I, MIF, and RCB, as lenders.

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement, the "2023 Term Loan Agreement", with ATW II as collateral agent (in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited, ATW I, Material Impact Fund ("MIF"), and RCB, as lenders.

The 2023 Term Loan Agreement provides the Company with up to $ 20 million of secured term loans.

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Subject to the terms and conditions of the 2023 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 2023 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 2023 Term Loan Agreement) multiplied by (ii) the highest closing sale price of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 $ 15,552 per share of Common Stock (the “Conversion Price”), subject to certain customary anti-dilution adjustments as described in the 2023 Term Loan Agreement.

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The loan incurred debt issuance costs of $ 72,000 which are being amortized to interest expense over the period of the loan.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Second Amendment to Convertible Senior Secured Term Loan

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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 Term Loan Agreement provides the Company with an aggregate $ 9,551,856 of secured term loans (the “2024 Loans”), including $ 1,000,000 which has an extended repayment period, (the "ATW Extended Maturity Term Loan").

Any portion of the outstanding principal amount of the 2024 Loans are prepayable at the Company’s option pro rata to each Lender upon at least 5 days’ prior written notice to each Lender.

The 2024 Term Loan Agreement also provides for up to an additional $ 6 million of secured term loans within 180 days of signing, $ 1 million of which has already been committed by ATW III or an affiliate.

The 2024 Term Loan Agreement also provided for up to an additional $ 6 million of secured term loans within 180 days of signing.

The 2024 Loans assumed debt issuance costs of $ 1,237,291 which are being amortized to interest expense over the period of the loan.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Company shall pay interest in cash or the Company may, at its option, elect for up to (x) 100 % for the six ( 6 ) months after the Closing Date and (y) thereafter, 50 %, in each case, of any accrued but unpaid interest that would otherwise be payable on an Interest Payment Date, to be capitalized and added as of such date to the principal amount of the Loans (the “PIK Interest”).

The principal amount of the Loans shall be deemed to be increased by the PIK Interest so capitalized and added to the unpaid principal balance of the Loans in accordance with the provisions hereof.

The Company opted to capitalize the interest payable.

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”), issued 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”).

(a) the third anniversary of the date of the Term Loan Agreement, (b) the maturity of the Indebtedness under the 2023 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, and (c) 91 days prior to the maturity of the 5 % Original Issue Discount Senior Secured Convertible Debentures, dated as of September 9, 2022, issued 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 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 $ 148.50 per share of Common Stock, subject to certain adjustments as described in the 2024 Term Loan Agreement.

On January 3, 2025, the Company reduced the conversion price of the loans under the 2024 Term Loan Agreement dated as of January 30, 2024 to $ 14.31 on a post reverse split basis.

The 2024 Loans were 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.

On January 3, 2025, the Company voluntarily reduced the conversion price of the loans under the 2024 Term Loan Agreement dated as of January 30, 2024 to $ 114.48 , in accordance with the original terms and provisions of the note agreement.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 III, one of the lenders under the 2024 Term Loan Agreement, 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.

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

The May 2024 Incremental Loan has 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.

The May 2024 Incremental Loan incurred debt issuance costs of $ 37,500 which are being amortized to interest expense over the period of the loan.

The 2023 Term Loan, the December 2023 Incremental Loan, the January 2024 Incremental Loan, 2024 Loans and the May 2024 Incremental Loan are collectively the S enior Secured Convertible Term Loan.

The principal amounts outstanding on the Senior Secured Convertible Term Loan as of March 31, 2026 to related parties ATW II, ATW III and MIF was $ 9,158,251 , $ 1,222,518 and $ 4,444,042 , respectively.

The principal amount outstanding on the convertible senior term loans as of December 31, 2025 to related parties ATW II, ATW III and MIF was $ 2,687,981 , $ 7,197,668 , and $ 4,399,060 , respectively.

Term Loan Note Conversions

During the nine months ended September 30, 2025, ATW I and ATW II converted 2024 Term Loan notes with principal amount of $ 2,551,855 and interest payable of $ 318,718 into 200,600 shares of Common Stock.

Interest expense includes the following relating to the 2023 Term Loan, the December 2023 Incremental Loan, the January 2024 Incremental Loan, 2024 Loans and the May 2024 Incremental Loan (collectively the "convertible senior term loans"):

During the three months ended March 31, 2025, ATW I and ATW II converted Term Loan notes with principal amount of $ 2,551,855 and interest payable of $ 318,718 into 25,075 shares of Common Stock.

Interest expense includes the following relating to the Senior Secured Convertible Term Loan:

Three months ended

September 30, Nine months ended September 30,

2025 2024 2025 2024

Debt discount amortization $ 9,976 $ 9,895

1 unchanged sentence

Provision for bridge note exit fee 12,600 24,152

Capitalized paid-in-kind (PIK) interest 179,939 166,882

For the three months ended March 31, 2026 interest expense attributable to related parties ATW II, ATW III and MIF, on the Senior Secured Convertible Term Loan was $ 95,255 , $ 27,000 and $ 116,479 .

For the three months ended March 31, 2025 interest expense attributable to related parties ATW I, ATW II, ATW III and MIF was $ 58,609 , $ 140,514 , $ 25,000 and $ 4,167 , respectively.

Small Business Association Loan (SBA)

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The loan amount is $ 485,300 with an annual interest rate of 3.75 %, and a maturity date of June 19, 2050.

In connection with the acquisition of SeaTrepid on March 20, 2025, the loan, with an outstanding principal of $ 485,300 as of September 30, 2025, is now an obligation of the Company.

In connection with the acquisition of SeaTrepid on March 20, 2025, the loan, with an outstanding principal of $ 485,300 as of March 31, 2026, is now an obligation of the Company.

The loan is secured by collateral which includes all tangible and intangible property of SeaTrepid.

Under the terms of the agreement, the sale of collateral without lender consent constitutes a violation of the loan agreement.

As of September 30, 2025, the lender had not issued a notice of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As a result of this and as the Company intends to repay the loan on or before December 31, 2025, the outstanding loan balance has been classified as a current liability.

As of March 31, 2026, the lender had not issued a notice of default.

As a result of this and as the Company intends to repay the loan on or before June 30, 2026, the outstanding loan balance has been classified as a current liability.

AmeriState Loan

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The loan amount was $ 2,335,000 with an annual interest rate of prime plus 2.5 %, and a maturity date of May 4, 2036.

In connection with the acquisition of SeaTrepid on March 20, 2025, the loan with an outstanding principal of $ 1,891,335 as of September 30, 2025 is now an obligation of the Company.

In connection with the acquisition of SeaTrepid on March 20, 2025, the loan with an outstanding principal of $ 1,785,026 as of March 31, 2026 is now an

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

obligation of the Company.

The loan is secured by collateral which includes all assets of SeaTrepid.

2 unchanged sentences

Under the terms of the agreement, the sale of collateral without lender consent constitutes a violation of the loan agreement and as such constitutes a non compliance with the financial covenants related to the debt-to-net worth ratio and debt service coverage ratio.

As of September 30, 2025, the lender had not issued a notice of default.

As a result of this and as the Company intends to repay the loan on or before December 31, 2025, the outstanding loan balance has been classified as a current liability.

Reclassification of Debt

During the quarter ended September 30, 2025, all of the Company's outstanding notes payable were reclassified from long-term to short-term liabilities, as the related obligations mature within twelve months of the balance sheet date.

As of March 31, 2026 the lender had not issued a notice of default.

As a result of this and as the Company intends to repay the loan on or before June 30, 2026, the outstanding loan balance has been classified as a current liability.

Insurance Financing

The Company finances certain insurance premiums through premium finance agreements with third-party lenders.

The agreements are generally collateralized by the underlying insurance policies and require monthly installment payments over terms of twelve months or less.

At March 31, 2026, the outstanding balance under the agreements was $ 603,272 , with interest rates ranging from 7.15 % to 7.69 %.

The agreements mature at various dates through the fourth quarter of 2026.

The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

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The Company’s secured borrowing rate of 15 % was used to determine the present value of the lease payments and establish the right-of-use asset and lease liability at lease inception for this lease.

During the first quarter of 2024, the Company agreed with the lessor to reduce the size of the office space leased and a gain on lease termination of $ 15,721 was reported under other (income) expense on the condensed consolidated statement of operations.

In July 2023, the Company entered into an operating lease for office space in Scotland.

The lease has a term of 5 years with two options to extend.

The lease had a term of 5 years with two options to extend.

During the first quarter of

During the fourth quarter of 2025 management agreed early termination of the lease with the landlord.

The Company’s other operating leases include leases for certain office equipment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2024, management decided the Company would not extend this lease beyond its initial term and a loss on lease termination of $ 356 was reported under other (income) expense on the condensed consolidated statement of operations.

The Company’s other operating leases include leases for certain office equipment.

The following table presents the Company’s lease costs which are included in general and administrative expenses in the unaudited condensed consolidated statements of operations:

Three months ended

September 30, Nine months ended September 30,

2025 2024 2025 2024

Fixed lease expense $ 103,329 $ 122,318

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Total lease expense $ 125,852 $ 202,369

Cash paid for operating leases was $ 365,564 and $ 379,720 for the nine months ended September 30, 2025, and 2024, respectively.

Cash paid for operating leases was $ 91,865 and $ 95,247 for the three months ended March 31, 2026, and 2025, respectively.

The following table presents the balance and classifications of the Company’s right-of-use assets and lease liabilities included in the unaudited condensed consolidated balance sheets:

September 30,

2026 December 31,

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Total operating lease liabilities $ 534,497 $ 637,747

For operating lease assets and liabilities, the weighted average remaining lease term was 2.4 years and 3 years as of September 30, 2025, and December 31, 2024, respectively.

The weighted average discount rate used in the valuation over the remaining lease terms was 11.5 % as of September 30, 2025, and 11.9 % as of December 31, 2024.

The following table presents the Company’s maturities of lease liabilities as of September 30, 2025:

2025 (excluding the nine months ended September 30, 2025) $ 131,609

For operating lease assets and liabilities, the weighted average remaining lease term was 2.5 years and 2.7 years as of March 31, 2026, and December 31, 2025, respectively.

The weighted average discount rate used in the valuation over the remaining lease terms was 10.5 % as of March 31, 2026, and December 31, 2025, respectively.

The following table presents the Company’s maturities of lease liabilities as of March 31, 2026:

2026 (excluding the 3 months ended March 31, 2026) $ 309,986

Total lease payments 630,692

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Litigation – From time to time, we may be subject to litigation and other claims in the normal course of business.

No amounts have been accrued in the condensed consolidated financial statements with respect to any matters.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Business Combination

On March 20, 2025, the Company acquired substantially all of the assets and certain specified liabilities of SeaTrepid, an expert in providing subsea robotic services to customers throughout the world, for a total consideration of $ 14.4 million.

The acquisition aligns with the Company’s long-term growth strategy and expands its presence in the offshore market.

The acquisition was accounted for as a business combination using the acquisition method in accordance with ASC 805 because the acquired assets and liabilities met the definition of a business, which includes inputs, processes, and outputs capable of generating revenue.

$ 3.95 million of the total consideration was paid in cash at closing and the remaining purchase price (excluding the contingent consideration) was due on or before September 30, 2025 per the asset purchase agreement.

The Company and counterparty mutually agreed to defer the payment, with the settlement now scheduled for November 2025.

The deferred amount is recorded in accrued liabilities in our condensed consolidated balance sheet as of September 30, 2025 and will be settled in cash.

The acquisition of SeaTrepid includes a contingent consideration arrangement in which the Company agreed to issue shares of its common stock to the sellers of SeaTrepid, subject to the achievement of $ 4 million of business revenue for the year ended December 31, 2025.

In accordance with the asset purchase agreement executed on March 5, 2025, the number of earnout shares is equal to $ 5.5 million divided by the Minimum Price, as defined under Nasdaq Rule 5635(d), determined as of the date of the asset purchase agreement.

The Company calculated the number of earnout shares equals 671,544 shares, based on a Minimum Price of $ 8.19 as of the date of execution of the asset purchase agreement.

At the acquisition date, the Company estimated the fair value of the contingent consideration to be approximately $ 6.9 million, which is included in the total consideration transferred for the business combination.

The contingent consideration is classified as equity in accordance with ASC 815-40, as it will be settled in a fixed number of shares and does not meet the definition of a derivative or liability.

As such, it will not be remeasured in future periods.

As part of the acquisition agreement, the purchase price is subject to a post-closing working capital adjustment.

Based on the closing balance sheet, a working capital shortfall of approximately $ 0.5 million was identified and reduced the total purchase consideration.

The following table summarizes the consideration transferred to acquire SeaTrepid and preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date:

Cash consideration $ 8,000,000

Earnout shares (fair value) 6,864,729

Purchase price adjustment ( 512,037 )

Total purchase price $ 14,352,692

Purchase Price Allocation March 20, 2025

Cash $ 78,008

Accounts receivable, net 138,354

Inventory 75,300

Other current assets 62,515

Property and equipment 6,169,303

Goodwill 10,652,389

Accounts payable ( 287,766 )

Accrued liabilities ( 97,668 )

Notes payable - current ( 2,437,743 )

Total purchase price $ 14,352,692

While the Company records accruals for certain matters as appropriate, it does not believe that any currently pending or threatened matters, individually or in the aggregate, are material to its consolidated financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The allocation of the purchase price is preliminary and subject to adjustment during the measurement period, not to exceed one year from the acquisition date, as the Company finalizes valuations for tangible and intangible assets and earnout shares.

For additional details on the fair value measurement of the acquired assets and liabilities, including the valuation techniques used, see Note 19 Fair Value Measurements.

The results of SeaTrepid's operations have been included in the Company’s consolidated financial statements since the acquisition date.

For the nine months ended September 30, 2025, SeaTrepid contributed approximately $ 4,181,918 in revenue and $ 1,666,453 in net income.

The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024.

Nine months ended September 30,

$ 4,714,842 $ 9,178,003

( 22,309,918 ) ( 48,049,681 )

These pro forma amounts reflect the historical operating results of the Company and SeaTrepid, adjusted for the effects of the acquisition, including the additional depreciation that would have been charged assuming the fair value adjustments to acquired property and equipment had been applied from January 1, 2024.

For the nine months ended September 30, 2025, the Company incurred $ 0.04 million of acquisition-related costs.

These expenses are included in general and administration expense on the condensed consolidated statement of operations for the nine months ended September 30, 2025.

The supplemental pro forma net loss for the nine months ended September 30, 2025 was adjusted to exclude the acquisition-related costs, and instead, these costs are reflected in pro forma net loss for the nine months ended September 30, 2024.

The Company recognized goodwill as a result of the acquisition of SeaTrepid on March 20, 2025.

1 unchanged sentence

The goodwill is not deductible for tax purposes.

As of September 30, 2025 , goodwill totale d $ 10,652,389 .

The Company did no t have any goodwill recorded on its balance sheet prior to this acquisition.

The Company evaluates goodwill for impairment annually as of December 31, or more frequently if events or changes in circumstances indicate the asset might be impaired.

No indicators of impairment were identified through the third quarter of 2025.

As of March 31, 2026 and December 31, 2025, goodwill totaled $ 9,600,745 .

The Company did not have any goodwill recorded on its consolidated balance sheets prior to this acquisition.

The Company evaluates goodwill for impairment annually or more frequently if events or changes in circumstances indicate the asset might be impaired.

No indicators of impairment were identified through the f irst quarter of 2026.

Intangible Assets

Intangible assets consisted of the following:

March 31, 2026

Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Tradename- Trademark 15 years $ 687,300 $ 47,175 $ 640,125

Intellectual property 5 years 731,900 150,708 581,192

Non-Competes 3 years 10,200 3,501 6,699

Total intangible assets $ 1,429,400 $ 201,384 $ 1,228,016

Amortization expense for the three months ended March 31, 2026 was $ 48,900 .

The following table presents the Company's estimated future amortization expense:

Years ending December 31, Amount

2026 (excluding the 3 months ended March 31, 2026) $ 146,700

Thereafter 376,660

Total $ 1,228,016

Income tax provisions for interim periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items related specifically to interim periods.

No income tax expense was recognized for the three and nine months ended September 30, 2025, or 2024.

The Company has a full valuation allowance against its net deferred tax assets as of September 30, 2025, and December 31, 2024, respectively.

No income tax expense was recognized for the three months ended March 31, 2026, or 2025, respectively.

The Company has a full valuation allowance against its net deferred tax assets as of March 31, 2026, and December 31, 2025, respectively.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Series B Convertible Preferred Stock - A total of 3,000 and 0 shares of Series B Convertible Preferred Stock were outstanding at September 30, 2025 and December, 2024, respectively .

On August 6, 2025, the “Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and among the Company and ATW pursuant to which the Company agrees to issue and sell in a private offering to ATW 3,000 shares of Series B Convertible Preferred Stock of the Company, $ 0.0001 par value (the “Series B Preferred Stock”), at a price per share of $ 980 (the “Preferred Offering”) for an aggregate purchase price of $ 2,940,000 .

The Preferred Offering also relates to the offering of the shares of the Company’s common stock issuable upon the conversion of or otherwise pursuant to the terms of the Series B Preferred Stock.

On August 7, 2025, the Company filed with the Secretary of State of the State of Delaware the Certificate of Designations of Rights and Preferences of the Series B Convertible Preferred Stock of the Company and designated 50,000 shares of Series B Preferred Stock.

On August 8, 2025, the Company and ATW closed on the initial closing transactions contemplated by the Purchase Agreement, and the Company issued 3,000 shares of Series B Preferred Stock to ATW.

Each share of Series B Preferred Stock has a stated value of $ 1,000 per share and, when issued, the Series B Preferred Stock will be fully paid and non-assessable.

The Series B Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company, unless the Required Holders (as defined in the Purchase Agreement) consent to the creation of other capital stock of the Company that is senior or on parity in rank (which, for the avoidance of doubt, such parity stock shall include the Series A Convertible Preferred Stock, $ 0.0001 par value, of the Company) to the Series B Preferred Stock.

The holders of Series B Preferred Stock will be entitled to a 10 % per annum dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock, when and if actually paid.

The dividends are payable to each record holder of the Series B Preferred Stock in shares of Common Stock so long as there has been no Equity Conditions Failure (as defined in the Certificate of Designations), and the Company may, at its option, under certain circumstances, capitalize the dividend by increasing the stated value of each Preferred Shares or elect a combination of the capitalized dividend and a payment in dividend shares.

If at any time the Company grants, issues or sells any options, convertible securities, or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each holder of Series B Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Series B Preferred Stock held by such holder immediately prior to the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights at the Alternate Conversion Price (as defined below);

Preferred Stock

Rights and Preferences of the Series A, B and C Preferred Stock

Each share of Series A, B and C Preferred Stock has a stated value of $ 1,000 per share and, when issued, the Preferred Stock will be fully paid and non-assessable.

The Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company, unless the Required Holders (as defined in the applicable Certificate of Designations) consent to the creation of other capital stock of the Company that is senior or equal in rank to the specific series of Preferred Stock.

For the avoidance of doubt, the Series A, B and C Preferred Stock ranks in parity with each other.

The holders of Series B and C Preferred Stock will be entitled to a 10 % per annum dividends and holders of Series A Preferred Stock will be entitled to 5 % per annum dividends.

The dividends are payable to each record holder of the Preferred Stock in shares of Common Stock so long as there has been no Equity Conditions Failure (as defined in the applicable Certificate of Designations), and the Company may, at its option, under certain circumstances, capitalize the dividend by increasing the stated value of each Preferred Shares or elect a combination of the capitalized dividend and a payment in dividend shares.

Management has elected to capitalize dividends on each dividend date, which is the first Trading Day of the quarter after to which the dividend relates.

During the three months ended March 31, 2026, dividends relating to the Series A, B and C Preferred Stock of $ 71,958 , $ 71,399 and $ 16,753 , respectively, were capitalized.

The stated value of the Series A, B and C Preferred Stock increased to $ 1,050.95 , $ 1,040.66 and $ 1,007.78 , respectively.

At March 31, 2026, dividends payable of $ 72,857 , $ 58,875 and $ 46,456 relating to Series A, B and C Preferred Stock, respectively, were reported under other creditors in the Condensed Consolidated Balance Sheets.

At December 31, 2025, dividends payable of $ 71,958 , $ 71,399 and $ 16,753 relating to Series A, B and C Preferred Stock, respectively, were reported under other liabilities in the Condensed Consolidated Balance Sheets.

If at any time the Company grants, issues or sells any options, convertible securities, or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each holder of Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Preferred Stock held by such holder immediately prior to the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights at the Alternate Conversion Price (as defined below);

subject to certain limitations on beneficial ownership.

Conversion at Option of Holder

At any time from and after the first date of issuance of any Preferred Shares (the “Initial Issuance Date”), each holder of Series B Preferred Stock may convert all, or any part, of the outstanding Series B Preferred Stock, at any time at such holder’s option, into shares of the Common Stock (which converted shares of Common Stock are referred to as “Conversion Shares” herein) at the fixed “Conversion Price” of $ 8.26 , which is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions.

At any time from and after the first date of issuance of any Preferred Shares, each holder of Preferred Stock may convert all, or any part, of the outstanding Preferred Stock, at any time at such holder’s option, into shares of the Common Stock (which converted shares of Common Stock are referred to as “Conversion Shares” herein) at the fixed “Conversion Price” of $ 7.60 for Series C, and $ 4.7520 for Series A and B respectively, which is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions.

The amounts to be converted include unpaid dividends and other charges for the Preferred Shares.

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Alternate Conversion at the Holder’s Election

At any time after the Initial Issuance Date, a holder may elect to convert the Series B Preferred Stock held by such holder at the “Alternate Conversion Price” equal to the lesser of:

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At any time after the Initial Issuance Date, a holder may elect to convert the Preferred Stock held by such holder at the “Alternate Conversion Price” equal to the lesser of:

• the Conversion Price;

• the greater of:

◦ the floor price of $ 1.6524 (the “Floor Price”);

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

◦the floor price of $ 1.52 , $ 13.22 and $ 17.71 for Series C, B and A Preferred Stock respectively (the “Floor price”);

◦ 98 % of the lowest volume weighted average price ("VWAP") of the Common Stock during the 10 consecutive trading days immediately prior to such conversion.

Alternate Conversion Upon a Triggering Event

Following the occurrence and during the continuance of a Triggering Event (as defined below), each holder may alternatively elect to convert the Series B Preferred Stock at the “Alternate Conversion Price”.

The Series B Certificate of Designations contains standard and customary triggering events (each, a “Triggering Event” including certain Bankruptcy Triggering Event), including but not limited to:

Following the occurrence and during the continuance of a Triggering Event (as defined below), each holder may alternatively elect to convert the Preferred Stock at the “Alternate Conversion Price”.

The Certificate of Designations contains standard and customary triggering events (each, a “Triggering Event” including certain Bankruptcy Triggering Event (as defined therein)), including but not limited to:

(i) the suspension from trading or the failure to list the Common Stock within certain time periods;

(ii) failure to declare or pay any dividend when due;

(iii) the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $ 500,000 of Indebtedness (as defined in the Purchase Agreement) of the Company, (iv) the Company’s failure to cure a conversion failure of failure to deliver shares of the Common Stock upon conversion, or notice of the Company’s intention not to comply with a request for conversion of any Series B Preferred Stock, and (v) bankruptcy or insolvency of the Company.

(iii) the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $ 500,000 of Indebtedness (as defined in the applicable exchange or purchase agreements) of the Company, (iv) the Company’s failure to cure a conversion failure of failure to deliver shares of the Common Stock upon conversion, or notice of the Company’s intention not to comply with a request for conversion of any Preferred Stock, and (v) bankruptcy or insolvency of the Company.

From and after the occurrence and during the continuance of any Triggering Event, the Dividend Rate in effect shall automatically be increased to the lesser of 18 % per annum and the maximum rate permitted under applicable law.

Series A Convertible Preferred Stock - A total of 13,696 and 35,034 shares of Series A Convertible Preferred Stock were outstanding at September 30, 2025 and December 31, 2024, respectiv ely.

On December 26, 2024, the Company filed with the Secretary of State of the State of Delaware the Certificate of Designation of Series A Convertible Preferred Stock of the Company and designated 40,000 shares of Series A Preferred Stock.

Under the terms of the Series A Certificate of Designation, each share of Series A Preferred Stock has a stated value of $ 1,000 per share and a par value of $ 0.0001 per share and, when issued, the Series A Preferred Stock will be fully paid and non-assessable.

The holders of Series A Preferred Stock will be entitled to a 5 % per annum dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock of the Company, when and if actually paid.

The holders of the Series A Preferred Stock shall have no voting power and no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of share of capital stock, and shall not be entitled to call a meeting of such holders for any purpose nor shall they be entitled to participate in any meeting of the holders of Common Stock, except as provided in the Series A Certificate of Designation (or as otherwise required by applicable law).

The Series A Preferred Stock holders may convert all, or any part, of the outstanding Series A Preferred Stock, at any time at such holder’s option, into shares of the Common Stock at the fixed “Conversion Price” of $ 8.26 , which is subject to proportional adjustments, or a holder may elect to convert the Series A Preferred Stock held by such holder at the “Alternate Conversion Price” (as defined in the Series A Certificate of Designation) at holder’s election or at certain triggering event.

The Company has the right to redeem in cash all, but not less than all, the shares of Series A Preferred Stock then outstanding at a 25 % redemption premium to the greater of (i) the Conversion Amount being redeemed, and (ii)

If at the time of a conversion the Alternate Conversion Price is determined to be the Floor Price because such Floor Price is greater than 98 % of the lowest VWAP of a share of Common Stock during the ten ( 10 ) trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice, then the Conversion Amount (as defined in the applicable Certificate of Designations) shall automatically increase pro rata, by the applicable Alternate Conversion Floor Amount (as defined in the applicable Certificate of Designations).

Rights Upon Issuance of Other Securities

If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share.

For the purposes of this Section, the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof;

and (y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration received or receivable (including, without limitation, any consideration consisting of cash, debt forgiveness, assets or other property) by, or benefit conferred on, the holder of such Convertible Security (or any other Person).

In determining the classification of the Series A, B and C Preferred Stock, the Company considered ASC 480 - Distinguishing Liabilities from Equity and ASC 815 - Derivatives and Hedging.

The Company concluded the Preferred Stock be classified as permanent equity because it is not mandatorily redeemable except upon a Bankruptcy Triggering Event, which the Company views as a liquidation-type contingency rather than a substantive redemption feature.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed, multiplied by (2) the equity value of the Common Stock underlying the Series A Preferred Stock.

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.

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

The total fair value of these exchange transactions was $ 110,300,191 .

These shares of the Preferred Stock are convertible into shares of the Company’s Common Stock, subject to a beneficial ownership cap of 9.9 % of the issued and outstanding Common Stock of the Company (with the exception to one investor), and to the stockholder approval requirement pursuant to Nasdaq rule 5635.

On August 6, 2025, the Company issued additional equity securities (see Series B Convertible Preferred Stock) at a price per share below the then-effective conversion price of its Series A Preferred Stock.

Under the terms of the Series A Certificate of Designation, a full-ratchet anti-dilution adjustment was triggered, reducing the conversion price of the Series A Preferred Stock from $ 11.07 per share to $ 8.26 per share (on a post–reverse-stock-split basis).

The resulting $ 3,427,706 value transfer was recorded as a reclassification within equity (charged to Accumulated Deficit and credit to APIC) and treated as a deemed dividend to preferred shareholders for EPS purposes.

There was no impact on total stockholders’ equity or the consolidated statement of operations.

Reverse Stock Split

On September 2, 2025, the Company filed a certificate of amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-9 reverse stock split of the shares of the Company's common stock, par value $ 0.0001 per share on September 5, 2025.

No fractional shares were issued in connection with the reverse stock split, but were instead be rounded up to the nearest whole share.

The Reverse Stock Split resulted in 42,758,379 shares of common stock being converted in to 4,750,954 shares of common stock.

The Board of Directors of the Company approved the Certificate of Amendment to meet the share bid price requirements of the NASDAQ Capital Market.

The Company’s stockholders approved the Certificate of Amendment at a special meeting held on June 25, 2025.

All options, warrants and other convertible securities of the Company outstanding immediately prior to the effectiveness of the Certificate of Amendment were adjusted in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

Each stockholder’s percentage ownership interest in the Company and proportional voting power will remain virtually unchanged by the Certificate of Amendment, except for minor changes and adjustments that will result from rounding fractional shares into whole shares.

The rights and privileges of the holders of shares of the Company’s common stock will be substantially unaffected.

As the par value per share of common stock was not changed in connection with the 1-for-9 Reverse Stock Split, there was no change in the par value of the preferred stock related to the 1-for-9 Reverse Stock Split recorded in the period ended September 30, 2025.

On July 22, 2024, the Company effected a 1-for-36 reverse stock split ("Reverse Stock Split") of the shares of the Company's common stock, par value $ 0.0001 per share.

No fractional shares were issued in connection with the Reverse Stock Split, but were instead rounded up to the nearest whole share.

The Reverse Stock Split resulted in 150,107,598 shares of common stock being converted in to 4,169,679 shares of common stock.

The Board of Directors of the Company approved the Certificate of Amendment effecting the Reverse Stock Split in order to meet the share bid price requirements

instrument also does not provide holders with a general put right, and any holder-controlled exchange is contingent upon a Change of Control, an event subject to the Company’s governance and approval processes.

In addition, the Company may settle the Change of Control Election Price in equity-linked rights convertible into the same consideration payable to common stockholders, and management has concluded that sufficient authorized shares exist to settle conversions in shares.

Series A Convertible Preferred Stock - A total of 5,546 shares of Series A Convertible Preferred Stock were outstanding as of March 31, 2026 of which 5,342 and 204 were held by related parties MIF and SLS Family Irrevocable Trust ("SLS"), respectively.

During the three months ended March 31, 2025, ATW I and SLS converted 13,188 and 2,000 shares of Series A Preferred Shares into 188,676 and 33,800 shares of Common Stock, respectively.

Series B Convertible Preferred Stock - A total of 2,263 shares of Series B Convertible Preferred Stock were outstanding at March 31, 2026, held by related party ATW II.

During the three months ended March 31, 2026, ATW II converted 550 Series B Convertible Preferred Stock into 146,781 shares of Common Stock.

Series C Convertible Preferred Stock - A total of 3,777 shares of Series C Convertible Preferred Stock were outstanding at March 31, 2026, held by related party ATW I.

During the three months ended March 31, 2026, 400 Series C Convertible Preferred Stock were converted into 67,320 shares of Common Stock.

Series D Convertible Preferred Stock

On February 6, 2026, the Company entered into a Securities Purchase Agreement and a registration rights agreement with Master Investment Group ("Investor"), pursuant to which the Company agreed to issue and sell in a private offering to Investor, (1) certain shares of Series D Convertible Preferred Stock of the Company, $ 0.0001 par value (the “Series D Preferred Stock”) for an aggregate purchase price of up to $ 3,000,000 and may issue additional shares of Series D Preferred Stock valued at up to $ 47,000,000 and (2) certain common stock purchase warrants (the “Warrants”) to purchase up to a number of shares of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), equal to 30 % of the aggregate purchase price (the “Preferred Offering”).

The Preferred Offering also relates to the offering of the shares of the Common Stock issuable upon the conversion of or otherwise pursuant to the terms of the Series D Preferred Stock (“Conversion Shares”) and the shares of the Common Stock issuable upon the exercise of the Warrants.

Pursuant to the Purchase Agreement, the Company agreed to issue the Initial Preferred Shares for an aggregate purchase price of $ 3,000,000 in two closings, in each case following the demonstration that Investor has made expenditures agreed by, and on behalf of, the Company in an aggregate amount equal to the applicable milestone aggregate investment amount specified in the Purchase Agreement.

At each such milestone closing, the Company will issue to Investor a number of shares of Series D Preferred Stock equal to the applicable milestone aggregate investment amount invested by Investor, at a price of $ 1,000 per share.

The Company and Investor agree that the proceeds of the Preferred Offering will be deployed to exclusively as UAE related working capital to fund and support, directly or indirectly, the establishment and operation of the Company’s business in the United Arab Emirates.

In addition, for a period of up to 3 years from the date of the Purchase Agreement (or such later date as mutually agreed to by the Company and Investor), by written notice from the Company to Investor and subject to other terms and conditions set forth in the Purchase Agreement, the Company may require the Investor to participate in one or more additional milestone closings and issue additional shares of Series D Preferred Stock to Investor up to an aggregate maximum purchase price of $ 47,000,000 in one or more tranches, and additional Warrants exercisable for an amount of shares of

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of the NASDAQ Capital Market.

The Company’s stockholders authorized the Reverse Stock Split and the Certificate of Amendment at a special meeting held on June 17, 2024.

All options, warrants and other convertible securities of the Company outstanding immediately prior to the split have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

The rights and privileges of the holders of shares of the Company’s common stock were substantially unaffected.

As the par value per share of common stock was not changed in connection with the 1-for-36 Reverse Stock Split, we recorded a decrease of $ 14,460 to common stock on our consolidated balance sheet with a corresponding increase in additional paid-in capital as of December 31, 2024.

An adjustment to round fractional shares into whole shares was recorded in the year ended December 31, 2024 which increased common stock by 133,975 shares and $ 13 with a corresponding decrease in additional paid-in capital.

Unless otherwise noted, all references in the condensed consolidated financial statements and notes to condensed consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split.

Common Stock – A total of 6,427,297 and 1,084,655 shares of Common Stock were outstanding as of September 30, 2025 and December 31, 2024, respectively.

On June 30, 2025, the Company commenced an At-The-Market ("ATM") offering under a previously filed shelf registration statement.

During the three months ended September 30, 2025 we issued and sold 1,106,261 shares, for gross proceeds of $ 5,160,244 and net proceeds of $ 4,938,966 , after deducting commissions and offering expenses totaling $ 221,278 .

During the first quarter of 2025, the Company conducted ATM offerings to offer and sell shares of the Company's Common Stock for an aggregate offering price of up to $ 20,189,798 .

Under this offering we issued and sold 832,092 shares, for gross proceeds of $ 20,141,905 and net proceeds of $ 19,438,121 after deducting commissions and offering expenses totaling $ 703,784 .

During the nine months ended September 30, 2025, ATW I and SLS converted 19,038 and 2,300 shares of Series A Preferred Shares into 2,789,635 and 310,748 shares of Common Stock respectively.

During the year ended December 31, 2024, ATW I converted 400 shares of Series A Preferred Shares into 61,659 shares of Common Stock.

During the year ended December 31, 2024, the Company entered into an ATM Offering Agreement to offer and sell shares of our Common Stock having an aggregate offering price of up to $ 9,858,269 .

Under this offering we issued and sold 156,270 shares, for gross proceeds of $ 9,857,857 and net proceeds of $ 9,357,954 after deducting commissions and offering expenses totaling $ 499,903 .

During the year ended December 31, 2024, ATW I and SLS converted New Convertible Debentures with a fair value of $ 29,741,859 principal values of $ 12,869,231 and $ 1,836,720 and interest of $ 442,140 and $ 4,785 into 535,427 and 77,673 shares of Common Stock, respectively.

Earnout Shares – Following the closing of the Merger between CleanTech, Merger Sub and Nauticus Robotics Holdings on September 9, 2022, former holders of shares of Nauticus Robotics Holdings’ Common Stock (including shares received as a result of the Nauticus Preferred Stock Conversion and the Nauticus Convertible Notes Conversion) are entitled to receive their pro rata share of up to 23,149 Earnout Shares which are held in escrow.

The Earnout Shares will be released from escrow upon the occurrence of the following (each a "triggering event"):

Common Stock with an aggregate initial value equal to 30 % of the value of the Series D Preferred Stock to be issued at each such additional closings, subject to mutually agreed milestones, assignments, and definitive documentation, and in each case, consent of certain existing holders of securities of the Company.

The Purchase Agreement further provides for a two-year lock-up period, during which Investor shall not, without the prior written consent of the Company and certain existing holders of securities of the Company, sell, transfer, pledge or otherwise dispose of any shares of Common Stock upon conversion of the Series D Preferred Stock, nor enter into any swap or other arrangement that transfers the economic consequence of ownership of such shares.

Pursuant to the Registration Rights Agreement, the Company agreed that in the event that the Company files a registration statement with the Securities and Exchange Commission, registering the offer and sale of any shares of its Common Shares under the Securities Act, the Investor shall have the option to require the Company to include registration under the Securities Act of 1933, as amended (the “Securities Act”), of the resale by Investor of shares of Common Stock issuable upon conversion of the Series D Preferred Stock and upon the exercise of the Warrants.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties.

On or prior to the first milestone closing, the Company will designate 50,000 shares of the Company’s authorized and unissued preferred stock as Series D Preferred Stock and establish the rights, preferences and privileges of the Series D Preferred Stock pursuant to the Certificate of Designations of Series D Preferred Stock (the “Certificate of Designations”), to be filed with the Secretary of State of the State of Delaware.

As of March 31, 2026 no Series D Preferred Shares have been issued as no services have been provided or exchanges made under the agreement as of the date of the issuance of these financial statements.

The Warrants, when issued pursuant to the Purchase Agreement, are immediately exercisable upon issuance and will expire on the fifth anniversary of the original issuance date.

The Warrants have an initial exercise price equal to $ 8.90 , subject to certain adjustments as described in the Warrant.

A Warrant holder will not have the right to exercise any portion of the Warrants to the extent that, after giving effect to such conversion, the holder would beneficially own in excess of 4.99 % (the “Maximum Percentage”) of the number of shares of the Common Stock outstanding immediately after giving effect to such conversion.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In October 2025, the Company filed a prospectus supplement to its shelf registration statement on Form S-3 (File No.

333-284675), initially filed with the SEC on February 3, 2025 registering the sale of up to $ 92 million of its common stock pursuant to its ATM offering program.

During the three months ended March 31, 2026, we issued and sold 364,264 shares, for gross proceeds of $ 2,464,316 and net proceeds of $ 2,343,144 after deducting commissions and offering expenses totaling $ 121,172 .

At March 31, 2026, $ 83,572,157 remains available for issuance under the Company's ATM program pursuant to the prospectus supplement filed on October 31, 2025 under a registration statement on Form S-1.

During the three months ended March 31, 2025, the Company conducted ATM offerings to offer and sell shares of its common stock for an aggregate offering price of up to $ 20,189,798 .

Under this offering we issued and sold 104,012 shares for gross proceeds of $ 20,141,905 and net proceeds of $ 19,438,121 after deducting commissions and offering expenses totaling $ 703,784 .

During the three months ended March 31, 2026, 550 Series B Convertible Preferred Stock and 400 Series C Convertible Preferred Stock were converted into 146,781 and 67,320 shares of Common Stock, respectively.

During the three months ended March 31, 2026, November 2024 Debentures with a principal value of $ 100,000 and fair value of $ 283,790 , were converted into 27,932 shares of Common Stock.

During the three months ended March 31, 2025, ATW I and SLS converted 13,188 and 2,000 shares of Series A Preferred Shares into 188,676 and 33,800 shares of Common Stock, respectively.

During the three months ended March 31, 2025, ATW I and ATW II converted Term Loan notes with principal amount of $ 2,551,855 and interest payable of $ 318,718 into 25,075 shares of Common Stock.

CleanTech Merger Earnout Shares

Following the closing of the Merger between CleanTech, Merger Sub and Nauticus Robotics Holdings on September 9, 2022, former holders of shares of Nauticus Robotics Holdings’ Common Stock (including shares received as a result of the Nauticus Preferred Stock Conversion and the Nauticus Convertible Notes Conversion) are entitled to receive their pro rata share of up to 2,894 Earnout Shares which are held in escrow.

The Earnout Shares will be released from escrow upon the occurrence of the following (each a “triggering event”):

one-half of the Earnout Shares will be released if, within a 5 -year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $ 38,880 per share over any 20 trading days within a 30 -day trading period;

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one-quarter of the Earnout Shares will be released if, within a 5 -year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $ 51,840 per share over any 20 trading days within a 30 -day trading period.

As of September 30, 2025, the Earnout targets have not been achieved, and the Earnout Shares remain in escrow.

Public Warrants – We assumed 8,624,991 Public Warrants on Septembe r 9, 2022 which remained outstanding as of September 30, 2025.

As of March 31, 2026, the earn out targets have not been achieved and the Earnout Shares remain in escrow.

SeaTrepid Acquisition Earnout Shares

The acquisition of SeaTrepid on March 20, 2025 included a contingent consideration arrangement in which the Company agreed to issue shares of its common stock to the sellers of SeaTrepid, subject to the achievement of $ 4 million of business revenue for the year ended December 31, 2025.

As of December 31, 2025, the earnout target was achieved and 83,944 shares of Common Stock were issued to the sellers of SeaTrepid in March 2026.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Public Warrants – As of March 31, 2026 there were 11,779,167 Public Warrants outstanding.

For every 2,592 Public Warrants, the holder is entitled to purchase one share of Common Stock at a price of $ 11.50 , subject to adjustment.

However, no Public Warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of Common Stoc k.

Notwithstanding the foregoing, if a registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days of September 9, 2022, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise, subject to the terms of the governing warrant agreement, Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

The Public Warrants expire on September 9, 2027, or earlier upon redemption or liquidation.

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The exercise price and number of shares of Common Stock issuable on exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.

The Public Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2025 and December 31, 2024 at $ 1,569 and $ 9,080 , respectively, based on their publicly-traded price.

For the three months ended September 30, 2025 and 2024, the Company reported a gain in value of the Public Warrants of

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$ 30,209 and $ 131,100 , respectively.

For the nine months ended September 30, 2025 and 2024, the Company reported a loss and gain in value of the Public Warrants of $ 7,511 and $ 323,438 , respectively.

The Public Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of March 31, 2026 and December 31, 2025 at $ 1,769 and $ 1,612 , respectively, based on their publicly-traded price.

For the three months ended March 31, 2026 and 2025, the Company reported a gain and loss in value of the Public Warrants of $ 157 and $ 11,263 , respectively.

The change in fair value of the Public Warrants was reported within other (income) expense in our condensed consolidated statements of operations.

Private Warrants – We assumed 4,020,833 Private Warrants, which are not publicly traded, on September 9, 2022.

These remained outstanding as of September 30, 2025.

These remained outstanding as of March 31, 2026.

For every 2,592 Private Warrants, the holder is entitled to purchase one share of Common Stock at an exercise price of $ 11.50 and is identical in all material respects to the Public Warrants except that the Private Warrants are exercisable for cash (even if a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the initial purchasers or their affiliates.

The Private Warrants purchased by CleanTech Investments, LLC are not exercisable after July 14, 2026, as long as Chardan Capital Markets, LLC or any of its related persons beneficially own these Private Warrants.

The Private Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2025 and December 31, 2024 at $ 572 and $ 7,884 , respectively.

The Private Warrants purchased by CleanTech Investments, LLC are not exercisable after 5 years as long as Chardan Capital Markets, LLC or any of its related persons beneficially own these Private Warrants.

The Private Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of March 31, 2026 and December 31, 2025 at $ 647 and $ 589 , respectively.

The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model using the following assumptions:

stock price of $ 4.00 , no assumed dividends, a risk-free rate of 3.73 %, implied volatility of 275.0 %, and a remaining term of 1.44 years.

For the three months ended September 30, 2025 and 2024, the Company reported a gain in value of the Private Warrants of $ 11,110 and $ 109,609 , respectively.

For the nine months ended September 30, 2025 and 2024, the Company reported a loss and gain in value of the Private Warrants of $ 7,312 and $ 265,278 , respectively.

The change in fair value of the Private Warrants was reported within other (income) expense in our condensed consolidated statements of operations.

SPA Warrants – On September 9, 2022 and pursuant to the Securities Purchase Agreement, we issued an aggregate 2,922,425 Original SPA Warrants, on a pre Reverse Stock Split basis, to the SPA Parties.

Upon issuance, each whole Original SPA Warrant was exercisable over its 10-year term for one share of Common Stock at a price of $ 20.00 per share, subject to certain adjustments including full ratchet anti-dilution price protections.

In connection with the Securities Purchase Agreement, the Company and the SPA Parties entered into that certain Registration Rights Agreement, dated as of September 9, 2022 (the “RRA”), pursuant to which the Company and the SPA Parties agreed to certain requirements and conditions covering the resale by the SPA Parties of the shares of Common Stock underlying the Debentures and Original SPA Warrants.

Under the terms of the RRA, the Company was required to (i) file a registration statement (the “Initial Registration Statement”) covering such underlying shares within 15 business days of the Closing and (ii) use its best efforts to cause the Initial Registration Statement to be declared effective as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date (as defined in the RRA) (the “Registration Requirements”).

The RRA additionally provided for liquidated damages if the Registration Requirements were not met.

On June 22, 2023, the Company and the SPA Parties entered into the first amendment to the RRA (the “RRA Amendment”), pursuant to which the Company agreed to deliver to the SPA Parties an aggregate 1,890,066 shares of Common Stock at an agreed upon price of $ 2.286 , on a Pre Reverse Stock Split basis, (the “RRA Amendment Shares”) in exchange for the waiver and release by the SPA Parties of any and all claims, remedies, causes of action and any other Initial Effectiveness Date Claims (as defined in the RRA Amendment) under any of the Transaction Documents (as defined in the RRA), including all past and future claims for liquidated damages under the RRA with respect to, and any other amounts that may be payable by reason of or otherwise relating to, the Effectiveness Date (as defined in the RRA) of the Initial Registration Statement.

During the second quarter of 2024, the Company issued 1,890,066 shares of Common Stock, on a pre Reverse Stock Split basis, as payment for liquidated damages and interest of $ 4,320,690 , and the damages and interest were recorded under interest expense in the condensed consolidated statements of operations.

The settlement date of the liquidated damages occurred August 3, 2023, with a closing price of $ 1.95 , with the change in the agreed upon price of $ 2.286 to settlement resulting in a gain of $ 635,061 , which was also included in interest expense in the condensed consolidated statements of operations.

Pursuant to the RRA Amendment, the Company also agreed to file a registration statement for the registration and resale of the RRA Amendment Shares by the SPA Parties and to cause such registration statement to become effective as soon as

The gain and loss in fair value of the Private Warrants during the three months ended March 31, 2026 and 2025 of $ 58 and $ 4,977 , respectively, and was reported with other (income) expense in our consolidated statements of operations.

SPA Warrants – On September 9, 2022 and pursuant to the Securities Purchase Agreement, we issued an aggregate 1,127 Original SPA Warrants to the SPA Parties.

Upon issuance, each whole Original SPA Warrant was exercisable over its 10-

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practicable thereafter in accordance with the terms of the RRA, as amended by the RRA Amendment.

The registration statement was filed on August 7, 2023 and was declared effective on September 12, 2023.

On June 22, 2023, we entered into the Letter Agreements with the SPA Parties (the “Letter Agreements”), pursuant to which the SPA Parties (also being the holders of the Original SPA Warrants) agreed to amend the exercise price of the Original SPA Warrants, which, since issuance, had been exercisable to purchase an aggregate 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis, in exchange for the Company’s agreement to (i) lower the exercise price of the Original SPA Warrants to a weighted average of $ 3.28 per share, with multiple tranches priced between $ 2.04 and $ 4.64 per share, and (ii) upon the SPA Parties’ exercise of the Amended SPA Warrants, issue New SPA Warrants to the SPA Parties to purchase, in the aggregate, up to 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis.

year term for one share of Common Stock at a price of $ 51,840 per share, subject to certain adjustments including full ratchet anti-dilution price protections.

On June 22, 2023, we entered into the Letter Agreements with the SPA Parties (the “Letter Agreements”), pursuant to which the SPA Parties (also being the holders of the Original SPA Warrants) agreed to amend the exercise price of the Original SPA Warrants, which, since issuance, had been exercisable to purchase an aggregate 1,127 shares of Common Stock in exchange for the Company’s agreement to (i) lower the exercise price of the Original SPA Warrants to a weighted average of $ 8,502 per share, with multiple tranches priced between $ 5,288 and $ 12,027 per share, and (ii) upon the SPA Parties’ exercise of the Amended SPA Warrants, issue New SPA Warrants to the SPA Parties to purchase, in the aggregate, up to 1,127 shares of Common Stock.

During any period when we shall have failed to maintain an effective registration statement covering the shares of Common Stock issuable upon exercise of the Amended SPA Warrants, the registered holder may exercise its Amended SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

On June 23, 2023, pursuant to its Letter Agreement with the Company, ATW I exercised 165,713 Amended SPA Warrants, pursuant to which 165,713 shares of Common Stock, on a pre Reverse Stock Split basis, ( 4,603 shares of Common Stock post Reverse Stock Split) and 165,713 New SPA Warrants were issued to ATW by the Company in accordance with the terms of the Letter Agreement.

The Company received proceeds of $ 338,055 from the warrants exercised by ATW.

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement convertible at $ 6.00 per share.

Based on the letter agreement, SPA warrants holders who exchange through March 1, 2024, the exercise price was reset from $ 20.00 to $ 6.00 a warrant pursuant to the full-ratchet provision.

The exchange warrants were reset to $ 6.00 with a factor of 3.3333 , increasing the number of warrants to 552,377 , on a pre Reverse Stock Split basis.

The New SPA Warrants will be (and, with respect to those already issued, are) substantially in the form of the Amended SPA Warrants as described above except that the New SPA Warrants (i) have an exercise price of $ 51,840 per share (including, for purposes of clarification, full-ratchet anti-dilution on the exercise price and number of underlying shares issuable based on the aggregate exercise price using $ 51,840 as the base exercise price), (ii) are immediately exercisable upon issuance, and (iii) are exercisable until September 9, 2032.

If a registration statement covering the shares of Common Stock issuable upon exercise of the New SPA Warrants is not effective 60 days after March 1, 2024 (or, in the event of a “full review” by the SEC, 120 days after March 1, 2024), upon the registered holder’s election to exercise its New SPA Warrants, the registered holder may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise its New SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

On December 31, 2023, the Company and ATW I, as the purchaser, entered into a Securities Purchase Agreement (the "PIPE SPA"), pursuant to which the purchaser agreed to purchase up to an aggregate of $ 5,000 shares of Common Stock of the Company at a $ 2 per share purchase price on a pre Reverse Stock Split basis.

Based on the PIPE SPA, the exercise price of the SPA Warrants was reset from $ 6.00 to $ 2.00 .

During the six months ended June 30, 2024, ATW I exercised 615,589 SPA Warrants, on a post Reverse Stock Split basis, ( 22,161,186 pre Reverse Stock Split) SPA Warrants in exchange for Common Stock.

The Company did no t receive cash in respect of these transactions.

Unless context otherwise requires, the term “SPA Warrants” means (i) before the entry into the Letter Agreements, the Original SPA Warrants, and (ii) upon and following the entry into the Letter Agreements, (a) the Amended SPA Warrants, and (b) the New SPA Warrants.

The SPA Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2025, at $ 34,034 and as of December 31, 2024 at $ 164,949 .

The fair value of the SPA Warrants was estimated using a Black-Scholes option pricing model using the following assumptions:

stock price of $ 0.90 , no assumed dividends, implied volatility of 180.6 %, and a remaining term of 2.19 years.

The change in value of the SPA Warrants

The SPA Warrants, which are accounted for as liabilities in our consolidated balance sheets, were valued as of March 31, 2026 and 2025 at $ 5,846 and $ 9,080 , respectively, and were estimated using a Black-Scholes valuation model using the following assumptions:

stock price $ 4.00 , implied volatility of 151.4 %, and remaining term of 6.5 years.

The change in the value of the SPA Warrants during the three months ended March 31, 2026 and 2025 was a loss and gain of $ 3,235 and $ 67,128 , respectively, and was reported with other (income) expense in our consolidated statements of operations.

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during the three months ended September 30, 2025 and 2024, was a gain of $ 62,288 and $ 374,796 , respectively.

The change in value of the SPA Warrants during the nine months ended September 30, 2025 and 2024, was a gain of $ 130,915 and $ 12,759,113 , respectively.

The change in fair value of SPA Warrants was reported with other (income) expense in our condensed consolidated statements of operations.

Equity Purchase Facility Agreement and Derivative Liability

On October 24, 2025, the Company entered into an equity purchase facility agreement (the “EPFA”) and a registration rights agreement (the “Registration Rights Agreement”) with a certain institutional investor (“Investor”), pursuant to which the Investor has committed to purchase up to $ 250 million of the Company’s common stock, par value $ 0.0001 per share.

Upon the terms and subject to the satisfaction of the conditions set forth in the EPFA, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to $ 250 million (the “Commitment Amount”) in shares of Common Stock.

Such sales of Common Stock by the Company, if any, are subject to certain limitations set forth in the EPFA, and may occur from time to time, at the Company’s sole discretion, over a period of up to 24 months, commencing on the date of the EPFA (such period, the “Commitment Period”).

During the Commitment Period, the Company may from time to time, by written notice delivered by the Company to the Investor (each, an “Advance Notice”), direct the Investor to purchase a number of shares of Common Stock up to the Maximum Advance Amount (as defined therein) as set forth in the Advance Notice, subject to limitations and adjustments as set forth in the EPFA.

The prices at which such shares will be sold will be based on the applicable Market Price (as defined therein).

Unless earlier terminated as provided under the EPFA, the term of the facility provided under the EPFA expires on the earlier to occur of (i) the first day of the next month following the 24-month anniversary of the first trading date after the date of the EPFA (the “Effective Date”), (ii) the date on which the Investor shall have made payment of Advances (as defined therein) pursuant to the EPFA for shares of Common Stock equal to the Commitment Amount and all shares of Common Stock purchased pursuant to the EPFA have been delivered, and (iii) the date on which the Company announces or publicly discloses a material restatement of its consolidated financial statements for two or more fiscal quarters (the “Lapsed Registration Termination”).

Under the EPFA, the Company will control the timing and amount of sales of Common Stock to the Investor, if any.

The Investor has no right to require the Company to sell any shares of Common Stock to the Investor, but the Investor is obligated to make purchases as the Company directs, subject to certain conditions set forth in the EPFA.

Actual sales of shares of Common Stock to the Investor, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, trading volume, the trading prices for the Common Stock, and determinations by the Company as to the appropriate sources of funding for the Company and its operations.

Consistent with the applicable Nasdaq listing rules, the aggregate number of shares of Common Stock that the Company may issue to the Investor under the EPFA may not exceed 19.99 % of the shares of Common Stock issued and outstanding as of the execution date of the EPFA (the “Exchange Cap”), unless the Company first obtains stockholder approval to issue shares of Common Stock in excess of the Exchange Cap in accordance with applicable Nasdaq listing rules.

Pursuant to the EPFA, the Company is required to provide each stockholder entitled to vote at a meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not later than 60 days following the date of the EPFA, a proxy statement in a form reasonably acceptable to the Investor and its counsel, at the expense of the Company to solicit each of the Company’s stockholders’ affirmative vote at the Stockholder Meeting for approval of the proposal to authorize the issuance of all shares of Common Stock issuable thereunder in compliance with the rules and regulations of Nasdaq, and the Company is required to use its reasonable best efforts to solicit its stockholders’ approval of such proposal and to cause the board of directors of the Company to recommend to the stockholders that they approve such proposal.

A special meeting of stockholders was held on January 28, 2026 and the issuance of shares of Common Stock pursuant to the EPFA was approved.

In connection with the EPFA, on October 24, 2025, the Company also entered into the Registration Rights Agreement with the Investor with respect to the resale of the shares of Common Stock issuable under the EPFA Agreement and the Commitment Shares.

The Registration Rights Agreement requires a registration statement registering such shares (the “Resale Registration Statement”) to be filed and that to be declared effective under the Securities Act of 1933, as amended, by the earlier of the (i) 90th day after following the date the Resale Registration Statement is filed, or (ii) the fifth business day following the date when the SEC notifies the Company that the Resale Registration Statement will not be reviewed or is no longer subject to further review and comments of the SEC.

The Company evaluated the EPFA under ASC 815, Derivatives and Hedging, and concluded that the EPFA meets the definition of a derivative instrument.

The Company further determined that the EPFA does not qualify for the scope

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exception for contracts indexed to and settled in the Company’s own stock under ASC 815-40 due to certain provisions that adjust the number of shares deliverable based on trading volume and other factors that are not inputs to the fair value of a fixed-for-fixed equity instrument.

Accordingly, the EPFA is accounted for as a freestanding derivative instrument and is measured at fair value at each reporting date, with changes in fair value recognized in earnings.

As of December 31, 2025, the Company determined that the fair value of the derivative associated with the EPFA was de minimis due to the low likelihood of utilization, the absence of any outstanding advances, and the Company’s discretion over whether to access the EPFA.

As of March 31, 2026, the Company recorded a derivative liability of $ 515,827 related to the EPFA.

The increase in fair value during the three months ended March 31, 2026 was primarily attributable to an increase in the likelihood that the Company may utilize the EPFA, driven by increased liquidity needs and changes in market conditions affecting the Company’s stock price.

The Company recognized a loss on derivative of $ 515,827 during the three months ended March 31, 2026 related to the change in fair value of the derivative liability, which is included in the condensed consolidated statements of operations within other (expense) income, net.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

Our 2022 Omnibus Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock units (“RSU”s), restricted stock and other stock-based awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock, or a combination thereof.

As of September 30, 2025, 112,214 equity units remained outstanding.

Total stock-based compensation expense including options and RSUs for the three and nine months ended September 30, 2025, net of forfeiture adjustments, totaled $ 398,225 and $ 968,240 , respectively.

Total stock-based compensation expense including options and RSUs for the three and nine months ended September 30, 2024, net of forfeiture adjustments, totaled $ 532,539 and $ 1,872,504 , respectively.

Total stock-based compensation expense including options and RSUs for the three months ended March 31, 2026, net of forfeiture adjustments, totaled $ 225,552 and $ 312,679 , respectively.

Employee Benefit Plan

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The 401(k) plan provides several investment options, for which the employee has sole investment discretion.

The Company’s cost for the 401(k) plan was $ 51,896 and $ 147,586 for the three and nine months ended September 30, 2025, respectively.

The Company’s cost for the 401(k) plan was $ 41,648 and $ 144,913 for the three and nine months ended September 30, 2024, respectively.

The Company’s cost for the 401(k) plan was $ 43,848 and $ 55,003 for the three months ended March 31, 2026, and 2025, respectively.

Related Party Transactions

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Further, MIF is considered a related party as Adam Sharkawy is a member of the Board of Directors of the Company and the founder and managing partner of MIF.

SPA Warrants – The SPA Warrants are held by related parties ATW I, MIF and SLS Family Irrevocable Trust (see Note 14 – Warrants).

Exchanged Senior Secured Convertible Debenture - On January 30, 2024, the Company and certain of its subsidiaries and ATW I entered into the Amendment and Exchange Agreement, pursuant to which ATW I transferred its existing 5 % Original Issue Discount Senior Secured Convertible Debenture to the Company in exchange for a new Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 (the “New Convertible Debentures”) in the aggregate principal amount of $ 29,591,600 .

In addition, on January 30, 2024, the Company and certain of its subsidiaries entered into additional Amendment and Exchange Agreements with MIF and SLS on substantially similar terms, pursuant to which MIF and SLS transferred their existing 5 % Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for New Convertible Debentures in the aggregate principal amount of $ 5,102,000 and $ 1,836,720 , respectively.

The fair value of the New Convertible Debentures was $ 99,195,791 upon issuance on January 30, 2024.

During the year ended December 31, 2024, ATW I and SLS converted Senior Secured Convertible Debentures with a principal value of $ 12,869,231 and $ 1,836,720 and interest of $ 442,140 and $ 4,785 into 535,427 and 77,673 shares of Common Stock, respectively.

The fair value of the conversion was $ 29,741,859 .

Second Amendment and Exchange Agreement - 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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Stock.

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.

On December 31, 2024, the Company issued 2,504 and 5,342 shares of Series A Preferred Stock to SLS and MIF, respectively, (see Note 13, “Equity”).

Series A Convertible Preferred Stock - During the nine months ended September 30, 2025, ATW I and SLS converted 19,038 and 2,300 shares of Series A Preferred Shares into 2,789,635 and 310,748 shares of Common Stock respectively.

During the year ended December 31, 2024, ATW I converted 400 shares of Series A Preferred Shares into 61,659 shares of Common Stock.

Series B Convertible Preferred Stock - On August 6, 2025, the “Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and among the Company and ATW pursuant to which the Company agrees to issue and sell in a private offering to ATW 3,000 shares of Series B Convertible Preferred Stock of the Company, $ 0.0001 par value (the “Series B Preferred Stock”), at a price per share of $ 980 (the “Preferred Offering”) for an aggregate purchase price of $ 2,940,000 .

The Preferred Offering also relates to the offering of the shares of the Company’s common stock issuable upon the conversion of or otherwise pursuant to the terms of the Series B Preferred Stock.

During the nine months ended September 30, 2025, ATW has made not converted any shares of Series B Preferred Shares into shares of Common Stock.

November 2024 Debentures - On November 4, 2024, the Company entered into a Securities Purchase Agreement with ATW I, pursuant to which ATW I 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 I purchased, in a private placement, $ 1,000,000 in principal amount of debentures.

The principal amount outstanding on the November 2024 Debentures at September 30, 2025 and December 31, 2024 was $ 2,150,000 and the fair value was $ 2,711,954 and $ 2,583,832 , respectively.

Convertible Senior Secured Term Loans – In the third quarter of 2023, the Company entered into a convertible senior secured term loan with related parties ATW II, ATW I, MIF and other non-related party lenders.

The loan was subsequently amended in the fourth quarter of 2023 and the first quarter of 2024 (see Note 7, “Notes Payable”).

On January 30, 2024, the Company also entered into the 2024 Term Loan Agreement with related parties ATW Management, as collateral agent and lender, and ATW III, ATW II, ATW I, MIF and another non-related party lenders.

On May 1, 2024, the Company entered into an amendment to the 2024 Term Loan Agreement with ATW I.

The principal amounts outstanding on the convertible senior term loans to related parties ATW I, ATW II, ATW III and MIF at September 30, 2025 were $ 1,643,933 , $ 4,404,211 , $ 1,177,311 and $ 4,353,665 , respectively.

The principal amount outstanding on the convertible senior term loans on December 31, 2024 to ATW I, ATW II, ATW III and MIF was $ 2,933,362 , $ 5,666,638 , $ 1,112,943 and $ 4,224,983 , respectively.

For the three and nine months ended September 30, 2025, interest expense attributable to ATW I, ATW II, ATW III and MIF was $ 52,515 , $ 140,690 , $ 26,572 and $ 117,011 and $ 155,831 , $ 417,483 , $ 71,116 and $ 331,772 , respectively.

For the three and nine months ended September 30, 2024, interest expense attributable to ATW I, ATW II, ATW III and MIF was $ 103,635 , $ 192,216 , $ 40,815 , and $ 146,845 , and $ 251,674 , $ 524,531 , $ 105,544 and $ 390,339 , respectively.

SPA Warrants – The SPA Warrants are held by related parties ATW I, MIF and SLS (see Note 16 – Warrants).

November 2024 Debentures - The November 2024 debentures are held by ATW II (see Note 8 - Notes Payable).

Senior Secured Convertible Term Loan - The Senior Secured Convertible Term Loan includes amounts outstanding to related parties, ATW II, ATW III and MIF (see Note 8 - Notes Payable).

Series A, B and C Convertible Preferred Stock - The Series A, B and C Convertible Preferred Stock is held by related parties ATW I, ATW II, MIF and SLS (see Note 14 - Preferred Stock).

Flexible Consulting, LLC - On December 1, 2023, the Board appointed Victoria Hay as the Interim Chief Financial Officer and principal financial officer of the Company.

2 unchanged sentences

Flexible Consulting, LLC is considered to be a related party from December 1, 2023.

The total value of services provided by Flexible Consulting, LLC to the Company for the three and nine months ended

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025 and 2024 was $ 275,000 and $ 907,684 , and $ 270,000 and $ 758,000 respectively.

Accounts payable included $ 45,000 and $ 160,366 due to Flexible Consulting, LLC at September 30, 2025 and December 31, 2024, respectively.

The total value of services provided by Flexible Consulting, LLC to the Company for the three months ended March 31, 2026 and 2025 was $ 250,000 and $ 332,994 , respectively.

Accounts payable included $ 40,000 and $ 45,000 due to Flexible Consulting, LLC at March 31, 2026 and December 31, 2025, respectively.

NAUTICUS ROBOTICS, INC.

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Loss Per Share

The following table is the basic and diluted loss per share computation.

For all periods presented, weighted average shares and loss per share reflect the effects of the Reverse Stock Split (see note 13, Equity).

Following is the computation of loss per basic and diluted share:

Three months ended

September 30, Nine months ended September 30,

2025 2024 2025 2024

Net income (loss) from continued operations $ ( 6,639,948 ) $ 17,931,827 $ ( 21,661,311 ) $ ( 50,366,134 )

Deemed dividend – Series A down-round adjustment ( 3,427,706 ) - ( 3,427,706 ) -

Net Income (loss) for basic earnings per share $ ( 10,067,654 ) $ 17,931,827 $ ( 25,089,017 ) $ ( 50,366,134 )

Change in fair value of SPA warrant liabilities - ( 374,796 ) - -

New convertible debentures interest and change in fair value - ( 24,199,071 ) - -

Convertible secured debentures interest and amortization - 1,151,356 - -

Adjusted net loss for diluted earnings per share $ ( 10,067,654 ) $ ( 5,490,684 ) $ ( 25,089,017 ) $ ( 50,366,134 )

Weighted average shares used to compute basic EPS 3,878,466 297,334 3,357,726 212,307

Dilutive effect of:

Stock options - - - -

Restricted and performance stock units - 133 - -

SPA Warrants - 11,837 - -

Convertible debt - 1,389,493 - -

Weighted average shares used to compute diluted EPS 3,878,466 1,698,797 3,357,726 212,307

Basic income (loss) per share $ ( 2.60 ) $ 60.31 $ ( 7.47 ) $ ( 237.23 )

Diluted loss per share $ ( 2.60 ) $ ( 3.23 ) $ ( 7.47 ) $ ( 237.23 )

Net loss $ ( 9,266,081 ) $ ( 7,567,187 )

Preferred stock dividend ( 191,250 ) -

Net loss attributable to Common Stockholders $ ( 9,457,331 ) $ ( 7,567,187 )

Weighted average shares used to compute basic LPS 3,840,563 381,215

Basic and diluted loss per share $ ( 2.46 ) $ ( 19.85 )

Anti-dilutive securities excluded from shares outstanding:

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Convertible debt 328,448 107,909

Series A and B Convertible Preferred Stock 2,424,688 - 2,424,688 -

Series A, B and C Convertible Preferred Stock 2,667,569 268,916

Total 3,007,906 473,452

Basic loss per share (“EPS”) is computed by dividing net loss by the weighted-average number of common shares outstanding during the period.

In computing the loss attributable to common shareholders, the Company deducts dividends on its preferred stock in accordance with ASC 260, Earnings Per Share.

For the three months ended March 31, 2026, total preferred dividends of $ 191,250 were deducted from net loss, consisting of $ 13,062 of dividends that were capitalized and added to the stated value of the preferred stock in accordance with the Certificates of Designation;

and $ 178,188 of dividends that were accrued but unpaid as of March 31, 2026.

Total preferred dividends increased the loss attributable to common shareholders for purposes of calculating basic and diluted earnings per share.

NAUTICUS ROBOTICS, INC.

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This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The estimated fair values of accounts receivable, contract assets, accounts payable, accrued expenses, and indebtedness with unrelated parties approximate their carrying amounts due to the relatively short maturity or time to maturity of these instruments.

Notes payable with related parties may not be arms-length transactions and therefore may not reflect fair value.

The estimated fair values of accounts receivable, contract assets, accounts payable and accrued expenses approximate their carrying amounts due to the relatively short maturity or time to maturity of these instruments.

Notes payable with related parties may not be arm's-length transactions and therefore may not reflect fair value.

The Company elected to measure the November 2024 Debentures at fair value under the fair value option in accordance with ASC 825-10, Financial Instruments - Fair Value Option.

The fair value of the November 2024 Debentures are measured at each reporting date in accordance with ASC 820-10, Fair Value Measurement, using a Monte Carlo simulation model.

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The fair value measurement is classified as Level 3 in the fair value hierarchy due to the use of unobservable inputs.

At September 30, 2025, the following assumptions were used in order to estimate the fair value of the November 2 024 Debentures:

At March 31, 2026, the following assumptions were used in order to estimate the fair value of the November 2024 Debentures:

stock price of $ 4.00 , a risk free rate of 3.72 %, implied volatility of 196 % and a remaining term of 0.44 years.

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The Private and SPA Warrants are considered Level 3 measurements as they involve significant unobservable inputs.

In connection with the acquisition of SeaTrepid on March 20, 2025, the Company measured the identifiable assets acquired and liabilities assumed at fair value in accordance to ASC 820-10.

The fair value of land and buildings acquired were measured using the market approach and considered Level 2 measurements as observable inputs from comparable sales were used.

Machinery and equipment acquired were measured using cost approach and considered Level 3 measurements due to the use of unobservable inputs.

The fair value of the earnout shares related to the acquisition were measured using the Monte Carlo simulation model.

The model incorporates Level 3 inputs, including stock price of $ 10.26 , stock price volatility of 99.9 %, revenue volatility of 101.4 %, risk free rate of 4.15 % and a remaining term of 0.78 years.

The fair value of notes payable acquired approximated their carrying values at the acquisition date as the Company plans to pay off the notes in the short-term.

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These items are not presented in the table below.

In connection with the issuance of Series B Preferred Stock on August 6, 2025, the Company measured the fair value of the Series A Preferred stock using a Monte Carlo simulation model.

Consistent with the guidance in ASC 260-10-S99-2, the valuation incorporated two separate simulations:

(a) the fair value of the instrument assuming the pre-reset conversion price ($ 11.07 per share post-reverse stock split), and (b) the fair value of the instrument assuming the reduced conversion price resulting from the down-round trigger ($ 8.26 per share post-reverse stock split).

All other model inputs, including the fair value of the Company’s common stock, volatility, and risk-free interest rate, were held constant between the two simulations.

The incremental fair value resulting from the difference between these two measurements represents the value transferred due to the down-round feature and was recognized in the period’s fair-value remeasurement.

The Company measures the derivative liability associated with the EPFA at fair value on a recurring basis.

The fair value of the derivative liability is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.

The fair value of the derivative liability was estimated using a Probability Weighted Expected Return Model ("PWERM") valuation model that incorporates probability-weighted scenarios regarding the Company’s expected utilization of the EPFA.

The valuation model incorporates both observable and unobservable inputs at March 31, 2026 including stock price of $ 4.00 , discount rate of 9.17 %, expected timing and frequency of potential draws under the EPFA and probability of utilization.

The probability of utilization represents a significant unobservable input and reflects management’s assessment of the likelihood that the Company will access the EPFA during its term.

As of March 31, 2026, this probability increased compared to December 31, 2025, primarily due to increased liquidity needs and declines in the Company’s stock price, which resulted in a corresponding increase in the fair value of the derivative liability.

The fair value of the 2,023 Series C Preferred Stock was measured on the exchange date of March 27, 2026 in accordance with ASC 820-10, Fair Value Measurement, using a Monte Carlo simulation model.

This model incorporates Level 3 inputs, including, current stock price, stock price volatility (historical and implied), risk free interest rate (U.S.

Treasury rates), and expected term to maturity.

The fair value measurement is classified as Level 3 in the fair value hierarchy due to the use of unobservable inputs.

The following assumptions were used in order to estimate the fair value of the Series C

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis and the related activity for the periods presented:

Fair Value as of September 30, 2025 Fair Value as of December 31, 2024

Preferred Stock at March 27, 2026:

stock price of $ 4.24 , risk free rate of 3.77 %, implied volatility of 152 %, and remaining term of 1.01 years.

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring and non-recurring basis and the related activity for periods presented:

Fair Value as of March 31, 2026 Fair Value as of December 31, 2025

Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3

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November 2024 Debentures $ 1,298,728 $ - $ - $ 1,298,728 $ 163,672 $ - $ - $ 163,672

Derivative liability $ 515,827 $ - $ - $ 515,827 $ - $ - $ - $ -

Public Warrants $ 1,769 $ 1,769 $ - $ - $ 1,612 $ 1,612 $ - $ -

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Non-recurring fair value instruments:

Series A Preferred Stock $ - $ - $ - $ - $ 110,300,391 $ - $ - $ 110,300,391

Series A Preferred Stock - Strike price $ 8.26

$ - $ - $ - $ - $ - $ - $ -

Series A Preferred Stock - Strike price $ 11.07

$ - $ - $ - $ - $ - $ - $ -

Fair Value as of March 20, 2025

Fair Value as of December 31, 2024

Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3

SeaTrepid Acquisition:

Land $ 444,435 $ - $ 444,435 $ - $ - $ - $ - $ -

Buildings $ 970,904 $ - $ 970,904 $ - $ - $ - $ - $ -

Machinery and equipment $ 4,753,964 $ - $ - $ 4,753,964 $ - $ - $ - $ -

Earnout shares $ 6,864,729 $ - $ - $ 6,864,729 $ - $ - $ - $ -

Series C Preferred Stock at March 27, 2026 $ 3,659,502 $ - $ - $ 3,659,502

The following table sets forth a summary of the changes in fair value of the Company’s financial liabilities categorized within Level 3:

November 2024 Debentures Warrant

Liability Derivative Liability

Balance, December 31, 2024 $ 2,583,832 $ 172,833 $ -

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Change in fair value of warrant liabilities - ( 62,151 ) -

Balance, September 30, 2025 $ 2,711,954 $ 34,606

Balance March 31, 2025 $ 3,307,758 $ 110,682 $ -

Balance, December 31, 2025 $ 163,672 $ 9,669 $ -

Issuance of November 2024 Debentures 2,960,000 - -

Fair value conversion of November 2024 Debentures to Common Stock ( 283,790 ) - -

Exchange of November 2024 Debentures to Series C Preferred Stock ( 2,729,994 ) - -

Change in fair value of November 2024 Debentures 1,188,840 - -

Change in fair value of warrant liabilities - ( 3,176 ) -

Change in fair value of derivative liability - - 515,827

Balance, March 31, 2026 $ 1,298,728 $ 6,493 $ 515,827

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Segment Information

The Company operates as a single operating and reportable segment.

The Company's Chief Operating Decision Maker ("CODM"), the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operational decisions, allocating resources, and evaluating financial performance.

The Company’s operations are organized and managed as a single segment because its products and services share similar economic characteristics, including production processes, customer types, distribution methods and regulatory environment.

Accordingly, the Company has determined that it has one reportable segment.

The CODM assesses performance by reviewing the Consolidated Balance Sheets and Consolidated Statements of Operations quarterly.

Segment assets are not regularly reviewed by the CODM and, therefore, are not disclosed.

Substantially all of the Company's revenues are derived from customers located in the United States, and substantially all long-lived assets are located in the United States.

Subsequent Events

On October 16, 2025, the Company received a written notice from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the requirement to maintain a minimum Market Value of Listed Securities (“MVLS”) of $35 million, as set forth in Nasdaq Listing Rule 5550(b)(2) (the “Listing Requirement”).

The Nasdaq notification has no immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “KITT.” The Company is evaluating various options to regain compliance with the Listing Requirement, which may include corporate or market-based actions, including establishing compliance under the alternative stockholders’ equity standard set forth in Nasdaq Listing Rule 5550(b)(1).

The Company intends to monitor its market value and stockholders’ equity and is preparing a plan to regain compliance.

On October 27, 2025, the Company announced the establishment of a $ 250 million equity line of credit facility to fund potential acquisitions and growth initiatives.

In connection with this facility, the Company launched a strategic initiative to expand into deep-sea rare earth and mineral exploration through targeted acquisitions of businesses and technologies that complement its existing autonomous systems portfolio.

This initiative is intended to leverage the Company’s advanced robotics, artificial intelligence, and subsea automation capabilities to support sustainable innovation and environmental stewardship in subsea resource development.

The Company believes this strategy aligns with its broader objectives to participate responsibly in the global energy transition and to strengthen its position in critical mineral exploration markets.

For more information please refer to the 8K filed on October 27, 2025.

On October 25, 2025, the Company entered into an Amendment Agreement to the 2023 Term Loan Agreement with each Lender, pursuant to which the conversion price was reduced to $ 1.76 for the period ending on November 7, 2025.

On October 29, 2025, the Company received notice that one of its lenders converted $ 3.7 million of outstanding debt to equity under the September 2023 Term Loan.

For more information please refer to the 8K filed on October 27, 2025.

On October 24, 2025 and October 31, 2025, the Company commenced ATM offerings of up to $ 93.6 million in the aggregate under a previously filed SEC shelf registration statement.

ATM offeri ng

From April 1, 2026 to May 14, 2026, the Company has conducted ATM offerings to offer and sell shares of the Company's Common Stock.

Under this offering we issued and sold 422,902 shares, for gross proceeds of $ 1,281,488 and net proceeds of $ 1,240,248 after deducting commissions and offering expenses totaling $ 41,240 .

Series B and C Preferred Stock Conversions

From April 1, 2026 to May 14, 2026, 250 and 325 shares of Series B and C Preferred Stock were converted into 67,436 and 165,026 shares of Common Stock, respectively.

Corrections to Certificates of Designations

On April 15, 2026, the Company filed with the Secretary of State of the State of Delaware, amendments to the Certificates of Designations of Rights and Preferences, respectively, of the Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock, and the Series C Convertible Preferred Stock, to correct an error in each such instrument.

Nasdaq Compliance Letter

On April 27, 2026, the Company received a formal notice from The Nasdaq Capital Market ("Nasdaq") confirming that the Company has demonstrated compliance with all continued listing requirements through the end of the Nasdaq Hearing Panel's jurisdiction, which expired on April 14, 2026.

Second Amendment to the 2023 Term Loan Agreement

On May 11, 2026, the Company entered into a Second Amendment to the 2023 Term Loan Agreement, dated September 18, 2023, with each Lender, pursuant to which the conversion price was reduced to $ 2.20 for the period ending on May 21, 2026.

November 2024 Debentures

On May 12, 2026, the Company issued November 2024 Debentures to an institutional investor, in aggregate principal amount of $ 1,556,122 , which are convertible into 204,753 shares of Common Stock of the Company calculated at a conversion price of $ 7.60 , pursuant to the Securities Purchase Agreement dated November 4, 2024.

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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-Q

Item 1. Financial Statements