What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-27 compared with 2025-03-31 · 221 added, 234 removed, 591 unchanged (43% of the section changed)

17 unchanged sentences

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company’s recurring losses from operations, available cash and cash used in operations raise substantial doubt about the Company’s ability to continue as a going concern.

As discussed in Note 1 to the financial statements, the Company’s recurring losses from operations and cash used in operations raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

30 unchanged sentences

Intangible assets, net

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expenses

Accrued expenses and other current liabilities

Deferred revenue

1 unchanged sentence

Debt obligations, current

Other current liabilities

Total current liabilities

1 unchanged sentence

Debt obligations, net of debt issuance costs of $ 238 and $ 316 as of December 31, 2025 and 2024, respectively

Preferred stock warrant liability

Derivative liability

Other noncurrent liabilities

Operating lease liabilities, noncurrent

Other noncurrent liabilities

Total liabilities

Commitments and contingencies (Note 9)

Stockholders’ equity:

Preferred Stock, $ 0.001 par value;

40,000,000 and 43,405,324 shares authorized as of December 31, 2024 and 2023, 0 and 189,982 shares issued and outstanding as of December 31, 2024 and 2023, respectively;

aggregate liquidation preference of $ 0 and $ 35,361 as of December 31, 2024 and 2023 respectively (1)

Stockholders’ equity (deficit) (1):

Class A Common Stock, $ 0.001 par, 228,000,000 and 114,000,000 shares authorized as of December 31, 2024 and 2023, 4,065,347 and 1,603,772 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Class B Common Stock, $ 0.001 par, 30,000,000 shares authorized as of December 31, 2024 and 2023, 336,759 and 187,156 shares issued and outstanding as of December 31, 2024 and 2023

40,000,000 shares authorized, no shares issued or outstanding

Class A Common Stock, $ 0.001 par value, 228,000,000 shares authorized as of December 31, 2025 and 2024, 12,194,078 and 4,065,347 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Class B Common Stock, $ 0.001 par value, 30,000,000 shares authorized as of December 31, 2025 and 2024, 336,424 and 336,759 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities, preferred stock and stockholders’ equity (deficit)

(1) Share amounts as of December 31, 2023 have been adjusted to reflect the impact of a 1 -for-50 reverse stock split of the Company’s common stock effected in September 2024 as discussed in Note 1.

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying Notes to Financial Statements.

8 unchanged sentences

Research and development

Sales and marketing

General and administrative

Sales, general and administrative

Restructuring charges

3 unchanged sentences

Change in fair value of warrant and derivative liabilities

Interest income (expense), net

Interest expense, net

Other income (expense), net

4 unchanged sentences

Weighted average shares used to compute basic and diluted net loss per share

(1) Share amounts for the year ended December 31, 2023 have been adjusted to reflect the impact of a 1 -for-50 reverse stock

split of the Company’s common stock effected in September 2024 as discussed in Note 1 .

See accompanying Notes to Financial Statements.

8 unchanged sentences

Stock-based compensation

Warrants exercised

Conversion of debt obligations to Class A Common Stock

Reclassification of warrant liabilities

Stock options exercised

Offering proceeds, net of issuance costs

Fractional share adjustment due to reverse stock split

Proceeds from Equity Sale, net of issuance costs

Shares issued for consulting services

Share conversion to Class A Common Stock

Issuance of vendor warrants for consulting services

Share conversion to common stock

Share conversion costs

1 unchanged sentence

Stock-based compensation

Reclassification of warrant liabilities

Stock options exercised

Fractional share adjustment due to reverse stock split

Offering proceeds, net of issuance costs

Issuance of common stock, and pre-funded warrants sold for cash, net of issuance costs

Share conversion to common stock

Proceeds from Equity Sale, net of issuance costs

Proceeds from Direct Registration Offering

Prefunded warrants exercised

Share conversion costs

Balance as of December 31, 2025

Share amounts have been adjusted to reflect the impact of a 1 -for-50 reverse stock split of the Company’s common stock effected in September 2024 as discussed in Note 1.

See accompanying Notes to Financial Statements.

7 unchanged sentences

Loss on disposal of Autonomous Security Robots

(Gain)/Loss on disposal of property and equipment

Stock compensation expense

Change in fair value of warrant and derivative liabilities

Change in allowance for credit losses

Accrued interest

Common stock issued in exchange for consulting services

Amortization of debt discount

Non-cash interest

Changes in operating assets and liabilities:

Accounts receivable, net

Prepaid expenses and other current assets

Accounts receivable

Prepaid expenses and other assets

Accounts payable

Accrued expenses

Accrued expenses and other current liabilities

Deferred revenue

Other current and noncurrent liabilities

Lease liabilities and other noncurrent liabilities

Net cash used in operating activities

1 unchanged sentence

Purchases and related costs incurred for Autonomous Security Robots

Proceeds from sales of property, equipment and software

Purchases of property and equipment

5 unchanged sentences

Proceeds from issuance of Public Safety Infrastructure Bonds, net of issuance costs

Proceeds from issuance of common stock and pre-funded warrants sold for cash, net of issuance costs

Proceeds from Direct Registration Offering

Proceeds for the issuance of common stock and pre-funded warrants sold for cash, net of issuance costs

Repayments of debt obligations

4 unchanged sentences

Cash, cash equivalents and restricted cash at end of the period

Supplemental Disclosure of Non-Cash Financing and Investing Activities

Goodwill adjustment

Conversion of preferred stock to common stock

Conversion of debt obligations to Class A Common Stock

Capital expenditures in accounts payable and other long-term liabilities

Supplemental Disclosure of Cash Flow Information

Capital expenditures in accounts payable, accrued expenses and other current liabilities, and other noncurrent liabilities

Preferred stock warrant reclassification to equity

Operating lease liabilities arising from obtaining right-of-use-assets

Promissory note issued in exchange for cancellation of Class A Common Stock Warrants

Operating lease liabilities arising from obtaining right of use asset

Financing of insurance premiums

Conversion of preferred stock to common stock

See accompanying Notes to Financial Statements.

1 unchanged sentence

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Dollars in thousands, unless otherwise stated)

The Company and Summary of Significant Accounting Policies

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Knightscope, Inc.

(the “Company”) is a public safety advanced technology company that builds fully autonomous security robots and blue light emergency communications systems.

(“the Company,” “we,” “us” or “our”) is a security technology company that builds fully autonomous security robots and blue light emergency communications systems.

The Company’s mission is to make the USA the safest country in the world by helping to protect the people, places, and assets where we live, work, study and visit.

To support this mission, the Company designs, develops, manufactures, markets, deploys, and supports Autonomous Security Robots (“ASRs”), autonomous charging stations, the proprietary Knightscope Security Operations Center (“KSOC”) software user interface, and Emergency Communication Devices (“ECDs”) which include, its newly released Knightscope Emergency Management System (“KEMS”) platform.

To support this mission, the Company designs, develops, manufactures, markets, deploys, and supports Autonomous Security Robots (“ASRs”), autonomous charging stations, the proprietary Knightscope Security Operations Center (“KSOC”) software user interface, and Emergency Communication Devices (“ECDs”) which include the Knightscope Emergency Management System (“KEMS”) platform.

Basis of Presentation and Liquidity

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Since its inception, the Company has incurred significant operating losses and negative cash flows from operations which is principally the result of scaling the business and research and development activities related to the development, continued improvement, and deployment of the Company’s ASRs (hardware and software).

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these financial statements are issued.

The financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business.

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Based on current operating levels, the Company will need to raise additional funds in the next twelve months by selling additional equity or incurring debt.

New financings may not be available to the Company on commercially acceptable terms, or at all.

If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, including capital expenditures, or downsize its organization, any of which may have a material adverse effect on its business, financial condition, results of operations, and ability to operate as a going concern.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months from the date of this report.

In connection with its listing on the Nasdaq Global Market on January 27, 2022, the Company completed its Regulation A Offering on January 26, 2022, issuing 2,236,619 shares of Class A Common Stock and generating net proceeds of approximately $ 20.2 million.

Following the Company’s listing on Nasdaq on January 27, 2022, in April 2022, Knightscope established a $ 100 million committed equity facility with B.

Riley Principal Capital, LLC, enabling the Company to access capital in its discretion, as required, subject to market conditions.

After the Class A Common Stock had been listed for a year, the Company filed a registration statement for up to $ 20 million for an at-the-market offering agreement on February 1, 2023 with H.C.

Wainwright & Co., LLC.

In August 2023, the Company filed a new prospectus supplement providing for the offering and sale from time to time of up to $ 25.0 million in shares of Class A Common Stock subject to, and in accordance with SEC rules.

This facility provides the Company with additional access to capital, as needed, subject to market conditions.

On September 29, 2023, the Company filed an Offering Circular (the “Offering Circular”) for the issuance of up to $ 10.0 million in Public Safety Infrastructure Bonds pursuant to Regulation A of the Securities Act, as amended.

The Offering Circular was qualified with the SEC on October 2, 2023.

On April 8, 2024, the Company filed a prospectus supplement (the “April Prospectus Supplement”), relating to the issuance and sale from time to time of up to $ 6.4 million in shares of Class A Common Stock subject to, and in accordance with, SEC rules.

On June 7, 2024, the Company filed a prospectus supplement (the “June Prospectus Supplement”) to amend the April Prospectus Supplement to increase the issuance and sale from time to time to up to $ 11.66 million in shares of Class A Common Stock subject to, and in accordance with, SEC rules.

The Company’s projected cash flows are subject to

various risks and uncertainties, and the unavailability or inadequacy of financing to meet future capital needs could force it to modify, curtail, delay, or suspend some or all aspects of its planned operations or discontinue operations completely.

Management’s plans include seeking additional financing, such as issuances of equity and issuances of debt and/or convertible debt instruments.

Sales of additional equity securities, convertible debt and/or warrants by the Company could result in the dilution of the interests of existing stockholders.

The Company will require significant additional financing to meet its planned capital needs and is pursuing opportunities to obtain additional financing through equity and/or debt alternatives.

However, there can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all.

As a result, the substantial doubt about the Company’s ability to continue as a going concern has not been alleviated.

The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Reverse Stock Split

On August 16, 2024, the Company held an annual meeting of stockholders at which the Company’s stockholders approved, among other items, amendments to the Company’s Certificate of Incorporation, to effect a reverse stock split of the Company’s Class A Common Stock at a ratio ranging from any whole number between 1 -for-5 and 1 -for-50, as determined by the Company’s Board of Directors (the “Board”) in its discretion, subject to the Board’s authority to abandon such amendments (the “Class A Reverse Stock Split Amendment”), and effect a reverse stock split of the Company’s Class B Common Stock at a ratio ranging from any whole number between 1 -for-5 and 1 -for-50 (which ratio shall be the same ratio as the reverse stock split determined by the Board with respect to the Class A Common Stock), as determined by the Board in its discretion, subject to the Board’s authority to abandon such amendments (the “Class B Reverse Stock Split Amendment” and, together with the Class A Reverse Stock Split Amendment, the “Reverse Stock Split Amendment”).

The Reverse Stock Split Amendment was described in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on July 5, 2024.

The Board had previously approved the Reverse Stock Split Amendment.

On September 4, 2024, the Board selected a reverse stock split of the Class A Common Stock at a final ratio of 1 -for-50 and a reverse stock split of the Class B Common Stock at a final ratio of 1 -for-50 and abandoned all other reverse stock split amendments at different ratios.

On September 13, 2024, the Company filed a Certificate of Amendment to Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect the Reverse Stock Split Amendment.

The Reverse Stock Split Amendment became effective at 5:00 p.m.

Eastern Time on the date of filing of the related Certificate of Amendment.

No fractional shares of either Class A Common Stock or Class B Common Stock were issued if, as a result of the Reverse Stock Split Amendment, a stockholder would otherwise have become entitled to a fractional share because the number of shares of Class A Common Stock or Class B Common Stock, as applicable, that they held before the Reverse Stock Split Amendment was not evenly divisible by the split ratio;

instead, each stockholder received a cash payment in lieu of such fractional share based on the closing price per share as reported by The Nasdaq Capital Market on September 13, 2024, which totaled approximately $ 78 .

All stock options outstanding under the Company’s Equity Incentive plan immediately prior to the Reverse Stock Split Amendment were adjusted by dividing the number of affected shares of common stock by 50 and, as applicable, multiplying the exercise price by 50 .

All share and per-share amounts in these financial statements have been restated to reflect the Reverse Stock Split Amendment as if it had occurred at the beginning of the earliest period presented.

On February 1, 2023, we entered into an ATM Agreement with H.C.

Wainwright & Co., LLC (“Wainwright”), pursuant to which we may offer and sell from time-to-time shares of Class A Common Stock through or to Wainwright acting as sales agent or principal (the “ATM Facility”).

We initially filed a prospectus supplement on February 9, 2023, for sales under the ATM Facility up to $ 20.0 million, which was further supplemented on April 8, 2024, June 7, 2024, October 11, 2024, and November 14, 2024.

On April 4, 2025, we filed a new shelf registration statement on Form S-3, pursuant to which we may, from time to time in one or more offerings, offer and sell up to $ 100.0 million in the aggregate of Class A common stock, preferred stock, debt securities, warrants and/or units, in any combination.

The new shelf registration statement was declared effective on April 11, 2025.

On July 18, 2025, we filed a new prospectus supplement for additional sales under the ATM Facility up to $ 50.0 million of shares of Class A Common Stock.

The Company has one operating segment and one reportable segment as its chief operating decision maker (“CODM”), who is its Chief Executive Officer , reviews financial information on a basis for purposes of allocating resources and evaluating financial performance.

All long-lived assets are located in the United States and substantially all revenue is attributed to sellers and buyers based in the United States.

Reclassifications

Certain reclassifications have been made to the fiscal year 2024 financial statements to conform to the fiscal year 2025 presentation.

The Company combined sales, general and administrative expenses on the Statements of Operations.

On the Balance Sheets, the Company combined accrued expenses and other current liabilities.

The amounts were not considered material to the financial statements.

The reclassifications had no impact on total assets, total liabilities, stockholders’ equity or net loss.

Comprehensive Loss

9 unchanged sentences

Restricted Cash

The Company has restricted cash as collateral for the Company’s corporate credit card program.

As of December 31, 2024 and 2023, the carrying value of restricted cash was $ 0.1 million.

The Company had restricted cash as collateral for the Company’s corporate credit card program, which was discontinued during the first quarter of 2025.

As of December 31, 2025 and 2024, the carrying value of restricted cash was $ 0.0 million and $ 0.1 million, respectively.

Concentrations of Credit Risk

9 unchanged sentences

The Company does not require collateral from its clients to secure accounts receivable.

Accounts receivable was derived from the leasing of proprietary ASRs along with access to browser-based interface KSOC as well as the sale of ECDs.

Accounts receivable were derived from the leasing of proprietary ASRs along with access to browser-based interface KSOC as well as the sale of ECDs.

The Company reviews its receivables for collectibility based on historical loss patterns, aging of the receivables, and assessments of specific identifiable client accounts considered at risk or uncollectible and provides allowances for potential credit losses, as needed.

The Company also considers any changes to the financial condition of its clients and any other external market factors that could impact the collectibility of the receivables in the determination of the allowance for credit losses.

Based on these assessments, the Company recorded a $ 139 allowance for credit losses on its accounts receivable as of December 31, 2024 compared to an allowance of $ 15 on its accounts receivable balance as of December 31, 2023.

As of December 31, 2024, the Company had one client whose accounts receivable balance totaled 10% or more of the Company’s total accounts receivable ( 13 %) compared with one client as of December 31, 2023 ( 34 %).

For the year ended December 31, 2024, the Company had no clients who individually accounted for 10% or more of the Company’s total revenue, net compared with two clients who individually accounted for 10% of total revenue, net for the year ended December 31, 2023 ( 11 %, 10 %).

Based on these assessments, the Company recorded a $ 0.2 million allowance for credit losses on its accounts receivable as of December 31, 2025 compared to an allowance of $ 0.1 million on its accounts receivable balance as of December 31, 2024.

As of December 31, 2025, the Company had two clients whose accounts receivable balance totaled 10% or more of the Company’s total accounts receivable ( 28 % , 11 % ) compared with one client as of December 31, 2024 ( 13 % ).

For the year ended December 31, 2025, the Company had one client who individually accounted for 10% or more of the Company’s total revenue, net ( 19 %) , compared with no clients who individually accounted for 10% of total revenue, net for the year ended December 31, 2024.

Vendor Concentration Risk

The Company purchases inventory from an assortment of vendors worldwide;

however certain components used in our ECD products and other platforms are sourced from single suppliers or from a limited number of qualified suppliers.

In some cases, these components require certification, customization, or regulatory compliance that limits short-term substitution.

Inventory, principally purchased components, is stated at the lower of cost or net realizable value.

2 unchanged sentences

At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

The following table presents the components of inventory (in thousands):

Raw materials

2 unchanged sentences

Prepaid expenses and other current assets

Prepaid and other current assets is comprised of the following:

Prepaid and other current assets is comprised of the following (in thousands):

Prepaid expense

Research and development tax credit

Prepaid inventory

Other receivables

Other current assets

Autonomous Security Robots, net

ASRs consist of materials, ASRs in progress and finished ASRs.

ASRs in progress and finished ASRs include materials, labor and other direct and indirect costs used in their production.

ASRs in progress and finished ASRs include materials, labor and other direct and indirect costs used in their manufacturing.

Finished ASRs are valued using a discrete bill of materials, which includes an allocation of labor and direct overhead based on assembly hours.

Depreciation expense on ASRs is recorded using the straight-line method over their estimated expected lives, which currently ranges from 3 to 5 years .

Depreciation expense of finished ASRs is included in research and development expense, sales and marketing expense, and cost of revenue, net in the Company’s Statements of Operations.

Depreciation expense on finished ASRs was to $ 2.0 million and $ 1.6 million for the years ended December 31, 2024 and 2023, respectively.

Depreciation expense of finished ASRs is included in research and development expense, sales, marketing, general and administrative expense, and cost of revenue, net in the Company’s Statements of Operations.

Depreciation expense on finished ASRs was $ 2.0 million for each of the years ended December 31, 2025 and 2024.

In the first quarter of 2024, the Company discontinued the K5 v3 machines and as a result, wrote off approximately $ 1.1 million against service cost of revenue, net for the year ended December 31, 2024.

ASRs, net, consisted of the following:

During the year ended December 31, 2025, the Company wrote off obsolete ASRs of approximately $ 0.9 million against service cost of revenue, net.

ASRs, net, consisted of the following (in thousands):

Raw materials

2 unchanged sentences

accumulated depreciation on Finished ASRs

The components of the Finished ASRs, net, are as follows:

The components of the Finished ASRs, net, are as follows (in thousands):

ASRs on lease or available for lease

8 unchanged sentences

When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the Balance Sheets and any resulting gain or loss is reflected in the Statements of Operations in the period realized.

Property, equipment, and software, net as of December 31, 2024 and 2023 were as follows:

Property, equipment, and software, net as of December 31, 2025 and 2024 were as follows (in thousands):

Computer equipment

Construction Work in Process

Furniture, fixtures and equipment

2 unchanged sentences

Property, equipment and software, net

Depreciation and amortization expense on property, equipment and software is included in research and development expenses, cost of revenue, net, and sales and marketing expense on the Company’s Statements of Operations.

Depreciation and amortization expense on property, equipment and software was $ 262 and $ 208 for the years ended December 31, 2024 and 2023, respectively.

Depreciation and amortization expense on property, equipment and software is included in research and development expenses, cost of revenue, net, and sales, general and administrative expense on the Company’s Statements of Operations.

Depreciation and amortization expense on property, equipment and software was $ 0.2 million and $ 0.3 million for the years ended December 31, 2025 and 2024, respectively.

Goodwill and Acquired Intangible Assets

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The Company amortizes the intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, which is normally one to eight years .

The amortization expense for developed technology is recorded in cost of revenues.

The amortization expense for the trademark and customer relationships is recorded in sales and marketing expense.

The amortization expense for developed technology is recorded in cost of revenue, net.

The amortization expense for the trademark and customer relationships is recorded in sales, general and administrative expense.

Impairment of Long-Lived Assets

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If the assets are determined to be recoverable, but the useful lives are shorter than originally estimated, the Company will depreciate or amortize the net book value of the assets over the newly determined remaining useful lives.

Management reviewed the Company‘s ASRs, property, equipment, software and intangible assets and no assets were determined to be impaired for the years ended December 31, 2024 and 2023.

Management reviewed the

Company‘s ASRs, property, equipment, software and intangible assets and no assets were determined to be impaired for the years ended December 31, 2025 and 2024.

The Company determines if a contract is a lease or contains a lease at the inception of the contract and reassesses that conclusion if the contract is modified.

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Operating lease costs for lease payments is recognized on a straight-line basis over the lease term.

The adjustments due to the adoption of ASC 842 primarily related to the recognition of an operating lease ROU asset and corresponding operating lease liability for the Company’s leased properties.

The Company’s operating lease ROU asset and liability were recognized at the adoption date of ASC 842, based on the present value of lease payments over the remaining lease term.

In determining the net present value of lease payments, the Company used its borrowing rate of 12.0 % based on the information available, including remaining lease term, at the adoption date of ASC 842.

As of December 31, 2024, the Company’s incremental borrowing rate for its real estate operating leases range from 5.75 % to 15 % dependent upon the weighted average remaining lease term of 0.7 years for the Company’s leased properties.

The Company’s lease contracts often include lease and non-lease components.

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

Other Current Liabilities

Other current liabilities consisted of the following:

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Legal, consulting and financial services

Warranty liability

Payroll and payroll taxes

Customer deposits

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The liability is established using historical warranty claim experience.

The current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future warranty claims.

current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future warranty claims.

Adjustments to the warranty accrual are recorded if actual claim experience indicates that adjustments are necessary.

Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.

Change in the warranty liability for the years ended consisted of the following:

Change in the warranty liability for the years ended December 31, 2025 and 2024 consisted of the following (in thousands):

Balance January 1,

1 unchanged sentence

Warranty services provided

Accrued Expenses

Accrued expenses consisted of the following:

Legal, consulting and financial services

Payroll and payroll taxes

Accrued interest

Convertible Preferred Warrant Liability and Common Stock Warrants

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In connection with the Company’s MaaS subscription for the Company’s ASRs, the Company’s standard billing terms are 1) annual in advance;

2) quarterly;

or 3) monthly.

In these situations, the Company records the invoices as deferred revenue and amortizes the subscription amount when the services are delivered, which generally is a 12 -month period.

In addition, the Company refers certain transactions to Dimension, whereby Dimension advances the full value of the MaaS subscription to the Company, less a processing fee.

The advanced payment is recorded in deferred revenue and amortized over the term of the subscription once the ASR is delivered to the deployment site.

The Company derives its revenue from the lease subscription of its proprietary ASRs along with access to its browser and mobile based software interface, KSOC.

MaaS subscription agreements typically have a twelve ( 12 )-month term.

MaaS subscription agreements typically have a 12 -month term.

The Company also records deferred revenue from unfinished contracts for certain ECD related services.

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Revenue recognized over a period generally results in a majority of the increases in deferred revenue as the performance obligations are fulfilled after the billing event.

Deferred revenue was as follows:

The following table summarizes the changes in the deferred revenue balance as follows (in thousands):

December 31, 2025

December 31, 2024

Deferred revenue - short term

Deferred revenue, beginning of period

Revenue recognized in the year ended related to amounts included in deferred revenue at the beginning of the period

Deferred revenue represents amounts invoiced to customers for contracts for which revenue has yet to be recognized based for subscription services to be delivered to the Company’s clients.

Revenue deferred, net of revenue recognized on contracts in the respective period

Deferred revenue, end of period

The Company expects the balance of deferred revenue to be recognized in the next 12 months.

Deferred revenue represents amounts invoiced to customers for contracts for which revenue has yet to be recognized for subscription services to be delivered to the Company’s clients.

Typically, the timing of invoicing is based on the terms of the contracts.

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The Company disaggregates revenue from contracts with customers into the timing of the transfers of goods and services by product line.

The following table summarizes revenue by product line and timing of recognition:

The following table summarizes revenue by product line and timing of recognition (in thousands):

Year Ended December 31

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Cost of revenue, net

Cost of revenue, net related to services includes depreciation of the ASRs and some ECDs over their useful lives, labor and associated benefits incurred in the production and maintenance of the ASRs, data and communications fees, routine maintenance costs, shipping costs, and other direct costs incurred during assembly and deployment.

Cost of revenue, net related to services includes depreciation of the ASRs and some ECDs over their useful lives, labor and associated benefits incurred in the manufacture and maintenance of the ASRs, data and communications fees, routine maintenance costs, shipping costs, and other direct costs incurred during assembly and deployment.

ECD related cost of revenue, net also consist of all direct materials and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tool, repairs and other expenses.

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The amounts classified as cost of revenue, net represent shipping and handling costs associated with the deployment or returns of the ASRs directly to or from clients.

Management believes that the classification of these shipping and handling costs as cost of revenue, net better

reflects the cost of producing the ASRs and selling its services.

Shipping and handling costs associated with the transportation of demonstration units shipped to sales personnel and clients are recorded as sales and marketing expenses.

The shipping and handling costs recorded within cost of revenue, net totaled approximately $ 315 and $ 275 for the years ended December 31, 2024 and 2023, respectively.

Shipping and handling costs recorded within sales and marketing was insignificant for the years ended December 31, 2024 and 2023, respectively.

Management believes that the classification of these shipping and handling costs as cost of revenue, net better reflects the cost of producing the ASRs and selling its services.

Shipping and handling costs associated with the transportation of demonstration units shipped to sales personnel and clients are recorded as sales, general and administrative expenses.

The shipping and handling costs recorded within cost of revenue, net totaled approximately $ 0.5 million and $ 0.3 million for the years ended December 31, 2025 and 2024, respectively.

Shipping and handling costs recorded within sales, general and administrative was insignificant for the years ended December 31, 2025 and 2024, respectively.

Stock-Based Compensation

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Research and development costs are expensed as incurred.

Sales, General and Administrative Costs

Selling, general and administrative costs consist primarily of salaries and other personnel-related expenses for our executive, administrative, legal, finance, information technology, human resources, sales, and marketing personnel, investor relations expenses, advertising expenses, travel and related expenses, trade shows, costs of computer and communications equipment and support services, consulting and professional service fees including legal, costs of marketing programs, costs of facilities, management information systems and support services, offset by allocations of indirect costs such as facilities and shared services expenses.

Advertising Costs

Advertising costs are recorded in sales and marketing expense in the Company’s statements of operations as incurred.

Advertising costs are recorded in sales, general and administrative expense in the Company’s Statements of Operations as incurred.

Advertising expense was $ 0.3 million and $ 1.5 million for the years ended December 31, 2025 and 2024, respectively.

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The voting, dividend, liquidation and other rights and powers of the common stock are subject to and qualified by the rights, powers and preferences of any series of preferred stock as may be designated by the Company’s Board of Directors and outstanding from time to time.

In accordance with the two-class method, earnings allocated

to these participating securities, which include participation rights in undistributed earnings with common stock, are subtracted from net loss to determine net loss attributable to common stockholders upon their occurrence.

In accordance with the two-class method, earnings allocated to these participating securities, which include participation rights in undistributed earnings with common stock, are subtracted from net loss to determine net loss attributable to common stockholders upon their occurrence.

Basic net loss per share is computed by dividing net loss attributable to common stockholders (net adjusted for preferred stock dividends declared or accumulated) by the weighted average number of shares of common stock outstanding during the period.

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Potentially dilutive securities that were excluded from the computation of diluted net loss per share for the years ended December 31, 2025 and 2024 consist of the following:

Series A Preferred Stock (convertible to Class B Common Stock)

Series B Preferred Stock (convertible to Class B Common Stock)

Series m Preferred Stock (convertible to Class A Common Stock)

Series m-2 Preferred Stock (convertible to Class B Common Stock)

Series S Preferred Stock (convertible to Class A Common Stock)

Warrants to purchase common stock (convertible to Class A Common Stock)

Warrants to purchase Series m-3 Preferred Stock (convertible to Class A Common Stock)

Warrants to purchase Series S Preferred Stock (convertible to Class A Common Stock)

Stock options

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and 626,334 outstanding pre-funded warrants as of that date are not included in the table above.

As of February 11, 2025, the pre-funded warrants were fully exercised.

As all potentially dilutive securities are anti-dilutive as of December 31, 2025 and 2024, diluted net loss per share of Class A and Class B Common Stock is the same as basic net loss per share for each year.

Accounting Pronouncements Adopted in 2025

In November 2023, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendment expands financial reporting by requiring disclosure of incremental segment information on an annual and interim basis.

It is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this standard on a retrospective basis for the fiscal 2024 annual period, and for interim periods beginning January 1, 2025.

The adoption did not have a material impact on the Company’s financial statements and is limited to financial statement disclosures.

Accounting Pronouncements Not Yet Adopted

On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

On December 14, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“2023-09” ) , which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation.

The amendment is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of the new standards on the financial statements and related disclosures.

The Company adopted the standard on a retrospective basis on January 1, 2025 for fiscal year reporting.

While the standard requires additional disclosures related to the Company’s income taxes, the standard did not have an impact on the Company’s operating results, financial condition or cash flows.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

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Disaggregation of Income Statement Expenses .

The standard requires entities to disclose specified information about certain expenses in the notes to the financial statements, including employee compensation.

It is effective on a prospective basis for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after

December 15, 2027 with early adoption permitted.

This ASU requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency into the expense captions presented on the face of the income statement.

It is effective on a prospective basis for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted.

Management does not believe the implementation of this standard will have a material impact on the Company’s financial statements.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient to measure credit losses on accounts receivable and contract assets.

The ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the timing of the adoption and the impact of the new standard on the financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which intends to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies.

The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.

The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years,

and permits prospective or full retrospective adoption.

Early adoption is permitted.

The Company is evaluating the impact of this guidance on its financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements , which addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S.

The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply.

ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years.

Entities are required to apply the amendments to ASC 260 retrospectively.

All other amendments may be applied prospectively or retrospectively.

Early adoption is permitted.

The Company is evaluating the impact of this guidance on its financial statements and related disclosures.

Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB and does not believe any of these accounting pronouncements has had or will have a material impact on the financial statements.

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The inputs used in estimating the fair value of the warrant liability are described in Note 5 - Capital Stock and Warrants .

The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2024 and 2023 and the classification by level of input within the fair value hierarchy:

The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2025 and 2024 and the classification by level of input within the fair value hierarchy (in thousands):

December 31, 2025

Cash equivalents and restricted cash

Cash equivalents:

Money market funds

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Money market funds

Warrant liability – Series m-3 Preferred Stock

Warrant liability – Series s Preferred Stock

Derivative liability – Class A common stock warrants

During the years ended December 31, 2025 and 2024, there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to the Company’s established practice.

As of December 31, 2024, there were no liabilities measured and recognized at fair value on a recurring basis.

The following table sets forth a summary of the changes in the fair value of Company’s Level 3 warrant and derivative liability during the years ended December 31, 2024 and 2023, which were measured at fair value on a recurring basis:

The following table sets forth a summary of the changes in the fair value of Company’s Level 3 warrant and derivative liability during the year ended December 31, 2024, which were measured at fair value on a recurring basis (in thousands):

Warrant and Derivative Liabilities

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Revaluation of Common Stock warrants

Revaluation of Series s and Series m-3 Preferred Stock warrants

Balance as of December 31, 2023

Warrant cancellations

Revaluation of Common Stock warrants

Reclassification of Series s and Series m-3 Preferred Stock warrants

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Balance as of December 31, 2024

There were no Level 3 instruments that were measured at fair value for the year ended December 31, 2025.

Goodwill and Intangible Assets, net

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There was no impairment of goodwill during the years ended December 31, 2025 and 2024.

The following table sets forth a summary of the changes in goodwill:

Balance as of January 1, 2023

Out of period adjustment

Balance as of December 31, 2023 and 2024

The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows:

The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows (in thousands):

December 31, 2025

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Customer relationships

Intangible assets amortization expense was recorded as follows:

Intangible assets amortization expense was recorded as follows (in thousands):

Cost of revenue

Sales and marketing

Sales, general and administrative

Total intangible asset amortization

As of December 31, 2024, future intangible assets amortization expense for each of the next five years and thereafter is as follows:

As of December 31, 2025, future intangible assets amortization expense for each of the next five years and thereafter is as follows (in thousands):

Year ending December 31,

2030 and thereafter

Debt Obligations

Public Safety Infrastructure Bonds

On September 29, 2023 , the Company filed an Offering Circular on Form 1-A/A (File No.

024-12314) (the “Offering Circular”) for the issuance of up to $ 10.0 million in Public Safety Infrastructure Bonds (the “Bonds”) pursuant to Regulation A of the Securities Act.

On September 29, 2023 , the Company filed an Offering Circular for the issuance of up to $ 10.0 million in Public Safety Infrastructure Bonds (the “Bonds”) pursuant to Regulation A of the Securities Act.

The Offering Circular was qualified with the SEC on October 2, 2023 .

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The Company has agreed to pay the Principal in two separate installments:

the first installment in an amount equal to $ 2,500,000 payable in 11 equal consecutive monthly installments beginning on September 1, 2024 , and the second installment in an amount equal to $ 500,000 payable on the earlier of (x) October 15, 2024, and (y) upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (other than pursuant to a customary ATM offering program and equity line of credits).

the first installment in an amount equal to $ 2.5 million payable in 11 equal consecutive monthly installments beginning on September 1, 2024 , and the second installment in an amount equal to $ 0.5 million payable on the earlier of (x) October 15, 2024, and (y) upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (other than pursuant to a customary ATM offering program and equity line of credits).

Upon the occurrence of a Change of Control (as defined in the August 2024 Note), the Holder may, at its option, exercisable at any time commencing on the public announcement of such Change of Control until the 30 th day after the consummation thereof, require the Company to repay the August 2024 Note in full.

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provided, however, upon the occurrence and during the continuance of an Event of Default (as defined in the August 2024 Note), the outstanding principal amount of the Principal shall, automatically upon the occurrence and during the continuance of such Event of Default, bear interest at a rate equal to ten percent of the amount payable per annum until such date that the Event of Default is cured or the August 2024 Note is paid in full.

Additionally, pursuant to the Waiver, the Holder agreed that the Company’s obligations under the 2022 Notes, the 2022 Purchase Agreement, the 2022 Registration Rights Agreement, the 2022 Warrants, and the other Transaction Documents (as defined in the 2022

Purchase Agreement) have been satisfied in full and such documents are terminated, except that the Company shall continue to comply with and perform Section 4.10 of the 2022 Purchase Agreement and Section 6 of the 2022 Registration Rights Agreement, in each case which provide for indemnification, and which in each case survive and shall remain in full force and effect.

the Company shall continue to comply with and perform Section 4.10 of the 2022 Purchase Agreement and Section 6 of the 2022 Registration Rights Agreement, in each case which provide for indemnification, and which in each case survive and shall remain in full force and effect.

The Waiver and August 2024 Note contain various representations and warranties, affirmative and negative covenants, financial covenants, events of default and other provisions and obligations.

In connection with the entry into the Waiver and the August 2024 Note, on the Issuance Date, the Company and the Holder entered into a security agreement, pursuant to which the Company granted to the Holder a security interest in substantially all current and future properties, assets, and rights of the Company.

As of December 31, 2024, the outstanding balance of the August 2024 Note is $ 1.4 million and is included in the current portion of

debt obligations.

The amortized carrying amount of the debt obligations consists of the following:

The August 2024 Note was paid in full on June 30, 2025.

As of December 31, 2025 and 2024, the outstanding balance of the August 2024 Note was $ 0.0 million and $ 1.4 million and was included in the current portion of debt obligations.

Insurance Notes

On October 26, 2024 , the Company financed $ 0.3 million in business insurance premiums to be repaid in eleven installments of $ 24 thousand with a borrowing rate of 7.39 % per year.

On February 4, 2025 , the Company financed additional business insurance premiums of $ 0.4 million to be repaid in eleven installments of $ 35 thousand with a borrowing rate of 7.39 % per year.

On October 24, 2025 , the Company financed additional business insurance premiums of $ 0.5 million to be repaid in eleven installments of $ 46 thousand with a borrowing rate of 6.65 % per year.

As of December 31, 2025, the outstanding balance on the financing for the insurance premiums was $ 0.4 million.

The amortized carrying amount of the debt obligations consists of the following (in thousands):

Bonds, net of unamortized issuance costs of $ 238 and $ 316 , respectively

August 2024 Note

Insurance Notes

current portion of debt obligations

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The Company issued Bonds with a total principal amount of approximately $ 2.8 million, in aggregate, generating net proceeds to the Company of approximately $ 2.6 million, net of issuance costs of approximately $ 0.2 million during the year ended December 31, 2024.

During the year ended December 31, 2025, approximately $ 15 thousand of Bonds were repaid and retired.

Capital Stock and Warrants

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As a result of the Automatic Conversion, there were no shares of Preferred Stock outstanding after the Preferred Stock Conversion Date.

For periods subsequent to May 15, 2024, the preferred warrants were no longer subject to contractual modification provisions and were reclassified from a liability classification to an equity classification on the balance sheet.

As described further in Note 1, on August 16, 2024, the Company held an annual meeting of stockholders at which the Company’s stockholders approved, among other items, amendments to the Certificate of Incorporation, to authorize 40,000,000 shares of “blank check” preferred stock, issuable in one or more series, and (ii) implement ancillary and conforming changes in connection with the authorization of “blank check” preferred stock and to remove provisions related to the Company’s former Super Voting Preferred Stock and Ordinary Preferred Stock, which are no longer outstanding.

On August 16, 2024, the Company held an annual meeting of stockholders at which the Company’s stockholders approved, among other items, amendments to the Certificate of Incorporation, to authorize 40,000,000 shares of “blank check”

preferred stock, issuable in one or more series, and (ii) implement ancillary and conforming changes in connection with the authorization of “blank check” preferred stock and to remove provisions related to the Company’s former Super Voting Preferred Stock and Ordinary Preferred Stock, which are no longer outstanding.

The term “blank check” preferred stock refers to preferred stock, the creation and issuance of which is authorized in advance by a company’s stockholders and the terms, rights and features of which are determined by the Board of Directors of a company without seeking further actions or vote of the stockholders.

The Company previously entered into an agreement that contemplated the potential issuance of up to 15,238 warrants (“Vendor Warrants”) to a vendor upon the completion of certain services and satisfaction of certain contractual conditions.

In the Company’s determination, such agreement was breached by the vendor, services were not performed, conditions were not satisfied and accordingly no Vendor Warrants were issued.

Pre-funded Warrants

On November 21, 2024, the Company priced a public offering (the “November offering”) of Class A Common Stock (and pre-funded warrants issued in lieu thereof) for gross proceeds of approximately $ 12.1 million.

The pre-funded warrants were exercisable immediately on the date of issuance at an exercise price of $ 0.001 per share and may be exercised at any time until all of the pre-funded

warrants are exercised in full.

The pre-funded warrants were exercisable immediately on the date of issuance at an exercise price of $ 0.001 per share and may be exercised at any time until all of the pre-funded warrants are exercised in full.

The securities in the November offering were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3, which was initially filed with the SEC on February 1, 2023, and subsequently declared effective on February 8, 2023 (File No.

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The Company also agreed to issue to the Underwriter a warrant to purchase 36,300 shares of Class A Common Stock and 3 % of the securities sold upon the exercise of the Underwriter’s overallotment option, which such warrant is exercisable commencing 180 days after the date of the Agreement, and will be exercisable for a period of five years from the date of the Agreement, at an exercise price of $ 18.29 per share.

The overallotment option was not exercised during the year ended December 31, 2025.

The material terms of the November offering are described in the Registration Statement and the Prospectus Supplement.

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The Company also agreed in the Agreement to indemnify the Underwriter against certain liabilities.

All pre-funded warrants issued in this offering were exercised in full as of December 31, 2025.

A summary of the Company’s outstanding warrants as of December 31, 2025, is as follows:

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December 31, 2027

Class A Common Stock (Prefunded Warrants)

Class A Common Stock (Underwriter Warrants)

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ATM Offering Program

In February 2023, the Company commenced an ATM offering program with H.C.

Wainwright & Co., LLC (“Wainwright”), as sales agent, in connection with which the Company filed a prospectus supplement filed on February 9, 2023 (the “February Prospectus Supplement”), allowing the Company to offer and sell from time to time up to $ 20.0 million in shares of Class A Common Stock, subject to, and in accordance with, SEC rules.

Pursuant to General Instruction I.B.6 of Form S-3, the February Prospectus Supplement provided that in no event would the Company sell any securities in a public primary offering with a value exceeding one-third of the Company’s non-affiliated public float in any 12 month period unless the Company’s non-affiliated public float subsequently rose to $75.0 million or more.

On August 18, 2023, after the Company’s non-affiliated public float subsequently rose to an amount greater than $75.0 million, the Company filed a new prospectus supplement (the “August Prospectus Supplement”) providing for the offer and sale from time to time of up to $ 25.0 million in shares of Class A Common Stock subject to, and in accordance with, SEC rules.

On November 14, 2024, after our non-affiliated public float subsequently rose to an amount greater than $75.0 million, we filed a new

prospectus supplement (the “November Prospectus Supplement”) providing for the offer and sale from time to time of up to $ 25.0 million in shares of Class A Common Stock, in addition to the shares of Class A common stock previously sold, subject to, and in accordance with, SEC rules.

On February 1, 2023, we entered into an ATM Agreement with Wainwright, pursuant to which we may offer and sell from time-to-time shares of Class A Common Stock through or to Wainwright acting as sales agent or principal (the “ATM Facility”).

The new shelf registration statement was declared effective on April 11, 2025.

On July 18, 2025, we filed a new prospectus supplement for additional sales under the ATM Facility up to $ 50.0 million of shares of Class A Common Stock.

As of March 25, 2026, we have approximately $ 21.7 million remaining to be sold pursuant to the new prospectus supplement and the accompanying prospectus related to the ATM Facility.

During the year ended December 31, 2025, the Company issued 6,877,113 shares of Class A Common Stock under the ATM offering program for net proceeds of approximately $ 42.8 million, net of brokerage and placement fees of approximately $ 1.2 million.

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The number of shares authorized under the 2022 Plan will be increased each January 1 st , beginning January 1, 2023 and ending on (and including) January 1, 2032, by an amount equal to the lesser of (a) 5 % of our Class A Common Stock and Class B Common Stock outstanding on December 31 st of the immediately preceding calendar year (rounded up to the nearest whole share) and (b) a number of shares determined by the plan administrator.

Shares subject to awards (including under the 2016 Plan and the 2014 Plan) that lapse, expire, terminate, or are canceled prior to the issuance of the underlying shares or that are subsequently forfeited to or otherwise reacquired by us will be added back to the shares of common stock available for issuance under the 2022 Plan.

Pursuant to clause (a) there were an additional 220,106 shares added to the 2022 Plan on March 31, 2025.

(iii) are withheld by or tendered to us as the payment for the purchase price of an award or to satisfy tax withholding obligations related to an award or (iv) are settled in cash will be added back to the shares of common stock available for issuance under the 2022 Plan.

On October 24, 2025, the 2022 Plan was amended to provide for the issuance of an additional 2,000,000 shares of Class A Common Stock.

The Board of Directors may grant stock options under the 2022 Plan at an exercise price of not less than 100 % of the fair market value of the Company’s common stock on the date the option is granted.

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Stock options comprise all of the awards granted since the 2022 Plan’s inception.

Stock option activity under all of the Company’s equity incentive plans as of December 31, 2024 is as follows:

On December 1, 2025, the Board of Directors approved the 2025 Inducement Plan (the “Inducement Plan”) pursuant to which 5,000,000 shares of Class A Common Stock became issuable under the Inducement Plan.

The Inducement Plan is generally subject to the same terms and conditions as the 2022 Plan and provides for the grant of awards to individuals who satisfy the standards for inducement grants under the relevant Nasdaq listing rules.

As of December 31, 2025, we have not issued any awards under the Inducement Plan.

Stock option activity under all of the Company’s equity incentive plans for the years ended December 31, 2025 and 2024 is as follows:

Available for

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Available and outstanding as of January 1, 2024

2022 Equity incentive plan increase

2022 Equity incentive plan decrease

2022 Plan increase

Available and outstanding as of December 31, 2024

2022 Equity incentive plan increase

2022 Plan and Inducement Plan increase

Available and outstanding as of December 31, 2025

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The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $ 3.71 as of December 31, 2025, which would have been received by the option holders had all option holders exercised their options as of that date.

The total intrinsic value of options exercised during the years ended December 31, 2024 and 2023 was $ 37 thousand and $ 0.2 million, respectively.

The total intrinsic value of options exercised during the years ended December 31, 2025 and 2024 was $ 0 and $ 37 thousand, respectively.

The fair value of stock options that vested during the years ended December 31, 2025 and 2024 was $ 1.5 million and $ 1.4 million, respectively.

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No dividend yield is included as the Company has not issued any dividends and do not anticipate issuing any dividends in the future.

A summary of stock-based compensation expense recognized in the Company’s statements of operations is as follows:

A summary of stock-based compensation expense recognized in the Company’s Statements of Operations is as follows (in thousands):

Cost of revenue, net

Research and development

Sales and marketing

General and administrative

Sales, general and administrative

Employee Benefit Plan

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Each eligible employee may elect to contribute to the 401(K) Plan.

During the years ended December 31, 2024 and 2023, the Company has made no matching contributions.

The Company has incurred cumulative U.S.

net operating losses since inception.

Income tax expense consisted of the following:

During the years ended December 31, 2025 and 2024, the Company made no matching contributions.

Domestic and foreign components of net loss before income taxes is as follows (in thousands):

Net loss before income tax expense

Income tax expense consisted of the following (in thousands):

Total current expense

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Total income tax expense

Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate of 21 % is as follows:

Provision at statutory rate

Stock-based compensation

Convertible notes

Fair value adjustment

Change in valuation allowance

Reconciliation between the effective tax rate on income from operations and the statutory tax rate of 21 % is as follows:

Income tax benefit at statutory federal rate

Research and development credits

Changes in valuation allowance

Nontaxable or nondeductible items

Stock-based compensation

Change in unrecognized tax benefits

Other Adjustments

Effective tax rate

Cash paid for income taxes, net of refunds received by jurisdictions is as follows (in thousands):

Total income taxes paid, net of refunds

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented:

The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented (in thousands):

Deferred tax assets:

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Right of use asset

Property, equipment and software

Total deferred tax liabilities

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The annual limitations may result in the inability to fully offset future annual taxable income and could result in the expiration of the net operating loss carry forwards before utilization.

On July 4, 2025, the current administration signed the One Big Beautiful Bill Act (“OBBBA”), which includes comprehensive U.S.

corporate tax legislation.

The legislation includes the modification and permanent extension of prior tax law under the Tax Cuts and Jobs Act and the introduction of new provisions such as permanently reinstating the immediate deduction of domestic specified research and experimental expenditures (“R&E”), permanent changes in the limitations for deducting business interest expense, and permanently restoring bonus depreciation allowances.

Following the enactment of the OBBBA, we are no longer capitalizing domestic research and experimental expenditures as of December 31, 2025.

The Company continues to generate a deferred tax asset for foreign capitalized R&E expenditures for the year ended December

Due to our valuation allowance on deferred tax assets, this tax law change did not result in a material impact to our financial statements.

The Company accounts for uncertainty in income taxes in accordance with ASC 740.

Tax positions are evaluated in a two-step process, whereby the Company first determines whether it is more likely than not that a tax position will be sustained upon examination by tax authorities, including resolutions of any related appeals or litigation processes, based on technical merit.

If a tax position meets the more

likely than not recognition threshold it is then measured to determine the amount of benefit to recognized in the financial statements.

If a tax position meets the more likely than not recognition threshold it is then measured to determine the amount of benefit to recognized in the financial statements.

The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

The changes in the unrecognized tax benefits are as follows (in thousands):

Unrecognized tax benefits as of the beginning of the year

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The Company did no t accrue interest or penalties related to unrecognized tax benefits as of December 31, 2025.

The Company does not anticipate any significant change within twelve months of this reporting date.

The Company files income tax returns in the U.S.

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The Company leases facilities for office space under non-cancelable operating lease agreements.

The Company leases space for its corporate headquarters in Mountain View, California through August 2025.

The components of leases and lease costs are as follows:

In April 2025, the Company entered into a new operating lease for its current headquarters in Sunnyvale, California, with a lease term through June 30, 2030.

Upon commencement of this new lease in April 2025, the Company paid a refundable lease deposit of $ 0.5 million on and recognized operating lease right-of-use asset and operating lease liability of $ 2.9 million, each.

The annual base rent under the new lease is $ 0.9 million.

In addition to base rent, the Company is also responsible for covering its share of the common area expenses and property taxes associated with the building.

The components of leases and lease costs are as follows (in thousands):

December 31, 2025

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Operating leases

Operating lease right-of-use assets

Operating lease ROU assets

Operating lease liabilities, current portion

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Operating lease costs

As of December 31, 2024, future minimum operating lease payments for the year is as follows:

As of December 31, 2025, future minimum operating lease payments for the year is as follows (in thousands):

Years ending December 31,

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Rent expense totaled $ 1.5 million and $ 1.0 million for the years ended December 31, 2025 and 2024, respectively, included in the Company’s Statements of Operations.

There were two month to month lease agreements for the year ended December 31, 2024.

were three month to month lease agreements and one lease agreement with a lease term of less than 12 months for the year ended December 31, 2023.

There were two month to month lease agreements for each of the years ended December 31, 2025 and 2024.

Purchase Commitments

The Company executed a purchase agreement on September 13, 2024, in order to secure the acquisition of raw materials essential to ASR production.

This agreement stipulates monthly purchases of $ 40 thousand commencing in January 2025 and concluding in August 2026, culminating in a total expenditure of $ 0.8 million.

The Company executed a purchase agreement on September 13, 2024, in order to secure the acquisition of raw materials essential to ASR manufacturing.

This agreement stipulates a total expenditure of $ 0.8 million before December 31, 2026.

During the year ended December 31, 2025, the Company made payments totaling $ 0.2 million pursuant to this commitment.

Legal Matters

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(i) arrangements with clients which generally include certain provisions for indemnifying clients against liabilities if the services infringe a third party’s intellectual property rights, (ii) the Regulation A Issuer Agreement where the Company may be required to indemnify the placement agent for any loss, damage, expense or liability incurred by the other party in any claim arising out of a material breach (or alleged breach) as a result of any potential violation of any law or regulation, or any third party claim arising out of any investment or potential investment in the offering, and (iii) agreements with the Company’s officers and directors, under which the Company may be required to indemnify such persons from certain liabilities arising out of such persons’ relationships with the Company.

The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the financial statements as of December 31, 2024 and 2023.

The Company has not incurred any material costs as a result of such obligations and has no t accrued any liabilities related to such obligations in the financial statements as of December 31, 2025 and 2024.

Sales Tax Contingencies

The Company has historically not collected state sales tax on the sale of its MaaS product offering but has paid sales tax in conjunction with the Financing Arrangement of the Company’s ASRs with Farnam and use tax on all purchases of raw materials.

The Company has historically not collected state sales tax on the sale of its MaaS product offering but has paid use tax on all purchases of raw materials.

The Company’s MaaS product offering may be subject to sales tax in certain jurisdictions.

If a taxing authority were to successfully assert that the Company has not properly collected sales or other transaction taxes, or if sales or other transaction tax laws or the interpretation thereof were to change, and the Company was unable to enforce the terms of their contracts with clients that give the right to reimbursement for the assessed sales taxes, tax liabilities in amounts that could be material may be incurred.

Based on the Company’s assessment, the Company has recorded a use tax liability of approximately $ 0.4 million as of December 31, 2024 and 2023, which has been included in other current liabilities on the accompanying balance sheets.

Based on the Company’s assessment, the Company has recorded a use tax liability of $ 42 thousand and $ 0.4 million as of December 31, 2025 and 2024, respectively, which has been included in accrued expense and other current liabilities on the accompanying Balance Sheets.

The Company continues to analyze possible sales tax exposure but does not currently believe that any individual claim or aggregate claims that might arise will ultimately have a material effect on its results of operations, financial position or cash flows.

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The CODM assesses performance at a Company level and decides how to allocate resources based on net loss.

The measure of segment assets is reported on the balance sheet as total assets.

The measure of significant segment expenses is listed on the statement of operations.

The measure of segment assets is reported on the Balance Sheets as total assets.

The measure of significant segment expenses is listed on the Statements of Operations.

The CODM evaluates performance and allocates resources for its reportable segment using segment income or loss.

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From January 1, 2026 through March 25, 2026 the Company issued 2,027,993 shares of Class A Common Stock under the ATM offering program for net proceeds of approximately $ 9.0 million, net of brokerage and placement fees of approximately $ 0.2 million pursuant to the August Prospectus Supplement.

Pre-funded warrants

As of February 11, 2025, the pre-funded warrants were fully exercised.

Registered Direct Offering of Common Stock

On March 28, 2025, the Company entered into definitive agreements for the sale of an aggregate of 625,000 shares of Class A Common Stock at a sale price of $ 2.75 per share in a registered direct offering.

The offering is expected to close on or about March 31, 2025, subject to the satisfaction of customary closing conditions.

The gross proceeds to the Company from the offering are expected to be approximately $ 1.7 million, before deducting the placement agent’s fees and other offering expenses payable by the Company.

The Company currently intends to use the net proceeds from the offering for working capital and general corporate purposes.

These shares are being offered and sold by the Company pursuant to a shelf registration on Form S-3 which was initially filed with the SEC on February 1, 2023, and subsequently declared effective on February 8, 2023 (File No.

As announced on February 27, 2026 , the Company entered into a securities purchase agreement (the “Event Risk Agreement”) with Event Risk LLC , an Indiana limited liability company (“Event Risk”), and Eric Rose (the “Seller”), pursuant to which the Company acquired all of the issued and outstanding membership interests of Event Risk.

Consideration for the Event Risk Acquisition consisted of (i) a $ 5.0 million cash payment at closing, (ii) repayment of Event Risk’s outstanding indebtedness of $ 1.1 million, (iii) the issuance of 1,724,418 shares of the Company’s Class A common stock, and (iv) $ 4.0 million of deferred cash payments, payable in quarterly installments through December 31, 2028 subject to the purchase agreement.

The purchase agreement also provides for contingent future cash and equity consideration based on post-closing performance, including a 2026 earn-out, revenue-based cash payments for 2027 through 2031, and potential additional equity issuances, each subject to specified thresholds and caps.

The Event Risk Agreement contains customary representations, warranties, covenants, indemnification provisions, working capital adjustment mechanics, non-compete provisions, and tax treatment provisions.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Event Risk Agreement filed as an exhibit to this Annual Report on Form 10-K.

The initial accounting for the transaction is incomplete at this time due to the close proximity of the acquisition close date to the issuance date of these financial statements.

The preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is anticipated to be completed in the first quarter of fiscal 2026.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data