Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and notes thereto included herein as Item 8. This discussion contains forward-looking statements. Refer to “Forward-Looking Statements” and “Risk Factors” herein, for a discussion of the uncertainties, risks, assumptions, and other important factors associated with these statements. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.
Our Management’s Discussion and Analysis discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024. For a discussion and analysis of the year ended December 31, 2024 as compared to the year ended December 31, 2023, please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025.
Overview
Knightscope is a security technology company providing technology-enabled security solutions through ASRs, ECDs, and real-time monitoring capabilities supported by our cloud-based KSOC and our RTX remote monitoring team. During 2025, we continued to operate and refine this integrated platform while investing in next-generation technologies.
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Total revenue increased to approximately $11.3 million in 2025 from approximately $10.8 million in 2024, driven primarily by growth in service-related revenue and ECD product sales. However, significant supply chain constraints, particularly affecting electronic components and certain single-source suppliers within our ECD product line, resulted in extended lead times, intermittent production interruptions, higher input costs, and delivery delays that impacted revenue timing and margin performance during the year.
Recent Developments
On February 27, 2026, we completed the Event Risk Acquisition of all the issued and outstanding membership interest of Event Risk pursuant to the Event Risk Agreement. As a result of the transaction, Event Risk became a wholly owned subsidiary of the Company. The aggregate purchase consideration 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, (iv) $4.0 million of deferred cash payments, payable in quarterly installments beginning March 31, 2027 through December 31, 2028 and (v) any post-closing purchase price adjustments.
See Note 11 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report for additional information on the Event Risk Acquisition and “Item 1A. Risk Factors—Risks Related to the Event Risk Acquisition” of this Annual Report for a discussion of the associated risks. 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.
Autonomous Security Robots (ASRs)
Our ASR portfolio includes:
● K1 Hemisphere
● K1 Tower
● K5 ASR
Service revenue associated with ASR deployments remained a significant component of our recurring revenue base in 2025. The K5 platform continued to represent the majority of mobile robot deployments. Revenue from Machine-as-a-Service (“MaaS”) subscriptions remained relatively stable year-over-year, reflecting both ongoing deployments and downtime credits associated with service-level performance.
The K7 ASR remains in development and did not contribute revenue in 2025. Engineering resources continued to be allocated toward mechanical design refinement, sensor integration, durability testing, and software integration. Commercial production is not expected until late 2026 or early 2027, subject to development milestones and supply chain readiness.
Each deployed ASR integrates light detection and ranging, imaging systems, and AI-based detection capabilities designed to enhance deterrence, situational awareness, and reporting. Throughout 2025, development efforts focused on improving overall performance.
Knightscope Security Operations Center
KSOC remains the operational command platform for our deployed fleet. It supports:
● Real-time monitoring and alert review;
● AI-driven detection for defined events and anomalies;
● Incident documentation and reporting; and
● Integration with emergency communication systems.
In 2025, we continued incremental enhancements to KSOC functionality, including alert prioritization improvements and workflow optimization.
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Emergency Communication Devices and Solutions
Our ECD portfolio includes
● K1 Blue Light Towers
● Blue Light Emergency Phones
● Call Boxes
ECD revenue increased in 2025, particularly in product sales; however, the segment experienced significant supply chain pressures during the year.
Global electronic component shortages, tariff-related cost increases, and extended lead times from certain suppliers - some of which are single-source for specialized components - constrained production schedules and contributed to inconsistent shipment timing. These constraints resulted in higher bill-of-material costs and intermittent production shortfalls, which negatively impacted both revenue timing and gross margin performance.
The KEMS continues to support remote monitoring and diagnostics for deployed ECD systems. KEMS functionality remained stable in 2025, with ongoing refinements to monitoring and reporting capabilities.
Strategic Resource Allocation in 2025
While 2025 operating performance remained primarily driven by existing ASR and ECD platforms, we allocated capital and engineering resources toward:
● Development of the K7 platform;
● Development of the next generation K1 platform; and
● Evaluation and execution of strategic initiatives, including acquisitions intended to support our evolving hybrid human-and-autonomy operating model.
These investments increased research and development activity and were made with the objective of supporting long-term scalability and integration across our hardware, software, and human operations.
Operational Considerations
During 2025, production schedules and margin performance were affected by:
● Extended supplier lead times;
● Limited availability of certain electronic components;
● Tariff-related input cost increases; and
● Inventory adjustments and absorption variability.
We continue to evaluate supplier diversification, procurement strategies, and production planning improvements; however, global supply chain volatility and cost pressures may continue to impact operating performance.
We derive our revenue from two primary sources: a) subscription MaaS offering which includes the ASRs as well as maintenance, service, support, data transfer, KSOC access, charging stations, and unlimited software, firmware and select hardware upgrades and b) the sale of ECD products and related recurring revenues from KEMS and full-service maintenance contracts.
The Company has incurred net losses since inception. Our net loss was $33.8 million for the year ended December 31, 2025 and $31.7 million for the year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $227.0 million. Cash and cash equivalents on hand were $20.6 million as of December 31, 2025, compared to $11.1 million as of December 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern. See Item 1A. Risk Factors—Risks Related to the Business and the Global Economy—We have not yet generated any profits, anticipate that we will incur continued losses for the foreseeable future, and may never achieve profitability .
As of March 24, 2026, the Company had a total backlog of approximately $3.1 million, comprised of $0.6 million related to ASR orders and $2.5 million related to orders for ECDs.
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Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations is based upon our accompanying financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that can have significant impact on the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of assets and liabilities at the date of our financial statements. These estimates include, but are not limited to: deriving the useful lives of ASRs, determination of the cost of ASRs, assessing assets for impairment, accounts receivable – estimated credit losses, determination of deferred tax valuation allowances and estimating fair values of the Company’s share-based awards. We base our estimates, assumptions and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On a regular basis, we evaluate our estimates, assumptions and judgments and make changes accordingly.
We believe the following critical accounting estimates affect our more significant judgments and estimates used in preparing our financial statements. Please see Note 1 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report.
Revenue Recognition
ASR related revenues
The Company derives its revenues from lease of proprietary ASRs along with access to the browser-based interface KSOC through contracts under the lease accounting that typically have a twelve (12)-month term. In addition, the Company derives non-lease revenue items such as professional services related to ASRs’ deployments, special decals, shipping costs and training if any, recognized when control of these services is transferred to the clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.
ECD related revenues
The Company also derives revenues from sales of its ECDs and related services, such as installation, maintenance, and upgrades. Revenue is recognized when clients sign full or partial certificate of completion, at which point, Knightscope can generate an invoice for its products and services. Clients also have the option to sign up for ongoing preventative and maintenance agreements. The maintenance revenue is recognized in the period the service is performed and the Company has determined that term of the contracts has been fulfilled. Installation or upgrades revenue are recognized upon completion of the project/contracts. In certain cases, deferred revenue is recognized to account for unfinished contracts.
Inventory
Inventory, principally purchased components, is stated at the lower of cost or net realizable value. Cost is determined using an average cost, which approximates actual cost on a first-in, first-out basis. Inventory in excess of salable amounts and inventory which is considered obsolete based upon changes in existing technology is fully expensed to the cost of revenue, net product line item in our Statements of Operations. 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.
Autonomous Security Robots, net (“ASRs”)
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 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, general and administrative expense, and cost of revenue, net on the Company’s Statements of Operations. Depreciation expense on
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finished ASRs was $2.0 million for each of the years ended December 31, 2025 and 2024. ASRs, net, were $7.7 million and $8.8 million as of December 31, 2025 and 2024, respectively.
Impairment of Long-Lived Assets
The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use or eventual disposition. If the assets are determined to be recoverable, but the useful lives are shorter than originally estimated, the Company will depreciate the net book value of the assets over the newly determined remaining useful lives. If estimates of future undiscounted net cash flows are insufficient to recover the carrying value of the assets, the Company will record an impairment loss in the amount by which the carrying value exceeds the fair value. None of the Company’s ASRs, property, equipment and software or intangible assets were determined to be impaired during the years ended December 31, 2025 and 2024.
Convertible Preferred Warrant Liability and Common Stock Warrants
Freestanding warrants to purchase shares of the Company’s preferred stock were classified as liabilities on the Balance Sheets at their estimated fair value because the underlying shares of preferred stock were contingently redeemable and, therefore, may have obligated the Company to transfer assets at some point in the future. The preferred stock warrants were recorded at fair value upon issuance and were subject to remeasurement to their respective estimated fair values. At the end of each reporting period, changes in the estimated fair value of the preferred stock warrants were recorded in the Statements of Operations. The Company adjusted the liability associated with the preferred stock warrants for changes in the estimated fair value until the earlier of the exercise or conversion. On May 15, 2024, the preferred stock warrants converted into warrants to purchase common stock and any liabilities recorded for the preferred stock warrants were reclassified to additional paid-in capital and are no longer subject to remeasurement.
Common stock warrants that are not considered derivative liabilities are accounted for at fair value at the date of issuance in additional paid-in capital.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with Accounting Standards Codification 718, Compensation – Stock Compensation , which requires that the estimated fair value on the date of grant be determined using the Black-Scholes option pricing model with the fair value recognized over the requisite service period of the awards, which is generally the option vesting period. The Company’s determination of the fair value of the stock-based awards on the date of grant, using the Black-Scholes option pricing model, is affected by the fair value of the Company’s common stock as well as other assumptions regarding a number of highly complex and subjective variables. These variables include but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee option exercise behaviors. Because there is insufficient historical information available to estimate the expected term of the stock-based awards, the Company adopted the simplified method of estimating the expected term of options granted by taking the average of the vesting term and the contractual term of the option. The Company recognizes forfeitures as they occur when calculating stock-based compensation for its equity awards.
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Results of Operations
The following table sets forth certain historical Statements of Operations data (in thousands) and such data as a percentage of revenue for the periods indicated.
Year Ended December 31,
(in thousands, except percentages)
2025
% of Revenue
2024
% of Revenue
Revenue, net
Service
$
7,968
70
%
$
7,474
69
%
Product
3,367
30
%
3,331
31
%
Total revenue, net
11,335
100
%
10,805
100
%
Cost of revenue, net
Service
12,324
109
%
11,626
108
%
Product
3,786
33
%
2,878
27
%
Total cost of revenue, net
16,110
142
%
14,504
134
%
Gross loss
(4,775)
(42)
%
(3,699)
(34)
%
Operating expenses:
Research and development
12,486
110
%
7,061
65
%
Sales, general and administrative
16,619
147
%
18,408
170
%
Restructuring charges
11
—
%
510
5
%
Total operating expenses
29,116
257
%
25,979
240
%
Loss from operations
(33,891)
(299)
%
(29,678)
(275)
%
Other income (expense):
Change in fair value of warrant and derivative liabilities
—
—
%
(1,515)
(14)
%
Interest expense, net
(39)
—
%
(423)
(4)
%
Other income (expense), net
115
1
%
(118)
(1)
%
Total other income (expense)
76
1
%
(2,056)
(19)
%
Net loss before income tax expense
(33,815)
(298)
%
(31,734)
(294)
%
Income tax expense
—
—
%
—
—
%
Net loss
$
(33,815)
(298)
%
$
(31,734)
(294)
%
Revenue, net
Total revenue, net, of $11.3 million for the year ended December 31, 2025 increased by $0.5 million or 5% compared to the year ended December 31, 2024.
Service revenue, net, which includes revenue generated through MaaS agreements for our ASRs and maintenance and support contracts for our portfolio of ECDs, increased by $0.5 million, or 7%, to $8.0 million, for the year ended December 31, 2025, from $7.5 million for the year ended December 31, 2024. The increase was driven primarily by higher maintenance and service contracts associated with ECD deployments and higher ASR subscription revenue.
Product revenue, net, was $3.4 million for the year ended December 31, 2025, an increase of 1% compared to the year ended December 31, 2024. Although ECD product sales increased year-over-year, supply chain disruptions during 2025, including extended lead times for certain electronic components and reliance on certain limited-source suppliers, resulted in production constraints and delayed shipments that impacted revenue timing.
While total revenue increased, growth was constrained by global supply chain disruptions, electronic component shortages, tariff-related cost increases, and inconsistent production scheduling.
Cost of revenue, net
Total cost of revenue, net of $16.1 million for the year ended December 31, 2025 increased by $1.6 million or 11% compared to the year ended December 31, 2024 as a result of $0.7 million higher service cost of revenue, net and by $0.9 million higher product cost of revenue, net during the same period.
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Service cost of revenue, net, representing the cost of supporting ASR MaaS deployments and maintenance and support agreements related to ECD installations, for the year ended December 31, 2025 increased by $0.7 million, or 6% to $12.3 million, as compared to $11.6 million for the year ended December 31, 2024. This was driven by $0.4 million in higher third-party outsourced field service costs, $0.2 million in higher consulting fees, $0.4 million in higher headcount related costs, $0.1 million increased supplies and materials expenses, partially offset by $0.3 million in lower scrap costs and $0.2 million lower communication and cellular costs.
Product cost of revenue, net of $3.8 million and $2.9 million for the years ended December 31, 2025 and 2024, respectively, increased by $0.9 million or 32% primarily due to $1.4 million in higher material costs, partially offset by $0.2 million in decreased headcount related expenses, $0.2 million in lessor rent and utilities expense, and $0.1 million in lower scrap costs.
Gross loss
Gross loss for the year ended December 31, 2025 was $4.8 million, as compared to $3.7 million for the year ended December 31, 2024, representing a year-over-year increase of approximately $1.1 million. As discussed above, this was primarily the result of higher material costs, consulting costs and headcount related costs.
Research and development
Year Ended
December 31,
(in thousands, except percentages)
2025
2024
$ Change
% Change
Research and development
$
12,486
$
7,061
$
5,425
77
%
Percentage of total revenue
110
%
65
%
Research and development (“R&D”) expense for the year ended December 31, 2025 was $12.5 million, or 110% of revenue, compared to R&D expense of $7.1 million, or 65% of revenue, for the year ended December 31, 2024. The year-over-year increase was due to the Company’s continued investment in new product development through the use of third-party engineering firms which drove an increase of $4.1 million in consulting fees, $0.3 million in supplies and materials, and $0.7 million in increased headcount related expenses and $0.3 million in other general costs.
Sales, general and administrative
Year Ended
December 31,
(in thousands, except percentages)
2025
2024
$ Change
% Change
Sales, general and administrative
$
16,619
$
18,408
$
(1,789)
(10)
%
Percentage of total revenue
147
%
170
%
Sales, general and administrative expense for the year ended December 31, 2025 was $16.6 million, a decrease of $1.8 million from the year ended December 31, 2024. The decrease was primarily driven by $2.8 million in lower investor relations and advertising expenses, and $1.2 million in lower professional services fees, partially offset by a $1.4 million increase in compensation expenses largely due to increased headcount in our sales and marketing teams and a $0.8 million increase in rent related costs associated with our new larger headquarters.
Restructuring charges
Year Ended
December 31,
(in thousands, except percentages)
2025
2024
$ Change
% Change
Restructuring Charges
$
11
$
510
$
(499)
(98)
%
Percentage of total revenue
—
%
5
%
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In 2024, we incurred restructuring charges as a result of operational changes made to the ECD portfolio. These changes, primarily driven by our decision to consolidate all operations at our headquarters, included costs related to headcount reduction across manufacturing and field services, lease termination, and other relocation, consolidation and exit costs.
Other income (expense)
Year Ended
December 31
(in thousands, except percentages)
2025
2024
$ Change
% Change
Change in fair value of warrant and derivative liabilities
$
—
$
(1,515)
$
1,515
100
%
Interest expense, net
(39)
(423)
384
91
%
Other income (expense), net
115
(118)
233
197
%
Total other income (expense)
$
76
$
(2,056)
$
2,132
104
%
Change in fair value of warrant and derivative liability
The change in the fair value of warrant and derivative liability is attributable to the change in stock prices. Due to the extinguishment of warrants with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B which occurred on August 1, 2024 this liability was zero at December 31, 2024. There was no such expense for the year ended December 31, 2025.
Interest expense, net
Interest expense, net for the year ended December 31, 2025 was $39 thousand, compared to interest expense, net of $0.4 million for the year ended December 31, 2024. The decrease in interest expense, net was due to increased interest received from interest bearing cash accounts offsetting interest expense from our debt obligations.
Other income (expense), net
Other income, net for the year ended December 31, 2025 was approximately $0.1 million, as compared to other expense, net of $0.1 million for the year ended December 31, 2024 mainly attributable to reduced third party accounts receivable collection fees.
Liquidity and Capital Resources
As of December 31, 2025 and 2024, we had $20.6 million and $11.1 million, respectively, of cash and cash equivalents. As of December 31, 2025, the Company also had an accumulated deficit of $227.0 million, working capital of $19.8 million, and stockholders’ equity of $27.8 million. For the year ended December 31, 2025, the Company had a net loss of $33.8 million and cash used in operating activities of $30.3 million. These factors raise substantial doubt about our ability to continue as a going concern. The Company will require significant additional financing to meet its planned capital and operational needs and is pursuing opportunities to obtain additional financing through equity and/or debt alternatives. There can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its future operations. 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. However, there can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company may have to significantly reduce its operations, delay, scale back or discontinue the development of one or more of its platforms or discontinue operations completely.
The Company executed a purchase agreement on September 13, 2024, which was modified in September 2025, in order to secure the acquisition of raw materials essential to ASR manufacturing. This modified agreement stipulates a total expenditure of $0.6 million before December 31, 2026. In the year ended December 31, 2025, the Company made payments totaling $0.2 million pursuant to this commitment.
Consideration for the Event Risk Acquisition on February 27, 2026 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
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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. In addition, management believes the acquisition materially strengthens the Company’s liquidity profile by adding a business that is expected to be free cash flow generating and contributive to operating cash flow. The Company expects to fund its acquisition-related obligations through cash on hand, cash generated from operations and, if appropriate, additional financing. While no assurance can be given that additional financing will be available on acceptable terms, management believes the Event Risk acquisition improves the Company’s path toward stronger cash generation, enhances overall capital efficiency, and supports the Company’s broader strategy to improve liquidity and capital resources over time.
Cash Flow
The table below, for the periods indicated, provides selected cash flow information:
Year Ended
December 31,
(in thousands)
2025
2024
Net cash used in operating activities
$
(30,345)
$
(22,453)
Net cash used in investing activities
(2,522)
(3,178)
Net cash provided by financing activities
42,207
34,475
Net change in cash, cash equivalents and restricted cash
$
9,340
$
8,844
Net Cash Used in Operating Activities
Net cash used in operating activities is influenced by the amount of cash we invest in personnel, marketing, and infrastructure to support the anticipated growth of our business, the number of clients to whom we lease our ASRs, sell and service ECDs, the amount and timing of accounts receivable collections, as well as the amount and timing of disbursements to our vendors.
Net cash used in operating activities for the year ended December 31, 2025 increased by $7.9 million to $30.3 million, compared to $22.5 million for the year ended December 31, 2024. The change in fair value of warrant and derivative liabilities accounted for an increase in cash used in operating activities of $1.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Changes in operating assets and liabilities, net of $3.7 million, also contributed to the increase in cash used in operating activities for the year ended December 31, 2025 compared to the prior year. In addition, an increase in net loss of $2.1 million, a decrease in stock compensation expense of $0.2 million and a decrease in the loss on disposal of ASR of $0.2 million in 2025 contributed to this increase in cash used in operating activities.
Net Cash Used in Investing Activities
Our primary investing activities have consisted of capital expenditures and investment in ASRs. As our business grows, we expect our capital expenditures to continue to increase.
Net cash used in investing activities for the year ended December 31, 2025 was $2.5 million compared to $3.2 million for the year ended December 31, 2024, a decrease of $0.7 million. The decrease was primarily a result of lower investments in ASRs of $1.2 million, partially offset by $0.6 million in additional purchases of property and equipment in 2025 for the new, larger headquarters.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $42.2 million for the year ended December 31, 2025, an increase of $7.7 million as compared to the prior year. Our financing activities for the year ended December 31, 2025, consisted primarily of the issuance and sale of shares of Class A Common Stock pursuant to our at-the-market offering program for net proceeds of $42.8 million, net proceeds from our direct registration offering of $1.4 million, partially offset by a $2.1 million repayment of debt obligations. Our financing activities for the year ended December 31, 2024, consisted primarily of the issuance and
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sale of shares of Class A Common Stock for net proceeds of $22.7 million, net proceeds for the issuance of common stock and pre-funded warrants sold for cash of $10.8 million and net proceeds from the issuance of Regulation A bonds of $2.6 million, partially offset by a note repayment of $1.6 million.
At-the-Market Offering Program
On February 1, 2023, we entered into an At-the-Market 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”).
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 of 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.
November 2024 Public Offering
On November 25, 2024, the Company closed the public offering of its Class A Common Stock and pre-funded warrants for total gross proceeds of $12.1 million. The offering was conducted under an effective shelf registration statement previously filed with the SEC and was comprised of the sale of 393,659 shares of Class A Common Stock and pre-funded warrants to purchase 816,341 shares of Class A Common Stock, at a public offering price of $10.00 per share and $9.999 per pre-funded warrant, respectively, before underwriting discounts and commissions. The pre-funded warrants were immediately exercisable at a nominal price of $0.001 per share and as of February 11, 2025, the pre-funded warrants were fully exercised. The offering was managed by Titan Partners Group LLC, a division of American Capital Partners, LLC who were also issued underwriter warrants, exercisable commencing 180 days after the agreement date and continuing for a period of five years, to purchase 36,300 shares of Class A Common Stock. These underwriter warrants are exercisable at a price of $18.29 per share.
Extinguishment of Warrants with Anti-Dilution Features
On October 10, 2022, the Company entered into a Securities Purchase Agreement (the “2022 Purchase Agreement”) with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B (the “Holder”), pursuant to which the Company issued and sold to the Holder in a private placement (i) senior secured convertible notes (the “2022 Notes”), and (ii) warrants (the “2022 Warrants”) to purchase up to 22,768 shares of the Company’s Class A common stock. The 2022 Warrants included an adjustment mechanism, whereby the exercise price and number of shares issuable upon the exercise of the 2022 Warrants (the “Warrant Exercise Price”) were subject to adjustment from time to time, such that immediately after an issuance of shares of Common Stock (a “Stock Issuance”) at any price per share of Common Stock that was lower than the then in effect Warrant Exercise Price (the “Reset Price”), the Warrant Exercise Price would be reduced to equal the Reset Price, and number of shares issuable upon the exercise of the 2022 Warrants would be increased to the number necessary to maintain the value of the 2022 Warrants immediately prior to such Stock Issuance. In connection with the entry into the 2022 Purchase Agreement, the Company and the Holder also entered into a registration rights agreement (the “2022 Registration Rights Agreement”), pursuant to which the Company agreed to provide the Holder with certain registration rights under the Securities Act and the rules and regulations thereunder. Capitalized terms not defined herein have the meaning assigned to them in the 2022 Purchase Agreement.
On August 1, 2024 (the “Issuance Date”), the Company and the Holder entered into an Agreement and Waiver (the “Waiver”) pursuant to which, on the Issuance Date, the Company issued to the Holder a Senior Secured Promissory Note due on July 1, 2025, in an aggregate amount equal to $3.0 million (the “Principal”), in exchange for the cancellation of the Holder’s 2022 Warrants (the “August 2024 Note”). 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
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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 at-the-market offering program and equity lines of credit). Upon the occurrence of a Change of Control (as defined in the August 2024 Note), the Holder may, at its option, require the Company to repay the Note in full, starting from the public announcement of such a Change of Control until 30 days after its completion. The August 2024 Note does not bear interest under normal circumstances; however, if an Event of Default occurs (as defined in the August 2024 Note), the outstanding principal will automatically bear interest at a rate of 10% per annum until the default is resolved or the Note is paid in full. As of June 30, 2025, this note was paid in full.
Public Safety Infrastructure Bonds
We filed an Offering Circular dated September 29, 2023 (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, as amended. The Offering Circular was qualified with the SEC on October 2, 2023. The price per Bond is $1,000. The Bonds are unsecured, bearing interest at 10% per annum, payable annually on December 31 each year, starting on December 31, 2024, with the Bonds maturing on the fifth anniversary of the initial issuance. For the year ended December 31, 2023, we issued Bonds totaling a principal amount of approximately $1.4 million, in aggregate, generating net proceeds to the Company of approximately $1.2 million, net of issuance costs of approximately $0.2 million. We closed the Bond issuance on March 14, 2024 and issued Bonds totaling a 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 period starting January 1, 2024 and ending on March 14, 2024. Overall, we issued Bonds totaling a principal amount of approximately $4.3 million, in aggregate, generating net proceeds to the Company of approximately $3.9 million, net of issuance costs of approximately $0.4 million during the life of the offering.
Contractual Obligations and Commitments
As of December 31, 2025, the Company had approximately $4.6 million in future minimum operating lease commitments, primarily related to its corporate headquarters lease in Sunnyvale, California, which extends through June 2030. The Company expects to fund these commitments through cash on hand and operating cash flows. See Note 9 "Commitments and Contingencies" of the notes to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Recent Accounting Pronouncements
See Note 1 "The Company and Summary of Significant Accounting Policies" of the notes to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide information under this item.