What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 49 added, 46 removed, 87 unchanged (52% of the section changed)

3 unchanged sentences

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Based upon their evaluation of these disclosure controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2021 due to a material weakness in our internal control over financial reporting as described below.

Material Weakness in Internal Control Over Financial Reporting

In connection with the audit of our financial statements for the year ended December 31, 2021, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses related to certain corporate finance and accounting oversight functions specifically related to the need for technical accounting and SEC expertise, which was primarily the result of the accounting for the preferred stock warrant liability, evaluation of the features of the convertible notes payable and other equity accounting items, due to lack of sufficient accounting and finance resources throughout 2021.

Commencing in the quarter ended December 31, 2020, the Company hired a full-time, in-house accounting team, including a chief financial officer (“CFO”), who has the requisite U.S.

GAAP and SEC Commission reporting expertise, to transition the Company from private to publicly listed.

To fully address this material weakness and to continue our implementation of new controls and procedures to address this material weakness in 2022, the Company intends to augment its accounting team with additional technical accounting professionals.

Evaluation of Changes in Internal Control over Financial Reporting

Remediation of Previously Reported Material Weakness

In connection with the audit of our consolidated financial statements for the year ended December 31, 2021, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting related to certain corporate finance and accounting oversight functions, specifically related to the need for technical accounting and SEC expertise with respect to accounting for the preferred stock warrant liability, convertible notes and other equity accounting items.

The material weakness was largely due to a lack of sufficient accounting and finance resources throughout 2021.

Management implemented remediation steps to address the material weakness by hiring a full-time, in-house accounting team, including a chief financial officer with U.S.

GAAP and SEC Commission reporting expertise, and augmenting its internal and external accounting team with additional technical accounting professionals.

As of December 31, 2022, the Company’s management believes the identified material weakness has been remediated.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Internal control over financial reporting is a process designed by, or under the supervision of, our president (our principal executive officer and our principal accounting officer and principal financial officer), to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company;

Because of its inherent limitations, internal control over financial reporting may not provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected.

Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway

Based upon the results of the evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Changes in Internal Control over Financial Reporting

As noted above, the Company hired a full-time, in-house accounting team and continues to address the controls related to the material weakness, including corporate finance and accounting oversight functions.

Except for these continued actions, there were no changes in our internal control over financial reporting during the three months ended December 31, 2021 that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth above, there were no changes in our internal control over financial reporting during the three months ended December 31, 2022 that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

Other Information

4 unchanged sentences

We have a written code of conduct in place that applies to all our employees and directors, including our principal executive officer and principal financial officer.

A copy of our code of ethics is available on our website at https://ir.knightscope.com/corporate-governance/governance-overview.

A copy of our code of conduct is available on our website at https://ir.knightscope.com/corporate-governance/governance-overview.

We are required to disclose certain changes to, or waivers from, that code for our senior financial officers.

10 unchanged sentences

(1) Financial Statements

Balance Sheets

Statements of Operations

Statements of Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(2) Schedules

1 unchanged sentence

The following exhibits are filed with, or incorporated by reference in this Annual Report

Asset Purchase Agreement, dated as of October 10, 2022, by and between Knightscope, Inc.

and Case Emergency Systems (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on October 11, 2022 (File No.

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 2.1 to our Regulation A Offering Statement on Form 1-A/A filed on July 18, 2019 (File No.

Bylaws (incorporated by reference to Exhibit 2.2 to our Regulation A Offering Statement on Form 1-A/A filed on December 7, 2016 (File No.

Description of Capital Stock

Description of Capital Stock (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 31, 2022 (File No001-41248)).

Warrant to Purchase Series S Preferred Stock, dated April 30, 2019, between Knightscope, Inc.

4 unchanged sentences

and Andrew Brown (incorporated by reference to Exhibit 3.12 to our Regulation A Offering Statement on Form 1-A/A filed on November 23, 2021 (File No.

Convertible Promissory Note, dated April 30, 2019, between Knightscope, Inc.

and Proud Ventures KS (incorporated by reference to Exhibit 3.2 to our Regulation A Offering Statement on Form 1-A filed on July 18, 2019 (File No.

Form of Exchange Agreement for purchasers of Series m-4 Preferred Stock (incorporated by reference to Exhibit 3.6 to our Regulation A Offering Statement on Form 1-A (File No.

Note and Warrant Purchase Agreement, dated April 30, 2019, between Knightscope, Inc.

and Proud Ventures KS LLC (incorporated by reference to Exhibit 3.1 to our Regulation A Offering Statement on Form 1-A filed on July 18, 2019 (File No.

Consent and Omnibus Amendment to Note and Warrant Purchase Agreement, dated November 18, 2021 (incorporated by reference to Exhibit 3.11 to our Regulation A Offering Statement on Form 1-A filed on November 23, 2021 (File No.

Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on October 11, 2022 (File No.

Form of Warrant to Purchase Common Stock (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on October 11, 2022 (File No.

2014 Equity Incentive Plan (incorporated by reference to Exhibit 6.1 to the our Regulation A Offering Statement on Form 1-A/A filed on December 7, 2016 (File No.

2016 Equity Incentive Plan (incorporated by reference to Exhibit 6.2 to the our Regulation A Offering Statement on Form 1-A/A filed on December 7, 2016 (File No.

Loan and Security Agreement, dated as of May 23, 2018, between Knighscope, Inc.

and Silicon Valley Bank, as amended (incorporated by reference to Exhibit 6.1 to our Current Report on Form 1-U filed on June 4, 2018 (File No.

Knightscope, Inc.

2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on June 28, 2022 (File No.

Lease Agreement dated January 14, 2018 between Terra Bella Partners LLC and the Company, as amended February 6, 2018 (incorporated by reference to Exhibit 6.5 to our Annual Report on Form 1-K for the period ended December 31, 2017, filed on April 30, 2018 (File No.

Employment Agreement and Indemnification Agreement between the Company and William Santana Li (incorporated by reference to Exhibit 6.6 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Employment Agreement and Indemnification Agreement between the Company and Stacy Dean Stephens (incorporated by reference to Exhibit 6.7 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Employment Agreement and Indemnification Agreement between the Company and Mallorie Burak (incorporated by reference to Exhibit 6.8 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Employment Agreement and Indemnification Agreement between the Company and Mercedes Soria Li (incorporated by reference to Exhibit 6.9 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Employment Agreement and Indemnification Agreement between the Company and Aaron J.

Lehnhardt (incorporated by reference to Exhibit 6.10 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Employment Agreement and Indemnification Agreement between the Company and Peter M.

Weinberg (incorporated by reference to Exhibit 6.11 to the our Regulation A Offering Statement on Form 1-A filed on October 15, 2021 (File No.

Form of Board of Directors Agreement

Form of Board of Directors Agreement (incorporated by reference to Exhibit 10.15 to our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 31, 2022 (File No.

Referral Program Agreement, dated April 20, 2021, between Knightscope, Inc.

and Dimension Funding, LLC (incorporated by reference to Exhibit 6.6 to our Annual Report on Form 1-K for the period ended December 31, 2020, filed on April 30, 2021 (File No.

Common Stock Purchase Agreement, dated April 4, 2022, by and between Knightscope, Inc.

Riley Principal Capital, LLC (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 5, 2022 (File No.

Amendment No.

1 to Common Stock Purchase Agreement, dated April 11, 2022, by and between Knightscope, Inc.

Riley Principal Capital, LLC (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 12, 2022 (File No.

Securities Purchase Agreement, dated as of October 10, 2022, by and between Knightscope, Inc.

and each purchaser identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 11, 2022 (File No.

Agreement and Waiver, dated as of December 30 2022, by and between Knightscope, Inc.

and the investor signatory thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 3, 2023 (File No.

At the Market Offering Agreement, dated as of February 1, 2023, by and between Knightscope, Inc.

Wainwright & Co., LLC (incorporated by reference to Exhibit 1.2 to our Registration Statement on Form S-3 (File No.

333-269493) filed on February 1, 2023).

Consent of BPM LLP.

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of

1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer pursuant to 18 U.S.C.

11 unchanged sentences

Furnished herewith.

Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits or schedules upon request;

provided that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits or schedules upon request.

Represents management contract or compensatory plan or arrangement.

16 unchanged sentences

(Principal Financial and Accounting Officer)

/s/ Kristi Ross

March 31, 2022

/s/ Jackeline V.

Hernandez Fentanez

March 31, 2022

Hernandez Fentanez

/s/ Linda Keene Solomon

7 unchanged sentences

Patricia Watkins

/s/ Suzanne Muchin

March 31, 2022

Suzanne Muchin

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 9A. Controls and Procedures