Knightscope, Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ ​ 46 Table of Contents KNIGHTSCOPE, INC. INDEX TO FINANCIAL STATEMENTS ​ ​ ​ Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 207 ) F-2 Balance sheets as of December 31, 2024 and 2023 ​ F-3 Statements of Operations for the Fiscal Years Ended December 31, 2024 and 2023 ​ F-4 Statements of Preferred Stock and Stockholders’ Equity (Deficit) for the Fiscal Years Ended December 31, 2024 and 2023 ​ F-5 Statements of Cash Flows for the Fiscal Years Ended December 31, 2024 and 2023 ​ F-6 Notes to Financial Statements ​ F-7 ​ ​ ​ F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Knightscope, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Knightscope, Inc. (a Delaware corporation) (the “Company”) as of December 31, 2024 and 2023, and the related statements of operations, preferred stock and stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern 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. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ BPM LLP We have served as the Company’s auditor since 2020. San Jose, California March 31, 2025 ​ F-2 Table of Contents KNIGHTSCOPE, INC. BALANCE SHEETS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 11,124 ​ $ 2,282 Restricted cash ​ 102 ​ 100 Accounts receivable, net of allowance for credit losses of $ 139 and $ 15 as of December 31, 2024 and 2023, respectively ​ 1,731 ​ 2,090 Inventory ​ ​ 1,797 ​ ​ 2,320 Prepaid expenses and other current assets ​ 345 ​ 1,421 Total current assets ​ 15,099 ​ 8,213 Autonomous Security Robots, net ​ 8,765 ​ 8,845 Property, equipment and software, net ​ 661 ​ 857 Operating lease right-of-use-assets ​ 407 ​ 1,458 Goodwill ​ ​ 1,922 ​ ​ 1,922 Intangible assets, net ​ ​ 1,241 ​ ​ 1,557 Other assets ​ 90 ​ 122 Total assets ​ $ 28,185 ​ $ 22,974 ​ ​ ​ ​ ​ ​ ​ LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 2,812 ​ $ 1,858 Accrued expenses ​ 734 ​ 1,155 Deferred revenue ​ 1,883 ​ 1,741 Operating lease liabilities, current ​ 412 ​ 733 Debt obligations, current ​ ​ 1,364 ​ ​ — Other current liabilities ​ 1,060 ​ 1,459 Total current liabilities ​ 8,265 ​ 6,946 ​ ​ ​ ​ ​ ​ ​ Non-current liabilities: ​ ​ Debt obligations, net of debt issuance costs of $ 316 and $ 194 as of December 31, 2024 and 2023, respectively ​ 3,952 ​ 1,242 Preferred stock warrant liability ​ — ​ 5,976 Derivative liability ​ ​ — ​ ​ 271 Other noncurrent liabilities ​ ​ 187 ​ ​ 259 Operating lease liabilities, noncurrent ​ — ​ 711 Total liabilities ​ 12,404 ​ 15,405 ​ ​ ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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) ​ — ​ 34,203 ​ ​ ​ ​ ​ ​ ​ 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 ​ 4 ​ 2 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 ​ — ​ — Additional paid-in capital ​ 208,969 ​ 134,822 Accumulated deficit ​ ( 193,192 ) ​ ( 161,458 ) Total stockholders’ equity (deficit) ​ 15,781 ​ ( 26,634 ) Total liabilities, preferred stock and stockholders’ equity (deficit) ​ $ 28,185 ​ $ 22,974 ​ (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. See accompanying Notes to Financial Statements. ​ F-3 Table of Contents KNIGHTSCOPE, INC. STATEMENTS OF OPERATIONS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 Revenue, net ​ ​ ​ ​ ​ ​ Service ​ $ 7,474 ​ $ 7,169 Product ​ ​ 3,331 ​ ​ 5,628 Total revenue, net ​ ​ 10,805 ​ ​ 12,797 Cost of revenue, net ​ ​ ​ ​ ​ Service ​ ​ 11,626 ​ ​ 9,874 Product ​ ​ 2,878 ​ ​ 4,947 Total cost of revenue, net ​ ​ 14,504 ​ ​ 14,821 Gross loss ​ ​ ( 3,699 ) ​ ​ ( 2,024 ) ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ Research and development ​ 7,061 ​ 6,351 Sales and marketing ​ 5,142 ​ 5,179 General and administrative ​ 13,266 ​ 12,585 Restructuring charges ​ ​ 510 ​ ​ 149 Total operating expenses ​ 25,979 ​ 24,264 ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ ( 29,678 ) ​ ( 26,288 ) ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ Change in fair value of warrant and derivative liabilities ​ ( 1,515 ) ​ 4,910 Interest income (expense), net ​ ​ ( 423 ) ​ ​ ( 551 ) Other income (expense), net ​ ( 118 ) ​ ( 189 ) Total other income (expense) ​ ( 2,056 ) ​ 4,170 ​ ​ ​ ​ ​ ​ Net loss before income tax expense ​ ​ ( 31,734 ) ​ ​ ( 22,118 ) Income tax expense ​ ​ — ​ ​ — Net loss ​ $ ( 31,734 ) ​ $ ( 22,118 ) Basic and diluted net loss per common share ​ $ ( 10.97 ) ​ $ ( 16.77 ) Weighted average shares used to compute basic and diluted net loss per share (1) ​ ​ 2,893,634 ​ ​ 1,318,676 ​ (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. ​ F-4 Table of Contents KNIGHTSCOPE, INC. STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (In thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series m ​ Series m-2 ​ Series S ​ ​ ​ ​ ​ ​ Series B ​ Class A ​ Class B ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ Preferred ​ Preferred ​ Series A ​ Preferred ​ Common ​ Common ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Stock ​ Stock ​ Stock ​ Preferred Stock ​ Stock ​ Stock ​ Stock ​ Additional ​ Accumulative ​ Stockholders’ ​ Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Paid-in-capital Deficit Equity (Deficit) Balance as of January 1, 2023 ​ 37,107 ​ $ 4,818 ​ 3,200 ​ $ 480 ​ 54,295 ​ $ 21,977 ​ 61,723 ​ $ 1,335 ​ ​ 70,712 ​ $ 7,173 ​ 560,585 ​ $ 1 ​ 206,397 ​ $ — ​ ​ 95,753 ​ $ ( 139,340 ) ​ $ ( 43,586 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock based compensation — ​ — — ​ — — ​ — — ​ — ​ — ​ — — ​ — — ​ ​ — ​ ​ 2,725 ​ ​ — ​ ​ 2,725 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrants exercised — ​ — — ​ — — ​ — — ​ — ​ — ​ — — ​ — — ​ ​ — ​ ​ ​ ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Conversion of debt obligations to Class A Common Stock ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 208,649 ​ ​ — ​ — ​ ​ — ​ ​ 8,591 ​ ​ — ​ ​ 8,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 4,260 ​ ​ — ​ 4,760 ​ ​ — ​ ​ 263 ​ ​ — ​ ​ 263 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Offering proceeds, net of issuance costs — ​ — — ​ — — ​ — — ​ — ​ — ​ — — ​ — — ​ ​ — ​ ​ ​ ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from equity sale, net of issuance costs ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 768,067 ​ ​ 1 ​ — ​ ​ — ​ ​ 25,919 ​ ​ — ​ ​ 25,920 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issued for consulting services ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ ​ ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share conversion to Class A Common Stock ​ ( 1,514 ) ​ ​ ( 197 ) ​ — ​ ​ — ​ ( 1,451 ) ​ ​ ( 587 ) ​ ( 33,355 ) ​ ​ ( 721 ) ​ ​ ( 735 ) ​ ​ ( 75 ) ​ 62,211 ​ ​ — ​ ( 24,001 ) ​ ​ — ​ ​ 1,580 ​ ​ — ​ ​ 1,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share conversion costs — ​ — — ​ — — ​ — — ​ — ​ — ​ — — ​ — — ​ ​ — ​ ​ ( 9 ) ​ ​ — ​ ​ ( 9 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — — ​ — — ​ — — ​ — ​ — ​ — — ​ — — ​ ​ — ​ ​ — ​ ​ ( 22,118 ) ​ ​ ( 22,118 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2023 35,593 ​ ​ 4,621 3,200 ​ ​ 480 52,844 ​ ​ 21,390 28,368 ​ ​ 614 ​ 69,977 ​ ​ 7,098 1,603,772 ​ ​ 2 187,156 ​ ​ — ​ ​ 134,822 ​ ​ ( 161,458 ) ​ ​ ( 26,634 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,712 ​ ​ — ​ ​ 1,712 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reclassification of warrant liabilities ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 4,762 ​ ​ — ​ ​ 4,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ 2,260 ​ ​ — ​ ​ 18 ​ ​ — ​ ​ 18 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fractional share adjustment due to reverse stock split ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ( 7,771 ) ​ ​ — ​ ( 16 ) ​ ​ — ​ ​ ( 78 ) ​ ​ — ​ ​ ( 78 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Offering proceeds, net of issuance costs ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 1,716,419 ​ ​ 1 ​ — ​ ​ — ​ ​ 22,724 ​ ​ — ​ ​ 22,725 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock, and pre-funded warrants sold for cash, net of issuance costs ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 583,656 ​ ​ 1 ​ — ​ ​ — ​ ​ 10,808 ​ ​ — ​ ​ 10,809 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share conversion to common stock ​ ( 35,593 ) ​ ​ ( 4,621 ) ​ ( 3,200 ) ​ ​ ( 480 ) ​ ( 52,844 ) ​ ​ ( 21,390 ) ​ ( 28,368 ) ​ ​ ( 614 ) ​ ​ ( 69,977 ) ​ ​ ( 7,098 ) ​ 169,271 ​ ​ — ​ 147,359 ​ ​ — ​ ​ 34,203 ​ ​ — ​ ​ 34,203 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share conversion costs ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ ( 2 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 31,734 ) ​ ​ ( 31,734 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ ​ — ​ $ — ​ 4,065,347 ​ $ 4 ​ 336,759 ​ $ — ​ $ 208,969 ​ $ ( 193,192 ) ​ $ 15,781 ​ Note: 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. ​ ​ F-5 Table of Contents KNIGHTSCOPE, INC. STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Cash Flows From Operating Activities ​ ​ ​ ​ ​ ​ Net loss $ ( 31,734 ) $ ( 22,118 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 2,617 ​ 2,364 Loss on disposal of Autonomous Security Robots ​ 1,180 ​ 19 Stock compensation expense ​ 1,712 ​ 2,726 Change in fair value of warrant and derivative liabilities ​ 1,515 ​ ( 4,910 ) Accrued interest ​ ​ ( 10 ) ​ ​ — Common stock issued in exchange for consulting services ​ ​ — ​ ​ 385 Amortization of debt discount ​ 71 ​ 5 Non-cash interest ​ ​ — ​ ​ 454 Changes in operating assets and liabilities: ​ ​ ​ ​ Accounts receivable, net ​ 359 ​ ( 720 ) Prepaid expenses and other current assets ​ 1,076 ​ ( 457 ) Inventory ​ ​ 523 ​ ​ 240 Other assets ​ 32 ​ ( 5 ) Accounts payable ​ 950 ​ ( 599 ) Accrued expenses ​ ( 411 ) ​ ( 1,258 ) Deferred revenue ​ 142 ​ ( 548 ) Other current and noncurrent liabilities ​ ( 475 ) ​ 267 Net cash used in operating activities ​ ( 22,453 ) ​ ( 24,155 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities ​ ​ Purchases and related costs incurred for Autonomous Security Robots ​ ( 3,135 ) ​ ( 4,665 ) Purchases of property and equipment ​ ( 43 ) ​ ( 457 ) Net cash used in investing activities ​ ( 3,178 ) ​ ( 5,122 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities ​ ​ Proceeds from stock options exercised ​ 18 ​ 263 Cash paid for fractional shares ​ ​ ( 78 ) ​ ​ — Proceeds from equity sale, net of issuance costs ​ 22,725 ​ 25,918 Proceeds from issuance of Public Safety Infrastructure Bonds, net of issuance costs ​ 2,639 ​ 1,237 Proceeds from issuance of common stock and pre-funded warrants sold for cash, net of issuance costs ​ 10,809 ​ — Repayments of debt obligations ​ ​ ( 1,636 ) ​ ​ ( 560 ) Share conversion costs ​ ​ ( 2 ) ​ ​ ( 9 ) Net cash provided by financing activities ​ 34,475 ​ 26,849 Net change in cash, cash equivalents and restricted cash ​ 8,844 ​ ( 2,428 ) Cash, cash equivalents and restricted cash at beginning of the period ​ 2,382 ​ 4,810 Cash, cash equivalents and restricted cash at end of the period ​ $ 11,226 ​ $ 2,382 ​ ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Non-Cash Financing and Investing Activities ​ ​ Goodwill adjustment ​ $ — ​ $ 578 Conversion of preferred stock to common stock ​ $ 34,203 ​ $ 1,580 Conversion of debt obligations to Class A Common Stock ​ $ — ​ $ 8,592 Capital expenditures in accounts payable and other long-term liabilities ​ $ 27 ​ $ — Preferred stock warrant reclassification to equity ​ $ 4,762 ​ $ — Promissory note issued in exchange for cancellation of Class A Common Stock Warrants ​ $ 3,000 ​ $ — Operating lease liabilities arising from obtaining right of use asset ​ $ ​ ​ $ 134 ​ See accompanying Notes to Financial Statements. ​ F-6 Table of Contents NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (Dollars in thousands, unless otherwise stated) ​ NOTE 1: The Company and Summary of Significant Accounting Policies Description of Business Knightscope, Inc., was incorporated on April 4, 2013 under the laws of the State of Delaware. 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’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. Basis of Presentation and Liquidity These financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). 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). 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. Cash and cash equivalents on hand were $ 11.1 million as of December 31, 2024, compared to $ 2.3 million as of December 31, 2023. The Company has historically incurred losses and negative cashflows from operations. As of December 31, 2024, the Company also had an accumulated deficit of $ 193.2 million, working capital of $ 6.8 million and stockholders’ equity of $ 15.8 million. The Company is dependent on additional fundraising in order to sustain its ongoing operations. 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. 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 F-7 Table of Contents 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. ​ Segments 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. Comprehensive Loss Comprehensive loss is defined as the change in the equity of a business during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss was equal to net loss for years ended December 31, 2024 and 2023. F-8 Table of Contents Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Specific accounts that require management estimates include, but are not limited to, estimating the useful lives of the Company’s ASRs, property and equipment and intangible assets, certain estimates required within revenue recognition, warranty and allowance for credit losses, determination of deferred tax valuation allowances, estimating fair values of the Company’s share-based awards, warrant liability, and derivative liabilities, inclusive of any contingent assets and liabilities. Actual results could differ from those estimates and such differences may be material to the financial statements. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash and cash equivalents in highly liquid instruments with, and in the custody of, financial institutions with high credit ratings. 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. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company monitors the credit exposure of its cash, cash equivalents, and restricted cash balances by reviewing the credit worthiness of the financial institutions in which it holds its cash. Such reviews may result in the Company moving its cash to banks with more solid balance sheets. Cash, cash equivalents, and restricted cash deposits with financial institutions may occasionally exceed the limits of insurance on bank deposits; however, the Company has not experienced any losses on such accounts. As of December 31, 2024 and 2023, the Company had cash, cash equivalent, and restricted cash balances exceeding Federal Deposit Insurance Corporation (“FDIC”) insured limits by $ 11.0 million and $ 2.1 million, respectively. The Company intends to monitor the stability of the financial institutions in which it keeps its liquid funds in order to mitigate against the exposure to loss of funds and delays in accessing cash. The Company extends credit to clients in the normal course of business and performs ongoing credit evaluations of its clients. Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the financial statements. 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. 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 %). F-9 Table of Contents 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 written off. 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Raw materials ​ $ 1,539 ​ $ 2,112 Work in process ​ 123 ​ 82 Finished goods ​ 135 ​ 126 ​ ​ $ 1,797 ​ $ 2,320 Prepaid expenses and other current assets Prepaid and other current assets is comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Prepaid expense ​ $ 259 ​ $ 488 Research and development tax credit ​ 86 ​ 376 Prepaid inventory ​ ​ — ​ ​ 123 Other receivables ​ — ​ 362 Other current assets ​ — ​ 72 ​ ​ $ 345 ​ $ 1,421 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. 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Raw materials ​ $ 2,465 ​ $ 3,841 ASRs in progress ​ 322 ​ 1,575 Finished ASRs ​ 11,790 ​ 12,130 ​ ​ 14,577 ​ 17,546 Less: accumulated depreciation on Finished ASRs ​ ( 5,812 ) ​ ( 8,701 ) ASRs, net ​ $ 8,765 ​ $ 8,845 ​ F-10 Table of Contents The components of the Finished ASRs, net, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 ASRs on lease or available for lease ​ $ 10,553 ​ $ 10,804 Demonstration ASRs ​ 587 ​ ​ 607 Research and development ASRs ​ 102 ​ ​ 194 Charge boxes ​ ​ 548 ​ ​ 525 ​ ​ 11,790 ​ ​ 12,130 Less: accumulated depreciation ​ ( 5,812 ) ​ ​ ( 8,701 ) Finished ASRs, net ​ $ 5,978 ​ $ 3,429 Property, Equipment and Software, net Property, equipment and software, net is stated at cost less accumulated depreciation and amortization and is depreciated using the straight-line method over the estimated useful lives of the assets. Computer equipment, software and furniture, fixtures and equipment are depreciated over useful lives ranging from three to five years , and leasehold improvements are depreciated over the respective lease term or useful lives, whichever is shorter . Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 ​ ​ 2024 2023 Computer equipment ​ $ 251 ​ $ 258 Software ​ 8 ​ 8 Furniture, fixtures and equipment ​ 1,263 ​ 1,245 Leasehold improvements ​ 54 ​ 46 ​ ​ 1,576 ​ 1,557 Accumulated depreciation and amortization ​ ( 915 ) ​ ( 700 ) Property, equipment and software, net ​ $ 661 ​ $ 857 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. Goodwill and Acquired Intangible Assets The Company records goodwill when the consideration paid in a purchase acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment. The Company performs testing for impairment of goodwill annually, during the fourth quarter, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company tests goodwill for impairment at the reporting unit level using a two-step approach. In step one, the Company determines if the fair value of the reporting unit exceeds the unit’s carrying value. If step one indicates that the fair value of the reporting unit is less than its carrying value, the Company performs step two, determining the fair value of goodwill and, if the carrying value of goodwill exceeds the implied fair value, recording an impairment charge. The Company has determined that there is a single reporting unit for the purpose of goodwill impairment tests. Since inception through December 31, 2024, the Company has not had any goodwill impairment. F-11 Table of Contents Acquired intangible assets consist of identifiable intangible assets, primarily developed technology, trademark and customer relationships. These intangible assets have been determined to have definite lives and are carried at cost, less accumulated amortization. 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. 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 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. 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. Leases 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. All leases are assessed for classification as an operating lease or a finance lease. Operating lease right-of-use (“ROU”) assets are presented separately on the Company’s balance sheets. The Company does not have any finance lease ROU assets or liabilities. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not obtain and control its right to use the identified asset until the lease commencement date. The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Because the rate implicit in the lease is not readily determinable, the Company generally uses its incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The Company factors in publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The Company’s ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor. Variable lease payments are expensed as incurred and do not factor into the measurement of the applicable ROU asset or lease liability. The term of the Company’s leases equals the non-cancellable period of the lease, including any rent-free periods provided by the lessor, and also include options to renew or extend the lease (including by not terminating the lease) that the Company is reasonably certain to exercise. The Company establishes the term of each lease at lease commencement and reassesses that term in subsequent periods when one of the triggering events outlined in Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) occurs. 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. For facility leases, the Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. The Company has elected, for all classes of underlying assets, not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease costs for short-term leases is recognized on a straight-line basis over the lease term. F-12 Table of Contents Other Current Liabilities Other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Sales tax ​ $ 378 ​ $ 364 Warranty liability ​ 364 ​ 406 Customer deposits ​ 82 ​ 239 Other ​ 236 ​ 450 ​ ​ $ 1,060 ​ $ 1,459 Accrued Warranty The liability for estimated warranty claims is accrued at the time of sale and the expense is recorded in the statements of operations in cost of revenue, net - product. 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Balance January 1, ​ $ 406 ​ $ 145 Provision for warranties issued ​ 275 ​ 675 Warranty services provided ​ ( 317 ) ​ ( 414 ) ​ ​ $ 364 ​ $ 406 Accrued Expenses Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Legal, consulting and financial services ​ $ 58 ​ $ 117 Payroll and payroll taxes ​ 364 ​ 604 Credit cards ​ 128 ​ 244 Accrued interest ​ ​ — ​ ​ 10 Other ​ 184 ​ 180 ​ ​ $ 734 ​ $ 1,155 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. F-13 Table of Contents 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. The Company determines revenue recognition through the following steps: ● identification of the contract, or contracts, with a client; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, the Company satisfies a performance obligation. The Company recognizes ASR subscription revenue as follows: ASR subscription revenue is generated from lease of proprietary ASRs along with access to the browser-based interface KSOC through contracts that typically have 12 -month terms. These revenue arrangements adhere to lease accounting guidance and are classified as leases for revenue recognition purposes. Currently, all revenue arrangements qualify as operating leases where consideration allocated to the lease deliverables is recognized ratably over the lease term. Deferred revenue In connection with the Company’s MaaS subscription for the Company’s ASRs, the Company’s standard billing terms are annual in advance. 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. The Company also records deferred revenue from unfinished contracts for certain ECD related services. F-14 Table of Contents Deferred revenue includes billings in excess of revenue recognized. Revenue recognized at a point in time generally does not result in significant increases in deferred revenue. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Deferred revenue - short term ​ $ 1,883 ​ $ 1,741 Revenue recognized in the year ended related to amounts included in deferred revenue at the beginning of the period ​ $ 1,576 ​ $ 1,466 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. Typically, the timing of invoicing is based on the terms of the contracts. Customer Deposits Customer deposits primarily relate to sales of ECDs to certain customers dependent upon credit worthiness. The customer deposits are recorded as current liabilities and reclassed to a contra accounts receivable account at the time that the final invoice for the sale is generated following the completion of the revenue recognition criteria. Disaggregation of revenue 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ ​ 2024 ​ 2023 ​ Point in time Over time Total Point in time Over time Total ASRs ​ $ 84 ​ $ 4,239 ​ $ 4,323 ​ $ 153 ​ $ 4,036 ​ $ 4,189 ECDs ​ ​ 5,767 ​ ​ 715 ​ 6,482 ​ ​ 8,330 ​ ​ 278 ​ 8,608 Total ​ $ 5,851 ​ $ 4,954 ​ $ 10,805 ​ $ 8,483 ​ $ 4,314 ​ $ 12,797 Product Revenue, net Product revenue, net includes point of sale transactions related to the ECDs, including product, shipping, and installation. Other revenue, net Other non-ASR service-related revenues such as deployment services, decals and training revenue are recognized when services are delivered. Revenue from these transactions has been immaterial for all periods presented and is included in service revenue, net. 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. 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. Shipping and Handling Costs The Company classifies certain shipping and handling costs as cost of revenue, net in the accompanying statements of operations. 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 F-15 Table of Contents 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. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 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. Research and Development Costs Research and development costs primarily consist of employee-related expenses, including salaries and benefits, share-based compensation expense, facilities costs, depreciation and other allocated expenses. Research and development costs are expensed as incurred. Advertising Costs Advertising costs are recorded in sales and marketing expense in the Company’s statements of operations as incurred. Advertising expense was $ 1.5 million and $ 1.7 million for the years ended December 31, 2024 and 2023, respectively. Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes (“ASC740”). Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. The Company measures deferred tax assets and liabilities using tax rates applicable to taxable income in effect for the years in which those tax assets are expected to be realized or settled and provides a valuation allowance against deferred tax assets when it cannot conclude that it is more likely than not that some or all deferred tax assets will be realized. The assessment requires significant judgment and is performed in each of the applicable taxing jurisdictions. Additionally, the Company assesses its uncertain tax positions and records tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company’s policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Basic and Diluted Net Loss per Share Net loss per share of common stock is computed using the two-class method required for participating securities based on their participation rights. All series of convertible preferred stock are participating securities as the holders are entitled to participate in common stock dividends with common stock on an as converted basis. 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 F-16 Table of Contents 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. All participating securities are excluded from basic weighted average shares outstanding. In computing diluted net loss attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by diluted weighted average shares outstanding, including potentially dilutive securities, unless anti-dilutive. Potentially dilutive securities that were excluded from the computation of diluted net loss per share for the years ended December 31, 2023 and 2024 consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Series A Preferred Stock (convertible to Class B Common Stock) ​ — 28,368 Series B Preferred Stock (convertible to Class B Common Stock) ​ — 69,977 Series m Preferred Stock (convertible to Class A Common Stock) ​ — 35,593 Series m-2 Preferred Stock (convertible to Class B Common Stock) ​ — 3,200 Series S Preferred Stock (convertible to Class A Common Stock) ​ — 52,844 Warrants to purchase common stock (convertible to Class A Common Stock) ​ 186,411 ​ 22,769 Warrants to purchase Series m-3 Preferred Stock (convertible to Class A Common Stock) ​ — 28,656 Warrants to purchase Series S Preferred Stock (convertible to Class A Common Stock) ​ — 58,836 Stock options ​ 296,391 201,388 Total potentially dilutive shares ​ 482,802 501,631 The weighted average number of shares of common stock outstanding as of December 31, 2024 includes the weighted average effect of the 816,341 pre-funded warrants issued in connection with the November Offering (as defined in Note 5 - Capital Stock and Warrants) because the exercise of such warrants requires nominal consideration ($ 0.001 per share exercise price for each pre-funded warrant). As of December 31, 2024, 190,007 of the pre-funded warrants have been exercised for 189,997 shares of Class A Common Stock; and 626,334 outstanding pre-funded warrants as of that date are not included in the table above. ​ As all potentially dilutive securities are anti-dilutive as of December 31, 2024 and 2023, 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 2024 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): Improvements to Income Tax Disclosures , 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. In November 2024, the FASB issued ASU No. 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): 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 F-17 Table of Contents 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. ​ 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. ​ NOTE 2: Fair Value Measurement The Company determines the fair market values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are three levels of inputs that may be used to measure fair value: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis. ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. Level 3 liabilities that are measured at fair value on a recurring basis consist of the convertible preferred stock warrant liability. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2024 ​ ​ ​ ​ Assets ​ ​ ​ ​ Cash equivalents and restricted cash ​ ​ ​ ​ Money market funds ​ $ 10,638 ​ $ 10,638 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2023 ​ ​ ​ ​ Assets ​ ​ ​ ​ Cash equivalents and restricted cash ​ ​ ​ ​ Money market funds ​ $ 1,104 ​ $ 1,104 ​ $ — ​ $ — Liabilities ​ ​ ​ ​ Warrant liability – Series m-3 Preferred Stock ​ $ 284 ​ $ — ​ $ — ​ $ 284 Warrant liability – Series s Preferred Stock ​ $ 5,692 ​ $ — ​ $ — ​ $ 5,692 Derivative liability – Class A common stock warrants ​ $ 271 ​ $ — ​ $ — ​ $ 271 During the years ended December 31, 2024 and 2023, 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. F-18 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ Warrant and Derivative Liabilities Balance as of January 1, 2023 ​ $ 11,157 Warrant cancellations ​ ( 308 ) Revaluation of Common Stock warrants ​ ​ ( 875 ) Revaluation of Series s and Series m-3 Preferred Stock warrants ​ ( 3,727 ) Balance as of December 31, 2023 ​ ​ 6,247 Warrant cancellations ​ ​ ( 3,000 ) Revaluation of Common Stock warrants ​ ​ 2,729 Reclassification of Series s and Series m-3 Preferred Stock warrants ​ ​ ( 4,762 ) Revaluation of Series s and Series m-3 Preferred Stock warrants ​ ​ ( 1,214 ) Balance as of December 31, 2024 ​ $ — ​ ​ NOTE 3: Goodwill and Intangible Assets, net ​ The Company recorded goodwill of $ 1.3 million during the year ended December 31, 2022 related to the Case Emergency Systems (“CASE”) acquisition. During the year ended December 31, 2023, an out of period adjustment of $ 0.6 million was recorded, bringing the total goodwill recorded pursuant to the CASE acquisition to $ 1.9 million. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any interim indicators of impairment. There was no impairment of goodwill during the years ended December 31, 2024 and 2023. The following table sets forth a summary of the changes in goodwill: ​ ​ ​ ​ ​ Balance as of January 1, 2023 ​ $ 1,344 Out of period adjustment ​ 578 Balance as of December 31, 2023 and 2024 ​ $ 1,922 The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Amortization ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Period ​ carrying ​ Accumulated ​ Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 ​ $ 990 ​ $ ( 437 ) ​ $ 553 Customer relationships 8 ​ 950 ​ ( 262 ) ​ 688 Total ​ ​ ​ $ 1,940 ​ $ ( 699 ) ​ $ 1,241 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ Amortization ​ Gross ​ ​ ​ ​ ​ ​ Period ​ carrying ​ Accumulated ​ Carrying Intangible assets with determinable lives ​ (years) amount amortization amount, net Developed technology 5 ​ $ 990 ​ $ ( 239 ) $ 751 Customer relationships 8 ​ 950 ​ ( 144 ) 806 Total ​ ​ ​ $ 1,940 ​ $ ( 383 ) $ 1,557 Intangible assets amortization expense was recorded as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Cost of revenue ​ $ 197 ​ $ 198 Sales and marketing ​ 119 ​ 301 Total intangible asset amortization ​ $ 316 ​ $ 499 F-19 Table of Contents As of December 31, 2024, future intangible assets amortization expense for each of the next five years and thereafter is as follows: ​ ​ ​ ​ ​ Year ending December 31, Amount 2025 ​ $ 317 2026 ​ 317 2027 ​ 275 2028 ​ 118 2029 ​ 119 2030 and thereafter ​ ​ 95 Total ​ $ 1,241 ​ NOTE 4: 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. 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. August 2024 Note 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 1,138,446 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 Class A Common Stock (a “Stock Issuance”), excluding an At The Market (“ATM”) offering, at any price per share of Class A 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 the 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. ​ 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 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). 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. The August 2024 Note shall not bear interest; 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 F-20 Table of Contents 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 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Bonds, net of unamortized issuance costs of $ 316 and $ 194 , respectively ​ $ 3,952 ​ $ 1,242 August 2024 Note ​ ​ 1,364 ​ ​ — Total debt ​ 5,316 ​ 1,242 Less: current portion of debt obligations ​ ( 1,364 ) ​ — Non-current portion of debt obligations ​ $ 3,952 ​ $ 1,242 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. ​ ​ NOTE 5: Capital Stock and Warrants On May 15, 2024 (“the Preferred Stock Conversion Date”), pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation as amended to date (the “Certificate of Incorporation”), each share of the Company’s Super Voting Preferred Stock (as defined in the Certificate of Incorporation) was automatically converted into fully-paid, non-assessable shares of Class B Common Stock and each share of the Company’s Ordinary Preferred Stock (as defined in the Certificate of Incorporation) was automatically converted into fully-paid, non-assessable shares of Class A Common Stock, in each case at the then effective applicable Conversion Rate (as defined in the Certificate of Incorporation), as a result of the receipt by the Company of a written request for such conversion from the holders of a majority of the voting power of the Preferred Stock then outstanding (the “Automatic Conversion”). 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. 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. 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 F-21 Table of Contents 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. 333-269493) (the “Registration Statement”), the base prospectus contained in the Registration Statement, as supplemented by the preliminary prospectus supplement, dated November 21, 2024 (the “Prospectus Supplement”), and a final prospectus supplement filed with the SEC pursuant to Rule 424(b) under the Securities Act. The November offering closed on November 25, 2024. ​ The November offering was conducted pursuant to an underwriting agreement (the “Agreement”) between the Company and Titan Partners Group LLC, a division of American Capital Partners, LLC, as the sole bookrunner (the “Underwriter”), that was entered into on November 21, 2024. Pursuant to the Agreement, the Company sold 393,659 shares of Class A Common Stock and pre-funded warrants to purchase 816,341 shares of Class A Common Stock in the November offering at a public offering price of $ 10.00 per share and $ 9.999 per pre-funded warrant, less underwriting discounts and commissions. The Company also granted the Underwriter a 30 -day option to purchase up to an additional 181,500 shares of Class A Common Stock (or pre-funded warrants) from the Company at the public offering price, less underwriting discounts and commissions. 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 material terms of the November offering are described in the Registration Statement and the Prospectus Supplement. The Agreement contains customary representations, warranties and agreements of the Company. The Company also agreed in the Agreement to indemnify the Underwriter against certain liabilities ​ A summary of the Company’s outstanding warrants as of December 31, 2024, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Class of shares Number of Warrants Exercise Price Expiration Date Class A Common Stock (previously Series m-3 Preferred Stock) 28,656 ​ $ 200.00 ​ December 31, 2027 Class A Common Stock (previously Series S Preferred Stock) 121,455 ​ $ 93.87 ​ December 31, 2027 Class A Common Stock (Prefunded Warrants) ​ 626,334 ​ $ 0.001 ​ None Class A Common Stock (Underwriter Warrants) ​ 36,300 ​ $ 18.29 ​ November 21, 2029 Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance relate to outstanding warrants or stock options as follows: ​ ​ ​ ​ ​ December 31, ​ ​ 2024 Stock options to purchase common stock 296,391 Warrants outstanding for future issuance of common stock 812,745 Stock options available for future issuance 92,020 Total shares of Class A Common Stock reserved 1,201,156 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 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. On November 14, 2024, after our non-affiliated public float subsequently rose to an amount greater than $75.0 million, we filed a new F-22 Table of Contents 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. During the year ended December 31, 2024, the Company issued 1,716,419 shares of Class A Common Stock under the ATM offering program for net proceeds of approximately $ 22.7 million, net of brokerage and placement fees of approximately $ 0.9 million. ​ ​ NOTE 6: Stock-Based Compensation Equity Incentive Plans In April 2014, the Board of Directors adopted the 2014 Equity Incentive Plan (the “2014 Plan”) allowing for the issuance of up to 40,000 shares of common stock through grants of options, stock appreciation rights, restricted stock or restricted stock units. In December 2016, the 2014 Plan was terminated, and the Company’s Board of Directors adopted a new equity incentive plan defined as the 2016 Equity Incentive Plan (the “2016 Plan”) in which the remaining 38,720 shares available for issuance under the 2014 Plan at that time were transferred to the Company’s 2016 Plan. Awards outstanding under the 2014 Plan at the time of the 2014 Plan’s termination will continue to be governed by their existing terms. The shares underlying any awards that are forfeited or repurchased by the Company under the 2014 Plan, on or after the 2014 Plan’s termination will be added back to the shares of common stock available for issuance under the Company’s 2016 Plan. The 2016 Plan provides for the granting of stock awards such as incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock or restricted stock units to employees, directors and outside consultants as determined by the Board of Directors. On June 23, 2022, following approval by the Board of Directors, the Company’s stockholders adopted the 2022 Equity Incentive Plan (the “2022 Plan”) allowing for the issuance of up to 100,000 shares of Class A Common Stock through grants of options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other stock or cash-based awards. In connection with the adoption of the 2022 Plan, shares previously available for issuance under the 2016 Plan became available for issuance under the 2022 Plan. 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. 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. The options generally have a term of ten years from the grant date. Incentive stock options granted to employees who, on the date of grant, own stock representing more than 10 % of the voting power of all of the Company’s classes of stock, are granted at an exercise price of not less than 110 % of the fair market value of the Company’s common stock. The maximum term of incentive stock options granted to employees who, on the date of grant, own stock having more than 10 % of the voting power of all the Company’s classes of stock, may not exceed five years . The Board of Directors also determines the terms and conditions of awards, including the vesting schedule and any forfeiture provisions. Options granted under the 2022 Plan may vest upon the passage of time, generally four years , or upon the attainment of certain performance criteria established by the Board of Directors. The Company may from time-to-time grant options to purchase common stock to non-employees for advisory and consulting services. At each measurement date, the Company will remeasure the fair value of these stock options using the Black-Scholes option pricing model and recognize the expense ratably over the vesting period of each stock option award. Stock options comprise all of the awards granted since the 2022 Plan’s inception. F-23 Table of Contents Stock option activity under all of the Company’s equity incentive plans as of December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ Shares ​ Number of ​ Average ​ Remaining ​ Aggregate ​ ​ Available for ​ Shares ​ Exercise ​ Contractual ​ Intrinsic ​ ​ Grant ​ Outstanding ​ Price ​ Life (Years) ​ Value (000’s) Available and outstanding as of January 1, 2023 ​ 70,781 ​ 201,622 ​ $ 155.50 ​ 7.61 ​ $ 82 2022 Equity incentive plan increase ​ 38,349 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted ​ ( 43,806 ) ​ 43,806 ​ ​ 50.50 ​ ​ ​ ​ ​ Exercised ​ — ​ ( 9,020 ) ​ ​ 29.00 ​ ​ ​ ​ ​ Forfeited ​ 35,036 ​ ( 35,036 ) ​ ​ 171.00 ​ ​ ​ ​ ​ Expired ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ 2022 Equity incentive plan decrease ​ ( 98,357 ) ​ — ​ ​ ​ ​ ​ ​ ​ ​ Available and outstanding as of December 31, 2023 ​ 2,003 ​ 201,372 ​ ​ 135.77 ​ 7.14 ​ $ 141 2022 Equity incentive plan increase ​ 187,296 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted ( 183,600 ) 183,600 ​ 17.79 ​ ​ ​ Exercised ​ — ​ ( 2,260 ) ​ ​ 8.00 ​ ​ ​ ​ ​ Forfeited 86,301 ( 86,301 ) ​ 187.22 ​ ​ ​ Expired ​ 20 ​ ( 20 ) ​ ​ 8.00 ​ ​ ​ ​ ​ Available and outstanding as of December 31, 2024 ​ 92,020 ​ 296,391 ​ $ 50.50 ​ 7.97 ​ $ 26 Vested and exercisable as of December 31, 2024 ​ ​ 99,442 ​ $ 86.23 5.46 ​ $ — The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $ 12.62 as of December 31, 2024, 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 fair value of stock options that vested during the years ended December 31, 2024 and 2023 was $ 1.4 million and $ 3.4 million, respectively. The determination of the fair value of options granted during the years ended December 31, 2024 and 2023 is computed using the Black-Scholes option pricing model with the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ ​ 2024 2023 Risk-free interest rate 4.22 % 4.00 % Expected dividend yield — % — % Expected volatility 54.29 % 54.39 % Expected term (in years) 5.7 5.8 ​ The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023 was $ 11.23 and $ 27.50 per share, respectively. ​ As of December 31, 2024, the Company had unamortized stock-based compensation expense of $ 2.7 million that will be recognized over the average remaining vesting term of options of 1.57 years. Option pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on the analysis of volatilities of the Company’s selected public peer group over a period commensurate with the expected term of the options. The expected term of the employee stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the contractual terms, the vesting period and the expected remaining term of the outstanding options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term in consistent with the expected life of the stock options. No dividend yield is included as the Company has not issued any dividends and do not anticipate issuing any dividends in the future. ​ F-24 Table of Contents A summary of stock-based compensation expense recognized in the Company’s statements of operations is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 2023 Cost of revenue, net ​ $ 208 ​ $ 358 Research and development ​ 565 ​ 397 Sales and marketing ​ 157 ​ 221 General and administrative ​ 782 ​ 1,750 Total ​ $ 1,712 ​ $ 2,726 ​ ​ NOTE 7: Employee Benefit Plan The Company administers a 401(K) retirement plan (the “401(K) Plan”) in which all employees are eligible to participate. 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. NOTE 8: Income Taxes The Company has incurred cumulative U.S. net operating losses since inception. Income tax expense consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 2023 Current: ​ ​ Federal ​ $ — ​ $ — State ​ — ​ — Total current expense ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Deferred: ​ ​ Federal ​ — ​ — State ​ — ​ — Total deferred expense ​ — ​ — 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: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Provision at statutory rate 21.0 % 21.0 % Stock-based compensation ​ ( 1.9 ) ​ ( 2.0 ) ​ Convertible notes — ( 0.4 ) ​ Fair value adjustment ( 1.0 ) 4.7 ​ Change in valuation allowance ( 19.0 ) ( 24.6 ) ​ Research and development credits ​ 1.0 ​ 1.6 ​ Other ( 0.1 ) ( 0.3 ) ​ Effective tax rate 0.0 % 0.0 % F-25 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Deferred tax assets: ​ ​ Net operating loss carryforwards ​ $ 40,925 ​ $ 34,157 Research and development credit carryforwards ​ 3,054 ​ 2,599 Stock-based compensation ​ ​ 290 ​ ​ 604 Accruals and other ​ 249 ​ 113 Lease liability ​ ​ 108 ​ ​ 388 Property, equipment and software ​ 123 ​ 93 Amortization ​ 162 ​ 198 Capitalized research and experimental expenses ​ ​ 2,758 ​ ​ 2,218 Other ​ 10 ​ 11 Total deferred tax assets ​ 47,679 ​ 40,381 Valuation allowance ​ ( 47,573 ) ​ ( 39,989 ) Deferred tax assets recognized ​ 106 ​ 392 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Right of use asset ​ ​ ( 106 ) ​ ​ ( 392 ) Total deferred tax liabilities ​ ( 106 ) ​ ( 392 ) Net deferred taxes ​ $ — ​ $ — The Company considers all available evidence, both positive and negative, including historical levels of taxable income, expectations and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. As of December 31, 2024 and 2023, based on the Company’s analysis of all available evidence, both positive and negative, it was considered more likely than not that the Company’s deferred tax assets would not be realized and, as a result, the Company recorded a full valuation allowance for its deferred tax assets. The valuation allowance increased $ 7.6 million and $ 7.3 million during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the Company had U.S. federal net operating loss carryforwards of approximately $ 153.3 million of which $ 23.3 million begin to expire in 2033 and $ 130.0 million can be carried over indefinitely. As of December 31, 2024, the Company had federal research and development tax credits of approximately $ 2.1 million which begin to expire in 2033. As of December 31, 2024, the Company had state net operating loss carryforwards of approximately $ 124.4 million which begin to expire in 2027. As of December 31, 2024, the Company had state research and development tax credits of approximately $ 2.0 million, which do not expire. Utilization of the federal and state net operating loss and federal and state research and development tax credit carryforwards may be subject to annual limitations due to the ownership percentage change provisions of the Internal Revenue Code Section 382 and similar state provisions. 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. 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 F-26 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Unrecognized tax benefits as of the beginning of the year ​ $ 544 ​ $ 430 Increases related to prior year tax provisions ​ — ​ 12 Decrease related to prior year tax provisions ​ ( 6 ) ​ — Increase related to current year tax provisions ​ 93 ​ 102 Statute lapse ​ — ​ — Unrecognized tax benefits as of the end of the year ​ $ 631 ​ $ 544 The Company’s unrecognized tax benefits as of December 31, 2024 relate entirely to research and development credits. The total amount of unrecognized tax benefits as of December 31, 2024 is $ 0.6 million. If recognized, none of the unrecognized tax benefits would impact the effective tax rate because of the valuation allowance. The Company’s policy is to recognize interest and penalties to income taxes as components of interest expense and other expense, respectively. The Company did no t accrue interest or penalties related to unrecognized tax benefits as of December 31, 2024. 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. federal jurisdiction and various state jurisdictions. Due to the Company’s net operating loss carryforwards, all tax years since inception remain subject to examination by all taxing authorities. The Company is not currently under audit in any major tax jurisdiction. NOTE 9: Commitments and contingencies Leases 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Operating leases ​ ​ Operating lease right-of-use assets ​ $ 407 ​ $ 1,458 ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities, current portion ​ $ 412 ​ $ 733 Operating lease liabilities, non-current portion ​ — ​ 711 Total operating lease liabilities ​ $ 412 ​ $ 1,444 ​ ​ ​ ​ ​ ​ ​ Operating lease costs ​ $ 989 ​ $ 1,027 As of December 31, 2024, future minimum operating lease payments for the year is as follows: ​ ​ ​ ​ ​ Years ending December 31, ​ Amount 2025 ​ $ 428 Total future minimum lease payments ​ 428 Less – Interest ​ ( 16 ) Present value of lease liabilities ​ $ 412 Weighted average remaining lease term is 0.7 years. The weighted average discount rate of 12.81 % ranges from 5.75 % to 15.0 % dependent upon the assets underlying the operating lease and its term. ​ Rent expense totaled $ 1.0 million and $ 1.0 million for the years ended December 31, 2024 and 2023, respectively, included in the Company’s statements of operations. There were two month to month lease agreements for the year ended December 31, 2024. There F-27 Table of Contents 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. 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. ​ Legal Matters The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business; however, no such claims have been identified as of December 31, 2024 that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company from time to time enters into contracts that contingently require the Company to indemnify parties against third party claims. These contracts primarily relate to: (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. 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’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. 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. NOTE 10: Segment Information Management identifies reportable segments based on how it manages the Company’s operations. As such, the Company operates as one segment for reporting purposes. The accounting policies of the Company’s segment are the same as those described in Note 1. ​ 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 CODM evaluates performance and allocates resources for its reportable segment using segment income or loss. This metric is used to evaluate the overall financial performance of the segment, make operational and strategic decisions, prepare our annual plan, and allocate resources. ​ F-28 Table of Contents NOTE 11: Subsequent Events ATM offering program From January 1, 2025 through March 31, 2025 the Company issued 1,247,836 shares of Class A Common Stock under the ATM offering program for net proceeds of approximately $ 7.4 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. 333-269493). ​ ​ ​ F-29 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.