Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 02, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41248 | |
Entity Registrant Name | Knightscope, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2482575 | |
Entity Address State Or Province | CA | |
Entity Address, Address Line One | 1070 Terra Bella Avenue | |
Entity Address, City or Town | Mountain View | |
Entity Address, Postal Zip Code | 94043 | |
City Area Code | 650 | |
Local Phone Number | 924-1025 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Trading Symbol | KSCP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,267,946 | |
Entity Central Index Key | 0001600983 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | ||
Current assets: | ||||
Cash and cash equivalents | $ 5,842 | $ 4,810 | [1] | |
Restricted cash | 100 | |||
Accounts receivable (net of allowance for credit losses of $26 as of June 30, 2023 and $229 as of December 31, 2022) | 2,043 | 1,370 | [1] | |
Inventory | 2,671 | 2,560 | [1] | |
Prepaid expenses and other current assets | 1,302 | 1,349 | [1] | |
Total current assets | 11,958 | 10,089 | [1] | |
Autonomous Security Robots, net | 6,753 | 5,850 | [1] | |
Property, equipment and software, net | 976 | 614 | [1] | |
Operating lease right-of-use-assets | 1,680 | 2,012 | [1] | |
Goodwill | 1,922 | 1,344 | [1] | |
Intangible assets, net | 1,783 | 2,056 | [1] | |
Other assets | 95 | 117 | [1] | |
Total assets | 25,167 | 22,082 | [1] | |
Current liabilities: | ||||
Accounts payable | 1,519 | 2,457 | [1] | |
Accrued expenses | 2,433 | 2,403 | [1] | |
Deferred revenue | 2,444 | 1,711 | [1] | |
Debt obligations | 546 | 2,144 | [1] | |
Operating lease liabilities, current | 748 | 731 | [1] | |
Other current liabilities | 1,651 | 1,063 | [1] | |
Total current liabilities | 9,341 | 10,509 | [1] | |
Non-current liabilities: | ||||
Debt obligations | [1] | 6,554 | ||
Preferred stock warrant liability | 5,102 | 10,011 | [1] | |
Derivative liability | 240 | 1,146 | [1] | |
Other noncurrent liabilities | 313 | 356 | [1] | |
Operating lease liabilities, noncurrent | 953 | 1,309 | [1] | |
Total liabilities | 15,949 | 29,885 | [1] | |
Commitments and contingencies | [1] | |||
Preferred Stock, $0.001 par value; 43,405,324 shares authorized as of June 30, 2023 and December 31, 2022, 9,554,764 and 11,351,841 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $35,700 and $37,733 as of June 30, 2023 and December 31, 2022, respectively | 34,536 | 35,783 | [1] | |
Stockholders' deficit: | ||||
Additional paid-in capital | 121,190 | 95,716 | [1] | |
Accumulated deficit | (146,582) | (139,340) | [1] | |
Total stockholders' deficit | (25,318) | (43,586) | [1] | |
Total liabilities, preferred stock and stockholders' deficit | 25,167 | 22,082 | [1] | |
Class A Common Stock | ||||
Stockholders' deficit: | ||||
Common Stock | 64 | 28 | [1] | |
Class B Common Stock | ||||
Stockholders' deficit: | ||||
Common Stock | $ 10 | $ 10 | [1] | |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 26 | $ 229 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 43,405,324 | 43,405,324 |
Preferred stock, shares issued | 9,554,764 | 11,351,841 |
Preferred stock, shares outstanding | 9,554,764 | 11,351,841 |
Preferred stock, aggregate liquidation preference | $ 35,700 | $ 37,733 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 114,000,000 | 114,000,000 |
Common stock, shares issued | 63,519,101 | 28,029,238 |
Common stock, share outstanding | 63,519,101 | 28,029,238 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 10,357,822 | 10,319,884 |
Common stock, share outstanding | 10,357,822 | 10,319,884 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Total revenues | $ 3,563 | $ 1,042 | $ 6,460 | $ 1,985 |
Total cost of revenues, net | 3,554 | 1,732 | 6,664 | 3,225 |
Gross profit (loss) | 9 | (690) | (204) | (1,240) |
Operating expenses: | ||||
Research and development | 1,482 | 2,075 | 2,879 | 3,913 |
Sales and marketing | 1,193 | 1,509 | 2,321 | 4,998 |
General and administrative | 3,274 | 2,960 | 6,913 | 5,286 |
Restructuring charges | 5 | 149 | ||
Total operating expenses | 5,954 | 6,544 | 12,262 | 14,197 |
Loss from operations | (5,945) | (7,234) | (12,466) | (15,437) |
Other income (expense): | ||||
Change in fair value of warrant liabilities | 1,193 | 8,125 | 5,815 | 15,647 |
Change in fair value of convertible notes | (43) | |||
Interest income (expense), net | 48 | 1 | (454) | (8,910) |
Other income (expense), net | (51) | (24) | (137) | (29) |
Total other income (expense) | 1,147 | 8,102 | 5,224 | 6,708 |
Net income (loss) before income tax expense | (4,798) | 868 | (7,242) | (8,729) |
Net income (loss) | $ (4,798) | $ 868 | $ (7,242) | $ (8,729) |
Basic net income (loss) per common share | $ (0.08) | $ 0.02 | $ (0.14) | $ (0.26) |
Diluted net income (loss) per common share | $ (0.08) | $ 0.02 | $ (0.14) | $ (0.26) |
Weighted average shares used to compute basic net income (loss) per share | 57,224,377 | 35,730,648 | 50,087,068 | 33,727,858 |
Weighted average shares used to compute diluted net income (loss) per share | 57,224,377 | 49,675,996 | 50,087,068 | 33,727,858 |
Service | ||||
Total revenues | $ 1,825 | $ 1,042 | $ 3,573 | $ 1,985 |
Total cost of revenues, net | 2,642 | $ 1,732 | 4,884 | $ 3,225 |
Product | ||||
Total revenues | 1,738 | 2,887 | ||
Total cost of revenues, net | $ 912 | $ 1,780 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) | Preferred Stock Series m Preferred Stock | Preferred Stock Series m-1 Preferred Stock | Preferred Stock Series m-2 Preferred Stock | Preferred Stock Series m-3 Preferred Stock | Preferred Stock Series S Preferred Stock | Preferred Stock Series A Preferred Stock | Preferred Stock Series B Preferred Stock | Common stock Class A Common Stock | Common stock Class B Common Stock | Additional Paid-in-capital | Accumulative Deficit | Class A Common Stock | Total | |
Balance as of beginning at Dec. 31, 2021 | $ 11,881,000 | $ 1,319,000 | $ 3,755,000 | $ 46,000 | $ 29,995,000 | $ 2,663,000 | $ 7,559,000 | |||||||
Balance as of beginning (in shares) at Dec. 31, 2021 | 4,574,917 | 186,872 | 1,251,666 | 16,757 | 3,705,239 | 6,155,564 | 3,726,092 | |||||||
Increase (decrease) in temporary equity | ||||||||||||||
Share conversion to common stock | $ (6,864,000) | $ (1,319,000) | $ (3,275,000) | $ (46,000) | $ (7,463,000) | $ (1,257,000) | $ (374,000) | |||||||
Share conversion to common stock (in shares) | (2,642,896) | (186,872) | (1,091,666) | (16,757) | (921,835) | (2,906,460) | (184,325) | 127,746,000 | ||||||
Balance at the end at Jun. 30, 2022 | $ 5,017,000 | $ 0 | $ 480,000 | $ 0 | $ 22,532,000 | $ 1,406,000 | $ 7,185,000 | |||||||
Balance at the end (in shares) at Jun. 30, 2022 | 1,932,021 | 0 | 160,000 | 0 | 2,783,404 | 3,249,104 | 3,541,767 | |||||||
Balance as of beginning at Dec. 31, 2021 | $ 6,000 | $ 13,000 | $ 30,745,000 | $ (113,697,000) | $ (82,933,000) | |||||||||
Balance as of beginning (in shares) at Dec. 31, 2021 | 5,936,929 | 13,131,197 | ||||||||||||
Increase (decrease) in stockholders' equity | ||||||||||||||
Stock based compensation | 1,452,000 | 1,452,000 | ||||||||||||
Warrants exercised | $ 370,000 | 370,000 | ||||||||||||
Warrants exercised (in shares) | 156,483 | |||||||||||||
Conversion of debt obligations to Class A Common Stock | $ 7,000 | 16,011,000 | ||||||||||||
Conversion of debt obligations to Class A Common Stock (in shares) | 6,513,385 | 16,004 | ||||||||||||
Stock options exercised | $ 202,000 | 202,000 | ||||||||||||
Stock options exercised (in shares) | 25,000 | |||||||||||||
Offering proceeds, net of issuance costs | $ 2,000 | 19,623,000 | 19,625,000 | |||||||||||
Offering proceeds, net of issuance costs (shares) | 2,236,619 | |||||||||||||
Proceeds from equity sale, net of issuance costs | 378,000 | 378,000 | ||||||||||||
Proceeds from equity sale, net of issuance costs (in shares) | 194,622 | |||||||||||||
Share conversion costs | (50,000) | (50,000) | ||||||||||||
Share conversion to common stock | $ 11,000 | $ (3,000) | 20,590,000 | 20,598,000 | ||||||||||
Share conversion to common stock (in shares) | 10,919,703 | (2,794,027) | ||||||||||||
Net loss | (8,729,000) | (8,729,000) | ||||||||||||
Balance as of end at Jun. 30, 2022 | $ 26,000 | $ 10,000 | $ 89,314,000 | (122,426,000) | (33,076,000) | |||||||||
Balance as of end (in shares) at Jun. 30, 2022 | 26,085,487 | 10,362,170 | 89,314,000 | |||||||||||
Balance as of beginning at Mar. 31, 2022 | $ 5,292,000 | $ 0 | $ 2,480,000 | $ 0 | $ 23,118,000 | $ 1,864,000 | $ 7,217,000 | |||||||
Balance as of beginning (in shares) at Mar. 31, 2022 | 2,037,910 | 0 | 826,666 | 0 | 2,855,743 | 4,308,812 | 3,557,371 | |||||||
Increase (decrease) in temporary equity | ||||||||||||||
Share conversion to common stock | $ (275,000) | $ (2,000,000) | $ (586,000) | $ (458,000) | $ (32,000) | |||||||||
Share conversion to common stock (in shares) | (105,889) | (666,666) | (72,339) | (1,059,708) | (15,604) | |||||||||
Balance at the end at Jun. 30, 2022 | $ 5,017,000 | $ 0 | $ 480,000 | $ 0 | $ 22,532,000 | $ 1,406,000 | $ 7,185,000 | |||||||
Balance at the end (in shares) at Jun. 30, 2022 | 1,932,021 | 0 | 160,000 | 0 | 2,783,404 | 3,249,104 | 3,541,767 | |||||||
Balance as of beginning at Mar. 31, 2022 | $ 24,000 | $ 10,000 | $ 84,586,000 | (123,294,000) | (38,674,000) | |||||||||
Balance as of beginning (in shares) at Mar. 31, 2022 | 23,877,817 | 10,378,251 | ||||||||||||
Increase (decrease) in stockholders' equity | ||||||||||||||
Stock based compensation | 727,000 | 727,000 | ||||||||||||
Stock options exercised | 105,000 | 105,000 | ||||||||||||
Stock options exercised (in shares) | 54,745 | |||||||||||||
Offering proceeds, net of issuance costs | 169,000 | 169,000 | ||||||||||||
Proceeds from equity sale, net of issuance costs | 378,000 | 378,000 | ||||||||||||
Proceeds from equity sale, net of issuance costs (in shares) | 194,622 | |||||||||||||
Share conversion to common stock | $ 2,000 | 3,349,000 | 3,351,000 | |||||||||||
Share conversion to common stock (in shares) | 1,958,303 | (16,081) | ||||||||||||
Net loss | 868,000 | 868,000 | ||||||||||||
Balance as of end at Jun. 30, 2022 | $ 26,000 | $ 10,000 | $ 89,314,000 | (122,426,000) | $ (33,076,000) | |||||||||
Balance as of end (in shares) at Jun. 30, 2022 | 26,085,487 | 10,362,170 | 89,314,000 | |||||||||||
Balance as of beginning at Dec. 31, 2022 | $ 4,818,000 | $ 480,000 | $ 21,977,000 | $ 1,335,000 | $ 7,173,000 | |||||||||
Balance as of beginning (in shares) at Dec. 31, 2022 | 1,855,328 | 160,000 | 2,714,732 | 3,086,160 | 3,535,621 | 11,351,841 | ||||||||
Increase (decrease) in temporary equity | ||||||||||||||
Share conversion to common stock | $ (142,000) | $ (309,000) | $ (721,000) | $ (75,000) | ||||||||||
Share conversion to common stock (in shares) | (54,369) | (38,167) | (1,667,779) | (36,762) | ||||||||||
Balance at the end at Jun. 30, 2023 | $ 4,676,000 | $ 480,000 | $ 21,668,000 | $ 614,000 | $ 7,098,000 | |||||||||
Balance at the end (in shares) at Jun. 30, 2023 | 1,800,959 | 160,000 | 2,676,565 | 1,418,381 | 3,498,859 | 9,554,764 | ||||||||
Balance as of beginning at Dec. 31, 2022 | $ 28,000 | $ 10,000 | $ 95,716,000 | (139,340,000) | $ (43,586,000) | [1] | ||||||||
Balance as of beginning (in shares) at Dec. 31, 2022 | 28,029,238 | 10,319,884 | ||||||||||||
Increase (decrease) in stockholders' equity | ||||||||||||||
Stock based compensation | 1,177,000 | 1,177,000 | ||||||||||||
Conversion of debt obligations to Class A Common Stock | $ 11,000 | 8,581,000 | 8,592,000 | |||||||||||
Conversion of debt obligations to Class A Common Stock (in shares) | 10,432,428 | 10,432,428 | ||||||||||||
Stock options exercised | 263,000 | $ 263,000 | ||||||||||||
Stock options exercised (in shares) | 213,020 | 238,000 | 451,020 | |||||||||||
Proceeds from equity sale, net of issuance costs | $ 23,000 | 14,213,000 | $ 14,236,000 | |||||||||||
Proceeds from equity sale, net of issuance costs (in shares) | 22,821,226 | |||||||||||||
Share conversion costs | (5,000) | (5,000) | ||||||||||||
Share conversion to common stock | $ 2,000 | 1,245,000 | 1,247,000 | |||||||||||
Share conversion to common stock (in shares) | 2,023,189 | (200,062) | ||||||||||||
Net loss | (7,242,000) | (7,242,000) | ||||||||||||
Balance as of end at Jun. 30, 2023 | $ 64,000 | $ 10,000 | 121,190,000 | (146,582,000) | $ (25,318,000) | |||||||||
Balance as of end (in shares) at Jun. 30, 2023 | 63,519,101 | 10,357,822 | ||||||||||||
Balance as of beginning at Mar. 31, 2023 | $ 4,696,000 | $ 480,000 | $ 21,805,000 | $ 614,000 | $ 7,098,000 | |||||||||
Balance as of beginning (in shares) at Mar. 31, 2023 | 1,808,498 | 160,000 | 2,693,500 | 1,418,381 | 3,498,859 | |||||||||
Increase (decrease) in temporary equity | ||||||||||||||
Share conversion to common stock | $ (20,000) | $ (137,000) | ||||||||||||
Share conversion to common stock (in shares) | (7,539) | (16,935) | ||||||||||||
Balance at the end at Jun. 30, 2023 | $ 4,676,000 | $ 480,000 | $ 21,668,000 | $ 614,000 | $ 7,098,000 | |||||||||
Balance at the end (in shares) at Jun. 30, 2023 | 1,800,959 | 160,000 | 2,676,565 | 1,418,381 | 3,498,859 | 9,554,764 | ||||||||
Balance as of beginning at Mar. 31, 2023 | $ 37,000 | $ 10,000 | 106,332,000 | (141,784,000) | $ (35,405,000) | |||||||||
Balance as of beginning (in shares) at Mar. 31, 2023 | 37,314,704 | 10,357,822 | ||||||||||||
Increase (decrease) in stockholders' equity | ||||||||||||||
Stock based compensation | 731,000 | 731,000 | ||||||||||||
Conversion of debt obligations to Class A Common Stock | $ 8,000 | 4,410,000 | 4,418,000 | |||||||||||
Conversion of debt obligations to Class A Common Stock (in shares) | 7,538,604,000 | |||||||||||||
Stock options exercised | 38,000 | 38,000 | ||||||||||||
Stock options exercised (in shares) | 238,000,000 | |||||||||||||
Offering proceeds, net of issuance costs | $ 18,000 | 9,524,000 | 9,542,000 | |||||||||||
Offering proceeds, net of issuance costs (shares) | 18,396,581,000 | |||||||||||||
Share conversion costs | (1,000) | (1,000) | ||||||||||||
Share conversion to common stock | $ 1,000 | 156,000 | 157,000 | |||||||||||
Share conversion to common stock (in shares) | 269,212 | (238,000) | ||||||||||||
Net loss | (4,798,000) | (4,798,000) | ||||||||||||
Balance as of end at Jun. 30, 2023 | $ 64,000 | $ 10,000 | $ 121,190,000 | $ (146,582,000) | $ (25,318,000) | |||||||||
Balance as of end (in shares) at Jun. 30, 2023 | 63,519,101 | 10,357,822 | ||||||||||||
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows From Operating Activities | ||
Net loss | $ (7,242) | $ (8,729) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,155 | 684 |
Stock compensation expense | 1,177 | 1,452 |
Change in fair value of warrant and derivative liability | (5,815) | (15,647) |
Accrued interest | 440 | 24 |
Common stock issued in exchange for consulting services | 293 | |
Amortization of debt discount | 8,878 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (673) | (448) |
Prepaid expenses and other current assets | (246) | 44 |
Inventory | (111) | |
Other assets | 22 | |
Accounts payable | (938) | (277) |
Accrued expenses | 30 | (606) |
Deferred revenue | 155 | 655 |
Other current and noncurrent liabilities | 538 | 332 |
Net cash used in operating activities | (11,215) | (13,638) |
Cash Flows From Investing Activities | ||
Purchases and related costs incurred for Autonomous Security Robots | (1,690) | (1,651) |
Purchase of property and equipment | (457) | (76) |
Net cash used in investing activities | (2,147) | (1,727) |
Cash Flows From Financing Activities | ||
Proceeds from stock options exercised | 263 | 202 |
Offering proceeds, net of issuance costs | 19,625 | |
Proceeds from equity sale, net of issuance costs | 14,236 | 378 |
Share conversion costs | (5) | (50) |
Net cash provided by financing activities | 14,494 | 20,155 |
Net change in cash and cash equivalents and restricted cash | 1,132 | 4,790 |
Cash, cash equivalents and restricted cash at beginning of the period | 4,810 | 10,849 |
Cash, cash equivalents and restricted cash at end of the period | 5,942 | 15,639 |
Supplemental Disclosure of Non-Cash Financing Activities | ||
Conversion of preferred stock to common stock | 1,247 | 20,598 |
Conversion of debt obligations to Class A common Stock | 8,592 | $ 16,011 |
Goodwill adjustment | $ 578 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
The Company and Summary of Significant Accounting Policies | |
The Company and Summary of Significant Accounting Policies | 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 an advanced public safety technology company that builds fully autonomous security robots and Blue Light emergency communications systems. The Company’s mission is to make the United States of America 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, Blue Light emergency communication devices, and its newly released Knightscope Emergency Management System (“KEMS”) platform. Basis of Presentation and Liquidity The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the period presented. The results of operations for the three and six-months ended June 30, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for other future periods. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023. The Company’s significant accounting policies are described in Note 1 to those audited consolidated financial statements. Since its inception, the Company has incurred significant operating losses and negative cash flows from operations which is principally the result of significant research and development activities related to the development and continued improvement of the Company’s ASRs and KSOC (hardware and software). Cash and cash equivalents on hand were $5.8 million as of June 30, 2023, compared to $4.8 million as of December 31, 2022. The Company has historically incurred losses and negative cashflows from operations. As of June 30, 2023, the Company also had an accumulated deficit of approximately $146.6 million and stockholders’ deficit of $25.3 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. Segments The Company has one operating segment and one reportable segment as its chief operating decision maker, who is its Chief Executive Officer, reviews financial information on a consolidated 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. Basic and Diluted net income (loss) per share Net income (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. Holders of Series m-4 Preferred Stock were entitled to receive cumulative dividends payable semi-annually in arrears at the rate per share of Series m-4 Preferred Stock equal to the dividend rate for the Series m-4 Preferred Stock, in each case subject to compliance with applicable law. Dividends to holders of Series m-4 Preferred Stock are paid in kind as a dividend of additional shares of Series m-4 Preferred Stock for each dividend period on the applicable dividend payment date using a price per share equal to the original issue price, provided that the Company shall not issue any fractional shares of Series m-4 Preferred Stock. The holders of the Company’s preferred stock, other than m-4 preferred stock, are also entitled to noncumulative dividends prior and in preference, to the Company’s common stock and do not have a contractual obligation to share in the losses of the Company. All shares of Series m-4 Preferred Stock have converted to Class A Common Stock, leaving no outstanding balance of the Series m-4 Preferred Stock as of June 30, 2023. In accordance with the two-class method, earnings allocated to these participating securities, which include participation rights in undistributed earnings with common stock, are subtracted from net income (loss) to determine net income (loss) attributable to common stockholders upon their occurrence. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders (net adjusted for preferred stock dividends declared or accumulated) by the weighted average number of common shares outstanding during the period. All participating securities are excluded from basic weighted average shares outstanding. In computing diluted net income (loss) attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing net income (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 income (loss) per share for the three-months ended June 30, 2023 and 2022 consist of the following: June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 — Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 — Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 — Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 — Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 — Warrants to purchase Class A Common Stock 1,138,446 — Warrants to purchase Series m-3 Preferred Stock 1,432,786 1,432,786 Warrants to purchase Series s Preferred Stock 2,941,814 4,441,814 Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 14,141,603 Potentially dilutive securities that were excluded from the computation of diluted net income (loss) per share for the six-months ended June 30, 2023 and 2022, consist of the following: June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 3,249,104 Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 3,541,767 Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 1,932,021 Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 160,000 Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 2,783,404 Warrants to purchase of Series m-3 (convertible to Class A Common Stock) 1,432,786 1,432,786 Warrants to purchase of Series s (convertible to Class A Common Stock) 2,941,814 4,441,814 Warrants to purchase Class A Common Stock 1,138,446 — Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 25,807,899 As all potentially dilutive securities are anti-dilutive for the six-months ended June 30, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each period. Comprehensive Income (Loss) Net income (loss) was equal to comprehensive income (loss) for the three and six-month periods ended June 30, 2023 and 2022. Use of Estimates The preparation of financial statements in conformity with U.S. 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 and property, equipment and software, certain estimates required within revenue recognition, estimating fair values of Company’s common stock, share-based awards and warrant liabilities, inclusive of any contingent assets and liabilities. Actual results could differ from those estimates and such differences may be material to the condensed consolidated financial statements. Accounting Pronouncements Adopted in 2023 In June 2016, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses.” The amendment revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to available-for-sale debt securities and accounts receivable. The Company’s implementation of this pronouncement did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted 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 condensed consolidated financial statements. Out of Period Adjustments During the quarter ended June 30, 2023, the Company became aware of an error in the calculation of deferred revenue and goodwill associated with the CASE Emergency Systems acquisition in October of 2022. The error resulted in an understatement of acquired deferred revenue and goodwill in the amount of $578. As such, the June 30, 2023 condensed consolidated balance sheet has been adjusted to increase goodwill and deferred revenue by $578. In addition, during the quarter ended June 30, 2023, the Company became aware of an error in the reporting of interest expense resulting in an additional charge of $62 in the three-months ended June 30, 2023. Based on an analysis of Staff Accounting Bulletin 108, “Quantifying Misstatements” and Staff Accounting Bulletin 99, “Materiality,” the Company has determined that these errors were immaterial to the previously issued audited consolidated financial statements for the year ended December 31, 2022 and the unaudited condensed consolidated financial statements for the quarter ended March 31, 2023. 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. June 30, December 31, 2023 2022 Raw materials $ 2,213 $ 2,032 Work in process 109 — Finished goods 349 528 $ 2,671 $ 2,560 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 included in research and development expense amounted to $2 and $14, depreciation expense of finished ASRs included in sales and marketing expense amounted to $1 and $13, and depreciation expense included in cost of revenue, net amounted to $409 and $295 for the three-months ended June 30, 2023 and 2022, respectively. Depreciation expense of finished ASRs included in research and development expense amounted to $4 and $34, depreciation expense of finished ASRs included in sales and marketing expense amounted to $13 and $27, and depreciation expense included in cost of revenue, net amounted to $770 and $602 for the six-months ended June 30, 2023 and 2022, respectively. ASRs, net, consisted of the following: June 30, December 31, 2023 2022 Raw materials $ 2,580 $ 2,732 ASRs in progress 1,392 773 Finished ASRs 11,421 10,198 15,393 13,703 Accumulated depreciation on Finished ASRs (8,640) (7,853) ASRs, net $ 6,753 $ 5,850 The components of the Finished ASRs, net are as follows: June 30, December 31, 2023 2022 ASRs on lease or available for lease $ 10,135 $ 9,002 Demonstration ASRs 607 622 Research and development ASRs 194 194 Docking stations 485 380 11,421 10,198 Less: accumulated depreciation (8,640) (7,853) Finished ASRs, net $ 2,781 $ 2,345 Intangible Assets The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows: June 30, 2023 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (140) 850 Customer relationships 8 950 (84) 866 Trademark 1 230 (163) 67 Total $ 2,170 $ (387) 1,783 December 31, 2022 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (41) $ 949 Customer relationships 8 950 (25) 925 Trademark 1 230 (48) 182 Total $ 2,170 $ (114) $ 2,056 Intangible assets amortization expense totaling $136 for the three-months ended June 30, 2023 was recorded in sales and marketing expense and cost of revenue, net - service in the amounts of $87 and $49, respectively. Intangible assets amortization expense totaling $273 for the six-months ended June, 30, 2023 was recorded in sales and marketing expense and cost of revenue, net - service in the amounts of $174 and $99, respectively. As of June 30, 2023, future intangible assets amortization expense for each of the next five years and thereafter is as follows: Year ending December 31, Amount 2023 $ 226 2024 317 2025 317 2026 317 2027 275 Thereafter 331 Total $ 1,783 Other Current Liabilities Other current liabilities consisted of the following: June 30, December 31, 2023 2022 Sales tax $ 563 $ 419 Customer and vendor deposits 332 50 Warranty liability 313 145 Lease liability – short term 85 92 Other 358 357 $ 1,651 $ 1,063 Accrued Warranty The liability for estimated warranty claims is accrued at the time of sale and the expense is recorded in the condensed consolidated 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 six-months ended consisted of the following: June 30, 2023 2022 Balance January 1, $ 145 $ — Provision for warranties issued during the quarter 240 — Warranty services provided (72) — $ 313 $ — Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, 2023 2022 Bonuses earned during 2022 $ 903 $ 961 Payroll and payroll taxes 577 696 Legal, consulting, and financial services 328 542 Other 625 204 $ 2,433 $ 2,403 Convertible Preferred Warrant Liabilities and Common Stock Warrants Freestanding warrants to purchase shares of the Company’s preferred stock are classified as liabilities on the balance sheets at their estimated fair value because the underlying shares of preferred stock are contingently redeemable and, therefore, may obligate the Company to transfer assets at some point in the future. The preferred stock warrants are recorded at fair value upon issuance and are 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 are recorded in the condensed consolidated statements of operations. The Company will continue to adjust the liability associated with the preferred stock warrants for changes in the estimated fair value until the earlier of the exercise or expiration of the preferred stock warrants or the completion of a sale of the Company. Upon an IPO, the preferred stock warrants will convert into warrants to purchase common stock and any liabilities recorded for the preferred stock warrants will be reclassified to additional paid-in capital and will no longer be 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. The fair value of these common stock warrants is determined using the Black-Scholes option-pricing model. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation |
Revenue and Deferred Revenue
Revenue and Deferred Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue and Deferred Revenue | |
Revenue and Deferred Revenue | NOTE 2: Revenue and Deferred Revenue Revenue Recognition ASR related revenue 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. Blue Light Towers, E-Phones and Call Boxes revenue The Company also derives revenues from fees from Blue Light Tower, E-Phone and Call Box sales and related services, such as installation, maintenance, and upgrades. 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 ASR subscription revenue is generated from lease of proprietary ASRs along with access to the browser-based interface KSOC through contracts that typically have twelve (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 Machine-as-a-Service (“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 and Balboa Capital, whereby Dimension or Balboa Capital 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 revenue from the lease subscription of its proprietary ASRs along with access to its KSOC browser-based software interface. MaaS subscription agreements typically have a twelve (12)-month term. The Company also records deferred revenue from unfinished contracts for certain Call Box services. 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: June 30, 2023 Deferred revenue - short term $ 2,444 Revenue recognized in the six-months ended related to amounts included in deferred revenue as of January 1, 2023 $ 1,055 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 contract. Customer Deposits Customer deposits primarily relate to sales of Blue Light Towers, E-Phones and Call Boxes 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: Three-Months Ended June 30, 2023 2022 Point in time Over time Total Point in time Over time Total ASRs $ 20 $ 1,080 $ 1,100 $ 31 $ 1,011 $ 1,042 Blue Light Towers, E-Phones and Call Boxes 2,393 70 2,463 — — — Total $ 2,413 $ 1,150 $ 3,563 $ 31 $ 1,011 $ 1,042 Six-Months Ended June 30, 2023 2022 Point in time Over time Total Point in time Over time Total ASRs $ 40 $ 2,082 $ 2,122 $ 46 $ 1,939 $ 1,985 Blue Light Towers, E-Phones and Call Boxes 4,180 158 4,338 — — — Total $ 4,220 $ 2,240 $ 6,460 $ 46 $ 1,939 $ 1,985 Other revenue Other non-ASR related revenue such as deployment services, decals, shipping, and training revenue is recognized when services are delivered. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurement | |
Fair Value Measurement | NOTE 3: 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 liabilities. The inputs used in estimating the fair value of the warrant liabilities are described in Note 6 -- 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 June 30, 2023, and December 31, 2022, and the classification by level of input within the fair value hierarchy: Total Level 1 Level 2 Level 3 June 30, 2023 Assets Cash equivalents: Money market funds $ 852 $ 852 $ — $ — Liabilities Warrant liability – Series m-3 Preferred Stock $ 245 $ — $ — $ 245 Warrant liability – Series S Preferred Stock $ 4,857 $ — $ — $ 4,857 Derivative liability – Class A Common Stock warrants $ 240 $ — $ — $ 240 Total Level 1 Level 2 Level 3 December 31, 2022 Assets Cash equivalents: Money market funds $ 3,025 $ 3,025 $ — $ — Liabilities Warrant liability – Series m-3 Preferred Stock $ 1,282 $ — $ — $ 1,282 Warrant liability – Series S Preferred Stock $ 8,729 $ — $ — $ 8,729 Derivative liability – Class A Common Stock warrants $ 1,146 $ — $ — $ 1,146 2022 Convertible Notes $ 8,152 $ — $ — $ 8,152 During the three-month periods ended June 30, 2023 and 2022, 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. The following table sets forth a summary of the changes in the fair value of Company’s Level 3 warrant liabilities during the six-month periods ended June 30, 2023 and 2022, which were measured at fair value on a recurring basis: June 30, June 30, 2023 2022 Beginning Balance $ 11,157 $ 30,566 Warrants exercised — (370) Warrants cancelled (308) — Revaluation of Series m-3 and S Preferred Stock warrants (4,601) (15,647) Revaluation of Common Stock warrants (906) — Ending Balance $ 5,342 $ 14,549 The following table sets forth a summary of the changes in the fair value of Company’s Level 3 convertible note liabilities during the six-month periods ended June 30, 2023 and 2022, which were measured at fair value on a recurring basis: June 30, June 30, 2023 2022 Beginning Balance $ 8,152 $ — Notes converted (8,592) — Interest accretion 440 — Ending Balance $ — $ — |
Debt Obligations
Debt Obligations | 6 Months Ended |
Jun. 30, 2023 | |
Debt Obligations | |
Debt Obligations | NOTE 4: Debt Obligations The amortized carrying amount of the Company’s debt obligations consists of the following: June 30, December 31, 2023 2022 Convertible notes, net of fees and discount $ — $ 8,152 Promissory notes 546 546 Total debt 546 8,698 Less: current portion of debt obligations 546 2,144 Non-current portion of debt obligations $ — $ 6,554 During the six-months ended June 30, 2023, the Company issued 10,432,428 shares of Class A Common Stock in connection with various conversions of the 2022 Convertible Notes by the Buyer, representing an aggregate principal amount of $6.075 million. As of June 30, 2023, the entire outstanding principal balance of the 2022 Convertible Notes was fully retired. The 2022 Common Stock Warrants remain outstanding. On June 30, 2023, Knightscope and CASE Emergency Systems (“CASE”) executed a Promissory Note Partial Payment and Extension Agreement, whereby the maturity date of the Seller’s Note (“Note”) issued on October 14, 2022 in the amount of $560,000 in connection with the acquisition of CASE was extended to October 6, 2023. The balance of the Note is payable in two installments with the first payment made July 10, 2023 and the final installment due on or before October 6, 2023. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE 5: Stock-Based Compensation Equity Incentive Plans In April 2014, the Company adopted the Knightscope, Inc. 2014 Equity Incentive Plan (the “2014 Plan”) allowing for the issuance of up to 2,000,000 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 adopted the Knightscope, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) in which the remaining 1,936,014 shares available for issuance under the 2014 Plan at that time were transferred to the 2016 Plan. Awards outstanding under the 2014 Plan at the time of the 2014 Plan’s termination continue to be governed by their existing terms. The shares underlying any awards that are forfeited, canceled, repurchased or are otherwise terminated by the Company under the 2014 Plan will be added back to the shares of common stock available for issuance under the 2016 Plan. The 2016 Plan provides for the granting of stock awards such as incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock or restricted stock units to employees, directors and outside consultants as determined by the Board of Directors. The Board may grant stock options under the 2016 Plan at a 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 option exercise price generally may not be less than the underlying stock’s fair market value at the date of grant and generally have a term of ten years. 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 2016 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 amounts granted each calendar year to an employee or non-employee is limited depending on the type of award. Stock options comprise all of the awards granted since the Plan’s inception. On June 23, 2022, following approval by the Board of Directors, the Company’s stockholders adopted the Knightscope, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) allowing for the issuance of up to 5,000,000 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 new grants under the 2016 Plan are available for new grants under the 2022 Plan, and shares subject to outstanding stock options under the prior plans as of the date of stockholder approval of the 2022 Plan, subsequently cease to be subject to such stock options (other than by reason of exercise of such stock options). The number of shares authorized under the 2022 Plan will be increased each January 1 st st 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 nonemployees for advisory and consulting services. The amounts granted each calendar year to an employee or non-employee is limited depending on the type of award. Stock option activity under all of the Company’s equity incentive plans for the six-month period ended of June 30, 2023, 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 December 31, 2022 3,538,268 10,081,915 $ 3.11 7.61 $ 4,098 2022 Plan annual increase 1,917,456 — — — — Granted (975,000) 975,000 0.44 — — Exercised — (451,020) 0.58 — — Forfeited 1,200,240 (1,200,240) 4.50 — — Available and outstanding as of June 30, 2023 5,680,964 9,405,655 $ 2.78 7.45 $ 166 Vested and exercisable as of June 30, 2023 — 5,252,184 $ 2.27 6.38 $ 42 The weighted average grant date fair value of options granted during the six-month period ended June 30, 2023, was $0.23 per share. There were 451,020 options exercised during the six-month period ended June 30, 2023, compared to 152,746 options exercised in the prior year period. The fair value of the options that vested during the six-months ended June 30, 2023 and 2022, was $1.4 million and $523, respectively. As of June 30, 2023, the Company had unamortized stock-based compensation expense of $6.4 million that will be recognized over the weighted average remaining vesting term of options of 1.79 years. The assumptions utilized for option grants during the three and six-months ended June 30, 2023 and 2022, are as follows: Three-months ended Six-months ended June 30, June 30, 2023 2022 2023 2022 Risk-free interest rate 3.62 % — % 3.62 % 0.96 % Expected dividend yield — % — % — % — % Expected volatility 54.73 % — % 54.71 % 53.84 % Expected term (in years) 5.4 — 5.4 6.1 A summary of stock-based compensation expense recognized in the Company’s condensed consolidated statements of operations is as follows: Three-months ended Six-months ended June 30, June 30, 2023 2022 2023 2022 Cost of revenue, net $ 107 $ 82 $ 200 $ 162 Research and development 125 243 125 470 Sales and marketing 55 61 108 132 General and administrative 444 341 744 688 Total $ 731 $ 727 $ 1,177 $ 1,452 |
Capital Stock and Warrants
Capital Stock and Warrants | 6 Months Ended |
Jun. 30, 2023 | |
Capital Stock and Warrants | |
Capital Stock and Warrants | NOTE 6: Capital Stock and Warrants The following tables summarize convertible preferred stock issued and outstanding as of June 30, 2023: Shares Proceeds Net Aggregate Issued and of Issuance Liquidation Outstanding Costs Preference Series A Preferred Stock 1,418,381 $ 614 $ 1,267 Series B Preferred Stock 3,498,859 7,098 7,138 Series m Preferred Stock 1,800,959 4,676 5,403 Series m-2 Preferred Stock 160,000 480 480 Series S Preferred Stock 2,676,565 21,668 21,412 Total Preferred Stock 9,554,764 $ 34,536 $ 35,700 A summary of the Company’s outstanding warrants as of June 30, 2023, is as follows: Class of shares Number of Warrants Exercise Price Expiration Date Series m-3 Preferred Stock 1,432,786 $ 4.0000 December 31, 2027 Series S Preferred Stock 2,941,814 $ 4.5000 December 31, 2027 Class A Common Stock 1,138,446 $ 3.2500 October 13, 2027 On April 7, 2023, the Company entered into an Amendment and Cancellation Agreement with certain holders of warrants to purchase Series m-3 and Series S Preferred Stock. Under the terms of the agreement, the expiration date for warrants to purchase 1,432,786 shares of Series m-3 Preferred Stock and 2,941,814 shares of Series S Preferred Stock was extended to the earlier of December 31, 2027 or eighteen (18) months after the closing of the Company’s first firm commitment underwritten initial public offering of the Company’s common stock pursuant to a registration statement filed under the Securities Act of 1933, as amended, in exchange for the cancellation of warrants to purchase 1,500,000 shares of Series S Preferred Stock. Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance relate to outstanding preferred stock, warrants and stock options as follows: June 30, 2023 Series A Preferred Stock 1,418,381 Series B Preferred Stock 3,498,859 Series m Preferred Stock 1,800,959 Series m-2 Preferred Stock 160,000 Series S Preferred Stock 2,676,565 Stock options to purchase common stock 9,405,655 Warrants outstanding for future issuance of convertible preferred stock and common stock 5,513,046 Stock options available for future issuance 5,680,964 Total shares of Class A Common Stock reserved 30,154,429 At-the-Market Offering Program In February 2023, the Company commenced an at-the-market offering program with H.C. Wainwright & Co., LLC, as sales agent, which allows the Company to sell and issue shares of Class A Common Stock from time-to-time of up to approximately $20.0 million, subject to, and in accordance with, SEC rules. During the six-months ended June 30, 2023, the Company issued 21,970,117 shares of Class A Common Stock under the at-the-market offering program for net proceeds of approximately $12.9 million, net of brokerage and placement fees of approximately $0.5 million. |
Related parties and related-par
Related parties and related-party transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related parties and related-party transactions | |
Related parties and related-party transactions | NOTE 7: Related parties and related-party transactions One of the Company’s vendors, Konica Minolta, Inc. (“Konica Minolta”), is a stockholder of the Company. Konica Minolta provides the Company with repair services to its ASRs. The Company paid Konica Minolta $145 and $101 and $244 and $192 in service fees for the three and six-month periods ended June 30, 2023 and 2022, respectively. The Company had payables of $52 and $117 owed to Konica Minolta as of June 30, 2023 and December 31, 2022, respectively. The Company paid $45 and $105 and $0 and $0 in rent for the three and six-month periods ended June 30, 2023 and 2022, respectively, for a building owned by an employee. |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and contingencies | |
Commitments and contingencies | NOTE 8: 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. As of June 30, 2023 and December 31, 2022, the components of leases and lease costs are as follows: June 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 1,680 $ 2,012 Operating lease liabilities, current portion $ 748 $ 731 Operating lease liabilities, non-current portion 953 1,309 Total operating lease liabilities $ 1,701 $ 2,040 Lease costs for the three and six-month periods ended June 30, 2023 are as follows: Three-months ended Six-months ended June 30, 2023 June 30, 2023 Operating lease costs Operating lease right-of-use assets $ 240 $ 486 As of June 30, 2023, future minimum operating lease payments for each year until the end of the operating leases is as follows: Years ending December 31, Amount 2023 (remaining) $ 470 2024 806 2025 608 2026 15 Total future minimum lease payments 1,899 Less - Interest (198) Present value of lease liabilities $ 1,701 Weighted average remaining lease term is 2.2 years as of June 30, 2023, and the weighted average discount rate is 11%. Legal Matters The Company may be subject to legal proceedings and regulatory actions in the ordinary course of business. The Company is not currently party to any legal proceedings or regulatory actions that would 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 consolidated financial statements as of June 30, 2023, and December 31, 2022. 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 and use tax on all purchases of raw materials and in conjunction with the financing arrangement of the Company’s ASRs with Farnam Street Financial. 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 customers 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 $0.6 million and $0.4 million as of June 30, 2023, and December 31, 2022, respectively, which has been included in other current liabilities on the accompanying condensed consolidated 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events | |
Subsequent Events | NOTE 9: Subsequent Events On July 21, 2023, The Nasdaq Stock Market LLC (“Nasdaq”) notified the Company that it had regained compliance with Nasdaq Listing Rule 5450(b)(2)(A) by maintaining a market value of listed securities of at least $50,000,000 for 10 consecutive business days. In addition, on July 25, 2023, Nasdaq notified the Company that it had regained compliance with Nasdaq Listing Rule 5450(a)(1) by maintaining a minimum bid price of $1.00 per share or above for ten consecutive business days. Both matters are now closed, and the Company is currently in full compliance with Nasdaq continued listing standards. From July 1, 2023 to August 11, 2023, the Company sold 3,764,215 shares of Class A Common Stock, generating approximately $3.5 million of proceeds, net of commissions and other issuance costs, under the Company’s at-the-market offering program. |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
The Company and Summary of Significant Accounting Policies | |
Description of Business | Description of Business Knightscope, Inc., was incorporated on April 4, 2013 under the laws of the State of Delaware. Knightscope, Inc. (the “Company”) is an advanced public safety technology company that builds fully autonomous security robots and Blue Light emergency communications systems. The Company’s mission is to make the United States of America 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, Blue Light emergency communication devices, and its newly released Knightscope Emergency Management System (“KEMS”) platform. |
Basis of Presentation and Liquidity | Basis of Presentation and Liquidity The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the period presented. The results of operations for the three and six-months ended June 30, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for other future periods. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023. The Company’s significant accounting policies are described in Note 1 to those audited consolidated financial statements. Since its inception, the Company has incurred significant operating losses and negative cash flows from operations which is principally the result of significant research and development activities related to the development and continued improvement of the Company’s ASRs and KSOC (hardware and software). Cash and cash equivalents on hand were $5.8 million as of June 30, 2023, compared to $4.8 million as of December 31, 2022. The Company has historically incurred losses and negative cashflows from operations. As of June 30, 2023, the Company also had an accumulated deficit of approximately $146.6 million and stockholders’ deficit of $25.3 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. |
Segments | Segments The Company has one operating segment and one reportable segment as its chief operating decision maker, who is its Chief Executive Officer, reviews financial information on a consolidated 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. |
Basic and Diluted net income (loss) per share | Basic and Diluted net income (loss) per share Net income (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. Holders of Series m-4 Preferred Stock were entitled to receive cumulative dividends payable semi-annually in arrears at the rate per share of Series m-4 Preferred Stock equal to the dividend rate for the Series m-4 Preferred Stock, in each case subject to compliance with applicable law. Dividends to holders of Series m-4 Preferred Stock are paid in kind as a dividend of additional shares of Series m-4 Preferred Stock for each dividend period on the applicable dividend payment date using a price per share equal to the original issue price, provided that the Company shall not issue any fractional shares of Series m-4 Preferred Stock. The holders of the Company’s preferred stock, other than m-4 preferred stock, are also entitled to noncumulative dividends prior and in preference, to the Company’s common stock and do not have a contractual obligation to share in the losses of the Company. All shares of Series m-4 Preferred Stock have converted to Class A Common Stock, leaving no outstanding balance of the Series m-4 Preferred Stock as of June 30, 2023. In accordance with the two-class method, earnings allocated to these participating securities, which include participation rights in undistributed earnings with common stock, are subtracted from net income (loss) to determine net income (loss) attributable to common stockholders upon their occurrence. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders (net adjusted for preferred stock dividends declared or accumulated) by the weighted average number of common shares outstanding during the period. All participating securities are excluded from basic weighted average shares outstanding. In computing diluted net income (loss) attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing net income (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 income (loss) per share for the three-months ended June 30, 2023 and 2022 consist of the following: June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 — Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 — Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 — Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 — Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 — Warrants to purchase Class A Common Stock 1,138,446 — Warrants to purchase Series m-3 Preferred Stock 1,432,786 1,432,786 Warrants to purchase Series s Preferred Stock 2,941,814 4,441,814 Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 14,141,603 Potentially dilutive securities that were excluded from the computation of diluted net income (loss) per share for the six-months ended June 30, 2023 and 2022, consist of the following: June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 3,249,104 Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 3,541,767 Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 1,932,021 Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 160,000 Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 2,783,404 Warrants to purchase of Series m-3 (convertible to Class A Common Stock) 1,432,786 1,432,786 Warrants to purchase of Series s (convertible to Class A Common Stock) 2,941,814 4,441,814 Warrants to purchase Class A Common Stock 1,138,446 — Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 25,807,899 As all potentially dilutive securities are anti-dilutive for the six-months ended June 30, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each period. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Net income (loss) was equal to comprehensive income (loss) for the three and six-month periods ended June 30, 2023 and 2022. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. 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 and property, equipment and software, certain estimates required within revenue recognition, estimating fair values of Company’s common stock, share-based awards and warrant liabilities, inclusive of any contingent assets and liabilities. Actual results could differ from those estimates and such differences may be material to the condensed consolidated financial statements. |
Accounting Pronouncements Adopted in 2023 | Accounting Pronouncements Adopted in 2023 In June 2016, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses.” The amendment revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to available-for-sale debt securities and accounts receivable. The Company’s implementation of this pronouncement did not have a material impact on the Company’s condensed consolidated financial statements. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted 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 condensed consolidated financial statements. |
Out of Period Adjustments | Out of Period Adjustments During the quarter ended June 30, 2023, the Company became aware of an error in the calculation of deferred revenue and goodwill associated with the CASE Emergency Systems acquisition in October of 2022. The error resulted in an understatement of acquired deferred revenue and goodwill in the amount of $578. As such, the June 30, 2023 condensed consolidated balance sheet has been adjusted to increase goodwill and deferred revenue by $578. In addition, during the quarter ended June 30, 2023, the Company became aware of an error in the reporting of interest expense resulting in an additional charge of $62 in the three-months ended June 30, 2023. Based on an analysis of Staff Accounting Bulletin 108, “Quantifying Misstatements” and Staff Accounting Bulletin 99, “Materiality,” the Company has determined that these errors were immaterial to the previously issued audited consolidated financial statements for the year ended December 31, 2022 and the unaudited condensed consolidated financial statements for the quarter ended March 31, 2023. |
Inventory | 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. June 30, December 31, 2023 2022 Raw materials $ 2,213 $ 2,032 Work in process 109 — Finished goods 349 528 $ 2,671 $ 2,560 |
Autonomous Security Robots, net | 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 included in research and development expense amounted to $2 and $14, depreciation expense of finished ASRs included in sales and marketing expense amounted to $1 and $13, and depreciation expense included in cost of revenue, net amounted to $409 and $295 for the three-months ended June 30, 2023 and 2022, respectively. Depreciation expense of finished ASRs included in research and development expense amounted to $4 and $34, depreciation expense of finished ASRs included in sales and marketing expense amounted to $13 and $27, and depreciation expense included in cost of revenue, net amounted to $770 and $602 for the six-months ended June 30, 2023 and 2022, respectively. ASRs, net, consisted of the following: June 30, December 31, 2023 2022 Raw materials $ 2,580 $ 2,732 ASRs in progress 1,392 773 Finished ASRs 11,421 10,198 15,393 13,703 Accumulated depreciation on Finished ASRs (8,640) (7,853) ASRs, net $ 6,753 $ 5,850 The components of the Finished ASRs, net are as follows: June 30, December 31, 2023 2022 ASRs on lease or available for lease $ 10,135 $ 9,002 Demonstration ASRs 607 622 Research and development ASRs 194 194 Docking stations 485 380 11,421 10,198 Less: accumulated depreciation (8,640) (7,853) Finished ASRs, net $ 2,781 $ 2,345 |
Intangible Assets | Intangible Assets The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows: June 30, 2023 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (140) 850 Customer relationships 8 950 (84) 866 Trademark 1 230 (163) 67 Total $ 2,170 $ (387) 1,783 December 31, 2022 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (41) $ 949 Customer relationships 8 950 (25) 925 Trademark 1 230 (48) 182 Total $ 2,170 $ (114) $ 2,056 Intangible assets amortization expense totaling $136 for the three-months ended June 30, 2023 was recorded in sales and marketing expense and cost of revenue, net - service in the amounts of $87 and $49, respectively. Intangible assets amortization expense totaling $273 for the six-months ended June, 30, 2023 was recorded in sales and marketing expense and cost of revenue, net - service in the amounts of $174 and $99, respectively. As of June 30, 2023, future intangible assets amortization expense for each of the next five years and thereafter is as follows: Year ending December 31, Amount 2023 $ 226 2024 317 2025 317 2026 317 2027 275 Thereafter 331 Total $ 1,783 |
Other Current Liabilities | Other Current Liabilities Other current liabilities consisted of the following: June 30, December 31, 2023 2022 Sales tax $ 563 $ 419 Customer and vendor deposits 332 50 Warranty liability 313 145 Lease liability – short term 85 92 Other 358 357 $ 1,651 $ 1,063 |
Accrued Warranty | Accrued Warranty The liability for estimated warranty claims is accrued at the time of sale and the expense is recorded in the condensed consolidated 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 six-months ended consisted of the following: June 30, 2023 2022 Balance January 1, $ 145 $ — Provision for warranties issued during the quarter 240 — Warranty services provided (72) — $ 313 $ — |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, 2023 2022 Bonuses earned during 2022 $ 903 $ 961 Payroll and payroll taxes 577 696 Legal, consulting, and financial services 328 542 Other 625 204 $ 2,433 $ 2,403 |
Convertible Preferred Warrant Liabilities and Common Stock Warrants | Convertible Preferred Warrant Liabilities and Common Stock Warrants Freestanding warrants to purchase shares of the Company’s preferred stock are classified as liabilities on the balance sheets at their estimated fair value because the underlying shares of preferred stock are contingently redeemable and, therefore, may obligate the Company to transfer assets at some point in the future. The preferred stock warrants are recorded at fair value upon issuance and are 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 are recorded in the condensed consolidated statements of operations. The Company will continue to adjust the liability associated with the preferred stock warrants for changes in the estimated fair value until the earlier of the exercise or expiration of the preferred stock warrants or the completion of a sale of the Company. Upon an IPO, the preferred stock warrants will convert into warrants to purchase common stock and any liabilities recorded for the preferred stock warrants will be reclassified to additional paid-in capital and will no longer be 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. The fair value of these common stock warrants is determined using the Black-Scholes option-pricing model. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
The Company and Summary of Significant Accounting Policies | |
Schedule of potentially dilutive securities that were excluded from the computation of diluted net loss per share | June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 — Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 — Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 — Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 — Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 — Warrants to purchase Class A Common Stock 1,138,446 — Warrants to purchase Series m-3 Preferred Stock 1,432,786 1,432,786 Warrants to purchase Series s Preferred Stock 2,941,814 4,441,814 Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 14,141,603 June 30, June 30, 2023 2022 Series A Preferred Stock (convertible to Class B Common Stock) 1,418,381 3,249,104 Series B Preferred Stock (convertible to Class B Common Stock) 3,498,859 3,541,767 Series m Preferred Stock (convertible to Class A Common Stock) 1,800,959 1,932,021 Series m-2 Preferred Stock (convertible to Class B Common Stock) 160,000 160,000 Series S Preferred Stock (convertible to Class A Common Stock) 2,676,565 2,783,404 Warrants to purchase of Series m-3 (convertible to Class A Common Stock) 1,432,786 1,432,786 Warrants to purchase of Series s (convertible to Class A Common Stock) 2,941,814 4,441,814 Warrants to purchase Class A Common Stock 1,138,446 — Stock options 9,405,655 8,267,003 Total potentially dilutive shares 24,473,465 25,807,899 |
Schedule of Inventory | June 30, December 31, 2023 2022 Raw materials $ 2,213 $ 2,032 Work in process 109 — Finished goods 349 528 $ 2,671 $ 2,560 |
Schedule of ASRs, net and components of the Finished ASRs, net | June 30, December 31, 2023 2022 Raw materials $ 2,580 $ 2,732 ASRs in progress 1,392 773 Finished ASRs 11,421 10,198 15,393 13,703 Accumulated depreciation on Finished ASRs (8,640) (7,853) ASRs, net $ 6,753 $ 5,850 The components of the Finished ASRs, net are as follows: June 30, December 31, 2023 2022 ASRs on lease or available for lease $ 10,135 $ 9,002 Demonstration ASRs 607 622 Research and development ASRs 194 194 Docking stations 485 380 11,421 10,198 Less: accumulated depreciation (8,640) (7,853) Finished ASRs, net $ 2,781 $ 2,345 |
Schedule of intangible assets | The gross carrying amounts and accumulated amortization of the intangible assets with determinable lives are as follows: June 30, 2023 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (140) 850 Customer relationships 8 950 (84) 866 Trademark 1 230 (163) 67 Total $ 2,170 $ (387) 1,783 December 31, 2022 Amortization Gross Period carrying Accumulated Carrying Intangible assets with determinable lives (years) amount amortization amount, net Developed technology 5 $ 990 $ (41) $ 949 Customer relationships 8 950 (25) 925 Trademark 1 230 (48) 182 Total $ 2,170 $ (114) $ 2,056 |
Schedule of future intangible assets amortization expense | As of June 30, 2023, future intangible assets amortization expense for each of the next five years and thereafter is as follows: Year ending December 31, Amount 2023 $ 226 2024 317 2025 317 2026 317 2027 275 Thereafter 331 Total $ 1,783 |
Schedule of components of Other Current Liabilities | June 30, December 31, 2023 2022 Sales tax $ 563 $ 419 Customer and vendor deposits 332 50 Warranty liability 313 145 Lease liability – short term 85 92 Other 358 357 $ 1,651 $ 1,063 |
Schedule of change in the warranty liability | June 30, 2023 2022 Balance January 1, $ 145 $ — Provision for warranties issued during the quarter 240 — Warranty services provided (72) — $ 313 $ — |
Schedule of components of Accrued Expenses | June 30, December 31, 2023 2022 Bonuses earned during 2022 $ 903 $ 961 Payroll and payroll taxes 577 696 Legal, consulting, and financial services 328 542 Other 625 204 $ 2,433 $ 2,403 |
Revenue and Deferred Revenue (T
Revenue and Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue and Deferred Revenue | |
Summary of deferred revenue | June 30, 2023 Deferred revenue - short term $ 2,444 Revenue recognized in the six-months ended related to amounts included in deferred revenue as of January 1, 2023 $ 1,055 |
Summary of revenue by timing of recognition | Three-Months Ended June 30, 2023 2022 Point in time Over time Total Point in time Over time Total ASRs $ 20 $ 1,080 $ 1,100 $ 31 $ 1,011 $ 1,042 Blue Light Towers, E-Phones and Call Boxes 2,393 70 2,463 — — — Total $ 2,413 $ 1,150 $ 3,563 $ 31 $ 1,011 $ 1,042 Six-Months Ended June 30, 2023 2022 Point in time Over time Total Point in time Over time Total ASRs $ 40 $ 2,082 $ 2,122 $ 46 $ 1,939 $ 1,985 Blue Light Towers, E-Phones and Call Boxes 4,180 158 4,338 — — — Total $ 4,220 $ 2,240 $ 6,460 $ 46 $ 1,939 $ 1,985 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurement | |
Summary of category of assets or liabilities carried at fair value | Total Level 1 Level 2 Level 3 June 30, 2023 Assets Cash equivalents: Money market funds $ 852 $ 852 $ — $ — Liabilities Warrant liability – Series m-3 Preferred Stock $ 245 $ — $ — $ 245 Warrant liability – Series S Preferred Stock $ 4,857 $ — $ — $ 4,857 Derivative liability – Class A Common Stock warrants $ 240 $ — $ — $ 240 Total Level 1 Level 2 Level 3 December 31, 2022 Assets Cash equivalents: Money market funds $ 3,025 $ 3,025 $ — $ — Liabilities Warrant liability – Series m-3 Preferred Stock $ 1,282 $ — $ — $ 1,282 Warrant liability – Series S Preferred Stock $ 8,729 $ — $ — $ 8,729 Derivative liability – Class A Common Stock warrants $ 1,146 $ — $ — $ 1,146 2022 Convertible Notes $ 8,152 $ — $ — $ 8,152 |
Warrant and Derivative Liability | |
Fair Value Measurement | |
Summary of changes in the fair value of Company's Level 3 warrant and derivative liability | June 30, June 30, 2023 2022 Beginning Balance $ 11,157 $ 30,566 Warrants exercised — (370) Warrants cancelled (308) — Revaluation of Series m-3 and S Preferred Stock warrants (4,601) (15,647) Revaluation of Common Stock warrants (906) — Ending Balance $ 5,342 $ 14,549 |
Convertible Note Payable | |
Fair Value Measurement | |
Summary of changes in the fair value of Company's Level 3 warrant and derivative liability | June 30, June 30, 2023 2022 Beginning Balance $ 8,152 $ — Notes converted (8,592) — Interest accretion 440 — Ending Balance $ — $ — |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Obligations | |
Schedule of amortized carrying amount of the Company's debt obligations | June 30, December 31, 2023 2022 Convertible notes, net of fees and discount $ — $ 8,152 Promissory notes 546 546 Total debt 546 8,698 Less: current portion of debt obligations 546 2,144 Non-current portion of debt obligations $ — $ 6,554 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Schedule of stock option activity under all of the Company's equity incentive plans | 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 December 31, 2022 3,538,268 10,081,915 $ 3.11 7.61 $ 4,098 2022 Plan annual increase 1,917,456 — — — — Granted (975,000) 975,000 0.44 — — Exercised — (451,020) 0.58 — — Forfeited 1,200,240 (1,200,240) 4.50 — — Available and outstanding as of June 30, 2023 5,680,964 9,405,655 $ 2.78 7.45 $ 166 Vested and exercisable as of June 30, 2023 — 5,252,184 $ 2.27 6.38 $ 42 |
Schedule of assumptions utilized for option grants | Three-months ended Six-months ended June 30, June 30, 2023 2022 2023 2022 Risk-free interest rate 3.62 % — % 3.62 % 0.96 % Expected dividend yield — % — % — % — % Expected volatility 54.73 % — % 54.71 % 53.84 % Expected term (in years) 5.4 — 5.4 6.1 |
Schedule of stock-based compensation expense recognized in the Company's condensed consolidated statements of operations | Three-months ended Six-months ended June 30, June 30, 2023 2022 2023 2022 Cost of revenue, net $ 107 $ 82 $ 200 $ 162 Research and development 125 243 125 470 Sales and marketing 55 61 108 132 General and administrative 444 341 744 688 Total $ 731 $ 727 $ 1,177 $ 1,452 |
Capital Stock and Warrants (Tab
Capital Stock and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Capital Stock and Warrants | |
Schedule of the Company's outstanding warrants | The following tables summarize convertible preferred stock issued and outstanding as of June 30, 2023: Shares Proceeds Net Aggregate Issued and of Issuance Liquidation Outstanding Costs Preference Series A Preferred Stock 1,418,381 $ 614 $ 1,267 Series B Preferred Stock 3,498,859 7,098 7,138 Series m Preferred Stock 1,800,959 4,676 5,403 Series m-2 Preferred Stock 160,000 480 480 Series S Preferred Stock 2,676,565 21,668 21,412 Total Preferred Stock 9,554,764 $ 34,536 $ 35,700 A summary of the Company’s outstanding warrants as of June 30, 2023, is as follows: Class of shares Number of Warrants Exercise Price Expiration Date Series m-3 Preferred Stock 1,432,786 $ 4.0000 December 31, 2027 Series S Preferred Stock 2,941,814 $ 4.5000 December 31, 2027 Class A Common Stock 1,138,446 $ 3.2500 October 13, 2027 |
Schedule of common stock reserved for future issuance | June 30, 2023 Series A Preferred Stock 1,418,381 Series B Preferred Stock 3,498,859 Series m Preferred Stock 1,800,959 Series m-2 Preferred Stock 160,000 Series S Preferred Stock 2,676,565 Stock options to purchase common stock 9,405,655 Warrants outstanding for future issuance of convertible preferred stock and common stock 5,513,046 Stock options available for future issuance 5,680,964 Total shares of Class A Common Stock reserved 30,154,429 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and contingencies | |
Schedule of components of leases and lease costs | June 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 1,680 $ 2,012 Operating lease liabilities, current portion $ 748 $ 731 Operating lease liabilities, non-current portion 953 1,309 Total operating lease liabilities $ 1,701 $ 2,040 Three-months ended Six-months ended June 30, 2023 June 30, 2023 Operating lease costs Operating lease right-of-use assets $ 240 $ 486 |
Schedule of future minimum operating lease payments | Years ending December 31, Amount 2023 (remaining) $ 470 2024 806 2025 608 2026 15 Total future minimum lease payments 1,899 Less - Interest (198) Present value of lease liabilities $ 1,701 |
The Company and Summary of Si_4
The Company and Summary of Significant Accounting Policies - Basis of Presentation and Liquidity (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | [1] | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Basis of Presentation and Liquidity | |||||||
Cash and cash equivalents | $ 5,842,000 | $ 4,810,000 | |||||
Stockholders' deficit | 25,300,000 | ||||||
Accumulated deficit | 146,582,000 | 139,340,000 | |||||
Stockholders' deficit | $ 25,318,000 | $ 35,405,000 | $ 43,586,000 | $ 33,076,000 | $ 38,674,000 | $ 82,933,000 | |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
The Company and Summary of Si_5
The Company and Summary of Significant Accounting Policies - Potentially dilutive securities that were excluded from the computation of diluted net loss per share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Potentially dilutive securities | ||||
Total potentially dilutive shares | 24,473,465 | 14,141,603 | 24,473,465 | 25,807,899 |
Series A Preferred Stock (convertible to Class B Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 1,418,381 | 1,418,381 | 3,249,104 | |
Series B Preferred Stock (convertible to Class B Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 3,498,859 | 3,498,859 | 3,541,767 | |
Series m Preferred Stock (convertible to Class A Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 1,800,959 | 1,800,959 | 1,932,021 | |
Series m-2 Preferred Stock (convertible to Class B Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 160,000 | 160,000 | 160,000 | |
Series m-4 Preferred Stock (convertible to Class A Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 0 | |||
Series S Preferred Stock (convertible to Class A Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 2,676,565 | 2,676,565 | 2,783,404 | |
Warrants to purchase Series m-3 (convertible to Class A Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 1,432,786 | 1,432,786 | 1,432,786 | 1,432,786 |
Warrants to purchase Series s (convertible to Class A Common Stock) | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 2,941,814 | 4,441,814 | 2,941,814 | 4,441,814 |
Warrants to purchase Class A Common Stock | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 1,138,446 | 1,138,446 | ||
Stock options | ||||
Potentially dilutive securities | ||||
Total potentially dilutive shares | 9,405,655 | 8,267,003 | 9,405,655 | 8,267,003 |
The Company and Summary of Si_6
The Company and Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
The Company and Summary of Significant Accounting Policies | ||
Allowance for credit losses | $ 26 | $ 229 |
The Company and Summary of Si_7
The Company and Summary of Significant Accounting Policies - Out of Period Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
The Company and Summary of Significant Accounting Policies | ||
Acquired deferred revenue and goodwill | $ 578 | |
Interest expense | $ 62 |
The Company and Summary of Si_8
The Company and Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
The Company and Summary of Significant Accounting Policies | |||
Raw materials | $ 2,213 | $ 2,032 | |
Work in process | 109 | ||
Finished goods | 349 | 528 | |
Inventory,Net | $ 2,671 | $ 2,560 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
The Company and Summary of Si_9
The Company and Summary of Significant Accounting Policies - Autonomous Security Robots, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research and development expense | ||||
Autonomous Security Robots, net | ||||
Depreciation expense of finished ASRs | $ 2 | $ 14 | $ 4 | $ 34 |
Sales and marketing expense | ||||
Autonomous Security Robots, net | ||||
Depreciation expense of finished ASRs | 1 | 13 | 13 | 27 |
Cost of revenue, net | ||||
Autonomous Security Robots, net | ||||
Depreciation expense of finished ASRs | $ 409 | $ 295 | $ 770 | $ 602 |
Minimum | ||||
Autonomous Security Robots, net | ||||
Estimated expected lives | 3 years | 3 years | ||
Maximum | ||||
Autonomous Security Robots, net | ||||
Estimated expected lives | 5 years | 5 years |
The Company and Summary of S_10
The Company and Summary of Significant Accounting Policies - Components of ASRs, net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
The Company and Summary of Significant Accounting Policies | |||
Raw materials | $ 2,580 | $ 2,732 | |
ASRs in progress | 1,392 | 773 | |
Finished ASRs | 11,421 | 10,198 | |
ASRs, gross | 15,393 | 13,703 | |
Accumulated depreciation on Finished ASRs | (8,640) | (7,853) | |
ASRs, net | $ 6,753 | $ 5,850 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
The Company and Summary of S_11
The Company and Summary of Significant Accounting Policies - Components of the Finished ASRs (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
The Company and Summary of Significant Accounting Policies | ||
ASRs on lease or available for lease | $ 10,135 | $ 9,002 |
Demonstration ASRs | 607 | 622 |
Research and development ASRs | 194 | 194 |
Docking stations | 485 | 380 |
Finished ASRs, gross | 11,421 | 10,198 |
Less: accumulated depreciation | (8,640) | (7,853) |
Finished ASRs, net | $ 2,781 | $ 2,345 |
The Company and Summary of S_12
The Company and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | ||
The Company and Summary of Significant Accounting Policies | ||||
Gross carrying amount | $ 2,170 | $ 2,170 | $ 2,170 | |
Accumulated amortization | (387) | (387) | (114) | |
Carrying amount, net | 1,783 | 1,783 | $ 2,056 | [1] |
Intangible assets amortization expense | 136 | 273 | ||
Sales and marketing | ||||
The Company and Summary of Significant Accounting Policies | ||||
Intangible assets amortization expense | 87 | 174 | ||
Cost of revenue, net | ||||
The Company and Summary of Significant Accounting Policies | ||||
Intangible assets amortization expense | $ 49 | $ 99 | ||
Developed technology | ||||
The Company and Summary of Significant Accounting Policies | ||||
Amortization Period (years) | 5 years | 5 years | 5 years | |
Gross carrying amount | $ 990 | $ 990 | $ 990 | |
Accumulated amortization | (140) | (140) | (41) | |
Carrying amount, net | $ 850 | $ 850 | $ 949 | |
Customer relationships | ||||
The Company and Summary of Significant Accounting Policies | ||||
Amortization Period (years) | 8 years | 8 years | 8 years | |
Gross carrying amount | $ 950 | $ 950 | $ 950 | |
Accumulated amortization | (84) | (84) | (25) | |
Carrying amount, net | $ 866 | $ 866 | $ 925 | |
Trademark | ||||
The Company and Summary of Significant Accounting Policies | ||||
Amortization Period (years) | 1 year | 1 year | 1 year | |
Gross carrying amount | $ 230 | $ 230 | $ 230 | |
Accumulated amortization | (163) | (163) | (48) | |
Carrying amount, net | $ 67 | $ 67 | $ 182 | |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
The Company and Summary of S_13
The Company and Summary of Significant Accounting Policies - Future intangible assets amortization expense (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Future intangible assets amortization expense | |
2023 | $ 226 |
2024 | 317 |
2025 | 317 |
2026 | 317 |
2027 | 275 |
Thereafter | 331 |
Total | $ 1,783 |
The Company and Summary of S_14
The Company and Summary of Significant Accounting Policies - Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
The Company and Summary of Significant Accounting Policies | |||
Sales tax | $ 563 | $ 419 | |
Customer and vendor deposits | 332 | 50 | |
Warranty liability | 313 | 145 | |
Lease liability - short term | 85 | 92 | |
Other | 358 | 357 | |
Total other current liabilities | $ 1,651 | $ 1,063 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
The Company and Summary of S_15
The Company and Summary of Significant Accounting Policies - Accrued Warranty (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Movement in accrued warranty | |
Balance January 1, | $ 145 |
Provision for warranties issued during the quarter | 240 |
Warranty services provided | (72) |
Balance June 30, | $ 313 |
The Company and Summary of S_16
The Company and Summary of Significant Accounting Policies - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
The Company and Summary of Significant Accounting Policies | |||
Bonuses earned during 2022 | $ 903 | $ 961 | |
Payroll and payroll taxes | 577 | 696 | |
Legal, consulting, and financial services | 328 | 542 | |
Other | 625 | 204 | |
Total accrued liabilities | $ 2,433 | $ 2,403 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Revenue and Deferred Revenue -
Revenue and Deferred Revenue - Deferred revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | [1] | |
Revenue and Deferred Revenue | |||
Deferred revenue - short term | $ 2,444 | $ 1,711 | |
Revenue recognized in the six months ended related to amounts included in deferred revenue as of January 1, 2023 | $ 1,055 | ||
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Revenue and Deferred Revenue _2
Revenue and Deferred Revenue - Revenue by product line and timing of recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue and Deferred Revenue | ||||
Total revenues | $ 3,563 | $ 1,042 | $ 6,460 | $ 1,985 |
ASRs | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 1,100 | 1,042 | 2,122 | 1,985 |
Blue Light Towers, E-Phones and Call Boxes | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 2,463 | 4,338 | ||
Point in time | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 2,413 | 31 | 4,220 | 46 |
Point in time | ASRs | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 20 | 31 | 40 | 46 |
Point in time | Blue Light Towers, E-Phones and Call Boxes | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 2,393 | 4,180 | ||
Transferred over time | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 1,150 | 1,011 | 2,240 | 1,939 |
Transferred over time | ASRs | ||||
Revenue and Deferred Revenue | ||||
Total revenues | 1,080 | $ 1,011 | 2,082 | $ 1,939 |
Transferred over time | Blue Light Towers, E-Phones and Call Boxes | ||||
Revenue and Deferred Revenue | ||||
Total revenues | $ 70 | $ 158 |
Fair Value Measurement - Classi
Fair Value Measurement - Classification by level of input within the fair value hierarchy (Details) - Recurring basis - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Liabilities | ||
Derivative liability - Class A Common Stock warrants | $ 240 | $ 1,146 |
2022 Convertible Notes | 8,152 | |
Warrant liability - Series m-3 Preferred Stock | ||
Liabilities | ||
Warrant liability | 245 | 1,282 |
Warrant liability - Series s Preferred Stock | ||
Liabilities | ||
Warrant liability | 4,857 | 8,729 |
Money market funds | ||
Assets | ||
Money market funds | 852 | 3,025 |
Level 1 | Money market funds | ||
Assets | ||
Money market funds | 852 | 3,025 |
Level 3 | ||
Liabilities | ||
Derivative liability - Class A Common Stock warrants | 240 | 1,146 |
2022 Convertible Notes | 8,152 | |
Level 3 | Warrant liability - Series m-3 Preferred Stock | ||
Liabilities | ||
Warrant liability | 245 | 1,282 |
Level 3 | Warrant liability - Series s Preferred Stock | ||
Liabilities | ||
Warrant liability | $ 4,857 | $ 8,729 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Fair Value Measurement | ||
Fair value assets, transfer from level 2 to level 1 | $ 0 | $ 0 |
Fair Value Measurement - Change
Fair Value Measurement - Changes in the fair value of Company's Level 3 warrant and derivative liability (Details) - Level 3 - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Warrant | ||
Changes in the fair value of Company's Level 3 financial liabilities | ||
Beginning Balance | $ 11,157 | $ 30,566 |
Warrants exercised | 0 | (370) |
Warrants cancelled | (308) | 0 |
Revaluation of Series m-3 and S Preferred Stock warrants | (4,601) | (15,647) |
Revaluation of Common Stock warrants | (906) | 0 |
Ending Balance | 5,342 | $ 14,549 |
Convertible Note Payable | ||
Changes in the fair value of Company's Level 3 financial liabilities | ||
Beginning Balance | 8,152 | |
Notes converted | (8,592) | |
Interest accretion | $ 440 |
Debt Obligations - Amortized ca
Debt Obligations - Amortized carrying amount of debt (Details) - USD ($) | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |||
Debt obligations | |||||
Total debt | $ 546,000 | $ 8,698,000 | |||
Less: current portion of debt obligations | 546,000 | 2,144,000 | [1] | ||
Non-current portion of debt obligations | [1] | 6,554,000 | |||
Conversion of debt obligations to Class A common Stock | 8,592,000 | $ 16,011,000 | |||
CASE Emergency Systems, Inc. | |||||
Debt obligations | |||||
Promissory note issued in connection with acquisition | $ 560,000 | ||||
Class A Common Stock | |||||
Debt obligations | |||||
Number of shares issued on conversion Of convertible notes | 10,432,428 | ||||
Conversion of debt obligations to Class A common Stock | $ 6,075,000 | ||||
Convertible notes, net of fees and discount | |||||
Debt obligations | |||||
Total debt | 8,152,000 | ||||
Promissory notes | |||||
Debt obligations | |||||
Total debt | $ 546,000 | $ 546,000 | |||
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plans (Details) - shares | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jun. 23, 2022 | Dec. 31, 2016 | Apr. 30, 2014 | |
Stock-Based Compensation | ||||||
Number of shares available for grant | 5,680,964 | 3,538,268 | ||||
Vesting period of options (in years) | 4 years | |||||
Percentage of outstanding common stock considered for annual increase in authorized shares under the plan (in percent) | 5% | |||||
2014 Equity Incentive Plan | ||||||
Stock-Based Compensation | ||||||
Number of shares issuable under plan | 2,000,000 | |||||
2016 Equity Incentive Plan | ||||||
Stock-Based Compensation | ||||||
Number of shares available for grant | 1,936,014 | |||||
Vesting period of options (in years) | 4 years | |||||
2016 Equity Incentive Plan | Term of stock options, If price of 100 % of fair market value | ||||||
Stock-Based Compensation | ||||||
Maximum percentage of fair market value of stock options price | 100% | |||||
Stock options term | 10 years | |||||
Percentage of voting power held | 10% | |||||
2016 Equity Incentive Plan | Term of stock options, If price of 110 % of fair market value | ||||||
Stock-Based Compensation | ||||||
Maximum percentage of fair market value of stock options price | 110% | |||||
Stock options term | 5 years | |||||
Percentage of voting power held | 10% | |||||
2022 Equity incentive plan | ||||||
Stock-Based Compensation | ||||||
Number of shares issuable under plan | 5,000,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Shares Available for Grant | |||
Outstanding as of beginning of year | 3,538,268 | ||
2022 Equity incentive plan increase | 1,917,456 | ||
Granted | (975,000) | ||
Forfeited | 1,200,240 | ||
Outstanding as of ending of year | 5,680,964 | 3,538,268 | |
Number of Shares Outstanding | |||
Outstanding as of beginning of year | 10,081,915 | ||
Granted | 975,000 | ||
Exercised | (451,020) | ||
Forfeited | (1,200,240) | ||
Outstanding as of ending of year | 9,405,655 | 10,081,915 | |
Vested and exercisable | 5,252,184 | ||
Weighted Average Exercise Price | |||
Outstanding as of beginning of year | $ 3.11 | ||
Granted | 0.44 | ||
Exercised | 0.58 | ||
Forfeited | 4.50 | ||
Outstanding as of ending of year | 2.78 | $ 3.11 | |
Vested and exercisable as of ending of year | $ 2.27 | ||
Weighted Average Remaining Contractual Life (Years) | |||
Outstanding as of ending of year | 7 years 5 months 12 days | 7 years 7 months 9 days | |
Vested and exercisable as of ending of year | 6 years 4 months 17 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, outstanding | $ 166 | $ 4,098 | |
Vested and exercisable | $ 42 | ||
Weighted average grant date fair value of options granted | $ 0.23 | ||
Share based payment award shares options exercise | 451,020 | 152,746 | |
Fair value of the shares subject to stock options vested | $ 1,400 | $ 523 | |
Unamortized stock-based compensation expense | $ 6,400 | ||
Vesting term (in years) | 1 year 9 months 14 days |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions utilized for option (Details) - Stock options | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-Based Compensation | |||
Risk-free interest rate | 3.62% | 3.62% | 0.96% |
Expected volatility | 54.73% | 54.71% | 53.84% |
Expected term (in years) | 5 years 4 months 24 days | 5 years 4 months 24 days | 6 years 1 month 6 days |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-Based Compensation | ||||
Total equity based compensation | $ 731 | $ 727 | $ 1,177 | $ 1,452 |
Cost of revenue, net | ||||
Stock-Based Compensation | ||||
Total equity based compensation | 107 | 82 | 200 | 162 |
Research and development | ||||
Stock-Based Compensation | ||||
Total equity based compensation | 125 | 243 | 125 | 470 |
Sales and marketing | ||||
Stock-Based Compensation | ||||
Total equity based compensation | 55 | 61 | 108 | 132 |
General and administrative | ||||
Stock-Based Compensation | ||||
Total equity based compensation | $ 444 | $ 341 | $ 744 | $ 688 |
Capital Stock and Warrants - Pr
Capital Stock and Warrants - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 35,700 | $ 37,733 | |
Preferred stock, shares issued | 9,554,764 | 11,351,841 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 43,405,324 | 43,405,324 | |
Shares issued and outstanding | 9,554,764 | ||
Proceeds Net of Issuance Costs | $ 34,536 | ||
Share conversion costs | (5) | $ (50) | |
Series A Preferred Stock | |||
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 1,267 | ||
Shares issued and outstanding | 1,418,381 | ||
Proceeds Net of Issuance Costs | $ 614 | ||
Series B Preferred Stock | |||
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 7,138 | ||
Shares issued and outstanding | 3,498,859 | ||
Proceeds Net of Issuance Costs | $ 7,098 | ||
Series m Preferred Stock | |||
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 5,403 | ||
Shares issued and outstanding | 1,800,959 | ||
Proceeds Net of Issuance Costs | $ 4,676 | ||
Series m-2 Preferred Stock | |||
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 480 | ||
Shares issued and outstanding | 160,000 | ||
Proceeds Net of Issuance Costs | $ 480 | ||
Series S Preferred Stock | |||
Capital Stock and Warrants | |||
Preferred stock, aggregate liquidation preference | $ 21,412 | ||
Shares issued and outstanding | 2,676,565 | ||
Proceeds Net of Issuance Costs | $ 21,668 |
Capital Stock and Warrants - Ou
Capital Stock and Warrants - Outstanding warrants (Details) | Jun. 30, 2023 $ / shares shares |
Capital Stock and Warrants | |
Number of warrants | 5,513,046 |
Class A Common Stock | Warrants expiration date, October 13, 2027 | |
Capital Stock and Warrants | |
Number of warrants | 1,138,446 |
Exercise price | $ / shares | $ 3.2500 |
Series m-3 Preferred Stock | Warrants expiration date, December 31, 2027 | |
Capital Stock and Warrants | |
Number of warrants | 1,432,786 |
Exercise price | $ / shares | $ 4 |
Series S Preferred Stock | Warrants expiration date, December 31, 2027 | |
Capital Stock and Warrants | |
Number of warrants | 2,941,814 |
Exercise price | $ / shares | $ 4.5000 |
Capital Stock and Warrants - Co
Capital Stock and Warrants - Common stock reserved for future issuance (Details) - shares | Jun. 30, 2023 | Dec. 31, 2022 |
Capital Stock and Warrants | ||
Stock options to purchase common stock | 9,405,655 | 10,081,915 |
Warrants outstanding for future issuance of convertible preferred stock and common stock | 5,513,046 | |
Stock options available for future issuance | 5,680,964 | 3,538,268 |
Total shares of common stock reserved | 30,154,429 | |
Series A Preferred Stock (convertible to Class B Common Stock) | ||
Capital Stock and Warrants | ||
Preferred stock reserved for future issuance | 1,418,381 | |
Series B Preferred Stock (convertible to Class B Common Stock) | ||
Capital Stock and Warrants | ||
Preferred stock reserved for future issuance | 3,498,859 | |
Series m Preferred Stock (convertible to Class A Common Stock) | ||
Capital Stock and Warrants | ||
Preferred stock reserved for future issuance | 1,800,959 | |
Series m-2 Preferred Stock (convertible to Class B Common Stock) | ||
Capital Stock and Warrants | ||
Preferred stock reserved for future issuance | 160,000 | |
Series S Preferred Stock (convertible to Class A Common Stock) | ||
Capital Stock and Warrants | ||
Preferred stock reserved for future issuance | 2,676,565 |
Capital Stock and Warrants - At
Capital Stock and Warrants - At-the-Market Offering Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Feb. 28, 2023 | |
Capital Stock and Warrants | ||||
Net proceeds | $ 378 | $ 14,236 | $ 378 | |
Class A Common Stock | At-the-Market Offering Program | ||||
Capital Stock and Warrants | ||||
Shares issued | 21,970,117 | |||
Net proceeds | $ 12,900 | |||
Brokerage and placement fees | $ 500 | |||
Class A Common Stock | At-the-Market Offering Program | H.C. Wainwright & Co., LLC | ||||
Capital Stock and Warrants | ||||
Maximum authorized amount | $ 20,000 |
Capital Stock and Warrants - Ad
Capital Stock and Warrants - Additional information (Details) | Apr. 07, 2023 shares |
Series M-3 Preferred Stock [Member] | |
Capital Stock and Warrants | |
Purchase of warrants | 1,432,786 |
Series S Preferred Stock [Member] | |
Capital Stock and Warrants | |
Purchase of warrants | 2,941,814 |
Period of extension | 18 months |
Cancellation of warrants to purchase common stock | 1,500,000 |
Related parties and related-p_2
Related parties and related-party transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party | Konica Minolta, Inc | |||||
Related parties and related-party transactions | |||||
Service fees | $ 145 | $ 101 | $ 244 | $ 192 | |
Payables | 52 | 52 | $ 117 | ||
Employee | |||||
Related parties and related-party transactions | |||||
Rent paid | $ 45 | $ 0 | $ 105 | $ 0 |
Commitments and contingencies -
Commitments and contingencies - Components of leases and lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | ||
Operating leases | ||||
Operating lease right-of-use assets | $ 1,680 | $ 1,680 | $ 2,012 | [1] |
Operating lease liabilities, current portion | 748 | 748 | 731 | [1] |
Operating lease liabilities, non-current portion | 953 | 953 | 1,309 | [1] |
Total operating lease liabilities | 1,701 | 1,701 | $ 2,040 | |
Operating lease costs | ||||
Operating lease right-of-use assets | $ 240 | $ 486 | ||
[1]The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet as of that date. |
Commitments and contingencies_2
Commitments and contingencies - Future minimum operating lease payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and contingencies | ||
2023 (remaining) | $ 470 | |
2024 | 806 | |
2025 | 608 | |
2026 | 15 | |
Total future minimum lease payments | 1,899 | |
Less - Interest | (198) | |
Present value of lease liabilities | $ 1,701 | $ 2,040 |
Weighted average remaining lease term | 2 years 2 months 12 days | |
Weighted average discount rate | 11% |
Commitments and contingencies_3
Commitments and contingencies - Sales Tax Contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and contingencies | ||
Sales tax liability | $ 563 | $ 419 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events - At The Market Offering [Member] $ in Millions | 2 Months Ended |
Aug. 31, 2023 USD ($) shares | |
Subsequent Events | |
Number of shares sold | shares | 3,764,215 |
Proceeds, net of commissions and other issuance costs | $ | $ 3.5 |