Knightscope, Inc.

Previous wording

Knightscope operates in a dynamic and evolving trade environment that can impact both material sourcing and manufacturing costs. Knightscope strongly supports efforts to revitalize domestic manufacturing and is committed to scaling U.S.-based engineering and production operations. While we strive to manufacture our ASRs and ECDs domestically, global material availability and supplier delivery performance continue to present challenges. These supply chain constraints have, at times, impacted the timing of equipment production and delivery to our clients.

Current wording

Knightscope operates in a dynamic and evolving trade environment that can impact both material sourcing and manufacturing costs. Knightscope strongly supports efforts to revitalize domestic manufacturing and is committed to scaling U.S.-based engineering and production operations. While we strive to manufacture our ASRs and ECDs domestically, global material availability and supplier delivery performance may present challenges. These supply chain constraints have, at times, impacted the timing of equipment production and delivery to our clients.

Previous wording

In addition, the evolving global tariff environment continues to influence input costs for certain components and materials. While the overall financial impact to date has been immaterial, we remain vigilant and proactive in mitigating future cost pressures.

Current wording

In addition, the evolving global tariff environment continues to influence input costs for certain components and materials. While the overall financial impact to date has been deemed immaterial, we remain vigilant and proactive in mitigating future cost pressures.

Previous wording

As of June 30, 2025, the senior secured promissory note was paid in full.

Current wording

On June 30, 2025, the senior secured promissory note was paid in full.

Previous wording

As of June 30, 2025, cash and cash equivalents of approximately $8.2 million, represent a $5.6 million year-over-year increase. This improvement is largely attributable to disciplined expense management and strategically executed financing.

Current wording

Strengthened Liquidity– As of September 30, 2025, cash and cash equivalents of approximately $20.4 million, represent a $15.2 million year-over-year increase. This improvement is largely attributable to disciplined expense management and strategically executed financing.

Previous wording

Production Scheduling** **- We have staffed a second production shift—resulting in overtime labor cost reduction, improved capacity utilization, and shorter delivery timelines. Our attention remains focused on converting backlog into billings and cash receipts in the coming periods.

Current wording

Production Improvements** **– The Company’s continued investment in continuous improvements of our production processes have yielded overtime labor cost reduction, improved capacity utilization, and shorter delivery timelines. Our attention remains focused on converting backlog into billings and cash receipts in the coming periods.

Previous wording

Facility Consolidation and Inventory Assessment – As part of our transition to the new, larger Sunnyvale facility, we are undertaking a comprehensive review and clean-up of our inventory, manufacturing processes, and legacy systems. This effort is expected to enhance operational efficiency and support long-term scalability. However, during this transition, we anticipate identifying a meaningful amount of obsolete, slow-moving, or excess inventory. As a result, the Company expects to incur non-cash inventory write-offs in future periods, which may adversely impact gross margin and operating results in the near term. These actions are part of a broader initiative to streamline operations and align inventory with current and future product roadmaps.

Current wording

Facility Consolidation and Inventory Assessment – As part of our transition to the new, larger Sunnyvale facility, we completed a comprehensive review of our inventory, manufacturing processes, and legacy systems. This effort is expected to enhance operational efficiency and support long-term scalability; in connection with these efforts, we identified obsolete, slow-moving, or excess inventory and recorded a non-cash inventory write-off of approximately $0.6 million during the three months ended September 30, 2025. This cost is recognized in the Company’s Statements of Operations in Cost of revenue, net - service. These actions are part of a broader initiative to streamline operations and align inventory with current and future product roadmaps.

Previous wording

As of August 8, 2025, the Company had a total backlog of approximately $2.9 million, comprised of $2.2 million related to orders for ECDs and $0.7 million related to ASR orders.

Current wording

As of November 10, 2025, the Company had a total backlog of approximately $2.8 million, comprised of $2.3 million related to orders for ECDs and $0.5 million related to ASR orders.

Previous wording

On July 4, 2025, President Trump signed the tax law referred to as One-Big-Beautiful-Bill-Act (“OBBBA”), which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and extension of prior tax law under the Tax Cuts and Jobs Act (“TCJA”) and the introduction of new provisions. Examples include the extension of so-called permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent expensing of domestic research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. The Company has done a preliminary analysis of the changes impacting its business and has determined that the aggregate impact, assuming various state tax legislation conforms to the OBBBA, would not have a material impact to the Company. The Company will continue to assess the tax accounting impacts as more information is made available and will record the tax impact, if any, in the third quarter of 2025.

Current wording

On July 4, 2025, President Trump signed the tax law referred to as One-Big-Beautiful-Bill-Act (“OBBBA”), which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and extension of prior tax law under the Tax Cuts and Jobs Act and the introduction of new provisions. Examples include the extension of so-called permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent expensing of domestic research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. The Company has done a preliminary analysis of the changes impacting its business and has determined that the aggregate impact, assuming various state tax legislation conforms to the OBBBA, would not have a material impact to the Company.

Previous wording

The revenue and cost of revenue described above resulted in a gross loss for the three months ended June 30, 2025 of approximately $0.9 million net, compared to $0.6 million or for the three months ended June 30, 2024.

Current wording

The revenue and cost of revenue described above resulted in a gross loss for the three months ended September 30, 2025 of approximately $1.6 million, compared to $0.5 million for the three months ended September 30, 2024.

Previous wording

As a percentage of net revenue, gross loss increased to approximately 33% from 17% for the three months ended June 30, 2025 and 2024 respectively. The increase in loss was primarily due to lower ECD revenue.

Current wording

As a percentage of net revenue, gross loss increased to approximately 50% from 20% for the three months ended September 30, 2025 and 2024 respectively. The increase in loss was primarily due to the previously mentioned write-off of ASR raw materials and lower ASR revenue.

Previous wording

General and administrative expenses decreased by approximately $0.6 million or approximately 21% for the three months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $0.3 million lower investor relations fees and $0.7 million lower third-party professional fees, primarily legal and finance services. These decreases were partially offset by $0.3 million higher costs in rent expense.

Current wording

General and administrative expenses decreased by approximately $1.4 million, or approximately 31%, for the three months ended September 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $0.2 million lower investor relations fees, $0.3 million lower stock-based compensation expenses, $0.3 million lower consumable supplies costs, $0.2 million lower credit loss expense and $0.5 million lower third-party professional fees, primarily legal and finance services. These decreases were partially offset by $0.2 million higher rent expense.

Previous wording

Restructuring charges were immaterial for the three-month period ended June 30, 2025 compared to $0.3 million for the same period in the prior year.

Current wording

Restructuring charges were immaterial for both the three-month periods ended September 30, 2025 and 2024.

Previous wording

Total other income (expense) decreased by approximately $0.6 million, or 112% for the three months ended June 30, 2025 as compared to the same period in the prior year as non-cash income from change in the fair value of warrant and derivative liabilities in 2024 was not repeated in 2025. The Company extinguished its outstanding warrant liability in 2024.

Current wording

Total other income (expense) decreased by approximately $3.1 million, or 99%, for the three months ended September 30, 2025 as compared to the same period in the prior year as non-cash expense from change in the fair value of warrant and derivative liabilities in 2024 was not repeated in 2025. The Company extinguished its outstanding warrant liability in 2024.

Previous wording

Total revenue, net for the six months ended June 30, 2025 increased by approximately $0.2 million compared to the same period in the prior year due to a $0.5 million increase in service revenue partially offset by $0.3 million decrease in product revenue, primarily driven by supply chain issues related to availability of ECD components in the second quarter. Service revenue increased across both product lines as ASR deployments increased year-over-year and ECD services revenue grew due to pricing changes and the increased use of full service maintenance plans by our clients.

Current wording

Total revenue, net for the nine months ended September 30, 2025 increased by approximately $0.8 million compared to the same period in the prior year due to a $0.6 million increase in service revenue and a $0.2 million increase in product revenue. Service revenue increased across both product lines as ASR deployments increased $0.2 million year-over-year and ECD services revenue grew $0.4 million over the same period due to pricing changes and the increased adoption of full-service maintenance plans by our clients.

Previous wording

Total cost of revenue, net of $7.3 million for the six months ended June 30, 2025 decreased approximately $0.2 million compared to the same period in the prior year. This decrease was primarily due to lower cost of revenue in services of $0.3 million, partially offset by higher costs of revenues in product of $0.1 million.

Current wording

Total cost of revenue, net of $12.0 million for the nine months ended September 30, 2025 increased by approximately $1.5 million compared to the same period in the prior year. This increase was due to higher cost of revenue in services of $0.8 million, and higher costs of revenues in product of $0.7 million.

Previous wording

Service cost of revenue, net came in $0.3 million lower as compared to the same period in 2024 due to $1.1 million in savings from one-time scrap fees in 2024 and $0.1 million in savings from cellular fees, partially offset by $0.6 million in higher third-party expenses. Third party expenses are related to the strategic decision we made in March 2024 to outsource field services to third party partners. The higher expense in 2025 reflects two full quarters of expenses compared to only one quarter of expenses in 2024.

Current wording

Service cost of revenue, net for the nine months ended September 30, 2025 increased by approximately $0.8 million as compared to the same period in 2024 primarily due to $0.5 million in higher third-party expenses and approximately $0.3 million in higher materials costs. Third party expenses are related to the strategic decision we made in March 2024 to outsource field services to third party partners. The higher expense in 2025 reflects three full quarters of expenses compared to only two quarters of expenses in 2024.

Previous wording

Product cost of revenue, net for the six months ended June 30, 2025 of $1.7 million was $0.1 million higher than the prior year.

Current wording

Product cost of revenue, net for the nine months ended September 30, 2025 of $2.8 million was $0.7 million higher than the prior year due to higher material costs.

Previous wording

The revenue and cost of revenue described above resulted in a gross loss for the six months ended June 30, 2025 of approximately $1.6 million, net, compared to $2.0 million for the six months ended June 30, 2024.

Current wording

The revenue and cost of revenue described above resulted in a gross loss for the nine months ended September 30, 2025 of approximately $3.2 million, compared to $2.4 million for the nine months ended September 30, 2024.

Previous wording

Sales and marketing expenses decreased by approximately $0.5 million, or approximately 31%, for the three months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to a decline in advertising and promotional costs compared to the same period in the prior year.

Current wording

Sales and marketing expenses decreased by approximately $0.6 million, or approximately 15%, for the nine months ended September 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to a decline in advertising and promotional costs compared to the same period in the prior year.

Previous wording

General and administrative expenses decreased by approximately $1.4 million or approximately 23% for the six months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $1.4 million lower investor relations fees that the Company spent in the prior year to support its funding efforts, including the Public Safety Infrastructure Bonds and $0.9 million lower third-party professional fees, primarily legal and finance services. These decreases were partially offset by $0.2 million higher consulting costs and $0.3 million higher rent expense related to our new, larger facility in Sunnyvale, CA.

Current wording

General and administrative expenses decreased by approximately $2.9 million, or approximately 26%, for the nine months ended September 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to $1.6 million lower investor relations fees that the Company spent in the prior year to support its funding efforts, including the Public Safety Infrastructure Bonds, $1.5 million lower third-party professional fees, primarily legal and finance services, and $0.2 million in lower credit loss expense. These decreases were partially offset by $0.2 million higher consulting costs and $0.5 million higher rent expense related to our new, larger facility in Sunnyvale, CA.

Previous wording

Restructuring charges were immaterial for the six months ended June 30, 2025 compared to $0.4 million for the same period in the prior year.

Current wording

Restructuring charges were immaterial for the nine months ended September 30, 2025 compared to $0.4 million for the same period in the prior year.

Previous wording

Total other income (expense) decreased by approximately $1.3 million, or 111% for the six months ended June 30, 2025 as compared to the same period in the prior year as non-cash income from change in the fair value of warrant and derivative liabilities in 2024 was not repeated in 2025. The Company extinguished its outstanding warrant liability in 2024.

Current wording

Total other income (expense) decreased by approximately $1.8 million, or 92%, for the nine months ended September 30, 2025 as compared to the same period in the prior year as non-cash expense from change in the fair value of warrant and derivative liabilities in 2024 was not repeated in 2025. The Company extinguished its outstanding warrant liability in 2024.

Previous wording

As of June 30, 2025 and December 31, 2024, we had $8.2 million and $11.1 million, respectively, of cash and cash equivalents. As of June 30, 2025, the Company had additional paid-in capital of $221.5 million, partially offset by an accumulated deficit of approximately $206.4 million, working capital of approximately $6.3 million and total stockholders’ equity of approximately $15.1 million.

Current wording

As of September 30, 2025 and December 31, 2024, we had $20.4 million and $11.1 million, respectively, of cash and cash equivalents. As of September 30, 2025, the Company had additional paid-in capital of $242.8 million, partially offset by an accumulated deficit of approximately $216.0 million, working capital of approximately $18.7 million and total stockholders’ equity of approximately $26.9 million.

Previous wording

On April 4, 2025, we filed a new shelf registration statement on Form S-3, pursuant to which we may, from time to time in one or more offerings, offer and sell up to $100.0 million in the aggregate of Class A common stock, preferred stock, debt securities, warrants and/or units, in any combination. The new shelf registration statement was declared effective on April 11, 2025. On July 18, 2025, we filed a new prospectus supplement for additional sales under the ATM Facility up to $50.0 million of shares of Class A Common Stock. As of August 8, 2025, we have approximately $44.2 million remaining to be sold pursuant to the new prospectus supplement and the accompanying prospectus related to the ATM Facility.

Current wording

On April 4, 2025, we filed a new shelf registration statement on Form S-3, pursuant to which we may, from time to time in one or more offerings, offer and sell up to $100.0 million in the aggregate of Class A common stock, preferred stock, debt securities, warrants and/or units, in any combination. The new shelf registration statement was declared effective on April 11, 2025. On July 18, 2025, we filed a new prospectus supplement for additional sales under the ATM Facility up to $50.0 million of shares of Class A Common Stock. As of November 7, 2025, we have approximately $35.6 million remaining to be sold pursuant to the new prospectus supplement and the accompanying prospectus related to the ATM Facility.

Previous wording

For the three months ended June 30, 2025, we have sold an aggregate of 531,884 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $2.9 million, after deducting sales agent fees and expenses of approximately $0.1 million.

Current wording

For the three months ended September 30, 2025, we have sold an aggregate of 2,967,130 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $20.9 million, after deducting sales agent fees and expenses of approximately $0.5 million.

Previous wording

For the six months ended June 30, 2025, we have sold an aggregate of 1,779,720 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $10.3 million, after deducting sales agent fees and expenses of approximately $0.3 million.

Current wording

For the nine months ended September 30, 2025, we have sold an aggregate of 4,746,850 shares of Class A Common Stock under the ATM Facility for net proceeds of approximately $31.2 million, after deducting sales agent fees and expenses of approximately $0.9 million.

Previous wording

Net cash used in operating activities represents use of cash to pay our suppliers, employees and local, state and federal government organizations. This is partially offset by customer-related activities, the largest of which is collecting cash resulting from product or services sales.

Current wording

Net cash used in operating activities represents use of cash to pay our suppliers, employees and local, state and federal government organizations. This is partially offset by customer-related activities, primarily cash collections from product or service sales.

Previous wording

Net cash used in operating activities was approximately $11.9 million for the six months ended June 30, 2025. Net cash used in operating activities resulted from a net loss of approximately $13.2 million and changes in working capital and non-cash charges.

Current wording

Net cash used in operating activities was approximately $19.7 million for the nine months ended September 30, 2025. Net cash used in operating activities resulted from a net loss of approximately $22.8 million and changes in assets and liabilities and non-cash charges.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 decreased by approximately $0.8 million as compared to the same period of the prior year. This was primarily a result of a decrease in the net loss of approximately $0.6 million, an increase in stock-based compensation of approximately $0.2 million, and a decrease in the change in fair

Current wording

Net cash used in operating activities for the nine months ended September 30, 2025 increased by approximately $2.4 million as compared to the same period of the prior year. This was primarily a result of a change in assets and liabilities of approximately $2.5 million, a decrease in the change in fair value of warrant and derivative liabilities of approximately $1.5

Previous wording

Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was approximately $1.2 million and $1.8 million, respectively.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was approximately $1.9 million and $2.5 million, respectively.

Previous wording

Net cash provided by financing activities was approximately $10.0 million for the six months ended June 30, 2025, a decrease of approximately $4.7 million as compared to the same period of the prior year. Our financing activities for the six months ended June 30, 2025, consisted primarily of net proceeds from the issuance of Class A Common Stock under our at-the-market offering program with Wainwright of approximately $10.3 million, net proceeds from the issuance of common stock under a direct registration offering of approximately $1.4 million, partially offset by repayments of debt obligations of $1.7 million. In the prior year period, our financing activities consisted primarily of net proceeds resulting from our at-the-market agreement with Wainwright of approximately $12.1 million and the issuance of our Public Safety Infrastructure Bonds of approximately $2.6 million.

Current wording

Net cash provided by financing activities was approximately $30.8 million for the nine months ended September 30, 2025, an increase of approximately $8.0 million as compared to the same period of the prior year. Our financing activities for the nine months ended September 30, 2025 consisted primarily of net proceeds from the issuance of Class A Common Stock under our at-the-market offering program with Wainwright of approximately $31.2 million, net proceeds from the issuance of common stock under a direct registration offering of approximately $1.4 million, partially offset by repayments of debt obligations of $1.9 million. In the prior year period, our financing activities consisted primarily of net proceeds resulting from our at-the-market agreement with Wainwright of approximately $20.4 million and the issuance of our Public Safety Infrastructure Bonds of approximately $2.6 million.