Knightscope plans public stock offering

MOUNTAIN VIEW, Calif. - Knightscope, Inc. (NASDAQ:KSCP), a company specializing in robotics and artificial intelligence (AI) for public safety, announced today its intention to conduct an underwritten public offering of its Class A common stock and potentially pre-funded warrants, depending on market conditions. The firm also plans to give the underwriter a 30-day option to buy up to an additional 15% of the shares and warrants issued in the offering under the same terms.

The company has stated that the proceeds from this offering will be directed toward general corporate purposes, which include working capital. Titan Partners Group, operating under American Capital Partners (WA:CPAP), will serve as the sole bookrunner for the offering.

This offering will be made in accordance with a shelf registration statement on Form S-3 (File No. 333-269493), effective since February 8, 2023. Detailed information about the offering will be available in a preliminary prospectus supplement and accompanying base prospectus to be filed with the SEC.

Knightscope's announcement comes with the disclaimer that the offering is subject to market conditions, and there is no guarantee of the offering's completion or the specifics of its size and terms.

The company's broader vision is to enhance public safety in the United States with its technology, aiming to make the country the safest in the world.

This press release includes forward-looking statements that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. Knightscope has directed interested parties to its SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2023, for a detailed discussion of risk factors.

The information for this article is based on a press release statement.

In other recent news, Knightscope, a developer of advanced security technologies, has reported a series of significant developments. The company has regained compliance with Nasdaq's minimum bid price requirement, a critical milestone following a period of uncertainty. Knightscope also reported a Q2 gross loss but confirmed an increase in the CASE business and expressed optimism about future opportunities with federal agencies and law enforcement.

Knightscope has implemented a 1-for-50 reverse stock split for both its Class A and Class B Common Stock, following stockholder approval at the Annual Meeting. Furthermore, the company has expanded the deployment of its K5 Autonomous Security Robots at various locations, including a hotel in Louisville, a casino in Kansas City, and a storage facility in Richmond.

An upgraded K5 robot has been deployed at a California hospital, and another K5 robot has been added to the fleet under a contract with the same healthcare provider. Knightscope has also renewed its contract with a top commercial real estate brokerage and property management firm in Texas. During the company's annual stockholders meeting, board members William Santana Li, William G. Billings, Robert A. Mocny, and Melvin W. Torrie were re-elected, and BPM LLP was ratified as Knightscope's independent registered public accounting firm for the fiscal year ending December 31, 2024.

InvestingPro Insights

Knightscope's decision to conduct a public offering comes at a time when the company faces significant financial challenges, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $49.48 million, reflecting investor caution about its prospects.

InvestingPro Tips highlight that Knightscope is "quickly burning through cash" and "not profitable over the last twelve months." These insights align with the company's need for additional capital through the announced public offering. The negative gross profit margin of -41.55% for the last twelve months ending Q3 2024 underscores the company's struggle to achieve profitability in its core operations.

Despite these challenges, Knightscope has shown some positive momentum in its stock performance. InvestingPro data indicates a strong return of 22.19% over the last month and 19.93% over the last three months. However, this recent uptick should be viewed in the context of the stock's longer-term performance, with a -44.75% return over the past year.

The company's focus on AI and robotics for public safety positions it in an innovative but capital-intensive sector. This is reflected in its high Price / Book multiple of 5.35, suggesting investors are pricing in future growth potential despite current financial difficulties.

Investors considering Knightscope should note that InvestingPro offers 14 additional tips for KSCP, providing a more comprehensive analysis of the company's financial health and market position. These insights can be valuable for understanding the full picture behind Knightscope's current offering and future prospects.

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