Knightscope K7 Alpha Testing Underway and 2024 Recap

Rhea-AI Summary

Knightscope (NASDAQ: KSCP) announces the completion of its K7 Autonomous Security Robot alpha prototype, marking a significant milestone in its 2024 transformation. The K7, a four-wheeled autonomous vehicle larger than the K5, features enhanced patrol speeds and capabilities for larger environments, with beta prototype and pre-orders planned for 2025.

The company underwent major changes in 2024, including board restructuring, management changes, and financial improvements. Notable achievements include eliminating toxic warrants, converting preferred stock to common stock, completing a reverse stock split to maintain Nasdaq compliance, and securing capital through various offerings. Operationally, Knightscope upgraded its K5 fleet, deployed K5 GOV with the U.S. Federal Government, initiated development of the Intelligence Control Module, hired a new sales team, and established a Risk & Threat Exposure department.

Positive

• Successful development of K7 Alpha Prototype, targeting larger market opportunities
• Secured second-highest cash balance since 2013 through multiple funding initiatives
• Successfully deployed K5 GOV with U.S. Federal Government
• Completed fleet upgrade to higher-quality, less costly K5v5 model
• Cleared multi-million-dollar backlog of new orders
• Regained Nasdaq compliance through reverse stock split

Negative

• Management expects continued financial choppiness in coming quarters
• Eliminated over 1/3 of management team
• Short-term benefits sacrificed for long-term value growth

Insights

Financial Analyst

The 2024 operational review reveals critical restructuring efforts at Knightscope, with mixed implications for investors. The company's successful capital raising through multiple channels, including a Reg A+ Bond Offering and CMPO, has resulted in the second-highest cash position since 2013. However, the extensive restructuring - including board changes, management reduction and facility consolidation - signals previous operational inefficiencies.

The retirement of K5v3 and deployment of K5v5 should improve margins through lower costs, while the federal government contract for K5 GOV opens significant revenue opportunities in the lucrative government sector. The K7 prototype development, while promising, represents significant R&D investment that may pressure near-term profitability. The CFO's warning about "choppiness in coming quarters" suggests continued volatility in financial performance.

Technology Analyst

The K7 prototype represents a significant technological leap with its enhanced patrol capabilities and new technical architecture. Key differentiators include higher operational speeds, extended range and versatility across various surfaces - features that could expand Knightscope's addressable market to larger facilities and campuses.

The development of a cross-platform Intelligence Control Module (ICM) is strategically important, as it creates a unified foundation for future products, potentially accelerating development cycles and reducing costs. The transition from K5v3 to K5v5 demonstrates commitment to product improvement, though rapid product iterations may create support challenges.

Market Research Analyst

The creation of the Risk & Threat Exposure (RTX) department represents a strategic pivot toward improved client retention and service differentiation. The Verizon Frontline partnership significantly enhances market credibility and distribution capabilities. The clearing of the multi-million-dollar order backlog indicates improved operational efficiency but may also suggest previous fulfillment challenges.

The outsourcing of routine maintenance services aligns with industry best practices for scaling operations. However, the extensive corporate restructuring and management changes (over 1/3 reduction) could temporarily impact organizational stability and growth execution.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Knightscope, Inc. [Nasdaq: KSCP] (“Knightscope” or the “Company”), an innovator in robotics and artificial intelligence (“AI”) technologies focused on public safety, today announces the successful completion of the all-new K7 Autonomous Security Robot (“ASR”) alpha prototype and is providing a recap of yesterday’s Town Hall highlighting a series of transformational achievements in 2024 aimed at positioning the Company for accelerated growth and innovation over the next 24 months.

K7 ALPHA PROTOTYPE

Knightscope proudly announces the successful build of the K7 Alpha Prototype, the testing of which comes ahead of the 2025 Beta prototype build and planned pre-orders (video clip here). The K7 is a four-wheeled autonomous vehicle targeting public safety in larger environments. Its physical presence is significantly larger than the K5, includes new features and is designed to autonomously operate at higher patrol speeds across various surface types. The K7’s extended range, speed and remote monitoring capabilities further advance Knightscope on its path to redefining the future of public safety.

“A key part of our path to long-term sustainable growth is technology innovation. I’m personally very excited about the future with our K7 ASR, which represents a significant top line revenue driver, a next generation technical architecture, and an all-new unique manufacturing process,” said William Santana Li, chairman and CEO, Knightscope. “We are leveraging over a decade of real-world autonomous experience to define an all-new category and market opportunity,” continued Li.

2024 YEAR END RECAP

Knightscope’s leadership emphasized 2024 as a turnaround year, highlighted by key changes across corporate structure, technology, and operations. These changes were designed to effectively re-establish the Company on a solid foundation for growth.

On the corporate front, a new Board of Directors was recruited, the CFO was replaced, a new accounting team was established and over 1/3 of the management team was eliminated. Toxic warrants were eradicated; preferred stock was converted to common stock; a successful reverse stock split was completed to regain compliance with Nasdaq; and a Reg A+ Public Infrastructure Bond Offering, At-the-Market facility and Confidentially Marketed Public Offering (CMPO) all enabled additional capital to be secured affording Knightscope to end the year with the second highest cash balance since its inception in 2013.

From a technology standpoint, the Company improved quality and implemented enhancements to deliver better robots to clients. The K5v3 was retired and nearly every machine in the field was replaced with the all-new, higher-quality and less costly K5v5. The K5 GOV was successfully deployed with the U.S. Federal Government, which is believed to be a significant differentiator and revenue driver in the future. Development of the cross-platform Intelligence Control Module (ICM) was kicked off to be the common platform for all future robots and devices. And testing of the K7 Alpha Prototype is well underway and is expected to have a meaningful impact on clients with large properties.

From an operations perspective, an all-new sales team was hired, routine field service and maintenance was outsourced, and the consolidation of facilities across the country commenced. Improved manufacturing and quality assurance processes were implemented, and an all-new Risk & Threat Exposure (RTX) department was created to improve client experience and retention. The RTX team will also be a competitive differentiator and force-multiplier for clients. And finally, the multi-million-dollar backlog of new orders was cleared and a partnership agreement with Verizon Frontline was announced.

“We have had a whirlwind of activity this year focused on improving the business. In many cases, we intentionally sacrificed short-term benefits for long-term value growth, which will believe to be prudent,” said Apoorv S Dwivedi, EVP and chief financial officer, Knightscope. “That said, the changes will continue to drive some choppiness in the coming quarters. In the long run we are planning to deliver a bright future for Knightscope clients, shareholders and team,” continued Dwivedi.

GET EXPERT HELP

To learn more about Knightscope’s portfolio of public safety technologies, including any of its Autonomous Security Robots, Blue Light Emergency Communication Systems or Automated Gunshot Detection Services, book a discovery call or demonstration today at www.knightscope.com/discover.

About Knightscope

Knightscope builds cutting-edge technologies to improve public safety, and our long-term ambition is to make the United States of America the safest country in the world. Learn more about us at www.knightscope.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by the use of words such as “should,” “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” “proposes” and similar expressions. Forward-looking statements contained in this press release and other communications include, but are not limited to, statements about the Company’s goals, profitability, growth, prospects, reduction of expenses, and outlook. Although Knightscope believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks, uncertainties and other important factors that could cause actual results to differ materially from such forward-looking statements, including the factors discussed under the heading “Risk Factors” in Knightscope’s Annual Report on Form 10-K for the year ended December 31, 2023, as updated by its other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of the document in which they are contained, and Knightscope does not undertake any duty to update any forward-looking statements, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241220860986/en/

Public Relations:

Stacy Stephens

Knightscope, Inc.

(650) 924-1025

Source: Knightscope, Inc.

FAQ

What are the key features of Knightscope's new K7 Autonomous Security Robot (KSCP)?

The K7 is a four-wheeled autonomous vehicle larger than the K5, designed for larger environments with extended range, higher patrol speeds across various surface types, and enhanced remote monitoring capabilities.

When will Knightscope (KSCP) begin taking pre-orders for the K7 robot?

Knightscope plans to begin taking pre-orders for the K7 robot in 2025, following the completion of the beta prototype build.

What major corporate changes did Knightscope (KSCP) implement in 2024?

In 2024, Knightscope recruited a new Board of Directors, replaced the CFO, established a new accounting team, eliminated toxic warrants, converted preferred stock to common stock, and completed a reverse stock split to maintain Nasdaq compliance.

How did Knightscope (KSCP) improve its K5 robot fleet in 2024?

Knightscope retired the K5v3 model and replaced nearly all field units with the new K5v5 version, which offers higher quality and lower costs. They also successfully deployed the K5 GOV version with the U.S. Federal Government.