Knightscope (KSCP) risk factors, FY2024 10-K

Risks Related to the Business and the Global Economy

1. 01We have not yet generated any profits or significant revenues, anticipate that we will incur continued losses for the foreseeable future, and may never achieve profitability
2. 02The report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going concern, and we may not be able to continue to operate the business if we are not successful in securing additional funding
3. 03The Company expects to experience future losses as it implements its business strategy and will need to generate significant revenues to achieve profitability, which may not occur
4. 04Investment in new business strategies could disrupt our ongoing business, present risks not originally contemplated and materially adversely affect our business, reputation, results of operations and financial condition
5. 05The Company is subject to potential fluctuations in operating results due to its sales cycle
6. 06If we are unable to acquire new customers, our future revenues and operating results will be harmed. Likewise, potential customer turnover in the future, or costs we incur to retain our existing customers, could materially and adversely affect our financial performance
7. 07We are subject to the loss of contracts, due to terminations, non-renewals or competitive re-bids, which could adversely affect our results of operations and liquidity, including our ability to secure new contracts from other customers
8. 08The Company’s future operating results are difficult to predict and may be affected by a number of factors, many of which are outside of the Company’s control
9. 09Our financial results will fluctuate in the future, which makes them difficult to predict
10. 10The occurrence of any of the above and any unanticipated obstacles may hinder the execution of our business plan and adversely affect or materially adversely affect our operating results
11. 11Our business could be adversely affected by trade tariffs or other trade barriers
12. 12Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations
13. 13We have a limited number of deployments, and limited market acceptance of our products could harm our business
14. 14We cannot assure you that we will effectively manage our growth
15. 15Our costs may grow more quickly than our revenues, harming our business and profitability
16. 16The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business
17. 17If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished and our business may be adversely affected
18. 18We may be subject to claims, disputes or legal proceedings in the ordinary course of our business. If the outcome of these proceedings is unfavorable to us, then our business, results of operations and financial condition could be adversely affected
19. 19We may face additional competition
20. 20Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity
21. 21We have limited experience in operating our ASRs in a variety of environments and increased interactions may lead to collisions, possible liability and negative publicity
22. 22Our brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of our products, infrastructure, and employees
23. 23The private security industry is undergoing structural changes in technology and services
24. 24We have a government customer and are seeking additional government customers, which would subject us to risks including early termination, audits, investigations, sanctions, or penalties
25. 25We are dependent on the global supply chain and have experienced supply chain constraints, as well as increased costs on components and shipping

Risks Related to Ownership of our Class A Common Stock

1. 26We may not be able to comply with all applicable listing requirements or standards of The Nasdaq Capital Market, and Nasdaq could delist our Class A Common Stock
2. 27The Company will need to seek additional funds in the future
3. 28Our stock price may be volatile
4. 29We have not paid cash dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our Class A Common Stock
5. 30If financial securities industry analysts cease to publish reports on us or publish unfavorable reports on us, then the market price and market trading volume of our Class A Common Stock could be negatively affected
6. 31We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A Common Stock less attractive to investors
7. 32We will continue to incur significant costs as a result of operating as a listed public company and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices
8. 33We are subject to complex and changing laws and regulations, which exposes us to potential liabilities, increased costs and other adverse effects on our business
9. 34Substantial future sales or issuances of our securities, or the perception in the public markets that these sales may occur, may depress our stock price
10. 35From time to time, we may complete acquisitions of companies and certain businesses of companies, and we may not realize the expected benefits from such acquisitions because of integration difficulties or other challenges
11. 36Increasing attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business
12. 37Short sellers of our stock may be manipulative and may drive down the market price of our Class A Common Stock