• Revenue: $0.4 million for Q3 2024, down $0.1 million from Q2 2024 and down $1.2 million from Q3 2023.
• Operating Expenses: $5.9 million for Q3 2024, a $3.9 million improvement from Q3 2023 and a $0.6 million sequential improvement.
• Net Loss: $11.4 million for Q3 2024, a $6.3 million reduction from Q3 2023 but a $6 million increase sequentially.
• Cash Position: $2.9 million at the end of Q3 2024, compared to $0.7 million at the end of 2023.
• Funding: Closed $1.1 million of funding as the first tranche of up to $21.1 million available through a new convertible debenture.
• Debt Conversion: Agreement to convert approximately $27 million of principal and $3 million of interest into preferred convertible stock.

• Warning! GuruFocus has detected 6 Warning Signs with KITT.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nauticus Robotics Inc (NASDAQ:KITT) achieved an industry first by successfully conducting Aquanaut's first commercial projects, marking a significant milestone for the company and the industry.
• The company is focused on creating its first business backlog for 2025, consisting of both commercial and defense work, indicating strong future growth potential.
• Nauticus Robotics Inc (NASDAQ:KITT) received strong support from existing lenders, converting debentures to increase shareholder equity, which should help maintain its NASDAQ listing.
• The Aquanaut vehicle exceeded customer expectations by providing high-quality data and identifying anomalies, leading to additional commercial discussions for the 2025 season.
• The company is working on extending its operating season and expanding into new geographies, aiming for year-round operations and reducing seasonality impacts.

Negative Points

• Revenue for the third quarter was only $0.4 million, down from both the previous quarter and the same period last year, largely due to a late start caused by bad weather.
• Operating expenses for the third quarter were $5.9 million, indicating a high cost structure relative to the revenue generated.
• The company reported a net loss of $11.4 million for the quarter, highlighting ongoing financial challenges.
• The third quarter was adversely impacted by a $2.1 million charge related to debt conversion liabilities, affecting the financial results.
• Nauticus Robotics Inc (NASDAQ:KITT) is still working on securing the necessary cash to support operations through the end of 2025, indicating potential liquidity concerns.

Q & A Highlights

Q: Can you provide an update on the Aquanaut vehicle's commercial projects and its impact on future operations? A: John Gibson, CEO, highlighted that Nauticus Robotics achieved a significant milestone by conducting the first commercial projects with the Aquanaut vehicle in the Gulf of Mexico. This success is expected to create a business backlog for 2025, with customers expanding their scope of work to include Aquanaut's unique capabilities. The company is working on technical modifications to allow year-round operations and is also engaging with South American customers to mitigate seasonality.

Q: What are the financial strategies in place to address NASDAQ compliance and future funding needs? A: Victoria Hay, Interim CFO, explained that Nauticus Robotics has entered into an agreement to convert debt into preferred stock to meet NASDAQ's listing requirements. The company is also focused on securing cash through the end of 2025, having closed $1.1 million of funding recently, with up to $21.1 million available through a new convertible debenture.

Q: How did the Aquanaut vehicle perform in its first commercial project, and what are the future expectations? A: Daniel Dehart, Field Operations Leader, reported that the Aquanaut vehicle exceeded expectations by providing high-quality data and identifying anomalies during its surveys in the Gulf of Mexico. The project has led to additional work and ongoing contract negotiations, with the second Aquanaut vehicle expected to be ready for commercial service in early 2025.

Q: What advancements have been made with the Toolkit software platform, and what are the goals for 2025? A: Jason Close, Autonomous Software Solutions Leader, stated that the Toolkit software performed reliably and is being advanced towards higher autonomy levels. The goal for 2025 is to sell the first commercial license of Toolkit, with ongoing discussions with third-party ROV manufacturers and service providers.

Q: How is Nauticus Robotics planning to leverage its government business unit for future growth? A: JD Yamokoski, CTO, mentioned that Nauticus is in productive conversations with defense partners for future work and is exploring opportunities in environmental monitoring. The company aims to leverage its vehicle's payload capacity for sample collection, enhancing its government business prospects.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.