Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-40611

NAUTICUS ROBOTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware						85-1699753
(State or other jurisdiction of incorporation)						(IRS Employer Identification No.)

17146 FEATHERCRAFT LANE, SUITE 450,

WEBSTER, TEXAS 77598

(Address of principal executive offices and zip code)

(281) 942-9069

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock

KITT

The Nasdaq Stock Market LLC

Redeemable Warrants

KITTW

The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x

As of November 11, 2024, the registrant had 6,407,475 shares of common stock outstanding.

TABLE OF CONTENTS


Cautionary Note Regarding Forward-Looking Statements		ii

Part I — Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

Part II — Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements appear in a number of places in this Form 10-Q including, without limitation, in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of our management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date such statements are made. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” and other sections in the Annual Report on Form 10-K filed by us on April 9, 2024, in our Quarterly Reports on Form 10-Q filed subsequent to the Annual Report on Form 10-K, and in our prospectus or any prospectus supplement which are on file with the Securities and Exchange Commission.

These and other factors could cause actual results to differ from those implied by the forward-looking statements. Forward-looking statements are not guarantees of performance and speak only as of the date hereof. There can be no assurance that future developments will be those that have been anticipated or that we will achieve or realize these plans, intentions, or expectations.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition, statements of belief and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date they are made, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30, 2024		December 31, 2023
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	2,915,757	$	753,398
Restricted certificate of deposit	51,763		201,822
Accounts receivable, net	397,726		212,428
Inventories	2,229,509		2,198,797

Prepaid expenses	1,105,645		1,889,218
Other current assets	338,542		1,025,214
Assets held for sale	277,180		2,940,254
Total Current Assets	7,316,122		9,221,131

Property and equipment, net	16,158,525		15,904,845
Operating lease right-of-use assets	1,283,982		834,972
Other assets	229,296		187,527
Total Assets	$	24,987,925	$	26,148,475

Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable	$	4,734,093	$	7,035,450
Accrued liabilities	7,269,833		7,339,099
Contract liability	697,818		2,767,913
Operating lease liabilities - current	433,820		244,774
Total Current Liabilities	13,135,564		17,387,236

Warrant liabilities	393,094		18,376,180
Operating lease liabilities - long-term	921,698		574,260
Notes payable - long-term, net of discount (related party)	46,148,307		31,597,649
Other liabilities	895,118		-
Total Liabilities	$	61,493,781	$	67,935,325

Stockholders’ Deficit:
Common stock, $0.0001 par value; 625,000,000 shares authorized, 5,634,942 and 1,389,884 shares issued, respectively, and 5,634,942 and 1,389,884 shares outstanding, respectively (As adjusted, see Note 11)	$	563	$	139
Additional paid-in capital (As adjusted, see Note 11)	98,628,931		77,004,714
Accumulated other comprehensive income	(26,983)		-
Accumulated deficit	(135,108,367)		(118,791,703)
Total Stockholders’ Deficit	(36,505,856)		(41,786,850)
Total Liabilities and Stockholders’ Deficit	$	24,987,925	$	26,148,475

The accompanying notes are an integral part of these condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Revenue:
Service	$	370,187	$	1,593,854	$	1,336,249	$	5,542,249
Service - related party	-		-		-		500
Total revenue	370,187		1,593,854		1,336,249		5,542,749

Costs and expenses:
Cost of revenue (exclusive of items shown separately below)	2,648,019		2,651,380		7,617,368		7,484,249
Depreciation	446,087		160,744		1,283,858		487,052
Research and development	-		275,154		64,103		984,882
General and administrative	2,845,956		6,704,890		9,502,685		17,478,099
Total costs and expenses	5,940,062		9,792,168		18,468,014		26,434,282

Operating loss	(5,569,875)		(8,198,314)		(17,131,765)		(20,891,533)

Other (income) expense:
Other (income) expense, net	2,278,909		(133,311)		2,300,710		1,015,908

Gain on lease termination	-		-		(23,897)		-
Foreign currency transaction loss	11,833		83,654		21,276		56,061
Loss on exchange of warrants	-		-		-		590,266
Change in fair value of warrant liabilities	(615,505)		8,656,392		(13,347,829)		(18,775,158)
Interest expense, net	4,111,844		873,738		10,234,639		7,365,402
Total other (income) expense, net	5,787,081		9,480,473		(815,101)		(9,747,521)

Net loss	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)

Basic loss per share (As adjusted, see Note 16)	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)
Diluted loss per share (As adjusted, see Note 16)	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)

Basic weighted average shares outstanding (As adjusted, see Note 16)	2,676,003		1,143,198		1,910,761		1,123,695
Diluted weighted average shares outstanding (As adjusted, see Note 16)	2,676,003		1,143,198		1,910,761		1,123,695

The accompanying notes are an integral part of these condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Net loss	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)
Other comprehensive loss:
Foreign currency translation adjustment	(26,983)		-		(26,983)		-
Comprehensive loss	$	(11,383,939)	$	(17,678,787)	$	(16,343,647)	$	(11,144,012)

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount
	(As adjusted, see Note 11)
Balance at June 30, 2024	4,131,426	$	413	$	94,390,920	$	-	$	(123,751,411)	$	(29,360,078)
Foreign currency translation adjustment	-	-		-		(26,983)		-		(26,983)
Stock-based compensation	-	-		532,539		-		-		532,539
Reverse stock split round up	133,975	13		(13)		-		-		-
Vesting of RSUs	8,707	1		(1)		-		-		-
Exercise of warrants	38,230	4		184,090		-		-		184,094
Conversion of convertible secured debentures	1,322,604	132		3,521,396		-		-		3,521,528

Net loss	-	-		-		-		(11,356,956)		(11,356,956)
Balance at September 30, 2024	5,634,942	$	563	$	98,628,931	$	(26,983)	$	(135,108,367)	$	(36,505,856)

Balance at June 30, 2023	1,330,396	$	133	$	71,890,449	$	-	$	(61,570,327)	$	10,320,255
Stock-based compensation	-	-		917,993		-		-		917,993
Settlement of liquidated damages	52,502	5		3,685,624		-		-		3,685,629
Exercise of stock options	1,351	-		78,596		-		-		78,596
Vesting of RSUs	703	-		-		-		-		-

Net loss	-	-		-		-		(17,678,787)		(17,678,787)
Balance at September 30, 2023	1,384,952	$	138	$	76,572,662	$	-	$	(79,249,114)	$	(2,676,314)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount
	(As adjusted, see Note 11)
Balance at December 31, 2023	1,389,884	$	139	$	77,004,714	$	-	$	(118,791,703)	$	(41,786,850)
Foreign currency translation adjustment	-	-		-		(26,983)		-		(26,983)
Stock-based compensation	-	-		1,872,504		-		-		1,872,504
Reverse stock split round up	133,975	13		(13)		-		-		-
Vesting of RSUs	99,294	10		(10)		-		-		-
Exercise of warrants	653,819	65		4,635,192		-		-		4,635,257
Conversion of convertible secured debentures	1,951,546	195		5,758,731		-		-		5,758,926
At the Market (ATM) share offering	1,406,424	141		9,357,813		-		-		9,357,954
Net loss	-	-		-		-		(16,316,664)		(16,316,664)
Balance at September 30, 2024	5,634,942	$	563	$	98,628,931	$	(26,983)	$	(135,108,367)	$	(36,505,856)

Balance at December 31, 2022	1,312,521	$	131	$	68,132,790	$	-	$	(68,105,102)	$	27,819
Stock-based compensation	-	-		3,995,020		-		-		3,995,020
Settlement of liquidated damages	52,502	5		3,685,624		-		-		3,685,629
Exercise of stock options	6,329	1		421,174		-		-		421,175
Vesting of RSUs	8,997	1		(1)		-		-		-
Exercise of warrants	4,603	-		338,055		-		-		338,055
Net loss	-	-		-		-		(11,144,012)		(11,144,012)
Balance at September 30, 2023	1,384,952	$	138	$	76,572,662	$	-	$	(79,249,114)	$	(2,676,314)

The accompanying notes are an integral part of these condensed consolidated financial statements.

NAUTICUS ROBOTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine months ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(16,316,664)	$	(11,144,012)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,283,858		487,052
Amortization of debt discount	5,694,378		2,924,820
Amortization of debt issuance cost	486,758		-
Capitalized paid-in-kind (PIK) interest	927,485		-
Accretion of RCB Equities #1, LLC exit fee	73,058		3,183
Stock-based compensation	1,872,504		3,995,020
Loss on exchange of warrants	-		590,266
Change in fair value of warrant liabilities	(13,347,829)		(18,775,158)
Non-cash impact of lease accounting	314,859		332,787
Gain on disposal of assets	(1,695)		-
Write off of property and equipment	32,636		-
Gain on lease termination	(23,897)		-
Settlement of liquidated damages with common stock	-		3,685,629
Gain on short-term investments	-		(40,737)
Interest expense assumed into Convertible Senior Secured Term Loan	-		378,116
Changes in operating assets and liabilities:
Accounts receivable	(185,298)		625,034
Inventories	(30,714)		(7,293,478)
Contract assets	-		547,183
Other assets	1,542,915		(206,702)
Accounts payable and accrued liabilities	(1,072,317)		7,470,351
Contract liabilities	(2,070,095)		152,000
Operating lease liabilities	(203,486)		(357,985)
Other liabilities	895,117		-
Net cash used in operating activities	(20,128,427)		(16,626,631)

Cash flows from investing activities:
Capital expenditures	(466,712)		(10,745,111)
Proceeds from sale of assets held for sale	420,220		-
Proceeds from sale of property and equipment	18,098		-
Proceeds from sale of short-term investments	-		5,000,000
Net cash used in investing activities	(28,394)		(5,745,111)

Cash flows from financing activities:
Proceeds from notes payable	14,305,000		10,596,884
Payment of debt issuance costs on notes payable	(1,316,791)		-
Proceeds from ATM offering	9,857,857		-
Payment of ATM commissions and fees	(499,903)		-
Proceeds from exercise of stock options	-		421,175
Proceeds from exercise of warrants	-		338,055
Net cash from financing activities	22,346,163		11,356,114

Effects of changes in exchange rates on cash and cash equivalents	(26,983)		-

Net change in cash and cash equivalents	2,162,359		(11,015,628)

Cash and cash equivalents, beginning of period	753,398		17,787,159
Cash and cash equivalents, end of period	$	2,915,757	$	6,771,531


Supplemental disclosure of cash flow information:
Cash paid for interest	$	135,089	$	1,006,993
Cash paid for taxes	$	-	$	-
Non-cash investing and financing activities:
Operating leases at inception	$	1,095,067	$	2,016,931
Exercise of warrants	$	4,635,257	$	-
Conversion of convertible secured debentures to common stock	$	5,758,926	$	-

Liabilities relieved through sale of asset held for sale	$	1,158,609	$	-
Transfer from assets held for sale to property and equipment	$	1,119,864	$	-
Capitalized interest	$	-	$	873,816
Capital expenditures included in accounts payable	$	-	$	849,951

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Description of the Business

Nauticus Robotics, Inc. (the “Company”, “our”, "us" or “we”) develops autonomous robots for the ocean industries. The Company’s principal corporate offices are located in Webster, Texas. Nauticus’ robotic systems and services are designed to address both commercial and government-facing customers. Autonomy requires the extensive use of sensors, artificial intelligence, and effective algorithms for perception and decision allowing the robot to adapt to changing environments. The Company’s business model includes using robotic systems for service, selling vehicles and components, and licensing of related software to both the commercial and government defense business sectors. Nauticus has designed and is currently testing and certifying a new generation of vehicles to reduce operational cost and gather data to maintain and operate a wide variety of subsea infrastructure. Besides a standalone service offering, Nauticus’ approach to ocean robotics has also resulted in the development of a range of technology products for retrofit/upgrading legacy systems and other third-party vehicle platforms. Nauticus’ services provide customers with the necessary data collection, analytics, and subsea manipulation capabilities to support and maintain assets while reducing their operational footprint, operating cost, and greenhouse gas emissions, to improve offshore health, safety, and environmental exposure.

Liquidity – The Company continues to develop its principal products and conduct research and development activities. Currently, the Company does not generate sufficient revenue to cover operating expenses, working capital and capital expenditures. The Company has embarked on cost-cutting measures to continue to preserve cash. The Company may require additional liquidity to continue its operations over the next twelve months, which a current investor has committed to support. The Company believes with this investor support that there will be sufficient resources to continue as a going concern for at least one year from the date that the condensed consolidated financial statements contained in this Form 10-Q are issued.

2. Summary of Significant Accounting Policies

Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed consolidated results of operations, financial position, cash flows and changes in stockholders’ deficit for each period presented. All intercompany balances and transactions have been eliminated in preparation of these condensed consolidated financial statements. The condensed consolidated results for the interim periods are not necessarily indicative of results to be expected for the full year. The 2023 year-end consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Summary of Significant Accounting Policies – The Company’s significant accounting policies are discussed in Note 2 to Nauticus Robotics, Inc.’s consolidated financial statements included in its Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2023. There have been no significant changes to these policies which have had a material impact on the Company’s interim unaudited condensed consolidated financial statements and related notes during the three and nine months ended September 30, 2024.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the (i) estimates of future costs to complete customer contracts recognized over time, (ii) valuation allowances for deferred income tax assets, (iii) valuation of stock-based compensation awards and (iv) the valuation of conversion options, warrants and earnouts. Actual results could differ from those estimates.

Cash and Cash Equivalents – The Company classifies all highly-liquid instruments with an original maturity of three months or less as cash equivalents. The Company maintains cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits of $250,000. Historically, the Company has not experienced any losses in such accounts. There were no cash equivalents at September 30, 2024 or December 31, 2023.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Restricted Certificates of Deposit – The Company has restricted certificate of deposits of $51,763 and $201,822, held by a bank on our behalf as of September 30, 2024 and December 31, 2023, respectively. The restricted certificate of deposit at September 30, 2024, relates to a guarantee against corporate credit cards. $150,000 of the balance at December 31, 2023 relates to a certificate of deposit required to collateralize a letter of credit which was released in the first quarter of 2024, with the remainder relating to a guarantee against corporate credit cards.

Short-term Investments – On March 14, 2023, the Company received proceeds of $5,000,000 from the maturity of a short-term investment in a US Treasury Bill. The gain on the investment of $40,737 is included in other (income) expense on the condensed consolidated statements of operations for the nine months ended September 30, 2023.

Accounts Receivable, Unbilled Revenues, and Allowance for Credit Losses – In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “standard”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Subsequently, the FASB issued several standard updates to clarify and improve the ASU. These ASUs significantly change how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model that will be based on an estimate of current expected credit loss (“CECL”). Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing an entity’s exposure to credit risk and the measurement of credit losses. Financial assets held by the Company that are subject to the guidance in Topic 326 were trade accounts receivable and unbilled revenues. The Company adopted the standard effective January 1, 2023. The impact of the adoption was not considered material to the financial statements and primarily resulted in new and enhanced disclosures.

With the adoption of ASU 2016-13, accounts receivable and contract assets are recorded at the invoiced amount and do not typically bear interest. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers. The Company's accounts receivables are primarily derived from the provision of services to our customers. At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. If applicable, accounts receivable and contract assets are evaluated individually when they do not share similar risk characteristics which could exist in circumstances where amounts are considered at risk or uncollectible.

The allowance estimate is derived from a review of the Company’s historical losses based on the aging of receivables. This estimate is adjusted for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s portfolio segments have remained constant since the Company’s inception.

The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized as income in the year of recovery and as a reduction to the allowance, in accordance with the entity’s accounting policy election.

Assets Held For Sale ("AHFS") – Long-lived assets identified as assets held for sale are categorized on the balance sheet as current assets and are measured at the lower of carrying value or fair value less any costs to sell. Any liabilities associated with the assets being sold are categorized on the condensed consolidated balance sheet as current liabilities. AHFS are no longer depreciated or amortized.

Property and Equipment – Property and equipment is recorded at cost and depreciated using the straight-line method. Expenditures which extend the useful lives of existing property and equipment are capitalized. Those costs which do not extend the useful lives are expensed as incurred. Upon disposition, the cost and accumulated depreciation are removed and any gain or loss on the disposal is reflected in the condensed consolidated statements of operations.

Segment Reporting – Our operations represent a single segment because each revenue stream possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance.

Table of Contents

NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Revenue – Our primary sources of revenue are from providing technology, engineering services and products to the offshore industry and governmental entities. Revenue is generated pursuant to contractual arrangements to design and develop subsea robots and software and to provide related engineering, technical, and other services according to the specifications of the customers. These contracts can be service sales (cost plus fixed fee or firm fixed price) or product sales and typically have terms of up to 18 months. The Company had no product sales for the three and nine months ended September 30, 2024 and 2023, respectively.

A performance obligation is a promise in a contract to transfer distinct goods or services to a customer. For all contracts, we assess if there are multiple promises that should be accounted for as separate performance obligations or combined into a single performance obligation. We generally separate multiple promises in a contract as separate performance obligations if those promises are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or require significant integration or customization within a group, they are combined and accounted for as a single performance obligation.

Our performance obligations under service agreements generally are satisfied over time as the service is provided. Revenue under these contracts is recognized over time using an input measure of progress (typically costs incurred to date relative to total estimated costs at completion). This requires management to make significant estimates and assumptions to estimate contract sales and costs associated with its contracts with customers. At the outset of a long-term contract, the Company identifies risks to the achievement of the technical, schedule and cost aspects of the contract. Throughout the contract term, on at least a quarterly basis, we monitor and assess the effects of those risks on its estimates of sales and total costs to complete the contract. Changes in these estimates could have a material effect on our results of operations. Where the current estimate of total costs at completion for contracts exceeds the total consideration we expect to receive we recognize the entire expected loss in the period that becomes evident. Estimated contract costs include costs that relate directly to the contract including direct labor, direct materials, and allocations of certain overhead costs.

Firm-fixed price contracts present the risk of unreimbursed cost overruns, potentially resulting in lower-than-expected contract profits and margins. This risk is generally lower for cost plus fixed fee contracts which, consequently, often have a lower margin.

Inventories – The inventories comprise raw materials, work in progress, and finished goods, as applicable, and are valued at the lower of cost or net realizable value. Work in progress and finished goods inventories include raw materials, direct labor and production overhead. The Company periodically reviews inventories on hand and current market conditions to determine if the cost of raw materials, work in progress and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly. The associated impairment is charged as a standalone expense on the condensed consolidated statements of operations. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost. The associated write-downs or write-offs of inventory are charged to cost of sales.

Inventories consisted of the following:


	September 30, 2024		December 31, 2023
Raw material and supplies	$	897,902	$	898,335
Work in progress	1,331,607		1,300,462

Total inventories	$	2,229,509	$	2,198,797

Leases – The Company’s lease arrangements are operating leases which are capitalized on the balance sheet as right-of-use (“ROU”) assets and obligations. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. These are recognized at the lease commencement date based on the present value of payments over the lease term. If leases do not provide for an implicit rate, we use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term as the lease payments. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less ("short term leases") are not recorded on the balance sheet; and the lease expense on short-term leases is recognized on a straight-line basis over the lease term.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Stock-Based Compensation – The Company accounts for employee stock-based compensation using the fair value method. Compensation cost for equity incentive awards is based on the fair value of the equity instrument generally on the date of grant and is recognized over the requisite service period. The Company’s policy is to issue new shares upon the exercise or conversion of options and recognize option forfeitures as they occur.

Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax asset (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. A valuation allowance for deferred tax assets is recorded when it is more likely than not that the benefit from the deferred tax asset will not be realized.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company had no material uncertain income tax positions as of September 30, 2024, and December 31, 2023.

Foreign Currency Translation – All assets and liabilities in the condensed consolidated balance sheet of the Company's foreign subsidiary, whose functional currency is the Brazilian Real, are translated at period-end exchange rates. All revenues and expenses in the condensed consolidated statements of operations, of this foreign subsidiary, are translated at average exchange rates for the period. Translation gains and losses are not included on determining net loss but are shown in accumulated other comprehensive loss on the condensed consolidated balance sheet.

Foreign Currency Gains and Losses – Foreign currency transaction gains and losses are included on determining net loss. The Company purchases certain materials and equipment from foreign companies and these transactions are generally denominated in the vendors’ local currency. The Company recorded $11,833 and $21,276 of foreign currency transaction losses for the three and nine months ended September 30, 2024, respectively. The Company recorded $83,654 and $56,061 of foreign currency transaction losses for the three and nine months ended September 30, 2023, respectively.

Common Stock Warrants – We account for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. This assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability or requirements for equity classification, including whether the warrants are indexed to the Company’s Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

We have determined that the Public and Private warrants should be accounted for as liabilities. The Public and Private Warrants were initially recorded at their estimated fair value. They are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations. Derivative warrant liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement). The Public Warrants are valued using their publicly-traded price at each measurement date (a Level 1 measurement).

We have determined that the Securities Purchase Agreement ("SPA") Warrants should be accounted for as liabilities. The SPA Warrants were initially recorded at their estimated fair value and are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations. Derivative warrant liabilities are classified in our balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The fair value of the Original SPA Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement).

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Earnout Shares – Following the closing of the Merger between CleanTech, Merger Sub and Nauticus Robotics Holdings on September 9, 2022, former holders of shares of Nauticus Robotics Holdings Inc.’s Common Stock are entitled to receive their pro-rata share of Earnout Shares which are held in escrow. The Earnout Shares will be released upon the occurrence of a triggering event within 5 years of the issue date (see Note 11, "Equity"). The Earnout Shares are considered legally issued and outstanding shares of Common Stock subject to restrictions on transfer and potential forfeiture pending the achievement of the Earnout targets. The Company evaluated the Earnout Shares and concluded that they meet the criteria for equity classification. The Earnout Shares were classified in stockholders’ equity, recognized at fair value upon issuance and will not be subsequently remeasured. A Monte Carlo valuation model (a Level 3 measurement) determined their estimated fair value upon issuance.

Capitalized Interest – The Company capitalizes interest costs incurred to work in progress during the related construction periods. Capitalized interest is charged to cost of revenue when the related completed project is delivered to the buyer. The Company did not capitalize interest during the nine months ended September 30, 2024. During the nine months ended September 30, 2023 the Company capitalized interest totaling $873,816, of which $354,162 and $519,654 related to inventory and property and equipment, respectively.

Earnings (Loss) per Share – Basic earnings per share is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of common stock that could have been outstanding assuming the exercise of stock options and warrants (determined using the treasury stock method) and conversion of convertible debt. The Earnout Shares, which are subject to forfeiture if the achievement of certain stock price thresholds is not met, are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of calculating earnings (loss) per share.

Major Customer and Concentration of Credit Risk – We have a limited number of customers. During the three and nine months ended September 30, 2024, sales to four and five customers accounted for 100% of total revenue. The total balance due from these customers as of September 30, 2024, comprised 100% of accounts receivable, net. During the three and nine months ended September 30, 2023, sales to two customers accounted for 99% of total revenue. The total balances due from these customers as of December 31, 2023, made up 68% of accounts receivable, with the remaining 32% due from one other customer. Loss of these customers could have a material adverse impact on the Company.

Reclassifications – Financial statements presented for prior periods include reclassifications that were made to conform to the current year presentation. There was no material impact to the condensed consolidated financial statements for these changes.

Accounting Standards Issued but not adopted as of September 30, 2024 – In November 2023, FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to increase reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of this guidance on the disclosures within our condensed consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our condensed consolidated financial statements.

All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our condensed consolidated financial statements.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. Revenue

The following table presents the components of our revenue:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Cost plus fixed fee	$	96,627	$	1,075,603	$	311,041	$	3,652,771
Firm fixed-price	273,560		518,251		1,025,208		1,889,978
Total	$	370,187	$	1,593,854	$	1,336,249	$	5,542,749

Our performance obligations under service agreements are generally satisfied over time as the service is provided and, therefore, all revenue above has been recognized over time.

Contract Balances – Accounts receivable, net as of September 30, 2024, totaled $397,726 due from customers for contract billings and is expected to be collected within the next three to six months. As of December 31, 2023, accounts receivable, net totaled $212,428. As of September 30, 2024, and December 31, 2023, allowances for doubtful accounts included in accounts receivable totaled $0. Bad debt expense was $0 and $39 for the three and nine months ended September 30, 2024, respectively and $0 for the three and nine months ended September 30, 2023, respectively.

Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are recorded at the net amount expected to be billed and collected. Contract assets were $0 at September 30, 2024 and December 31, 2023.

Contract liabilities include billings in excess of revenue recognized and accruals for certain contract obligations. The Company had contract liabilities at September 30, 2024 and December 31, 2023 of $697,818 and $2,767,913, respectively. Contract liabilities at September 30, 2024 and December 31, 2023 included costs accrued for an ongoing contract expected to be loss making with the loss reported on the condensed consolidated income statement for the three and nine months ended September 30, 2024 and in the fourth quarter of the year ended December 31, 2023. The decrease in contract liabilities at September 30, 2024 is primarily attributable to costs incurred on the loss making contract in the first half of 2024 being offset against the accrual.

Unfulfilled Performance Obligations – As of September 30, 2024, we expect to recognize approximately $840,000 of revenue in future periods from unfulfilled performance obligations from existing contracts with customers.

If any of our contracts were to be modified or terminated, the expected value of the unfulfilled performance obligations of such contracts would be reduced.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	September 30, 2024		December 31, 2023
Prepaid material purchases	$	388,530	$	440,091
Prepaid insurance	467,472		1,282,703
Other prepayments	249,643		166,424
Total prepaid expenses	$	1,105,645	$	1,889,218

Term loan receivable	$	-	$	695,000
Other current assets	338,542		330,214
Total other current assets	$	338,542	$	1,025,214

5. Property and Equipment

Property and equipment consisted of the following:


	Useful Life (years)	September 30, 2024		December 31, 2023
Leasehold improvements	5	$	833,920	$	796,136
Property & equipment	3-5 years	7,381,529		5,906,859
Technology hardware equipment	3-5 years	2,006,179		1,907,770
Total		10,221,628		8,610,765
Less accumulated depreciation		(3,393,644)		(2,035,034)
Construction in progress		9,330,541		9,329,114
Total property and equipment, net		$	16,158,525	$	15,904,845

During the year ended December 31, 2023, the Company conducted a thorough review of its assets and decided to divest items that no longer aligned with its strategic objectives. This strategic shift aimed to enhance cash flow within the Company. Consequently, through an update of its business model, the Company identified and reclassified $2,940,254 worth of property and equipment, including Hydronaut vessels, the Drix unmanned surface vessel, and other miscellaneous equipment, as AHFS. At September 30, 2024 property and equipment totaling $277,180 remains as AHFS with the decrease driven primarily by the sale of Hydronaut vessels 2 and 3 on January 22, 2024, for $1,533,609, which included cash of $375,000, combined with the offset of open payable invoices, and the reclassification of the Drix unmanned surface vessel back to property and equipment as it became revenue generating in the third quarter of 2024. The Company is actively pursuing the sale of the remaining assets earmarked for sale and anticipates that the majority will be sold by the end of the fourth quarter of 2024.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. Accrued Liabilities

Accrued liabilities consisted of the following:


	September 30, 2024		December 31, 2023
Accrued compensation	$	304,481	$	618,630
Accrued severance	1,031,731		1,375,000
Accrued professional fees	77,850		1,355,721
Accrued insurance	185,417		876,150
Accrued sales and property taxes	695,565		885,292
Accrued royalties	362,500		250,000
Accrued interest	2,296,243		-
Debt conversion liability accrual	2,135,480		-
Accrued AHFS liability	-		1,158,609
Accrued lease termination costs	163,503		657,000
Other accrued expenses	17,063		162,697
Total accrued expenses	$	7,269,833	$	7,339,099

Under the Convertible Secured Debentures agreement, on conversion of secured debentures, the Company owes the debt holder the difference between the floor price of $3.16 and the conversion price. As of September 30 2024, the amount due is $2,135,480 and is recorded under accrued liabilities on the condensed consolidated balance sheet.

The Hydronaut vessels 2 and 3 are reported as AHFS at December 31, 2023 at an amount based on an offer for sale. The offer for sale contains both cash and non-cash considerations. The AHFS liability of $1,158,609 included the non-cash consideration, which are purchase invoices submitted by the purchaser that will be foregone upon closing of the sale. Hydronaut vessels 2 and 3 were sold on January 22, 2024, and the AHFS current asset of December 31, 2023 was offset with the AHFS liability and cash received.

In December 2023, the Company started negotiations to exit a lease for office space. The negotiations completed in March 2024 with the Company agreeing a settlement figure with the lessor of $657,000 to be paid over 8 months commencing April 2024. See Note 8, "Leases" for further discussion. The accrual is recorded under accrued liabilities on the condensed consolidated balance sheet as of September 30, 2024.

In April 2023, the Company received correspondence from the State of Texas assessing a sale and use tax liability of $575,602. The sales and use tax audit is currently ongoing. The accrual is recorded under accrued liabilities on the condensed consolidated balance sheet as of September 30, 2024.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7. Notes Payable

Notes payable consisted of the following:


	September 30, 2024		December 31, 2023
Convertible secured debentures	$	30,911,089	$	36,530,320
Convertible senior secured term loan	27,527,485		12,295,000
Total	58,438,574		48,825,320
Less: debt discount, net	(11,005,493)		(16,593,357)
Less: capitalized debt issuance costs	(1,385,440)		(661,922)
Senior bridge note exit fee provision	100,666		27,608

Total notes payable – long-term	$	46,148,307	$	31,597,649

Convertible Secured Debentures

On September 9, 2022, we issued Debentures, secured debt instruments, which featured a 2% original issue discount, in an aggregate principal amount of $36,530,320, together with 2,922,425 associated warrants ("Original SPA Warrants"), for gross proceeds of $35,800,000. The fair value of the Original SPA Warrants was estimated to be $20,949,110 using a Monte Carlo valuation model incorporating future projections of the various potential outcomes and any exercise price adjustments based on future financing events. This amount was recorded as a warrant liability and, together with the original issue discount, was recognized as a debt discount upon issuance totaling $21,679,716. The debt discount is being amortized to interest expense over the four-year term of the Debentures.

The Debentures were convertible at each holder’s option at 120% of the principal amount at a conversion price of $15.00 or 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis, subject to certain adjustments including full ratchet anti-dilution price protections. Interest accrued on the outstanding principal amount of the Debentures at 5% per annum, payable quarterly. The Debentures were secured by first priority interests, and liens on, all our assets, and are scheduled to mature on the fourth anniversary of the date of issuance, September 9, 2026.

Exchanged Senior Secured Convertible Debenture

On January 30, 2024, the Company and certain of its subsidiaries and ATW Special Situations I LLC ("ATW I") entered into an Amendment and Exchange Agreement (the “Amendment and Exchange Agreement”), pursuant to which ATW I transferred its existing 5% Original Issue Discount Senior Secured Convertible Debenture to the Company in exchange for a new Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 (the “New Debenture”) in the aggregate principal amount of $29,591,600. The Amendment and Exchange Agreement provides for certain amendments to the Securities Purchase Agreement dated December 16, 2021, as amended, and contains certain covenants of the Company to, among other items, hold one or more stockholder meetings in respect of the shares of the Company’s common stock underlying the New Debentures and obtain certain voting agreements related thereto. In addition, on January 30, 2024, the Company and certain of its subsidiaries entered into additional Amendment and Exchange Agreements with Material Impact Fund II, L.P. ("MIF") and SLS Family Irrevocable Trust ("SLS") on substantially similar terms, pursuant to which MIF and SLS transferred their existing 5% Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for New Debentures in the aggregate principal amount of $5,102,000 and $1,836,720, respectively.

The New Debentures provide for, among other items: (a) an interest rate of 5% per annum, payable quarterly in shares of the Company’s common stock (if the conditions described therein are met) and/or in cash, at the Company’s option; (b) conversion by the holder into shares of the Company’s common stock at any time (subject to limitations on conversion described therein); (c) a conversion price of $0.4582, on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) with shares of the Company’s common stock issuable on conversion determined by dividing 120% of the applicable “conversion amount” (as defined in the New Debenture) by the conversion price; (d) prior to the date of sale of the Company’s common stock (or equivalents) in one or in a series of transactions resulting in net cash proceeds to the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Company of at least $30 million an alternate conversion price at the lower of (1) $0.4582, on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) and (2) the greater of a floor price of $0.0878, on a pre Reverse Stock Split basis, (subject to adjustment as provided therein) and 98% of the lowest volume-weighted average price ("VWAP") of the Company’s shares of commons stock during the applicable 10-trading day period (subject to payment in cash if the applicable VWAP calculation is less than the floor price), and an interest conversion rate of 90% of such alternate conversion price; and (e) an option by the holder to extend the maturity date by an additional year.

Generally, upon an event of default the outstanding principal, interest, liquidated damages, and other amounts become immediately due and payable in cash (and interest then accrues at 18% per annum). The obligations of the Company under the New Debentures are generally secured by all assets of the Company and its subsidiaries, and are generally guaranteed by the Company’s subsidiaries. The New Debentures include, among other items, representations, warranties, affirmative and negative covenants, certain adjustments (including in respect of stock dividends, stock splits, and subsequent equity sales and rights offerings, pro rata distributions, and fundamental transactions), certain limitations on share issuances (including prior to stockholder approval), optional redemption, liquidated damages, events of default, and remedies, in each case, as further described therein.

Conversion of Senior Secured Convertible Debentures

During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares (post Reverse Stock Split).

During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 628,942 shares (post Reverse Stock Split).

Debt discount amortization of $2,441,861 and $5,664,436 was included within interest expense in the condensed consolidated statement of operations for the three and nine months ended September 30, 2024, respectively. Debt discount amortization of $1,037,971 and $2,916,347 was included within interest expense in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023, respectively. The Debentures effective interest rate was approximately 25.2% at September 30, 2024 and 2023.

RCB Equities #1, LLC

On July 14, 2023, the Company issued a secured promissory note to RCB Equities #1, LLC (RCB) for $5,000,000. The promissory note included a 2.5% original issue discount or $125,000, interest at 15% per annum, and was scheduled to mature on September 9, 2026. The promissory note provided for an exit fee of $125,000 if paid off in full between October 12, 2023, and the maturity date, with no other considerations triggered for premiums or penalties. Further, the promissory note provided for an automatic rollover into the structure of certain future debt-financing transactions. On September 18, 2023, the RCB promissory note was rolled into the convertible senior secured term loan discussed below bearing interest at 12.5% per annum including the $125,000 exit fee.

Convertible Senior Secured Term Loan

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement, the "2023 Term Loan Agreement", with ATW Special Situations II LLC ("ATW II") as collateral agent (in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited, ATW I, MIF, and RCB, as lenders.

The 2023 Term Loan Agreement provides the Company with up to $20 million of secured term loans. Any portion of the outstanding principal amount of the loans is prepayable at the Company’s option pro rata to each Lender upon at least 5 days' prior written notice to each Lender.

The initial amount funded under the 2023 Term Loan Agreement was $11,600,000, (the "2023 Term Loan"). The 2023 Term Loan Agreement included a 2.5% exit fee of $290,000, bearing interest at 12.50% per annum, payable quarterly in arrears on the first day of each calendar quarter commencing April 1, 2024. The exit fee is being provided for over the period of the loan. The loan agreement included a 2.5% original issue discount of $125,000 from the RCB promissory note. The loan includes assumed debt issuance costs of $577,500 and deemed interest from convertible debentures of $378,118.

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The debt discount and debt issuance costs are being amortized to interest expense over the period of the loan. The Loans will mature on the earliest of (a) the third anniversary of the date of the 2023 Term Loan Agreement of September 17, 2026, (b) 91 days prior to the maturity of the 5% Original Issue Discount Senior Secured Convertible Debentures, dated as of September 9, 2022.

Subject to the terms and conditions of the 2023 Term Loan Agreement, the Company may, upon at least two trading days’ written notice to the Lenders, elect to redeem some or all of the then outstanding principal amount of the Loans. In connection with any such election, which shall be irrevocable, the Company shall pay each Lender, on a pro rata basis, an amount in cash equal to the greater of (x) the sum of (i) 100% of the then outstanding principal amount of the Loans, (ii) accrued but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Loans (including, without limitation, the Exit Fee (as defined in the 2023 Term Loan Agreement)) (the “Optional Redemption Amount”) and (y) the product of (i) the aggregate number of shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), then issuable upon conversion of the applicable Optional Redemption Amount (without regard to any limitations on conversion set forth in the 2023 Term Loan Agreement) multiplied by (ii) the highest closing sale price of the Common Stock on any trading day during the period commencing on the date immediately preceding the date that the applicable notice of redemption is delivered to the Lenders and ending on the trading day immediately prior to the date the Company makes the entire payment required to be made in connection with such redemption.

The Loans are convertible, in whole or in part, at the option of each Lender into shares of Common Stock until the date that the Loans are no longer outstanding, at a conversion rate equal to the outstanding principal amount of the Loans to be converted divided by a conversion price of $6.00 per share of Common Stock (the “Conversion Price”), on a pre Reverse Stock Split basis, subject to certain customary anti-dilution adjustments as described in the 2023 Term Loan Agreement.

First Amendment to Convertible Senior Secured Term Loan

On December 31, 2023, the Company entered into a First Amendment to 2023 Term Loan Agreement, dated as of December 31, 2023 (the “First Amendment”), by and among the Company, the subsidiary guarantors (as defined in the First Amendment) and ATW II which amended that certain 2023 Term Loan Agreement dated as of September 18, 2023 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Term Loan Agreement”) with ATW II, as collateral agent (as replaced by Acquiom Agency Services LLC, in such capacity, the “Collateral Agent”) and lender, and Transocean Finance Limited (“Transocean Finance”), ATW I, MIF, and RCB, as lenders (collectively, the “Initial Lenders”).

The First Amendment provided the Company with an incremental loan in the aggregate principal amount of $695,000 (the “December 2023 Incremental Loan”), subject to the terms and conditions set forth in the Term Loan Agreement and the First Amendment. The total loan funded under the Term Loan Agreement and First Amendment as of December 31, 2023 is $12,295,000. The December 2023 Incremental Loan was made on the same terms as the 2023 Term Loan and be deemed to be Additional Term Loans for all purposes under the Term Loan Agreement. The loan incurred debt issuance costs of $72,000 which are being amortized to interest expense over the period of the loan.

Second Amendment to convertible Senior Secured Term Loan

On January 30, 2024, the Company entered into a Second Amendment to Term Loan Agreement, dated as of January 30, 2024 (the “Second Amendment”), by and among the Company, the guarantors (as defined in the Second Amendment) and the required lenders (as defined in the Second Amendment), which amended that certain Term Loan Agreement, dated as of September 18, 2023, by and among the Company, Transocean Finance, ATW I, MIF and RCB as lenders and ATW II, as collateral agent (as succeeded by Acquiom Agency Services LLC).

In connection with the Second Amendment, the Company also entered into a Second Agreement regarding incremental loans, dated as of January 30, 2024 (the “Second Agreement”), by and among the Company, the guarantors (as defined in the Second Agreement), and ATW II and MIF, as incremental lenders. The Second Agreement provides the Company with an incremental loan in the aggregate principal amount of $3,753,144 (the “January 2024 Incremental Loan”). The January 2024 Incremental Loan would be made on the same terms as the 2023 Term Loan and be deemed to be Additional Term Loans for all purposes under the Term Loan Agreement.

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New Senior Secured Term Loan Agreement

On January 30, 2024, the Company also entered into a senior secured term loan agreement (the “2024 Term Loan Agreement”) with ATW Special Situations Management LLC (“ATW Management”), as collateral agent (in such capacity, the “Collateral Agent”) and lender, and ATW Special Situations III LLC (“ATW III”), MIF, VHG Investments, ATW II and ATW I, as lenders.

The 2024 Term Loan Agreement provides the Company with an aggregate $9,551,856 of secured term loans (the "2024 Loans"). Any portion of the outstanding principal amount of the 2024 Loans are prepayable at the Company’s option pro rata to each Lender upon at least 5 days’ prior written notice to each Lender. The 2024 Term Loan Agreement also provides for up to an additional $6 million of secured term loans within 180 days of signing, $1 million of which has already been committed by ATW III or an affiliate. The 2024 Loans assumed debt issuance costs of $1,237,291 which are being amortized to interest expense over the period of the loan.

The 2024 Loans bear interest at the rate of 15% per annum, payable quarterly in arrears on the first day of each calendar quarter commencing April 1, 2024. The 2024 Loans (other than the ATW Extended Maturity Term Loan) will mature on the earliest of: (a) the third anniversary of the date of the Term Loan Agreement, (b) the maturity of the Indebtedness under that certain Term Loan Agreement among the Company, the lenders party thereto and Acquiom Agency Services LLC, as collateral agent, dated September 18, 2023, as amended on December 31, 2023, and as further amended on January 30, 2024 (the “Term Loan Agreement”), and (c) 91 days prior to the maturity of the 5% Original Issue Discount Senior Secured Convertible Debentures, dated as of September 9, 2022 (the “Original Debentures”), issued by the Company pursuant to that certain Securities Purchase Agreement, dated as of December 16, 2021, as amended on January 31, 2022, and as further amended on September 9, 2022, and as further amended on January 30, 2024 (the “SPA”). The ATW Extended Maturity Term Loan will mature on the earlier of the 30th anniversary of the date of the Term Loan Agreement or such earlier date as is required or permitted to be repaid under the Term Loan Agreement.

The 2024 Loans are convertible, in whole or in part, at the option of each Lender into shares of Common Stock until the date that the 2024 Loans are no longer outstanding, at a conversion rate equal to the outstanding principal amount of the Loans to be converted divided by a conversion price of $0.4582 per share of Common Stock, on a pre Reverse Stock Split basis, subject to certain adjustments as described in the 2024 Term Loan Agreement.

Amendment to 2024 Term Loan Agreement

On May 1, 2024, the Company entered into an amendment (the "the May 2024 Amendment") to the 2024 Term Loan Agreement dated January 30, 2024 between the Company, ATW Management as collateral agent, and the lenders party thereto. Pursuant to the Amendment, ATW III, one of the lenders under the 2024 Term Loan Agreement, will loan an additional $1,000,000 (the "May 2024 Incremental Loan") to the Company. The May 2024 Incremental Loan will have the same terms as the ATW Extended Maturity Term Loan under the 2024 Term Loan Agreement and will mature on the 30th anniversary of the date of the 2024 Term Loan Agreement or such earlier date as is required or permitted to be repaid under the 2024 Term Loan Agreement. The May 2024 Incremental Loan incurred debt issuance costs of $37,500 which are being amortized to interest expense over the period of the loan.

Interest expense includes the following relating to the 2023 Term Loan, the December 2023 Incremental Loan, the January 2024 Incremental Loan, 2024 Loans and the May 2024 Incremental Loan (collectively the "convertible senior term loans"):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Debt discount amortization	$	10,074	$	8,473	$	29,942	$	8,473
Amortization of debt issuance costs	174,318		-		486,758		-
Provision for bridge note exit fee	24,583		3,183		73,058		3,183

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8. Leases

The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. After the criteria are satisfied, the Company accounts for these arrangements as leases in accordance with ASC 842, Leases. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. For leases in which the Company is the lessee and do not have a readily determinable implicit rate, an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases.

In March 2024, the Company extended the lease on its current office and manufacturing facility for an additional 3 years. The incremental borrowing rate on this lease of 8% was used to determine the present value of lease payments and establish the right-of-use asset and lease liability at lease inception for this lease.

In December 2023 the Company started negotiations to exit the lease for office space entered into in April 2023. The negotiations were completed in March 2024 with a settlement figure of $657,000 being agreed between the Company and the lessor. The Company removed the right-of-use asset and lease liability relating to this operating lease from the consolidated balance sheet as of December 31, 2023.

In August 2023, the Company entered into an operating lease for office space in Norway. The lease has a term of 5 years. The Company’s secured borrowing rate of 15% was used to determine the present value of the lease payments and establish the right-of-use asset and lease liability at lease inception for this lease. During the nine months ended September 30, 2024, the Company agreed with the lessor on two separate occasions to reduce the size of the office space leased and a gain on lease termination of $0 and $23,897 was reported for the three and nine months ended September 30, 2024, respectively, under other (income) expense on the condensed consolidated statement of operations.

In July 2023, the Company entered into an operating lease for office space in Scotland. The lease has a term of 5 years with two options to extend. The Company’s secured borrowing rate of 15% was used to determine the present value of the lease payments and establish the right-of-use asset and lease liability at lease inception for this lease. During the first quarter of 2024, management decided the Company would not extend this lease beyond its initial term and a loss on lease termination of $356 was reported under other (income) expense on the condensed consolidated statement of operations.

The Company’s other operating leases include leases for certain office equipment.

The following table presents the Company’s lease costs which are included in general and administrative expenses in the unaudited condensed consolidated statements of operations:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Fixed lease expense	$	129,510	$	129,822	$	388,953	$	382,662
Variable lease expense	47,353		136,785		261,624		192,547
Total operating lease expense	176,863		266,607		650,577		575,209
Short-term lease expense	6,915		-		34,343		-
Total lease expense	$	183,778	$	266,607	$	684,920	$	575,209

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Cash paid for operating leases was $379,720 and $357,985 for the nine months ended September 30, 2024, and 2023, respectively.

The following table presents the balance and classifications of the Company’s right-of-use assets and lease liabilities included in the unaudited condensed balance sheets:


	September 30, 2024		December 31, 2023
Operating lease right-of-use assets	$	1,283,982	$	834,972

Current portion of operating lease liabilities	433,820		244,774
Long-term operating lease liabilities	921,698		574,260
Total operating lease liabilities	$	1,355,518	$	819,034

For operating lease assets and liabilities, the weighted average remaining lease term was 3.4 years and 8.7 years as of September 30, 2024, and December 31, 2023, respectively. The weighted average discount rate used in the valuation over the remaining lease terms was 12.6% as of September 30, 2024, and 14.3% as of December 31, 2023.

The following table presents the Company’s maturities of lease liabilities as of September 30, 2024:


2024 (excluding the nine months ended September 30, 2024)	$	134,162
2025	541,988
2026	552,142
2027	284,946
2028	35,229

Total lease payments	1,548,467
Total present value discount	(192,949)
Operating lease liabilities	$	1,355,518

9. Commitments and Contingencies

Litigation – From time to time, we may be subject to litigation and other claims in the normal course of business. No amounts have been accrued in the condensed consolidated financial statements with respect to any matters.

10. Income Taxes

Income tax provisions for interim periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items related specifically to interim periods. No income tax expense was recognized for the nine months ended September 30, 2024, or 2023. The Company has a full valuation allowance against its deferred income tax assets as of September 30, 2024, and December 31, 2023, respectively.

11. Equity

Reverse Stock Split

On July 22, 2024, the Company effected a 1-for-36 reverse stock split ("Reverse Stock Split") of the shares of the Company's common stock, par value $0.0001 per share. No fractional shares were issued in connection with the Reverse Stock Split, but were instead rounded up to the nearest whole share. The Reverse Stock Split resulted in 150,107,598 shares of common stock being converted in to 4,169,679 shares of common stock. The Board of Directors of the Company approved the Certificate of Amendment effecting the Reverse Stock Split in order to meet the share bid price requirements

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of the NASDAQ Capital Market. The Company’s stockholders authorized the Reverse Stock Split and the Certificate of Amendment at a special meeting held on June 17, 2024.

All options, warrants and other convertible securities of the Company outstanding immediately prior to the split have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

Each stockholder’s percentage ownership interest in the Company and proportional voting power remain virtually unchanged by the split, except for minor changes and adjustments that resulted from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of the Company’s common stock were substantially unaffected.

As the par value per share of common stock was not changed in connection with the Reverse Stock Split, we recorded a decrease of $14,460 and $4,865 to common stock on our consolidated balance sheet with a corresponding increase in additional paid-in capital as of September 30, 2024 and December 31, 2023, respectively. An adjustment to round fractional shares into whole shares was recorded in the three months ending September 30, 2024 which increased common stock by 133,975 shares and $13 with a corresponding decrease in additional paid-in capital.

Unless otherwise noted, all references in the condensed consolidated financial statements and notes to condensed consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split.

Common Stock – A total of 5,634,942 shares of Common Stock were outstanding as of September 30, 2024.

During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares of Common Stock.

During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 22,641,909 shares of Common Stock, on a pre Reverse Stock Split basis, (628,942 shares post Reverse Stock Split).

During the second quarter of 2024 the Company entered into an At The Market ("ATM") Offering Agreement to offer and sell shares of our Common Stock having an aggregate offering price of up to $9,858,269. Under this offering we issued and sold 50,631,263 shares, on a pre Reverse Stock Split basis, (1,406,424 shares post Reverse Stock Split), for gross proceeds of $9,857,857 and net proceeds of 9,357,954 after deducting commissions and offering expenses totaling $499,903.

On December 31, 2023, the Company and ATW I, as the purchaser, entered into a Securities Purchase Agreement (the “PIPE SPA”), pursuant to which the purchaser agreed to purchase up to an aggregate of $5,000 of the shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at a $2 per share purchase price. The sale of these shares of Common Stock was subject to the terms and conditions set forth in the PIPE SPA and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder as a transaction by an issuer not involving a public offering. As a result of the sale of shares under the PIPE SPA, the conversion prices under the warrants and debentures issued pursuant to the Securities Purchase Agreement were reset to $2, pursuant to their terms, removing future dilutive effects pursuant to the “ratchet” provisions of such warrants and debentures.

Earnout Shares – Following the closing of the Merger between CleanTech, Merger Sub and Nauticus Robotics Holdings on September 9, 2022, former holders of shares of Nauticus Robotics Holdings’ Common Stock (including shares received as a result of the Nauticus Preferred Stock Conversion and the Nauticus Convertible Notes Conversion) are entitled to receive their pro rata share of up to 7,499,993, on a pre Reverse Stock Split basis, (208,333 post Reverse Stock Split), Earnout Shares which are held in escrow. The Earnout Shares will be released from escrow upon the occurrence of the following (each a "triggering event"):

i.one-half of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $15.00 per share over any 20 trading days within a 30-day trading period;

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ii.one-quarter of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $17.50 per share over any 20 trading days within a 30-day trading period; and

iii.one-quarter of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $20.00 per share over any 20 trading days within a 30-day trading period.

As of September 30, 2024, the Earnout targets have not been achieved, and the Earnout Shares remain in escrow.

12. Warrants

Public Warrants – We assumed 8,624,991 Public Warrants on September 9, 2022 which remained outstanding as of September 30, 2024. For every 36 Public Warrants, the holder is entitled to purchase one share of Common Stock at a price of $11.50, subject to adjustment. However, no Public Warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the foregoing, if a registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days of September 9, 2022, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise, subject to the terms of the governing warrant agreement, Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Public Warrants expire on September 9, 2027, or earlier upon redemption or liquidation. Our Public Warrants are listed on Nasdaq under the symbol “KITTW”.

We may redeem the outstanding Public Warrants, in whole and not in part, at a price of $0.01 per warrant:

•at any time after the Public Warrants become exercisable,

•upon not less than 30 days’ prior written notice of redemption to each warrant holder,

•if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $16.50 per share (subject to adjustment for splits, dividends, recapitalizations and other similar events), for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, and

•if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If we call the Public Warrants for redemption as described above, we have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”

The exercise price and number of shares of Common Stock issuable on exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.

The Public Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024 and December 31, 2023 at $127,650 and $451,088, respectively, based on their publicly-traded price. For the three months ended September 30, 2024 and 2023, the Company reported a gain in value of the Public Warrants of $131,100 and $24,150, respectively, and for the nine months ended September 30, 2024 and 2023, a gain in value of the Public Warrants of $323,438 and $378,638, respectively. The change in fair value of the Public Warrants was reported within other (income) expense in our condensed consolidated statements of operations.

Private Warrants – We assumed 7,175,000 Private Warrants, which are not publicly traded, on September 9, 2022. These remained outstanding as of September 30, 2024. For every 36 Private Warrants, the holder is entitled to purchase one share

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(UNAUDITED)

of Common Stock at an exercise price of $11.50 and is identical in all material respects to the Public Warrants except that the Private Warrants are exercisable for cash (even if a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the initial purchasers or their affiliates. The Private Warrants purchased by CleanTech Investments, LLC are not exercisable after July 14, 2026, as long as Chardan Capital Markets, LLC or any of its related persons beneficially own these Private Warrants.

The Private Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024 and December 31, 2023 at $115,257 and $380,531, respectively. The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model using the following assumptions: stock price of $1.41, no assumed dividends, a risk-free rate of 3.58%, implied volatility of 197.8%, and a remaining term of 2.94 years. For the three months ended September 30, 2024 and 2023, the Company reported a gain and loss in value of the Private Warrants of $109,609 and $40,973, respectively. For the nine months ended September 30, 2024 and 2023, the Company reported a gain in value of the Private Warrants of $265,278 and $298,536, respectively. The change in fair value of the Private Warrants was reported within other (income) expense in our condensed consolidated statements of operations.

SPA Warrants – On September 9, 2022 and pursuant to the Securities Purchase Agreement, we issued an aggregate 2,922,425 Original SPA Warrants, on a pre Reverse Stock Split basis, to the SPA Parties. Upon issuance, each whole Original SPA Warrant was exercisable over its 10-year term for one share of Common Stock at a price of $20.00 per share, subject to certain adjustments including full ratchet anti-dilution price protections.

In connection with the Securities Purchase Agreement, the Company and the SPA Parties entered into that certain Registration Rights Agreement, dated as of September 9, 2022 (the “RRA”), pursuant to which the Company and the SPA Parties agreed to certain requirements and conditions covering the resale by the SPA Parties of the shares of Common Stock underlying the Debentures and Original SPA Warrants. Under the terms of the RRA, the Company was required to (i) file a registration statement (the “Initial Registration Statement”) covering such underlying shares within 15 business days of the Closing and (ii) use its best efforts to cause the Initial Registration Statement to be declared effective as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date (as defined in the RRA) (the “Registration Requirements”). The RRA additionally provided for liquidated damages if the Registration Requirements were not met.

On June 22, 2023, the Company and the SPA Parties entered into the first amendment to the RRA (the “RRA Amendment”), pursuant to which the Company agreed to deliver to the SPA Parties an aggregate 1,890,066 shares of Common Stock at an agreed upon price of $2.286, on a Pre Reverse Stock Split basis, (the “RRA Amendment Shares”) in exchange for the waiver and release by the SPA Parties of any and all claims, remedies, causes of action and any other Initial Effectiveness Date Claims (as defined in the RRA Amendment) under any of the Transaction Documents (as defined in the RRA), including all past and future claims for liquidated damages under the RRA with respect to, and any other amounts that may be payable by reason of or otherwise relating to, the Effectiveness Date (as defined in the RRA) of the Initial Registration Statement.

During the third quarter of 2023, the Company issued 1,890,066 shares of Common Stock, on a pre Reverse Stock Split basis, as payment for liquidated damages and interest of $4,320,690, and the damages and interest were recorded under interest expense in the condensed consolidated statements of operations. The settlement date of the liquidated damages occurred August 3, 2023, with a closing price of $1.95, with the change in the agreed upon price of $2.286 to settlement resulting in a gain of $635,061, which was also included in interest expense in the condensed consolidated statements of operations.

Pursuant to the RRA Amendment, the Company also agreed to file a registration statement for the registration and resale of the RRA Amendment Shares by the SPA Parties and to cause such registration statement to become effective as soon as practicable thereafter in accordance with the terms of the RRA, as amended by the RRA Amendment. The registration statement was filed on August 7, 2023 and was declared effective on September 12, 2023.

On June 22, 2023, we entered into the Letter Agreements with the SPA Parties (the “Letter Agreements”), pursuant to which the SPA Parties (also being the holders of the Original SPA Warrants) agreed to amend the exercise price of the Original SPA Warrants, which, since issuance, had been exercisable to purchase an aggregate 2,922,425 shares of Common

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Stock, on a pre Reverse Stock Split basis, in exchange for the Company’s agreement to (i) lower the exercise price of the Original SPA Warrants to a weighted average of $3.28 per share, with multiple tranches priced between $2.04 and $4.64 per share, and (ii) upon the SPA Parties’ exercise of the Amended SPA Warrants, issue New SPA Warrants to the SPA Parties to purchase, in the aggregate, up to 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis.

During any period when we shall have failed to maintain an effective registration statement covering the shares of Common Stock issuable upon exercise of the Amended SPA Warrants, the registered holder may exercise its Amended SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

On June 23, 2023, pursuant to its Letter Agreement with the Company, ATW I exercised 165,713 Amended SPA Warrants, pursuant to which 165,713 shares of Common Stock, on a pre Reverse Stock Split basis, (4,603 shares of Common Stock post Reverse Stock Split) and 165,713 New SPA Warrants were issued to ATW by the Company in accordance with the terms of the Letter Agreement. The Company received proceeds of $338,055 from the warrants exercised by ATW.

On September 18, 2023, the Company entered into a convertible senior secured term loan agreement convertible at $6.00 per share. Based on the letter agreement, SPA warrants holders who exchange through March 1, 2024, the exercise price was reset from $20.00 to $6.00 a warrant pursuant to the full-ratchet provision. The exchange warrants were reset to $6.00 with a factor of 3.3333, increasing the number of warrants to 552,377, on a pre Reverse Stock Split basis.

The New SPA Warrants will be (and, with respect to those already issued, are) substantially in the form of the Amended SPA Warrants as described above except that the New SPA Warrants (i) have an exercise price of $20.00 per share (including, for purposes of clarification, full-ratchet anti-dilution on the exercise price and number of underlying shares issuable based on the aggregate exercise price using $20.00 as the base exercise price), (ii) are immediately exercisable upon issuance, and (iii) are exercisable until September 9, 2032.

If a registration statement covering the shares of Common Stock issuable upon exercise of the New SPA Warrants is not effective 60 days after March 1, 2024 (or, in the event of a “full review” by the SEC, 120 days after March 1, 2024), upon the registered holder’s election to exercise its New SPA Warrants, the registered holder may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise its New SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

On December 31, 2023, the Company and ATW I, as the purchaser, entered into a Securities Purchase Agreement (the "PIPE SPA"), pursuant to which the purchaser agreed to purchase up to an aggregate of $5,000 shares of Common Stock of the Company at a $2 per share purchase price on a pre Reverse Stock Split basis. Based on the PIPE SPA, the exercise price of the SPA Warrants was reset from $6.00 to $2.00.

In March 2024, ATW I exercised 158,334, on a post Reverse Stock Split basis, (5,700,000 pre Reverse Stock Split) SPA Warrants in exchange for Common Stock. The Company did not receive cash in respect of this transaction.

In the second quarter of 2024, ATW I exercised 457,255 SPA Warrants, on a post Reverse Stock Split basis, (16,461,186 pre Reverse Stock Split) in exchange for Common Stock. The Company did not receive cash in respect of this transaction.

In the third quarter of 2024, SLS exercised 38,230 SPA Warrants in exchange for Common Stock. The Company did not receive cash in respect of this transaction.

Unless context otherwise requires, the term “SPA Warrants” means (i) before the entry into the Letter Agreements, the Original SPA Warrants, and (ii) upon and following the entry into the Letter Agreements, (a) the Amended SPA Warrants, and (b) the New SPA Warrants.

The SPA Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024, at $150,187 and as of December 31, 2023 at $17,544,561. The fair value of the SPA Warrants was estimated using a Black-Scholes option pricing model using the following assumptions: stock price of $1.41, no assumed dividends, implied volatility of 197.8%, and a remaining term of 8 years. The change in value of the SPA Warrants during the three and nine months ended September 30, 2024, was a gain of $374,796 and $12,759,113, respectively. The change in

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value of the SPA Warrants during the three and nine months ended September 30, 2023, was a loss of $8,721,515 and a gain of $18,097,987, respectively, and was reported with other (income) expense in our condensed consolidated statements of operations.

13. Stock-Based Compensation

Our 2022 Omnibus Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock units (“RSU”s), restricted stock and other stock-based awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock, or a combination thereof. During the three months ended September 30, 2024, 201,586 RSUs were granted with a weighted-average grant-date fair value of $4.64. As of September 30, 2024, 333,175 equity units remained outstanding.

Total stock-based compensation expense including options, PRSUs, and RSUs for the three and nine months ended September 30, 2024 and 2023, net of forfeiture adjustments, totaled $532,539 and $1,872,504, and $917,993 and $3,995,020, respectively.

14. Employee Benefit Plan

Nauticus offers a 401(k) plan which permits eligible employees to contribute portions of their compensation to an investment trust. The Company makes contributions to the plan totaling 3% of employees’ gross salaries and such contributions vest immediately. The 401(k) plan provides several investment options, for which the employee has sole investment discretion. The Company’s cost for the 401(k) plan was $41,648 and $144,913, and $103,446 and $262,952, for the three and nine months ended September 30, 2024 and 2023, respectively.

15. Related Party Transactions

SPA Warrants – The SPA Warrants are held by related parties ATW I, MIF and SLS Family Irrevocable Trust (see Note 12 – Warrants). During the nine months ended September 30, 2024, ATW and SLS exercised 615,589 and 38,230 SPA Warrants, respectively, in exchange for Common Stock.

Convertible Secured Debentures – During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares.

During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 628,942 shares.

On January 30, 2024, the Company and certain of its subsidiaries and ATW I entered into an Amendment and Exchange Agreement (the “Amendment and Exchange Agreement”), pursuant to which ATW I transferred its existing 5% Original Issue Discount Senior Secured Convertible Debenture to the Company in exchange for a new Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 (the “New Debenture”) in the aggregate principal amount of $29,591,600. In addition, on January 30, 2024, the Company and certain of its subsidiaries entered into additional Amendment and Exchange Agreements with MIF and SLS Family Irrevocable Trust on substantially similar terms, pursuant to which MIF and SLS Family Irrevocable Trust transferred their existing 5% Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for New Debentures in the aggregate principal amount of $5,102,000 and $1,836,720, respectively. (see Note 7, “Notes Payable”).

For the three and nine months ended September 30, 2024, interest expense attributable to ATW, MIF, and SLS Family Irrevocable Trust was $327,682, $65,192 and $23,469, and $1,070,098, $194,159 and $69,897, respectively. For the three and nine months ended September 30, 2023 interest expense to ATW, MIF, and SLS Family Irrevocable Trust was $378,115, $65,192 and $23,469 and $1,122,015, $193,451 and $69,642, respectively.

Convertible Senior Secured Term Loans – In the third quarter of 2023, the Company entered into a convertible senior secured term loan with related parties ATW II, ATW I, MIF and other non-related party lenders. The loan was subsequently amended in the fourth quarter of 2023 and the first quarter of 2024 (see Note 7, “Notes Payable”).

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On January 30, 2024, the Company also entered into the 2024 Term Loan Agreement with related parties ATW Management, as collateral agent and lender, and ATW III, ATW II, ATW I, MIF and another non-related party lenders. The principal amounts outstanding on the convertible senior term loans to related parties ATW I, ATW II, ATW III and MIF at September 30, 2024 were $2,977,513, $5,748,354, $1,064,730 and $4,128,594, respectively. For the three and nine months ended September 30, 2024, interest expense attributable to ATW I, ATW II, ATW III and MIF was $103,635, $192,216, $40,815 and $145,845, and $251,674, $524,531, $105,544 and $390,339, respectively. For the three and nine months ended September 30, 2023, interest expense attributable to ATW I, ATW II and MIF was $6,850, $3,984 and $4,167.

Flexible Consulting, LLC - On December 1, 2023, the Board appointed Victoria Hay as the Interim Chief Financial Officer and principal financial officer of the Company. Victoria Hay is the co-owner and President of Flexible Consulting, LLC, a financial and accounting consulting firm, with which the Company has engaged with since January 2023 to provide it with accounting and finance services relating to its quarterly reporting and mergers/acquisition activity. Flexible Consulting, LLC is considered to be a related party from December 1, 2023. The total value of services provided by Flexible Consulting, LLC to the Company for the three and nine months ended September 30, 2024 was $270,000 and $758,000, respectively, and accounts payable included $90,000 and $95,177 due to Flexible Consulting, LLC at September 30, 2024 and December 31, 2023, respectively.

16. Earnings (Loss) Per Share

The following table is the basic and diluted earnings loss per share computation. For all periods presented, weighted average shares and loss per share reflect the effects of the Reverse Stock Split.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss for basic earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)



Adjusted net loss for diluted earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)

Denominator:
Weighted average shares used to compute basic EPS	2,676,003		1,143,198		1,910,761		1,123,695





Weighted average shares used to compute diluted EPS	2,676,003		1,143,198		1,910,761		1,123,695

Basic loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)
Diluted loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)

Anti-dilutive securities excluded from shares outstanding:
Stock options	25,023		85,683		25,023		85,683
Restricted and performance stock units	333,175		66,989		333,175		66,989
Warrants	545,419		530,808		545,419		530,808
Earnout shares	208,333		208,333		208,333		208,333
Convertible debt	12,505,433		134,882		12,505,433		134,882
Total	13,617,383		1,026,695		13,617,383		1,026,695

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

17. Fair Value Measurements

The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels related to fair value measurements are as follows:


			Level 1 –			Observable inputs such as quoted prices in active markets for identical assets or liabilities.

			Level 2 –			Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

			Level 3 –			Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The estimated fair values of accounts receivable, contract assets, accounts payable, accrued expenses, and indebtedness with unrelated parties approximate their carrying amounts due to the relatively short maturity or time to maturity of these instruments. Notes payable with related parties may not be arms-length transactions and therefore may not reflect fair value. The estimated fair value of the Debentures approximates their carrying amount due to their recent issuance.

The Company’s non-financial assets measured at fair value on a recurring basis include Public, Private and SPA Warrants. The Private and SPA Warrants are considered Level 3 measurements as they involve significant unobservable inputs. See Note 12 for more information about the valuation methodologies and assumptions.

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis and the related activity for the periods presented:


	Fair Value as of September 30, 2024
	Carrying Value		Level 1		Level 2		Level 3
Financial liabilities:
Warrant liability - Public Warrants	$	127,650	$	127,650	$	-	$	-
Warrant liability - Private Warrants	115,257		-		-		115,257
Warrant liability - SPA Warrants	150,187		-		-		150,187
Total	$	393,094	$	127,650	$	-	$	265,444

The following table sets forth a summary of the changes in fair value of the Company’s financial liabilities:


	Warrant Liability
Balance, December 31, 2023	$	18,376,180
Exercise of warrants	(4,635,257)
Change in fair value of warrant liabilities	(13,347,829)
Balance, September 30, 2024	$	393,094

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NAUTICUS ROBOTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

18. Subsequent Events

Second Amendment and Exchange Agreement

On November 4, 2024, the Company entered into a Second Amendment and Exchange Agreement (the "Exchange Agreement") by and among the Company and a certain institutional investor, pursuant to which such investor will exchange the remaining portion of the amount outstanding under the 5% original issue discount senior secured convertible debentures (the "Existing Notes") and certain other amounts outstanding with respect thereto, in the aggregate amount of $26,180,415 into 26,180 of Series A preferred convertible stock subject to adjustment with respect to any change in the Outstanding Amount, whether as a result of any additional amounts that may become outstanding under the Existing Notes or any conversion of all, or any part, of the Existing Notes, as applicable, from and after the date of the Exchange Agreement through the closing date of the Exchange, in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). The Exchange Agreement further amended the Securities Purchase Agreement dated as of December 16, 2021, as amended, and contained certain covenants of the Company to, among other items, hold one or more stockholder meetings, no later than December 31, 2024, in respect of the shares of the Company’s common stock issuable underlying the Series A Preferred Stock upon conversion.

In addition, on November 4, 2024, the Company entered into Exchange Agreements with two other institutional investors on substantially the same terms, pursuant to which such investors will transfer their Existing Notes to the Company in exchange for a number of shares of Series A Preferred Stock in the aggregate principal amount of $1,836,720 and $5,296,159, respectively.

November 2024 Debentures

On November 4, 2024, the Company entered into a Securities Purchase Agreement (the “Nov 24 SPA”) with certain accredited investors named therein (the “Debenture Investors”), pursuant to which the Debenture Investors purchased, in a private placement, $1,150,000 in principal amount of debentures, with an option to purchase up to an additional aggregate of $20,000,000 in principal amount of original issue discount senior secured convertible debentures (the “November 2024 Debentures”). The closing of this private placement will occur upon satisfaction of customary closing conditions.

The November 2024 Debentures provide for, among other items: (a) an interest rate of the Prime Rate published in the Wall Street Journal plus 2% per annum, payable quarterly and added to the principal amount of the November 2024 Debentures, and/or in cash, at the Company’s option; (b) conversion by the holder into shares of the Company’s common stock at any time (subject to limitations on conversion described therein); (c) a conversion price of $1.23 (subject to adjustment as provided therein) with shares of the Company’s common stock issuable on conversion determined by dividing 120% of the applicable “conversion amount” (as defined in the November 2024 Debentures) by the conversion price; (d) an alternate conversion price at the lower of (1) $1.23 (subject to adjustment as provided therein) and (2) the greater of a floor price of $0.246 (subject to adjustment as provided therein) and 98% of the lowest VWAP of the Company’s shares of common stock during the applicable 10-trading day period (subject to payment in cash if the applicable VWAP calculation is less than the floor price); (e) a maturity date of September 9, 2026, and (f) an option by the holder to extend the maturity date by an additional year.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

Overview

Nauticus Robotics, Inc. (the “Company,” “our,” “us” or “we”) is a developer of ocean robots, cloud software and services delivered to the ocean industry. The Company’s principal corporate offices are located in Webster, Texas. Our services provide customers with the necessary data collection, analytics, and subsea manipulation capabilities to support and maintain assets while reducing their operational footprint, operating cost, and greenhouse gas emissions, as well as to improve offshore health, safety, and environmental exposure.

Our subsea robotic product, Aquanaut, is a vehicle that begins its mission in a hydrodynamically efficient configuration that enables efficient transit to the worksite (i.e. operating as an autonomous underwater vehicle, or “AUV”). During transit (operating in survey mode), Aquanaut’s sensor suite provides the capability to observe and inspect subsea assets or other subsea features. Once it arrives at the worksite, Aquanaut transforms its hull configuration to expose two electric manipulators that can perform dexterous tasks with (supervised), or without (autonomous), direct human involvement. In this intervention mode, the vehicle has capabilities similar to a conventional remotely operated vehicle (“ROV”). The ability to operate in both AUV and ROV modes is a quality unique to our subsea robot and is protected under a U.S. patent. To take advantage of these special configuration qualities, we have developed underwater acoustic communication technology, called Wavelink, our over-the-horizon remote connectivity solution, which removes the need for long umbilical cables to connect the robot with topside vessels. Eliminating these umbilical cables and communicating with the robot through acoustic or other latent, laser, or RF methods reduces much of the system infrastructure currently required for ROV servicing operations and is core to our value proposition.

The component technologies that comprise the Aquanaut are also marketable to the existing worldwide ROV fleet. Aquanaut’s perception and machine learning software technologies combined with its perception and electric manipulators can be retrofitted on existing ROV platforms to improve their ability to perform subsea maintenance activities.

Our key technologies are autonomous platforms, acoustic communications networks, electric manipulators, AI-based perception and control software, and high-definition workspace sensors. Implementation of these technologies enables operators to reduce costs relative to conventional methods.

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Results of Operations

Three and nine months ended September 30, 2024, compared to three and nine months ended September 30, 2023

The following table sets forth summarized condensed consolidated financial information:


	Three months ended September 30,								Nine months ended September 30,
					Change								Change
	2024		2023		$		%		2024		2023		$		%
Revenue
Service	$	370,187	$	1,593,854	$	(1,223,667)	-77	%	$	1,336,249	$	5,542,249	$	(4,206,000)	-76	%
Service - related party	-		-		-		-		-		500		(500)		-100	%
Total revenue	370,187		1,593,854		(1,223,667)		-77	%	1,336,249		5,542,749		(4,206,500)		-76	%

Costs and Expenses
Cost of revenue	2,648,019		2,651,380		(3,361)		0	%	7,617,368		7,484,249		133,119		2	%
Depreciation	446,087		160,744		285,343		178	%	1,283,858		487,052		796,806		164	%
Research and development	-		275,154		(275,154)		-100	%	64,103		984,882		(920,779)		-93	%
General and administrative	2,845,956		6,704,890		(3,858,934)		-58	%	9,502,685		17,478,099		(7,975,414)		-46	%
Total costs and expenses	5,940,062		9,792,168		(3,852,106)		-39	%	18,468,014		26,434,282		(7,966,268)		-30	%

Operating loss	(5,569,875)		(8,198,314)		(2,628,439)		-32	%	(17,131,765)		(20,891,533)		(3,759,768)		-18	%

Other (income) expense:
Other (income) expense, net	2,278,909		(133,311)		(2,412,220)		-1809	%	2,300,710		1,015,908		1,284,802		126	%

Gain on lease termination	-		-		-		-		(23,897)		-		(23,897)		-100	%
Foreign currency transaction loss	11,833		83,654		(71,821)		-86	%	21,276		56,061		(34,785)		-62	%
Loss on exchange of warrants	-		-		-		-		-		590,266		(590,266)		-100	%
Change in fair value of warrant liabilities	(615,505)		8,656,392		(9,271,897)		-107	%	(13,347,829)		(18,775,158)		(5,427,329)		-29	%
Interest expense, net	4,111,844		873,738		3,238,106		371	%	10,234,639		7,365,402		2,869,237		39	%

Net income (loss)	$	(11,356,956)	$	(17,678,787)	$	(6,321,831)	-36	%	$	(16,316,664)	$	(11,144,012)	$	5,172,652	46	%

Revenue. For the three and nine months ended September 30, 2024, revenue decreased $1,223,667 and $4,206,500, or 77% and 76%, respectively, as compared to the three and nine months ended September 30, 2023, primarily driven by a reduction in government related contracts.

Cost of revenue. For the three months ended September 30, 2024, cost of revenue decreased $3,361 or 0%, as compared to the three months ended September 30, 2023 primarily driven by decreased revenue offset by costs relating to testing of the Aquanaut vehicle. For the nine months ended September 30, 2024, cost of revenue increased $133,119 or 2%, as compared to the nine months ended September 30, 2023 driven by costs relating to commercialization of the vehicle.

Depreciation. For the three and nine months ended September 30, 2024, depreciation increased $285,343 and $796,806, or 178% and 164%, respectively, as compared to the three and nine months ended September 30, 2023, due to the increase in property and equipment.

Research and development. For the three and nine months ended September 30, 2024, research and development costs decreased $275,154 and $920,779, or 100% and 93%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the Company achieving technological feasibility in both hardware and software development and focusing on bringing its products to market.

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General and administrative. For the three and nine months ended September 30, 2024, general and administrative costs decreased $3,858,934 and $7,975,414, or 58% and 46%, respectively, compared to the three and nine months ended September 30, 2023, driven by headcount reductions and a concerted effort to reduce costs.

Other (income) expense, net. For the three and nine months ended September 30, 2024, other expense related mainly to an accrual of $2,135,480 for the debt conversion liability (see Note 6, "Accrued Liabilities"). For the nine months ended September 30, 2023, other expense related primarily to a state sales tax assessment of $1.2 million from the Texas Comptroller of Public Accounts for which the audit is currently ongoing.

Gain on lease termination. For the nine months ended September 30, 2024, a gain on lease termination of $23,897 was reported, primarily due to the reduction in leased office space in Norway.

Change in fair value of warrant liabilities. For the three months ended September 30, 2024 and 2023, the Company reported a gain and loss in the fair value of warrant liabilities of $615,505 and $8,656,392, respectively. For the nine months ended September 30, 2024 and 2023, the Company reported a gain in the fair value of warrant liabilities of $13,347,829 and $18,775,158, respectively.

Interest expense, net. For the three months ended September 30, 2024, interest expense, net, increased $3,238,106 or 371%, driven by interest on the convertible senior secured term loans received in the second half of 2023 and the first half of 2024. For the nine months ended September 30, 2024, interest expense, net increased, $2,869,237 or 39% driven by interest on the convertible senior secured term loans. Interest expense for the nine months ended September 30, 2023 also included $4 million associated with liquidated damages and interest arising out of the RRA.

Liquidity and Capital Resources

The Company continues to develop its principal products and conduct research and development activities. Currently, the Company does not generate sufficient revenue to cover operating expenses, working capital and capital expenditures. The Company has embarked on cost-cutting measures to continue to preserve cash. The Company may require additional liquidity to continue its operations over the next twelve months which a current investor has committed to provide. The Company believes with this investor support that there will be sufficient resources to continue as a going concern for at least one year from the date that the condensed consolidated financial statements contained in this Form 10-Q are issued.

As of September 30, 2024, the Company had $2,915,757 of cash and cash equivalents. The cash equivalents consist of money market funds.

Significant sources and uses of cash during the nine months ended September 30, 2024.

Sources of cash:

•The Company received net proceeds of $22,346,163 from debt and equity financing comprising of additional convertible secured term loans and an ATM share offering.

Uses of cash:

•Cash used in operating activities was $20,128,427, of which $1,123,878 was used to increase working capital.

•Cash used in investing activities related to capital expenditures of $466,712 partially offset by proceeds from the sale of AHFS of $420,220.

Indebtedness. The Company’s indebtedness as of September 30, 2024, is presented in Item 1, “Financial Statements – Note 7 – Notes Payable” and our lease obligations are presented in Item 1, “Financial Statements – Note 8 – Leases.”

Critical Accounting Policies and Estimates

Please refer to “Critical Accounting Policies and Estimates” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 for a complete discussion of our critical accounting estimates.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation and under the supervision of our Chief Executive Officer and our Interim Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Based on such evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that, as of September 30, 2024, as a result of the continuation of the previously disclosed material weakness discussed below, our disclosure controls and procedures were not effective because of a material weakness in our internal control over financial reporting described below. In light of this fact, our management, including our Chief Executive Officer and Interim Chief Financial Officer, have performed additional analyses, reconciliations, and other post-closing procedures in order to conclude that, notwithstanding such material weakness, the unaudited condensed consolidated financial statements included in this Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP as of the dates and for the periods presented in this Form 10-Q.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, as amended. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Previously identified material weakness. In 2021, we identified a material weakness in our internal control over financial reporting, as defined in the standards established by the Sarbanes-Oxley Act of 2002. This material weakness related to a lack of qualified accounting and financial reporting personnel with an appropriate level of experience and inadequate procedures for the accounting close process including obtaining information supporting significant accounting estimates and judgments affecting the financial statements on a timely basis. As a result, our management concluded that a material weakness existed in our internal control over financial reporting.

Through the years ended December 31, 2022 and 2023, we continued to implement remediation initiatives in response to the previously identified material weakness, including, but not limited to, hiring additional experienced accounting and financial reporting personnel and modifying a new Enterprise Resource Planning (ERP) System which will assist in the automation of processes, including standardizing workflows, enhancing segregation of duties, and ensuring compliance with policies. As a result of the significant turnover of key finance personnel at the end of 2023 and limited handover to the new finance team, we have concluded there was a gap in the implementation of the above remediation initiatives.

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Remediation Plan. In order to remediate the material weakness, the Company plans to formally document the system controls that we have in place, including user access reviews and a formally documented segregation of duties that includes formal system-based roles. Our ongoing remediation actions planned include:

•Continue to search for, evaluate and hire qualified accounting personnel to prepare and report financial information in accordance with GAAP;

•Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and

•Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures

Our remediation activities are ongoing and are subject to continued management review supported by ongoing design and testing of our framework of internal controls over financial reporting. Due to the nature of the remediation process and the need for sufficient time after implementation to evaluate and test the design and effectiveness of the controls, no assurance can be given as to the timing for completion of remediation

Changes in internal control over financial reporting. During the fiscal quarter ended September 30, 2024, except as described above in "Remediation Plan" there were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitation on the effectiveness of internal control. The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Although we may, from time to time, be subject to litigation and other claims in the normal course of business, we are currently not a party to any material legal proceeding. No amounts have been accrued in the condensed consolidated financial statements with respect to any such matters.

ITEM 1A. RISK FACTORS

During the three months ended September 30, 2024, there have been no material changes in the “Risk Factors” as set forth in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company's prospectus supplement dated May 20, 2024 filed by the Company with the SEC. The risks described therein are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the third quarter of 2024, the Company issued 1,322,604 shares to ATW Special Situations I LLC, upon its conversion of its secured debentures with a principal value of $3,425,000 and interest of $96,528.

In the third quarter of 2024, the Company issued 38,230 shares to SLS Family Irrevocable Trust, upon its exercise of 38,230 SPA Warrants in exchange for the Common Stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Trading Plans

During the three months ended September 30, 2024, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit

Description

Schedule/
Form

File
Number

Exhibits

Filing Date

3.1

Second Amended and Restated Certificate of Incorporation of Nauticus Robotics, Inc.

Form 8-K

001-40611

3.5

September 15, 2022

3.2

Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Nauticus Robotics, Inc.

Form 8-K

001-40611

3.1

July 18, 2024

3.3

Amended and Restated Bylaws of Nauticus Robotics, Inc (as of May 11, 2023).

Form 8-K

001-40611

3.1

May 15, 2023

10.1+

Offer Letter dated August 9, 2024, Between Nauticus Robotics, Inc. and John Symington

31.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

+ Management Contract

*Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			NAUTICUS ROBOTICS, INC.

			By:			/s/ John W. Gibson, Jr.
						John W. Gibson, Jr.
						Chief Executive Officer
						(Principal Executive Officer)

			Date:			November 12, 2024

			By:			/s/ Victoria Hay
						Victoria Hay
						Interim Chief Financial Officer

			Date:			November 12, 2024

EXHIBIT 10.1

August 9, 2024

John Symington

Re: Offer Letter

Dear John:

On behalf of Nauticus Robotics, Inc., a Texas corporation (“Nauticus”), I am delighted to confirm our offer to you for employment in the position of General Counsel of Nauticus. You shall report directly to the CEO of Nauticus. Your employment under this letter agreement (this “Agreement”) will be effective on August 12, 2024 subject to the terms and conditions of this Agreement.

In connection with your employment, you will receive the following compensation and benefits package, as approved by the Board of Directors of Nauticus (the “Board”) or its Compensation Committee (the “Committee”):

Compensation and Benefits

Base Salary: You will be paid a base salary of $300,000 annually, subject to all withholdings as required by law.

Annual Cash Bonuses: You will be eligible to receive an annual cash bonus (each, an “Annual Cash Bonus”) under the annual cash bonus plan adopted by the Board or the Committee at its discretion. The target amount of your Annual Cash Bonus will be 50% of your annual base salary received during the applicable performance year at the discretion of the compensation committee. The Annual Cash Bonus for 2024, if any, will be prorated based on tenure of service during that year.

Sign-On Incentive Equity Award: As soon as reasonably practicable following the date hereof, you will be eligible for an initial sign-on grant of an equity or equity-based incentive award under the Nauticus Robotics, Inc. 2022 Omnibus Incentive Plan, as may be amended from time to time (the “Plan”) equal to 210,000 shares of common stock of Nauticus (the “Initial Award”). The Initial Award will vest ratably over five years. The Initial Award will be subject to the terms of the Plan as well as any applicable award agreement and any time-based vesting conditions as determined by the Board or the Committee.

Annual Incentive Equity Award: Inclusive of the calendar year 2024, if applicable, you will be eligible to participate in the Plan on an annual basis and in a manner consistent with other senior executives of Nauticus, subject to approval and as determined by the Board or the Committee in its discretion (such grant, the “Annual Equity Bonus”). Any Annual Equity Bonus granted to you under the Plan will be subject to the terms of the

Plan, any applicable award agreement, and any time-based and/or performance-based vesting conditions as determined by the Board of the Committee. The Annual Equity Bonus for 2024, if any, will be pro rated based on tenure of service during that year.

Other Benefits: You will be eligible to participate in all other benefit plans generally offered to other non-CEO C-Suite executives of Nauticus in similar positions and with similar responsibilities (subject to any applicable waiting periods and other restrictions). In addition, Nauticus will reimburse you for reasonable legal bar and professional associations memberships and continuing legal education expenses.

Other Terms of Employment

At-Will Employment: Your employment is at-will, meaning that either party can terminate your employment without cause or reason at any time.

Severance: If your employment with Nauticus is (i) involuntarily terminated for reasons other than “for Cause” (as that term is defined below) or a breach by you of the terms and conditions of this Agreement, or (ii) voluntarily terminated “for Good Reason” (as that term is defined below), and subject to your execution, and non-revocation, of a release of claims in a form provided by Nauticus, you will be eligible to receive severance equal to six months of your then-current base salary, which shall be paid in equal installments in accordance with Nauticus’ payroll practices over six months following the effective date of termination.

In addition, in the event that (1) Nauticus has not granted you the full amount of your Initial Award due to lack of capacity under the Plan and (2) a Change of Control (as defined in the Plan) occurs and your employment is involuntarily terminated for reasons other than “for Cause” or by you for “Good Reason” within 12 months of after such Change of Control, then Nauticus shall also, in addition to any other severance payable hereunder, pay to you a cash amount equal to the product of (A) the number of shares that remain to be granted under the Initial Award as of such date of termination and (B) (i) if Nauticus is the surviving entity in such Change of Control, the 20-day volume weighted average price of a share of Nauticus’ common stock, or (ii) if Nauticus is not the surviving entity after such Change of Control, the per-share consideration received in respect of one share of Nauticus’ common stock as part of such Change of Control.

“For Cause” is defined as (a) your breach of fiduciary duty or duty of loyalty to Nauticus; (b) your conviction of or plea of nolo contendere to a felony or any crime involving moral turpitude; (c) your failure, refusal or neglect to perform and discharge your duties and responsibilities on behalf of Nauticus (other than by reason of disability) or to comply with any lawful directive of the Board or its designee; (d) your breach of any written material policy of Nauticus (including, without limitation, those relating to sexual harassment or the disclosure or misuse of confidential information); (e) your breach of any agreement with Nauticus (including, without limitation, any confidentiality, non-competition, non-solicitation or assignment of inventions agreement); (f) your

commission of fraud, dishonesty, theft, embezzlement, self- dealing, misappropriation or other malfeasance against the business of Nauticus; or (g) your commission of acts or omissions constituting gross negligence or gross misconduct in the performance of any aspect of your lawful duties or responsibilities, which has or may be expected to have an adverse effect on Nauticus.

For the avoidance of doubt, the termination of your employment due to your death or disability shall not be considered a termination by Nauticus for a reason other than “for Cause”.

“For Good Reason” is defined as the occurrence of any of the following events: (a) a diminution in your base salary of 10% or more, unless such reduction is part of an initiative that applies to and affects all similarly situated senior executives of Nauticus substantially the same and proportionately; (b) a material diminution in your Annual Cash Bonus opportunity or a material diminution in your Annual Equity Bonus opportunity, unless such reduction is part of an initiative that applies to and affects all similarly situated senior executives of Nauticus substantially the same and proportionately; (c) a material diminution in your authority, duties, or responsibilities or you ceasing to serve as the General Counsel employed by Nauticus; or (d) a material breach by Nauticus of this Agreement.

Outside Business Activities: During your employment, you will devote your best efforts and full business time and attention to Nauticus and its affiliates, you will not engage in any other business activity or have any other business pursuits or interests, unless such activity, pursuit or interest is approved by the Board in writing.

Other Obligations: As a condition of your employment, you will be required to review and sign an executive restrictive covenant agreement that may include, among other things, confidentiality, work product assignment, and post-employment non-competition and non-solicitation provisions that will protect the ongoing interests of Nauticus and its affiliates. You also agree to be subject to any applicable clawback provision of Nauticus as may be in effect from time to time.

This letter supersedes any prior oral or written agreements or understandings with Nauticus, Nauticus, or their respective affiliates related to your employment and cannot be changed except in a writing signed by an authorized executive of Nauticus and you.

Please indicate your acceptance of this offer by signing in the space provided below and returning one copy of this letter to me at your earliest convenience. Should you have any questions, please feel free to call me.

/s/ John Gibson

By: John Gibson

Title: President & Chief Executive Officer

Nauticus Robotics, Inc.

Accepted and agreed:

/s/ John Symington

John Symington

Date: August 9, 2024

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, John W. Gibson, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Nauticus Robotics, Inc. (“registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2024


			/s/ John W. Gibson, Jr.
			John W. Gibson, Jr.
			Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Victoria Hay, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Nauticus Robotics, Inc. (“registrant”);

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2024


			/s/ Victoria Hay
			Victoria Hay
			Interim Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, the undersigned Officer of Nauticus Robotics, Inc. (the "Company"), hereby certifies, that the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 12, 2024


			/s/ John W. Gibson, Jr.
			John W. Gibson, Jr.
			Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

November 12, 2024


			/s/ Victoria Hay
			Victoria Hay
			Interim Chief Financial Officer

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 11, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-40611
Entity Registrant Name	NAUTICUS ROBOTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-1699753
Entity Address, Address Line One	17146 FEATHERCRAFT LANE
Entity Address, Address Line Two	SUITE 450
Entity Address, City or Town	WEBSTER
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77598
City Area Code	(281)
Local Phone Number	942-9069
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,407,475
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001849820
Current Fiscal Year End Date	--12-31
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	KITT
Security Exchange Name	NASDAQ
Redeemable Warrants
Document Information [Line Items]
Title of 12(b) Security	Redeemable Warrants
Trading Symbol	KITTW
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 2,915,757	$ 753,398
Restricted certificate of deposit	51,763	201,822
Accounts receivable, net	397,726	212,428
Inventories	2,229,509	2,198,797
Prepaid expenses	1,105,645	1,889,218
Other current assets	338,542	1,025,214
Assets held for sale	277,180	2,940,254
Total Current Assets	7,316,122	9,221,131
Property and equipment, net	16,158,525	15,904,845
Operating lease right-of-use assets	1,283,982	834,972
Other assets	229,296	187,527
Total Assets	24,987,925	26,148,475
Current Liabilities:
Accounts payable	4,734,093	7,035,450
Accrued liabilities	7,269,833	7,339,099
Contract liability	697,818	2,767,913
Operating lease liabilities - current	433,820	244,774
Total Current Liabilities	13,135,564	17,387,236
Warrant liabilities	393,094	18,376,180
Operating lease liabilities - long-term	921,698	574,260
Notes payable - long-term, net of discount (related party)	46,148,307	31,597,649
Other liabilities	895,118	0
Total Liabilities	61,493,781	67,935,325
Stockholders’ Deficit:
Common stock, $0.0001 par value; 625,000,000 shares authorized, 5,634,942 and 1,389,884 shares issued, respectively, and 5,634,942 and 1,389,884 shares outstanding, respectively (As adjusted, see Note 11)	563	139
Additional paid-in capital (As adjusted, see Note 11)	98,628,931	77,004,714
Accumulated other comprehensive income	(26,983)	0
Accumulated deficit	(135,108,367)	(118,791,703)
Total Stockholders’ Deficit	(36,505,856)	(41,786,850)
Total Liabilities and Stockholders’ Deficit	$ 24,987,925	$ 26,148,475

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	625,000,000	625,000,000
Common stock, shares issued (in shares)	5,634,942	1,389,884
Common stock, shares outstanding (in shares)	5,634,942	1,389,884

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Total revenue	$ 370,187	$ 1,593,854	$ 1,336,249	$ 5,542,749
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Service [Member]	Service [Member]	Service [Member]	Service [Member]
Costs and expenses:
Cost of revenue (exclusive of items shown separately below)	$ 2,648,019	$ 2,651,380	$ 7,617,368	$ 7,484,249
Cost, Product and Service [Extensible Enumeration]	Service [Member]	Service [Member]	Service [Member]	Service [Member]
Depreciation	$ 446,087	$ 160,744	$ 1,283,858	$ 487,052
Research and development	0	275,154	64,103	984,882
General and administrative	2,845,956	6,704,890	9,502,685	17,478,099
Total costs and expenses	5,940,062	9,792,168	18,468,014	26,434,282
Operating loss	(5,569,875)	(8,198,314)	(17,131,765)	(20,891,533)
Other (income) expense:
Other (income) expense, net	2,278,909	(133,311)	2,300,710	1,015,908
Gain on lease termination	0	0	(23,897)	0
Foreign currency transaction loss	11,833	83,654	21,276	56,061
Loss on exchange of warrants	0	0	0	590,266
Change in fair value of warrant liabilities	(615,505)	8,656,392	(13,347,829)	(18,775,158)
Interest expense, net	4,111,844	873,738	10,234,639	7,365,402
Total other (income) expense, net	5,787,081	9,480,473	(815,101)	(9,747,521)
Net loss	$ (11,356,956)	$ (17,678,787)	$ (16,316,664)	$ (11,144,012)
Basic loss per share (in dollars per share)	$ (4.24)	$ (15.46)	$ (8.54)	$ (9.92)
Diluted loss per share (in dollars per share)	$ (4.24)	$ (15.46)	$ (8.54)	$ (9.92)
Basic weighted average shares outstanding (in shares)	2,676,003	1,143,198	1,910,761	1,123,695
Diluted weighted average shares outstanding (in shares)	2,676,003	1,143,198	1,910,761	1,123,695
Nonrelated Party
Revenue:
Total revenue	$ 370,187	$ 1,593,854	$ 1,336,249	$ 5,542,249
Related Party
Revenue:
Total revenue	0	$ 0	0	$ 500
Costs and expenses:
General and administrative	$ 270,000		$ 758,000

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (11,356,956)	$ (17,678,787)	$ (16,316,664)	$ (11,144,012)
Other comprehensive loss:
Foreign currency translation adjustment	(26,983)	0	(26,983)	0
Comprehensive loss	$ (11,383,939)	$ (17,678,787)	$ (16,343,647)	$ (11,144,012)

Condensed Consolidated Statements of Changes of Stockholders’ Equity (Deficit) (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning Balance (in shares) at Dec. 31, 2022		1,312,521
Beginning Balance at Dec. 31, 2022	$ 27,819	$ 131	$ 68,132,790	$ 0	$ (68,105,102)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	0
Stock-based compensation	3,995,020		3,995,020
Vesting of RSUs (in shares)		8,997
Vesting of RSUs	0	$ 1	(1)
Exercise of warrants (in shares)		4,603
Exercise of warrants	338,055		338,055
Conversion of convertible secured debentures	0
Settlement of liquidated damages (in shares)		52,502
Settlement of liquidated damages	3,685,629	$ 5	3,685,624
Exercise of stock options (in shares)		6,329
Exercise of stock options	421,175	$ 1	421,174
Net loss	(11,144,012)				(11,144,012)
Ending Balance (in shares) at Sep. 30, 2023		1,384,952
Ending Balance at Sep. 30, 2023	(2,676,314)	$ 138	76,572,662	0	(79,249,114)
Beginning Balance (in shares) at Jun. 30, 2023		1,330,396
Beginning Balance at Jun. 30, 2023	10,320,255	$ 133	71,890,449	0	(61,570,327)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	0
Stock-based compensation	917,993		917,993
Vesting of RSUs (in shares)		703
Settlement of liquidated damages (in shares)		52,502
Settlement of liquidated damages	3,685,629	$ 5	3,685,624
Exercise of stock options (in shares)		1,351
Exercise of stock options	78,596		78,596
Net loss	(17,678,787)				(17,678,787)
Ending Balance (in shares) at Sep. 30, 2023		1,384,952
Ending Balance at Sep. 30, 2023	(2,676,314)	$ 138	76,572,662	0	(79,249,114)
Beginning Balance (in shares) at Dec. 31, 2023		1,389,884
Beginning Balance at Dec. 31, 2023	(41,786,850)	$ 139	77,004,714	0	(118,791,703)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	(26,983)			(26,983)
Stock-based compensation	1,872,504		1,872,504
Reverse stock split round up (in shares)		133,975
Reverse stock split round up	0	$ 13	(13)
Vesting of RSUs (in shares)		99,294
Vesting of RSUs	0	$ 10	(10)
Exercise of warrants (in shares)		653,819
Exercise of warrants	4,635,257	$ 65	4,635,192
Conversion of convertible secured debentures (in shares)		1,951,546
Conversion of convertible secured debentures	5,758,926	$ 195	5,758,731
At the Market (ATM) share offering (in shares)		1,406,424
At the Market (ATM) share offering	9,357,954	$ 141	9,357,813
Net loss	(16,316,664)				(16,316,664)
Ending Balance (in shares) at Sep. 30, 2024		5,634,942
Ending Balance at Sep. 30, 2024	(36,505,856)	$ 563	98,628,931	(26,983)	(135,108,367)
Beginning Balance (in shares) at Jun. 30, 2024		4,131,426
Beginning Balance at Jun. 30, 2024	(29,360,078)	$ 413	94,390,920	0	(123,751,411)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	(26,983)			(26,983)
Stock-based compensation	532,539		532,539
Reverse stock split round up (in shares)		133,975
Reverse stock split round up	0	$ 13	(13)
Vesting of RSUs (in shares)		8,707
Vesting of RSUs	0	$ 1	(1)
Exercise of warrants (in shares)		38,230
Exercise of warrants	184,094	$ 4	184,090
Conversion of convertible secured debentures (in shares)		1,322,604
Conversion of convertible secured debentures	3,521,528	$ 132	3,521,396
Net loss	(11,356,956)				(11,356,956)
Ending Balance (in shares) at Sep. 30, 2024		5,634,942
Ending Balance at Sep. 30, 2024	$ (36,505,856)	$ 563	$ 98,628,931	$ (26,983)	$ (135,108,367)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net loss	$ (16,316,664)	$ (11,144,012)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,283,858	487,052
Amortization of debt discount	5,694,378	2,924,820
Amortization of debt issuance cost	486,758	0
Capitalized paid-in-kind (PIK) interest	927,485	0
Accretion of RCB Equities #1, LLC exit fee	73,058	3,183
Stock-based compensation	1,872,504	3,995,020
Loss on exchange of warrants	0	590,266
Change in fair value of warrant liabilities	(13,347,829)	(18,775,158)
Non-cash impact of lease accounting	314,859	332,787
Gain on disposal of assets	(1,695)	0
Write off of property and equipment	32,636	0
Gain on lease termination	(23,897)	0
Settlement of liquidated damages with common stock	0	3,685,629
Gain on short-term investments	0	(40,737)
Interest expense assumed into Convertible Senior Secured Term Loan	0	378,116
Changes in operating assets and liabilities:
Accounts receivable	(185,298)	625,034
Inventories	(30,714)	(7,293,478)
Contract assets	0	547,183
Other assets	1,542,915	(206,702)
Accounts payable and accrued liabilities	(1,072,317)	7,470,351
Contract liabilities	(2,070,095)	152,000
Operating lease liabilities	(203,486)	(357,985)
Other liabilities	895,117	0
Net cash used in operating activities	(20,128,427)	(16,626,631)
Cash flows from investing activities:
Capital expenditures	(466,712)	(10,745,111)
Proceeds from sale of assets held for sale	420,220	0
Proceeds from sale of property and equipment	18,098	0
Proceeds from sale of short-term investments	0	5,000,000
Net cash used in investing activities	(28,394)	(5,745,111)
Cash flows from financing activities:
Proceeds from notes payable	14,305,000	10,596,884
Payment of debt issuance costs on notes payable	(1,316,791)	0
Proceeds from ATM offering	9,857,857	0
Payment of ATM commissions and fees	(499,903)	0
Proceeds from exercise of stock options	0	421,175
Proceeds from exercise of warrants	0	338,055
Net cash from financing activities	22,346,163	11,356,114
Effects of changes in exchange rates on cash and cash equivalents	(26,983)	0
Net change in cash and cash equivalents	2,162,359	(11,015,628)
Cash and cash equivalents, beginning of period	753,398	17,787,159
Cash and cash equivalents, end of period	2,915,757	6,771,531
Supplemental disclosure of cash flow information:
Cash paid for interest	135,089	1,006,993
Cash paid for taxes	0	0
Non-cash investing and financing activities:
Operating leases at inception	1,095,067	2,016,931
Exercise of warrants	4,635,257	0
Conversion of convertible secured debentures	5,758,926	0
Liabilities relieved through sale of asset held for sale	1,158,609	0
Transfer from assets held for sale to property and equipment	1,119,864	0
Capitalized interest	0	873,816
Capital expenditures included in accounts payable	$ 0	$ 849,951

Description of the Business	9 Months Ended
Description of the Business	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business Nauticus Robotics, Inc. (the “Company”, “our”, "us" or “we”) develops autonomous robots for the ocean industries. The Company’s principal corporate offices are located in Webster, Texas. Nauticus’ robotic systems and services are designed to address both commercial and government-facing customers. Autonomy requires the extensive use of sensors, artificial intelligence, and effective algorithms for perception and decision allowing the robot to adapt to changing environments. The Company’s business model includes using robotic systems for service, selling vehicles and components, and licensing of related software to both the commercial and government defense business sectors. Nauticus has designed and is currently testing and certifying a new generation of vehicles to reduce operational cost and gather data to maintain and operate a wide variety of subsea infrastructure. Besides a standalone service offering, Nauticus’ approach to ocean robotics has also resulted in the development of a range of technology products for retrofit/upgrading legacy systems and other third-party vehicle platforms. Nauticus’ services provide customers with the necessary data collection, analytics, and subsea manipulation capabilities to support and maintain assets while reducing their operational footprint, operating cost, and greenhouse gas emissions, to improve offshore health, safety, and environmental exposure. Liquidity – The Company continues to develop its principal products and conduct research and development activities. Currently, the Company does not generate sufficient revenue to cover operating expenses, working capital and capital expenditures. The Company has embarked on cost-cutting measures to continue to preserve cash. The Company may require additional liquidity to continue its operations over the next twelve months, which a current investor has committed to support. The Company believes with this investor support that there will be sufficient resources to continue as a going concern for at least one year from the date that the condensed consolidated financial statements contained in this Form 10-Q are issued.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Inventories consisted of the following:


	September 30, 2024		December 31, 2023
Raw material and supplies	$	897,902	$	898,335
Work in progress	1,331,607		1,300,462

Total inventories	$	2,229,509	$	2,198,797

Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

The following table presents the components of our revenue:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Cost plus fixed fee	$	96,627	$	1,075,603	$	311,041	$	3,652,771
Firm fixed-price	273,560		518,251		1,025,208		1,889,978
Total	$	370,187	$	1,593,854	$	1,336,249	$	5,542,749

Our performance obligations under service agreements are generally satisfied over time as the service is provided and, therefore, all revenue above has been recognized over time.

If any of our contracts were to be modified or terminated, the expected value of the unfulfilled performance obligations of such contracts would be reduced.

Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	September 30, 2024		December 31, 2023
Prepaid material purchases	$	388,530	$	440,091
Prepaid insurance	467,472		1,282,703
Other prepayments	249,643		166,424
Total prepaid expenses	$	1,105,645	$	1,889,218

Term loan receivable	$	-	$	695,000
Other current assets	338,542		330,214
Total other current assets	$	338,542	$	1,025,214

Property and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following:


	Useful Life (years)	September 30, 2024		December 31, 2023
Leasehold improvements	5	$	833,920	$	796,136
Property & equipment	3-5 years	7,381,529		5,906,859
Technology hardware equipment	3-5 years	2,006,179		1,907,770
Total		10,221,628		8,610,765
Less accumulated depreciation		(3,393,644)		(2,035,034)
Construction in progress		9,330,541		9,329,114
Total property and equipment, net		$	16,158,525	$	15,904,845

Accrued Liabilities

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following:


	September 30, 2024		December 31, 2023
Accrued compensation	$	304,481	$	618,630
Accrued severance	1,031,731		1,375,000
Accrued professional fees	77,850		1,355,721
Accrued insurance	185,417		876,150
Accrued sales and property taxes	695,565		885,292
Accrued royalties	362,500		250,000
Accrued interest	2,296,243		-
Debt conversion liability accrual	2,135,480		-
Accrued AHFS liability	-		1,158,609
Accrued lease termination costs	163,503		657,000
Other accrued expenses	17,063		162,697
Total accrued expenses	$	7,269,833	$	7,339,099

Notes Payable

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Notes Payable

Notes payable consisted of the following:


	September 30, 2024		December 31, 2023
Convertible secured debentures	$	30,911,089	$	36,530,320
Convertible senior secured term loan	27,527,485		12,295,000
Total	58,438,574		48,825,320
Less: debt discount, net	(11,005,493)		(16,593,357)
Less: capitalized debt issuance costs	(1,385,440)		(661,922)
Senior bridge note exit fee provision	100,666		27,608

Total notes payable – long-term	$	46,148,307	$	31,597,649

Convertible Secured Debentures

Exchanged Senior Secured Convertible Debenture

Conversion of Senior Secured Convertible Debentures

During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares (post Reverse Stock Split).

During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 628,942 shares (post Reverse Stock Split).

RCB Equities #1, LLC

Convertible Senior Secured Term Loan

First Amendment to Convertible Senior Secured Term Loan

Second Amendment to convertible Senior Secured Term Loan

New Senior Secured Term Loan Agreement

Amendment to 2024 Term Loan Agreement


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Debt discount amortization	$	10,074	$	8,473	$	29,942	$	8,473
Amortization of debt issuance costs	174,318		-		486,758		-
Provision for bridge note exit fee	24,583		3,183		73,058		3,183

Leases

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Leases

The Company’s other operating leases include leases for certain office equipment.

The following table presents the Company’s lease costs which are included in general and administrative expenses in the unaudited condensed consolidated statements of operations:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Fixed lease expense	$	129,510	$	129,822	$	388,953	$	382,662
Variable lease expense	47,353		136,785		261,624		192,547
Total operating lease expense	176,863		266,607		650,577		575,209
Short-term lease expense	6,915		-		34,343		-
Total lease expense	$	183,778	$	266,607	$	684,920	$	575,209

Cash paid for operating leases was $379,720 and $357,985 for the nine months ended September 30, 2024, and 2023, respectively.

The following table presents the balance and classifications of the Company’s right-of-use assets and lease liabilities included in the unaudited condensed balance sheets:


	September 30, 2024		December 31, 2023
Operating lease right-of-use assets	$	1,283,982	$	834,972

Current portion of operating lease liabilities	433,820		244,774
Long-term operating lease liabilities	921,698		574,260
Total operating lease liabilities	$	1,355,518	$	819,034

The following table presents the Company’s maturities of lease liabilities as of September 30, 2024:


2024 (excluding the nine months ended September 30, 2024)	$	134,162
2025	541,988
2026	552,142
2027	284,946
2028	35,229

Total lease payments	1,548,467
Total present value discount	(192,949)
Operating lease liabilities	$	1,355,518

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation – From time to time, we may be subject to litigation and other claims in the normal course of business. No amounts have been accrued in the condensed consolidated financial statements with respect to any matters.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income tax provisions for interim periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items related specifically to interim periods. No income tax expense was recognized for the nine months ended September 30, 2024, or 2023. The Company has a full valuation allowance against its deferred income tax assets as of September 30, 2024, and December 31, 2023, respectively.

Equity	9 Months Ended
Equity	Sep. 30, 2024
Stockholders' Equity Note [Abstract]
Equity	Equity Reverse Stock Split On July 22, 2024, the Company effected a 1-for-36 reverse stock split ("Reverse Stock Split") of the shares of the Company's common stock, par value $0.0001 per share. No fractional shares were issued in connection with the Reverse Stock Split, but were instead rounded up to the nearest whole share. The Reverse Stock Split resulted in 150,107,598 shares of common stock being converted in to 4,169,679 shares of common stock. The Board of Directors of the Company approved the Certificate of Amendment effecting the Reverse Stock Split in order to meet the share bid price requirements of the NASDAQ Capital Market. The Company’s stockholders authorized the Reverse Stock Split and the Certificate of Amendment at a special meeting held on June 17, 2024. All options, warrants and other convertible securities of the Company outstanding immediately prior to the split have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. Each stockholder’s percentage ownership interest in the Company and proportional voting power remain virtually unchanged by the split, except for minor changes and adjustments that resulted from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of the Company’s common stock were substantially unaffected. As the par value per share of common stock was not changed in connection with the Reverse Stock Split, we recorded a decrease of $14,460 and $4,865 to common stock on our consolidated balance sheet with a corresponding increase in additional paid-in capital as of September 30, 2024 and December 31, 2023, respectively. An adjustment to round fractional shares into whole shares was recorded in the three months ending September 30, 2024 which increased common stock by 133,975 shares and $13 with a corresponding decrease in additional paid-in capital. Unless otherwise noted, all references in the condensed consolidated financial statements and notes to condensed consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split. Common Stock – A total of 5,634,942 shares of Common Stock were outstanding as of September 30, 2024. During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares of Common Stock. During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 22,641,909 shares of Common Stock, on a pre Reverse Stock Split basis, (628,942 shares post Reverse Stock Split). During the second quarter of 2024 the Company entered into an At The Market ("ATM") Offering Agreement to offer and sell shares of our Common Stock having an aggregate offering price of up to $9,858,269. Under this offering we issued and sold 50,631,263 shares, on a pre Reverse Stock Split basis, (1,406,424 shares post Reverse Stock Split), for gross proceeds of $9,857,857 and net proceeds of 9,357,954 after deducting commissions and offering expenses totaling $499,903. On December 31, 2023, the Company and ATW I, as the purchaser, entered into a Securities Purchase Agreement (the “PIPE SPA”), pursuant to which the purchaser agreed to purchase up to an aggregate of $5,000 of the shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at a $2 per share purchase price. The sale of these shares of Common Stock was subject to the terms and conditions set forth in the PIPE SPA and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder as a transaction by an issuer not involving a public offering. As a result of the sale of shares under the PIPE SPA, the conversion prices under the warrants and debentures issued pursuant to the Securities Purchase Agreement were reset to $2, pursuant to their terms, removing future dilutive effects pursuant to the “ratchet” provisions of such warrants and debentures. Earnout Shares – Following the closing of the Merger between CleanTech, Merger Sub and Nauticus Robotics Holdings on September 9, 2022, former holders of shares of Nauticus Robotics Holdings’ Common Stock (including shares received as a result of the Nauticus Preferred Stock Conversion and the Nauticus Convertible Notes Conversion) are entitled to receive their pro rata share of up to 7,499,993, on a pre Reverse Stock Split basis, (208,333 post Reverse Stock Split), Earnout Shares which are held in escrow. The Earnout Shares will be released from escrow upon the occurrence of the following (each a "triggering event"): i.one-half of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $15.00 per share over any 20 trading days within a 30-day trading period; ii.one-quarter of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $17.50 per share over any 20 trading days within a 30-day trading period; and iii.one-quarter of the Earnout Shares will be released if, within a 5-year period from September 9, 2022, the volume-weighted average price of our Common Stock equals or exceeds $20.00 per share over any 20 trading days within a 30-day trading period. As of September 30, 2024, the Earnout targets have not been achieved, and the Earnout Shares remain in escrow.

Warrants	9 Months Ended
Warrants	Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Warrants	Warrants Public Warrants – We assumed 8,624,991 Public Warrants on September 9, 2022 which remained outstanding as of September 30, 2024. For every 36 Public Warrants, the holder is entitled to purchase one share of Common Stock at a price of $11.50, subject to adjustment. However, no Public Warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the foregoing, if a registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days of September 9, 2022, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise, subject to the terms of the governing warrant agreement, Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Public Warrants expire on September 9, 2027, or earlier upon redemption or liquidation. Our Public Warrants are listed on Nasdaq under the symbol “KITTW”. We may redeem the outstanding Public Warrants, in whole and not in part, at a price of $0.01 per warrant: •at any time after the Public Warrants become exercisable, •upon not less than 30 days’ prior written notice of redemption to each warrant holder, •if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $16.50 per share (subject to adjustment for splits, dividends, recapitalizations and other similar events), for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, and •if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. If we call the Public Warrants for redemption as described above, we have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” The exercise price and number of shares of Common Stock issuable on exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. The Public Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024 and December 31, 2023 at $127,650 and $451,088, respectively, based on their publicly-traded price. For the three months ended September 30, 2024 and 2023, the Company reported a gain in value of the Public Warrants of $131,100 and $24,150, respectively, and for the nine months ended September 30, 2024 and 2023, a gain in value of the Public Warrants of $323,438 and $378,638, respectively. The change in fair value of the Public Warrants was reported within other (income) expense in our condensed consolidated statements of operations. Private Warrants – We assumed 7,175,000 Private Warrants, which are not publicly traded, on September 9, 2022. These remained outstanding as of September 30, 2024. For every 36 Private Warrants, the holder is entitled to purchase one share of Common Stock at an exercise price of $11.50 and is identical in all material respects to the Public Warrants except that the Private Warrants are exercisable for cash (even if a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the initial purchasers or their affiliates. The Private Warrants purchased by CleanTech Investments, LLC are not exercisable after July 14, 2026, as long as Chardan Capital Markets, LLC or any of its related persons beneficially own these Private Warrants. The Private Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024 and December 31, 2023 at $115,257 and $380,531, respectively. The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model using the following assumptions: stock price of $1.41, no assumed dividends, a risk-free rate of 3.58%, implied volatility of 197.8%, and a remaining term of 2.94 years. For the three months ended September 30, 2024 and 2023, the Company reported a gain and loss in value of the Private Warrants of $109,609 and $40,973, respectively. For the nine months ended September 30, 2024 and 2023, the Company reported a gain in value of the Private Warrants of $265,278 and $298,536, respectively. The change in fair value of the Private Warrants was reported within other (income) expense in our condensed consolidated statements of operations. SPA Warrants – On September 9, 2022 and pursuant to the Securities Purchase Agreement, we issued an aggregate 2,922,425 Original SPA Warrants, on a pre Reverse Stock Split basis, to the SPA Parties. Upon issuance, each whole Original SPA Warrant was exercisable over its 10-year term for one share of Common Stock at a price of $20.00 per share, subject to certain adjustments including full ratchet anti-dilution price protections. In connection with the Securities Purchase Agreement, the Company and the SPA Parties entered into that certain Registration Rights Agreement, dated as of September 9, 2022 (the “RRA”), pursuant to which the Company and the SPA Parties agreed to certain requirements and conditions covering the resale by the SPA Parties of the shares of Common Stock underlying the Debentures and Original SPA Warrants. Under the terms of the RRA, the Company was required to (i) file a registration statement (the “Initial Registration Statement”) covering such underlying shares within 15 business days of the Closing and (ii) use its best efforts to cause the Initial Registration Statement to be declared effective as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date (as defined in the RRA) (the “Registration Requirements”). The RRA additionally provided for liquidated damages if the Registration Requirements were not met. On June 22, 2023, the Company and the SPA Parties entered into the first amendment to the RRA (the “RRA Amendment”), pursuant to which the Company agreed to deliver to the SPA Parties an aggregate 1,890,066 shares of Common Stock at an agreed upon price of $2.286, on a Pre Reverse Stock Split basis, (the “RRA Amendment Shares”) in exchange for the waiver and release by the SPA Parties of any and all claims, remedies, causes of action and any other Initial Effectiveness Date Claims (as defined in the RRA Amendment) under any of the Transaction Documents (as defined in the RRA), including all past and future claims for liquidated damages under the RRA with respect to, and any other amounts that may be payable by reason of or otherwise relating to, the Effectiveness Date (as defined in the RRA) of the Initial Registration Statement. During the third quarter of 2023, the Company issued 1,890,066 shares of Common Stock, on a pre Reverse Stock Split basis, as payment for liquidated damages and interest of $4,320,690, and the damages and interest were recorded under interest expense in the condensed consolidated statements of operations. The settlement date of the liquidated damages occurred August 3, 2023, with a closing price of $1.95, with the change in the agreed upon price of $2.286 to settlement resulting in a gain of $635,061, which was also included in interest expense in the condensed consolidated statements of operations. Pursuant to the RRA Amendment, the Company also agreed to file a registration statement for the registration and resale of the RRA Amendment Shares by the SPA Parties and to cause such registration statement to become effective as soon as practicable thereafter in accordance with the terms of the RRA, as amended by the RRA Amendment. The registration statement was filed on August 7, 2023 and was declared effective on September 12, 2023. On June 22, 2023, we entered into the Letter Agreements with the SPA Parties (the “Letter Agreements”), pursuant to which the SPA Parties (also being the holders of the Original SPA Warrants) agreed to amend the exercise price of the Original SPA Warrants, which, since issuance, had been exercisable to purchase an aggregate 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis, in exchange for the Company’s agreement to (i) lower the exercise price of the Original SPA Warrants to a weighted average of $3.28 per share, with multiple tranches priced between $2.04 and $4.64 per share, and (ii) upon the SPA Parties’ exercise of the Amended SPA Warrants, issue New SPA Warrants to the SPA Parties to purchase, in the aggregate, up to 2,922,425 shares of Common Stock, on a pre Reverse Stock Split basis. During any period when we shall have failed to maintain an effective registration statement covering the shares of Common Stock issuable upon exercise of the Amended SPA Warrants, the registered holder may exercise its Amended SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. On June 23, 2023, pursuant to its Letter Agreement with the Company, ATW I exercised 165,713 Amended SPA Warrants, pursuant to which 165,713 shares of Common Stock, on a pre Reverse Stock Split basis, (4,603 shares of Common Stock post Reverse Stock Split) and 165,713 New SPA Warrants were issued to ATW by the Company in accordance with the terms of the Letter Agreement. The Company received proceeds of $338,055 from the warrants exercised by ATW. On September 18, 2023, the Company entered into a convertible senior secured term loan agreement convertible at $6.00 per share. Based on the letter agreement, SPA warrants holders who exchange through March 1, 2024, the exercise price was reset from $20.00 to $6.00 a warrant pursuant to the full-ratchet provision. The exchange warrants were reset to $6.00 with a factor of 3.3333, increasing the number of warrants to 552,377, on a pre Reverse Stock Split basis. The New SPA Warrants will be (and, with respect to those already issued, are) substantially in the form of the Amended SPA Warrants as described above except that the New SPA Warrants (i) have an exercise price of $20.00 per share (including, for purposes of clarification, full-ratchet anti-dilution on the exercise price and number of underlying shares issuable based on the aggregate exercise price using $20.00 as the base exercise price), (ii) are immediately exercisable upon issuance, and (iii) are exercisable until September 9, 2032. If a registration statement covering the shares of Common Stock issuable upon exercise of the New SPA Warrants is not effective 60 days after March 1, 2024 (or, in the event of a “full review” by the SEC, 120 days after March 1, 2024), upon the registered holder’s election to exercise its New SPA Warrants, the registered holder may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise its New SPA Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. On December 31, 2023, the Company and ATW I, as the purchaser, entered into a Securities Purchase Agreement (the "PIPE SPA"), pursuant to which the purchaser agreed to purchase up to an aggregate of $5,000 shares of Common Stock of the Company at a $2 per share purchase price on a pre Reverse Stock Split basis. Based on the PIPE SPA, the exercise price of the SPA Warrants was reset from $6.00 to $2.00. In March 2024, ATW I exercised 158,334, on a post Reverse Stock Split basis, (5,700,000 pre Reverse Stock Split) SPA Warrants in exchange for Common Stock. The Company did not receive cash in respect of this transaction. In the second quarter of 2024, ATW I exercised 457,255 SPA Warrants, on a post Reverse Stock Split basis, (16,461,186 pre Reverse Stock Split) in exchange for Common Stock. The Company did not receive cash in respect of this transaction. In the third quarter of 2024, SLS exercised 38,230 SPA Warrants in exchange for Common Stock. The Company did not receive cash in respect of this transaction. Unless context otherwise requires, the term “SPA Warrants” means (i) before the entry into the Letter Agreements, the Original SPA Warrants, and (ii) upon and following the entry into the Letter Agreements, (a) the Amended SPA Warrants, and (b) the New SPA Warrants. The SPA Warrants, which are accounted for as liabilities in our condensed consolidated balance sheets, were valued as of September 30, 2024, at $150,187 and as of December 31, 2023 at $17,544,561. The fair value of the SPA Warrants was estimated using a Black-Scholes option pricing model using the following assumptions: stock price of $1.41, no assumed dividends, implied volatility of 197.8%, and a remaining term of 8 years. The change in value of the SPA Warrants during the three and nine months ended September 30, 2024, was a gain of $374,796 and $12,759,113, respectively. The change in value of the SPA Warrants during the three and nine months ended September 30, 2023, was a loss of $8,721,515 and a gain of $18,097,987, respectively, and was reported with other (income) expense in our condensed consolidated statements of operations.

Stock-Based Compensation	9 Months Ended
Stock-Based Compensation	Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation Our 2022 Omnibus Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock units (“RSU”s), restricted stock and other stock-based awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock, or a combination thereof. During the three months ended September 30, 2024, 201,586 RSUs were granted with a weighted-average grant-date fair value of $4.64. As of September 30, 2024, 333,175 equity units remained outstanding. Total stock-based compensation expense including options, PRSUs, and RSUs for the three and nine months ended September 30, 2024 and 2023, net of forfeiture adjustments, totaled $532,539 and $1,872,504, and $917,993 and $3,995,020, respectively.

Employee Benefit Plan	9 Months Ended
Employee Benefit Plan	Sep. 30, 2024
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit PlanNauticus offers a 401(k) plan which permits eligible employees to contribute portions of their compensation to an investment trust. The Company makes contributions to the plan totaling 3% of employees’ gross salaries and such contributions vest immediately. The 401(k) plan provides several investment options, for which the employee has sole investment discretion. The Company’s cost for the 401(k) plan was $41,648 and $144,913, and $103,446 and $262,952, for the three and nine months ended September 30, 2024 and 2023, respectively.

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions SPA Warrants – The SPA Warrants are held by related parties ATW I, MIF and SLS Family Irrevocable Trust (see Note 12 – Warrants). During the nine months ended September 30, 2024, ATW and SLS exercised 615,589 and 38,230 SPA Warrants, respectively, in exchange for Common Stock. Convertible Secured Debentures – During the third quarter of 2024, ATW I converted secured debentures with a principal value of $3,425,000 and interest of $96,528 into 1,322,604 shares. During the second quarter of 2024, ATW I converted secured debentures with a principal value of $2,194,231 and interest of $43,167 into 628,942 shares. On January 30, 2024, the Company and certain of its subsidiaries and ATW I entered into an Amendment and Exchange Agreement (the “Amendment and Exchange Agreement”), pursuant to which ATW I transferred its existing 5% Original Issue Discount Senior Secured Convertible Debenture to the Company in exchange for a new Original Issue Discount Exchanged Senior Secured Convertible Debenture due September 9, 2026 (the “New Debenture”) in the aggregate principal amount of $29,591,600. In addition, on January 30, 2024, the Company and certain of its subsidiaries entered into additional Amendment and Exchange Agreements with MIF and SLS Family Irrevocable Trust on substantially similar terms, pursuant to which MIF and SLS Family Irrevocable Trust transferred their existing 5% Original Issue Discount Senior Secured Convertible Debentures to the Company in exchange for New Debentures in the aggregate principal amount of $5,102,000 and $1,836,720, respectively. (see Note 7, “Notes Payable”). For the three and nine months ended September 30, 2024, interest expense attributable to ATW, MIF, and SLS Family Irrevocable Trust was $327,682, $65,192 and $23,469, and $1,070,098, $194,159 and $69,897, respectively. For the three and nine months ended September 30, 2023 interest expense to ATW, MIF, and SLS Family Irrevocable Trust was $378,115, $65,192 and $23,469 and $1,122,015, $193,451 and $69,642, respectively. Convertible Senior Secured Term Loans – In the third quarter of 2023, the Company entered into a convertible senior secured term loan with related parties ATW II, ATW I, MIF and other non-related party lenders. The loan was subsequently amended in the fourth quarter of 2023 and the first quarter of 2024 (see Note 7, “Notes Payable”). On January 30, 2024, the Company also entered into the 2024 Term Loan Agreement with related parties ATW Management, as collateral agent and lender, and ATW III, ATW II, ATW I, MIF and another non-related party lenders. The principal amounts outstanding on the convertible senior term loans to related parties ATW I, ATW II, ATW III and MIF at September 30, 2024 were $2,977,513, $5,748,354, $1,064,730 and $4,128,594, respectively. For the three and nine months ended September 30, 2024, interest expense attributable to ATW I, ATW II, ATW III and MIF was $103,635, $192,216, $40,815 and $145,845, and $251,674, $524,531, $105,544 and $390,339, respectively. For the three and nine months ended September 30, 2023, interest expense attributable to ATW I, ATW II and MIF was $6,850, $3,984 and $4,167. Flexible Consulting, LLC - On December 1, 2023, the Board appointed Victoria Hay as the Interim Chief Financial Officer and principal financial officer of the Company. Victoria Hay is the co-owner and President of Flexible Consulting, LLC, a financial and accounting consulting firm, with which the Company has engaged with since January 2023 to provide it with accounting and finance services relating to its quarterly reporting and mergers/acquisition activity. Flexible Consulting, LLC is considered to be a related party from December 1, 2023. The total value of services provided by Flexible Consulting, LLC to the Company for the three and nine months ended September 30, 2024 was $270,000 and $758,000, respectively, and accounts payable included $90,000 and $95,177 due to Flexible Consulting, LLC at September 30, 2024 and December 31, 2023, respectively.

Earning (Loss) Per Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

The following table is the basic and diluted earnings loss per share computation. For all periods presented, weighted average shares and loss per share reflect the effects of the Reverse Stock Split.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss for basic earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)



Adjusted net loss for diluted earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)

Denominator:
Weighted average shares used to compute basic EPS	2,676,003		1,143,198		1,910,761		1,123,695





Weighted average shares used to compute diluted EPS	2,676,003		1,143,198		1,910,761		1,123,695

Basic loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)
Diluted loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)

Anti-dilutive securities excluded from shares outstanding:
Stock options	25,023		85,683		25,023		85,683
Restricted and performance stock units	333,175		66,989		333,175		66,989
Warrants	545,419		530,808		545,419		530,808
Earnout shares	208,333		208,333		208,333		208,333
Convertible debt	12,505,433		134,882		12,505,433		134,882
Total	13,617,383		1,026,695		13,617,383		1,026,695

Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements


			Level 1 –			Observable inputs such as quoted prices in active markets for identical assets or liabilities.

			Level 2 –			Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

			Level 3 –			Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.


	Fair Value as of September 30, 2024
	Carrying Value		Level 1		Level 2		Level 3
Financial liabilities:
Warrant liability - Public Warrants	$	127,650	$	127,650	$	-	$	-
Warrant liability - Private Warrants	115,257		-		-		115,257
Warrant liability - SPA Warrants	150,187		-		-		150,187
Total	$	393,094	$	127,650	$	-	$	265,444

The following table sets forth a summary of the changes in fair value of the Company’s financial liabilities:


	Warrant Liability
Balance, December 31, 2023	$	18,376,180
Exercise of warrants	(4,635,257)
Change in fair value of warrant liabilities	(13,347,829)
Balance, September 30, 2024	$	393,094

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Second Amendment and Exchange Agreement On November 4, 2024, the Company entered into a Second Amendment and Exchange Agreement (the "Exchange Agreement") by and among the Company and a certain institutional investor, pursuant to which such investor will exchange the remaining portion of the amount outstanding under the 5% original issue discount senior secured convertible debentures (the "Existing Notes") and certain other amounts outstanding with respect thereto, in the aggregate amount of $26,180,415 into 26,180 of Series A preferred convertible stock subject to adjustment with respect to any change in the Outstanding Amount, whether as a result of any additional amounts that may become outstanding under the Existing Notes or any conversion of all, or any part, of the Existing Notes, as applicable, from and after the date of the Exchange Agreement through the closing date of the Exchange, in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). The Exchange Agreement further amended the Securities Purchase Agreement dated as of December 16, 2021, as amended, and contained certain covenants of the Company to, among other items, hold one or more stockholder meetings, no later than December 31, 2024, in respect of the shares of the Company’s common stock issuable underlying the Series A Preferred Stock upon conversion. In addition, on November 4, 2024, the Company entered into Exchange Agreements with two other institutional investors on substantially the same terms, pursuant to which such investors will transfer their Existing Notes to the Company in exchange for a number of shares of Series A Preferred Stock in the aggregate principal amount of $1,836,720 and $5,296,159, respectively. November 2024 Debentures On November 4, 2024, the Company entered into a Securities Purchase Agreement (the “Nov 24 SPA”) with certain accredited investors named therein (the “Debenture Investors”), pursuant to which the Debenture Investors purchased, in a private placement, $1,150,000 in principal amount of debentures, with an option to purchase up to an additional aggregate of $20,000,000 in principal amount of original issue discount senior secured convertible debentures (the “November 2024 Debentures”). The closing of this private placement will occur upon satisfaction of customary closing conditions. The November 2024 Debentures provide for, among other items: (a) an interest rate of the Prime Rate published in the Wall Street Journal plus 2% per annum, payable quarterly and added to the principal amount of the November 2024 Debentures, and/or in cash, at the Company’s option; (b) conversion by the holder into shares of the Company’s common stock at any time (subject to limitations on conversion described therein); (c) a conversion price of $1.23 (subject to adjustment as provided therein) with shares of the Company’s common stock issuable on conversion determined by dividing 120% of the applicable “conversion amount” (as defined in the November 2024 Debentures) by the conversion price; (d) an alternate conversion price at the lower of (1) $1.23 (subject to adjustment as provided therein) and (2) the greater of a floor price of $0.246 (subject to adjustment as provided therein) and 98% of the lowest VWAP of the Company’s shares of common stock during the applicable 10-trading day period (subject to payment in cash if the applicable VWAP calculation is less than the floor price); (e) a maturity date of September 9, 2026, and (f) an option by the holder to extend the maturity date by an additional year.

Pay vs Performance Disclosure - USD ($)	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net loss for basic earnings per share	$ (11,356,956)	$ (17,678,787)	$ (16,316,664)	$ (11,144,012)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	The accompanying condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed consolidated results of operations, financial position, cash flows and changes in stockholders’ deficit for each period presented. All intercompany balances and transactions have been eliminated in preparation of these condensed consolidated financial statements. The condensed consolidated results for the interim periods are not necessarily indicative of results to be expected for the full year. The 2023 year-end consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Use of Estimates	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the (i) estimates of future costs to complete customer contracts recognized over time, (ii) valuation allowances for deferred income tax assets, (iii) valuation of stock-based compensation awards and (iv) the valuation of conversion options, warrants and earnouts. Actual results could differ from those estimates.
Cash and Cash Equivalents	The Company classifies all highly-liquid instruments with an original maturity of three months or less as cash equivalents. The Company maintains cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits of $250,000. Historically, the Company has not experienced any losses in such accounts. There were no cash equivalents at September 30, 2024 or December 31, 2023.
Restricted Certificate of Deposit	The Company has restricted certificate of deposits of $51,763 and $201,822, held by a bank on our behalf as of September 30, 2024 and December 31, 2023, respectively. The restricted certificate of deposit at September 30, 2024, relates to a guarantee against corporate credit cards. $150,000 of the balance at December 31, 2023 relates to a certificate of deposit required to collateralize a letter of credit which was released in the first quarter of 2024, with the remainder relating to a guarantee against corporate credit cards.
Short-term Investments	On March 14, 2023, the Company received proceeds of $5,000,000 from the maturity of a short-term investment in a US Treasury Bill. The gain on the investment of $40,737 is included in other (income) expense on the condensed consolidated statements of operations for the nine months ended September 30, 2023.
Accounts Receivable, Unbilled Revenues, and Allowance for Credit Losses	In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “standard”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Subsequently, the FASB issued several standard updates to clarify and improve the ASU. These ASUs significantly change how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model that will be based on an estimate of current expected credit loss (“CECL”). Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing an entity’s exposure to credit risk and the measurement of credit losses. Financial assets held by the Company that are subject to the guidance in Topic 326 were trade accounts receivable and unbilled revenues. The Company adopted the standard effective January 1, 2023. The impact of the adoption was not considered material to the financial statements and primarily resulted in new and enhanced disclosures. With the adoption of ASU 2016-13, accounts receivable and contract assets are recorded at the invoiced amount and do not typically bear interest. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers. The Company's accounts receivables are primarily derived from the provision of services to our customers. At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. If applicable, accounts receivable and contract assets are evaluated individually when they do not share similar risk characteristics which could exist in circumstances where amounts are considered at risk or uncollectible. The allowance estimate is derived from a review of the Company’s historical losses based on the aging of receivables. This estimate is adjusted for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s portfolio segments have remained constant since the Company’s inception. The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized as income in the year of recovery and as a reduction to the allowance, in accordance with the entity’s accounting policy election.
Assets Held For Sale ("AHFS")	Long-lived assets identified as assets held for sale are categorized on the balance sheet as current assets and are measured at the lower of carrying value or fair value less any costs to sell. Any liabilities associated with the assets being sold are categorized on the condensed consolidated balance sheet as current liabilities. AHFS are no longer depreciated or amortized.
Property and Equipment	Property and equipment is recorded at cost and depreciated using the straight-line method. Expenditures which extend the useful lives of existing property and equipment are capitalized. Those costs which do not extend the useful lives are expensed as incurred. Upon disposition, the cost and accumulated depreciation are removed and any gain or loss on the disposal is reflected in the condensed consolidated statements of operations.
Segment Reporting	Our operations represent a single segment because each revenue stream possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance.
Revenue	Our primary sources of revenue are from providing technology, engineering services and products to the offshore industry and governmental entities. Revenue is generated pursuant to contractual arrangements to design and develop subsea robots and software and to provide related engineering, technical, and other services according to the specifications of the customers. These contracts can be service sales (cost plus fixed fee or firm fixed price) or product sales and typically have terms of up to 18 months. The Company had no product sales for the three and nine months ended September 30, 2024 and 2023, respectively. A performance obligation is a promise in a contract to transfer distinct goods or services to a customer. For all contracts, we assess if there are multiple promises that should be accounted for as separate performance obligations or combined into a single performance obligation. We generally separate multiple promises in a contract as separate performance obligations if those promises are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or require significant integration or customization within a group, they are combined and accounted for as a single performance obligation. Our performance obligations under service agreements generally are satisfied over time as the service is provided. Revenue under these contracts is recognized over time using an input measure of progress (typically costs incurred to date relative to total estimated costs at completion). This requires management to make significant estimates and assumptions to estimate contract sales and costs associated with its contracts with customers. At the outset of a long-term contract, the Company identifies risks to the achievement of the technical, schedule and cost aspects of the contract. Throughout the contract term, on at least a quarterly basis, we monitor and assess the effects of those risks on its estimates of sales and total costs to complete the contract. Changes in these estimates could have a material effect on our results of operations. Where the current estimate of total costs at completion for contracts exceeds the total consideration we expect to receive we recognize the entire expected loss in the period that becomes evident. Estimated contract costs include costs that relate directly to the contract including direct labor, direct materials, and allocations of certain overhead costs. Firm-fixed price contracts present the risk of unreimbursed cost overruns, potentially resulting in lower-than-expected contract profits and margins. This risk is generally lower for cost plus fixed fee contracts which, consequently, often have a lower margin.
Inventories	The inventories comprise raw materials, work in progress, and finished goods, as applicable, and are valued at the lower of cost or net realizable value. Work in progress and finished goods inventories include raw materials, direct labor and production overhead. The Company periodically reviews inventories on hand and current market conditions to determine if the cost of raw materials, work in progress and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly. The associated impairment is charged as a standalone expense on the condensed consolidated statements of operations. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost. The associated write-downs or write-offs of inventory are charged to cost of sales.
Leases	The Company’s lease arrangements are operating leases which are capitalized on the balance sheet as right-of-use (“ROU”) assets and obligations. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. These are recognized at the lease commencement date based on the present value of payments over the lease term. If leases do not provide for an implicit rate, we use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term as the lease payments. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less ("short term leases") are not recorded on the balance sheet; and the lease expense on short-term leases is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. After the criteria are satisfied, the Company accounts for these arrangements as leases in accordance with ASC 842, Leases. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. For leases in which the Company is the lessee and do not have a readily determinable implicit rate, an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases.
Stock-Based Compensation	The Company accounts for employee stock-based compensation using the fair value method. Compensation cost for equity incentive awards is based on the fair value of the equity instrument generally on the date of grant and is recognized over the requisite service period. The Company’s policy is to issue new shares upon the exercise or conversion of options and recognize option forfeitures as they occur.
Income Taxes	Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax asset (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. A valuation allowance for deferred tax assets is recorded when it is more likely than not that the benefit from the deferred tax asset will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company had no material uncertain income tax positions as of September 30, 2024, and December 31, 2023.
Foreign Currency Translation /Foreign Currency Gains and Losses	All assets and liabilities in the condensed consolidated balance sheet of the Company's foreign subsidiary, whose functional currency is the Brazilian Real, are translated at period-end exchange rates. All revenues and expenses in the condensed consolidated statements of operations, of this foreign subsidiary, are translated at average exchange rates for the period. Translation gains and losses are not included on determining net loss but are shown in accumulated other comprehensive loss on the condensed consolidated balance sheet. Foreign currency transaction gains and losses are included on determining net loss. The Company purchases certain materials and equipment from foreign companies and these transactions are generally denominated in the vendors’ local currency.
Common Stock Warrants	We account for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. This assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability or requirements for equity classification, including whether the warrants are indexed to the Company’s Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. We have determined that the Public and Private warrants should be accounted for as liabilities. The Public and Private Warrants were initially recorded at their estimated fair value. They are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations. Derivative warrant liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement). The Public Warrants are valued using their publicly-traded price at each measurement date (a Level 1 measurement). We have determined that the Securities Purchase Agreement ("SPA") Warrants should be accounted for as liabilities. The SPA Warrants were initially recorded at their estimated fair value and are then revalued at each reporting date thereafter, with changes in the fair value reported in the condensed consolidated statements of operations. Derivative warrant liabilities are classified in our balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The fair value of the Original SPA Warrants was estimated using a Black-Scholes option pricing model (a Level 3 measurement).
Earnout Shares	The Earnout Shares will be released upon the occurrence of a triggering event within 5 years of the issue date (see Note 11, "Equity"). The Earnout Shares are considered legally issued and outstanding shares of Common Stock subject to restrictions on transfer and potential forfeiture pending the achievement of the Earnout targets. The Company evaluated the Earnout Shares and concluded that they meet the criteria for equity classification. The Earnout Shares were classified in stockholders’ equity, recognized at fair value upon issuance and will not be subsequently remeasured. A Monte Carlo valuation model (a Level 3 measurement) determined their estimated fair value upon issuance.
Capitalized Interest	The Company capitalizes interest costs incurred to work in progress during the related construction periods. Capitalized interest is charged to cost of revenue when the related completed project is delivered to the buyer. The Company did not capitalize interest during the nine months ended September 30, 2024.
Earnings (Loss) per Share	Basic earnings per share is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of common stock that could have been outstanding assuming the exercise of stock options and warrants (determined using the treasury stock method) and conversion of convertible debt. The Earnout Shares, which are subject to forfeiture if the achievement of certain stock price thresholds is not met, are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of calculating earnings (loss) per share.
Major Customer and Concentration of Credit Risk	We have a limited number of customers. During the three and nine months ended September 30, 2024, sales to four and five customers accounted for 100% of total revenue. The total balance due from these customers as of September 30, 2024, comprised 100% of accounts receivable, net. During the three and nine months ended September 30, 2023, sales to two customers accounted for 99% of total revenue. The total balances due from these customers as of December 31, 2023, made up 68% of accounts receivable, with the remaining 32% due from one other customer. Loss of these customers could have a material adverse impact on the Company.
Reclassifications	Financial statements presented for prior periods include reclassifications that were made to conform to the current year presentation. There was no material impact to the condensed consolidated financial statements for these changes.
Accounting Standards Issued but not adopted as of September 30, 2024	In November 2023, FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to increase reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of this guidance on the disclosures within our condensed consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our condensed consolidated financial statements. All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our condensed consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Inventories

Inventories consisted of the following:


	September 30, 2024		December 31, 2023
Raw material and supplies	$	897,902	$	898,335
Work in progress	1,331,607		1,300,462

Total inventories	$	2,229,509	$	2,198,797

Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue Components

The following table presents the components of our revenue:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Cost plus fixed fee	$	96,627	$	1,075,603	$	311,041	$	3,652,771
Firm fixed-price	273,560		518,251		1,025,208		1,889,978
Total	$	370,187	$	1,593,854	$	1,336,249	$	5,542,749

Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	September 30, 2024		December 31, 2023
Prepaid material purchases	$	388,530	$	440,091
Prepaid insurance	467,472		1,282,703
Other prepayments	249,643		166,424
Total prepaid expenses	$	1,105,645	$	1,889,218

Term loan receivable	$	-	$	695,000
Other current assets	338,542		330,214
Total other current assets	$	338,542	$	1,025,214

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:


	Useful Life (years)	September 30, 2024		December 31, 2023
Leasehold improvements	5	$	833,920	$	796,136
Property & equipment	3-5 years	7,381,529		5,906,859
Technology hardware equipment	3-5 years	2,006,179		1,907,770
Total		10,221,628		8,610,765
Less accumulated depreciation		(3,393,644)		(2,035,034)
Construction in progress		9,330,541		9,329,114
Total property and equipment, net		$	16,158,525	$	15,904,845

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:


	September 30, 2024		December 31, 2023
Accrued compensation	$	304,481	$	618,630
Accrued severance	1,031,731		1,375,000
Accrued professional fees	77,850		1,355,721
Accrued insurance	185,417		876,150
Accrued sales and property taxes	695,565		885,292
Accrued royalties	362,500		250,000
Accrued interest	2,296,243		-
Debt conversion liability accrual	2,135,480		-
Accrued AHFS liability	-		1,158,609
Accrued lease termination costs	163,503		657,000
Other accrued expenses	17,063		162,697
Total accrued expenses	$	7,269,833	$	7,339,099

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consisted of the following:


	September 30, 2024		December 31, 2023
Convertible secured debentures	$	30,911,089	$	36,530,320
Convertible senior secured term loan	27,527,485		12,295,000
Total	58,438,574		48,825,320
Less: debt discount, net	(11,005,493)		(16,593,357)
Less: capitalized debt issuance costs	(1,385,440)		(661,922)
Senior bridge note exit fee provision	100,666		27,608

Total notes payable – long-term	$	46,148,307	$	31,597,649

Schedule of Long-Term Debt Instruments


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Debt discount amortization	$	10,074	$	8,473	$	29,942	$	8,473
Amortization of debt issuance costs	174,318		-		486,758		-
Provision for bridge note exit fee	24,583		3,183		73,058		3,183

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of Operating Lease Expense

The following table presents the Company’s lease costs which are included in general and administrative expenses in the unaudited condensed consolidated statements of operations:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Fixed lease expense	$	129,510	$	129,822	$	388,953	$	382,662
Variable lease expense	47,353		136,785		261,624		192,547
Total operating lease expense	176,863		266,607		650,577		575,209
Short-term lease expense	6,915		-		34,343		-
Total lease expense	$	183,778	$	266,607	$	684,920	$	575,209

Schedule of Right-of-Use Assets and Lease Liabilities

The following table presents the balance and classifications of the Company’s right-of-use assets and lease liabilities included in the unaudited condensed balance sheets:


	September 30, 2024		December 31, 2023
Operating lease right-of-use assets	$	1,283,982	$	834,972

Current portion of operating lease liabilities	433,820		244,774
Long-term operating lease liabilities	921,698		574,260
Total operating lease liabilities	$	1,355,518	$	819,034

Schedule of Lease Maturities

The following table presents the Company’s maturities of lease liabilities as of September 30, 2024:


2024 (excluding the nine months ended September 30, 2024)	$	134,162
2025	541,988
2026	552,142
2027	284,946
2028	35,229

Total lease payments	1,548,467
Total present value discount	(192,949)
Operating lease liabilities	$	1,355,518

Earning (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Earnings (Loss) Per Basic and Diluted Share

The following table is the basic and diluted earnings loss per share computation. For all periods presented, weighted average shares and loss per share reflect the effects of the Reverse Stock Split.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss for basic earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)



Adjusted net loss for diluted earnings per share	$	(11,356,956)	$	(17,678,787)	$	(16,316,664)	$	(11,144,012)

Denominator:
Weighted average shares used to compute basic EPS	2,676,003		1,143,198		1,910,761		1,123,695





Weighted average shares used to compute diluted EPS	2,676,003		1,143,198		1,910,761		1,123,695

Basic loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)
Diluted loss per share	$	(4.24)	$	(15.46)	$	(8.54)	$	(9.92)

Anti-dilutive securities excluded from shares outstanding:
Stock options	25,023		85,683		25,023		85,683
Restricted and performance stock units	333,175		66,989		333,175		66,989
Warrants	545,419		530,808		545,419		530,808
Earnout shares	208,333		208,333		208,333		208,333
Convertible debt	12,505,433		134,882		12,505,433		134,882
Total	13,617,383		1,026,695		13,617,383		1,026,695

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Hierarchy


	Fair Value as of September 30, 2024
	Carrying Value		Level 1		Level 2		Level 3
Financial liabilities:
Warrant liability - Public Warrants	$	127,650	$	127,650	$	-	$	-
Warrant liability - Private Warrants	115,257		-		-		115,257
Warrant liability - SPA Warrants	150,187		-		-		150,187
Total	$	393,094	$	127,650	$	-	$	265,444

Schedule of Changes in Fair Value

The following table sets forth a summary of the changes in fair value of the Company’s financial liabilities:


	Warrant Liability
Balance, December 31, 2023	$	18,376,180
Exercise of warrants	(4,635,257)
Change in fair value of warrant liabilities	(13,347,829)
Balance, September 30, 2024	$	393,094

Summary of Significant Accounting Policies - Narrative (Details)			3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 14, 2023 USD ($)	Sep. 09, 2022	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Concentration Risk [Line Items]
Restricted certificate of deposit			$ 51,763		$ 51,763		$ 201,822
Restricted certificate of deposit used as collateral							$ 150,000
Proceeds from maturity of short-term investment	$ 5,000,000
Gain on short-term investments					$ 0	$ 40,737
Number of operating segments \| segment					1
Foreign currency transaction (losses) gains			$ (11,833)	$ (83,654)	$ (21,276)	(56,061)
Earnout shares period		5 years
Capitalized interest					$ 0	873,816
Capitalized interest, inventory						354,162
Capitalized interest, property and equipment						$ 519,654
Four Customers \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage			100.00%
Four Customers \| Accounts Receivable \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage			100.00%
Five Customers \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage					100.00%
Five Customers \| Accounts Receivable \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage					100.00%
Two Customers \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage				99.00%		99.00%
Two Customers \| Accounts Receivable \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage							68.00%
One Customer \| Accounts Receivable \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk percentage							32.00%

Summary of Significant Accounting Policies - Schedule of Inventories (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Raw material and supplies	$ 897,902	$ 898,335
Work in progress	1,331,607	1,300,462
Total inventories	$ 2,229,509	$ 2,198,797

Revenue - Schedule of Revenue Components (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 370,187	$ 1,593,854	$ 1,336,249	$ 5,542,749
Cost plus fixed fee
Disaggregation of Revenue [Line Items]
Revenue	96,627	1,075,603	311,041	3,652,771
Firm fixed-price
Disaggregation of Revenue [Line Items]
Revenue	$ 273,560	$ 518,251	$ 1,025,208	$ 1,889,978

Revenue - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
Revenue - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Accounts receivable, net	$ 397,726		$ 397,726		$ 212,428
Allowance for doubtful accounts	0		0		0
Write-offs and expected credit losses	0	$ 0	39	$ 0
Contract assets	0		0		0
Contract liabilities	697,818		697,818		$ 2,767,913
Revenue expected to the recognized in future periods related to unfulfilled performance obligations	$ 840,000		$ 840,000

Prepaid Expenses and Other Current Assets (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid material purchases	$ 388,530	$ 440,091
Prepaid insurance	467,472	1,282,703
Other prepayments	249,643	166,424
Total prepaid expenses	1,105,645	1,889,218
Term loan receivable	0	695,000
Other current assets	338,542	330,214
Total other current assets	$ 338,542	$ 1,025,214

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Less accumulated depreciation	$ (3,393,644)	$ (2,035,034)
Total property and equipment, net	16,158,525	15,904,845
Depreciable Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 10,221,628	8,610,765
Leasehold improvements
Property, Plant and Equipment [Line Items]
Useful Life (years)	5 years
Total property and equipment, gross	$ 833,920	796,136
Property & equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 7,381,529	5,906,859
Property & equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful Life (years)	3 years
Property & equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful Life (years)	5 years
Technology hardware equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 2,006,179	1,907,770
Technology hardware equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful Life (years)	3 years
Technology hardware equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful Life (years)	5 years
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 9,330,541	$ 9,329,114

Property and Equipment - Narrative (Details) - USD ($)		9 Months Ended
Property and Equipment - Narrative (Details) - USD ($)	Jan. 22, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Property and equipment, assets held for sale		$ 277,180		$ 2,940,254
Purchase price of assets held for sale	$ 1,533,609
Cash received from sale of assets held for sale	$ 375,000	$ 420,220	$ 0

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)	Sep. 30, 2024	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued compensation	$ 304,481		$ 618,630
Accrued severance	1,031,731		1,375,000
Accrued professional fees	77,850		1,355,721
Accrued insurance	185,417		876,150
Accrued sales and property taxes	695,565		885,292
Accrued royalties	362,500		250,000
Accrued interest	2,296,243		0
Debt conversion liability accrual	2,135,480		0
Accrued AHFS liability	0		1,158,609
Accrued lease termination costs	163,503	$ 657,000	657,000
Other accrued expenses	17,063		162,697
Total accrued expenses	$ 7,269,833		$ 7,339,099

Accrued Liabilities - Narrative (Details) - USD ($)	1 Months Ended
Accrued Liabilities - Narrative (Details) - USD ($)	Apr. 30, 2024	Sep. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Apr. 30, 2023
Payables and Accruals [Abstract]
Floor price (in dollars per share)		$ 3.16
Debt conversion liability accrual		$ 2,135,480		$ 0
Accrued assets held for sale liability				1,158,609
Accrued lease termination costs		$ 163,503	$ 657,000	$ 657,000
Lease costs payment period	8 months
Sale and use tax liability, State of Texas					$ 575,602

Notes Payable - Schedule of Notes Payable (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Total	$ 58,438,574	$ 48,825,320
Less: debt discount, net	(11,005,493)	(16,593,357)
Less: capitalized debt issuance costs	(1,385,440)	(661,922)
Senior bridge note exit fee provision	100,666	27,608
Total notes payable – long-term	46,148,307	31,597,649
Convertible secured debentures \| Convertible debt
Debt Instrument [Line Items]
Total	30,911,089	36,530,320
Convertible senior secured term loan \| Convertible debt
Debt Instrument [Line Items]
Total	$ 27,527,485	$ 12,295,000

Notes Payable - Convertible Secured Debentures (Details)	Jan. 30, 2024 $ / shares	Jun. 22, 2023 shares	Sep. 09, 2022 USD ($) $ / shares shares	Sep. 30, 2024	Sep. 30, 2023
Debt Instrument [Line Items]
Debenture warrants shares (in Shares) \| shares			2,922,425
Inclusive proceeds			$ 35,800,000
Fair value debenture warrants			20,949,110
Debt discount upon issuance totaling			$ 21,679,716
Shares of common stock from exercisable warrants (in shares) \| shares		2,922,425	2,922,425
Convertible secured debentures \| Convertible debt
Debt Instrument [Line Items]
Original issue discount percentage			2.00%	25.20%	25.20%
Aggregate principal amount			$ 36,530,320
Debt instrument term			4 years
Conversion ratio	1.20		1.20
Conversion price (in dollars per share) \| $ / shares	$ 0.4582		$ 15.00
Percentage of promissory note	5.00%		5.00%

Notes Payable - Exchanged Senior Secured Convertible Debenture (Details) - Convertible secured debentures - Convertible debt	Jan. 30, 2024 USD ($) meeting day $ / shares	Sep. 09, 2022 USD ($) $ / shares	Sep. 18, 2023
Debt Instrument [Line Items]
Original issue discount percentage	0.05		0.05
Aggregate principal amount		$ 36,530,320
Minimum number of stockholder meetings required under convertible debt covenants \| meeting	1
Percentage of promissory note	5.00%	5.00%
Conversion price (in dollars per share) \| $ / shares	$ 0.4582	$ 15.00
Conversion ratio	1.20	1.20
Proceeds, stock price trigger	$ 30,000,000
Conversion price floor (in dollars per share) \| $ / shares	$ 0.0878
Stock price trigger, threshold percentage	98.00%
Number of trading days \| day	10
Interest conversion rate	0.90
Default interest rate	0.18
Debt instrument term		4 years
ATW
Debt Instrument [Line Items]
Aggregate principal amount	$ 29,591,600
Material Impact \| Related Party
Debt Instrument [Line Items]
Aggregate principal amount	5,102,000
SLS Irrevocable Trust \| Related Party
Debt Instrument [Line Items]
Aggregate principal amount	$ 1,836,720

Notes Payable -Conversion of Senior Secured Convertible Debentures (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 09, 2022
Debt Instrument [Line Items]
Debt discount accretion	$ 2,441,861		$ 1,037,971	$ 5,664,436	$ 2,916,347
Convertible secured debentures \| Convertible debt
Debt Instrument [Line Items]
Aggregate principal amount						$ 36,530,320
Original issue discount percentage	25.20%		25.20%	25.20%	25.20%	2.00%
Convertible secured debentures \| Convertible debt \| ATW Special Situations I LLC
Debt Instrument [Line Items]
Aggregate principal amount	$ 3,425,000	$ 2,194,231		$ 3,425,000
Interest expense	$ 96,528	$ 43,167
Convertible debt, number of shares (in shares)	1,322,604	22,641,909
Convertible secured debentures \| Convertible debt \| ATW Special Situations I LLC \| Pro Forma
Debt Instrument [Line Items]
Convertible debt, number of shares (in shares)		628,942

Notes Payable - RCB Equities #1, LLC (Details)		9 Months Ended
Notes Payable - RCB Equities #1, LLC (Details)	Jul. 14, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Amortization of debt discount		$ 5,694,378	$ 2,924,820
Fixed interest rate	12.50%
Exit fee amount	$ 125,000
Secured Promissory Note
Debt Instrument [Line Items]
Aggregate principal amount	$ 5,000,000
Original issue discount percentage	0.025
Percentage of promissory note	15.00%
Secured Promissory Note \| Secured Debt
Debt Instrument [Line Items]
Amortization of debt discount	$ 125,000

Notes Payable - Convertible Senior Secured Term Loan (Details)					9 Months Ended
	Sep. 18, 2023 USD ($) $ / shares	Sep. 18, 2023 USD ($) $ / shares	Sep. 18, 2023 USD ($) day $ / shares	Sep. 18, 2023 USD ($) tradingDay $ / shares	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Jan. 30, 2024 USD ($) $ / shares	Dec. 31, 2023 USD ($) $ / shares	Jul. 14, 2023 USD ($)	Jun. 22, 2023 $ / shares	Sep. 09, 2022 $ / shares
Debt Instrument [Line Items]
Fixed interest rate									12.50%
Exit fee amount									$ 125,000
Amortization of debt discount					$ 5,694,378	$ 2,924,820
Deemed interest					$ 0	$ 378,116
Sale of price per share (in dollars per share) \| $ / shares								$ 2		$ 2.286
Convertible debt
Debt Instrument [Line Items]
Fixed interest rate	100.00%	100.00%	100.00%	100.00%
Sale of price per share (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Convertible senior secured term loan \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 20,000,000	$ 20,000,000	$ 20,000,000	$ 20,000,000			$ 3,753,144	$ 695,000
Days required for prior written notice for secured term loans			5	2
Fixed interest rate	2.50%	2.50%	2.50%	2.50%
Exit fee amount	$ 290,000	$ 290,000	$ 290,000	$ 290,000
Interest rate		12.50%
Percentage of promissory note	2.50%	2.50%	2.50%	2.50%
Amortization of debt discount	$ 125,000
Debt issuance costs	577,500	$ 577,500	$ 577,500	$ 577,500				$ 72,000
Deemed interest	$ 378,118
Loan maturity, days prior to the debenture maturity	91 days	91 days	91 days	91 days
Conversion price (in dollars per share) \| $ / shares	$ 6.00	$ 6.00	$ 6.00	$ 6.00
Convertible senior secured term loan \| Convertible debt \| Minimum
Debt Instrument [Line Items]
Initial amount funded under Convertible Senior Secured Term Loan Agreement	$ 11,600,000	$ 11,600,000	$ 11,600,000	$ 11,600,000
Convertible secured debentures \| Convertible debt
Debt Instrument [Line Items]
Percentage of promissory note							5.00%				5.00%
Original issue discount percentage	0.05	0.05	0.05	0.05			0.05
Conversion price (in dollars per share) \| $ / shares							$ 0.4582				$ 15.00

Notes Payable - First Amendment to Convertible Senior Secured Term Loan (Details) - USD ($)	Sep. 30, 2024	Jan. 30, 2024	Dec. 31, 2023	Sep. 18, 2023
Debt Instrument [Line Items]
Total loan funded	$ 58,438,574		$ 48,825,320
Convertible senior secured term loan \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 3,753,144	695,000	$ 20,000,000
Total loan funded	$ 27,527,485		12,295,000
Legal fees associated with debt			$ 72,000	$ 577,500

Notes Payable - Second Amendment to Convertible Senior Secured Term Loan (Details) - USD ($)	Jan. 30, 2024	Dec. 31, 2023	Sep. 18, 2023
Convertible senior secured term loan \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 3,753,144	$ 695,000	$ 20,000,000

Notes Payable - New Senior Secured Term Loan Agreement (Details)	May 01, 2024 USD ($)	Jan. 30, 2024 USD ($) day $ / shares	Sep. 18, 2023 USD ($) $ / shares	Sep. 18, 2023 USD ($) day $ / shares	Sep. 18, 2023 USD ($) tradingDay $ / shares	Dec. 31, 2023 USD ($)
Senior Secured Term Loan Agreement
Debt Instrument [Line Items]
Percentage of promissory note		15.00%
Senior Secured Term Loan Agreement \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 1,000,000	$ 9,551,856
Days required for prior written notice for secured term loans \| day		5
Incremental loan amount		$ 6,000,000
Incremental loan option period		180 days
Committed amount of debt		$ 1,000,000
Legal fees associated with debt	$ 37,500	$ 1,237,291
Debt instrument term	30 years
Loan maturity, days prior to the debenture maturity		91 days
Original issue discount percentage		0.05
Conversion price (in dollars per share) \| $ / shares		$ 0.4582
ATW Extended Maturity Loan \| Convertible debt
Debt Instrument [Line Items]
Debt instrument term		30 years
Convertible senior secured term loan \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 3,753,144	$ 20,000,000	$ 20,000,000	$ 20,000,000	$ 695,000
Days required for prior written notice for secured term loans				5	2
Legal fees associated with debt			$ 577,500	$ 577,500	$ 577,500	$ 72,000
Debt instrument term			3 years
Percentage of promissory note			2.50%	2.50%	2.50%
Loan maturity, days prior to the debenture maturity			91 days	91 days	91 days
Conversion price (in dollars per share) \| $ / shares			$ 6.00	$ 6.00	$ 6.00

Notes Payable - Amendment to 2024 Term Loan Agreement (Details) - USD ($)		3 Months Ended		9 Months Ended
	May 01, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Jan. 30, 2024
Debt Instrument [Line Items]
Debt discount amortization				$ 5,694,378	$ 2,924,820
Amortization of debt issuance costs				486,758	0
Senior Secured Term Loan Agreement \| Convertible debt
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 1,000,000					$ 9,551,856
Debt instrument term	30 years
Debt issuance costs	$ 37,500					$ 1,237,291
Debt discount amortization		$ 10,074	$ 8,473	29,942	8,473
Amortization of debt issuance costs		174,318	0	486,758	0
Provision for bridge note exit fee		$ 24,583	$ 3,183	$ 73,058	$ 3,183

Leases - Narrative (Details)	3 Months Ended			9 Months Ended
Leases - Narrative (Details)	Sep. 30, 2024 USD ($)	Mar. 31, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Aug. 31, 2023	Jul. 31, 2023 option
Lessee, Lease, Description [Line Items]
Lease term		3 years					5 years	5 years
Borrowing rate		8.00%					15.00%	15.00%
Accrued lease termination costs	$ 163,503	$ 657,000		$ 163,503		$ 657,000
Gain on lease termination	$ 0		$ 0	23,897	$ 0
Number of options to extend \| option								2
Cash paid for operating leases				$ 379,720	$ 357,985
Weighted average remaining lease term	3 years 4 months 24 days			3 years 4 months 24 days		8 years 8 months 12 days
Weighted average discount rate	12.60%			12.60%		14.30%
NORWAY
Lessee, Lease, Description [Line Items]
Gain on lease termination	$ 0			$ 23,897
Scotland
Lessee, Lease, Description [Line Items]
Gain on lease termination		$ (356)

Leases - Lease Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
Leases - Lease Costs (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Fixed lease expense	$ 129,510	$ 129,822	$ 388,953	$ 382,662
Variable lease expense	47,353	136,785	261,624	192,547
Total operating lease expense	176,863	266,607	650,577	575,209
Short-term lease expense	6,915	0	34,343	0
Total lease expense	$ 183,778	$ 266,607	$ 684,920	$ 575,209

Leases - Right-of-Use Assets and Lease Liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Operating lease right-of-use assets	$ 1,283,982	$ 834,972
Current portion of operating lease liabilities	433,820	244,774
Long-term operating lease liabilities	921,698	574,260
Total operating lease liabilities	$ 1,355,518	$ 819,034

Leases - Schedule of Lease Maturities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
2024 (excluding the nine months ended September 30, 2024)	$ 134,162
2025	541,988
2026	552,142
2027	284,946
2028	35,229
Total lease payments	1,548,467
Total present value discount	(192,949)
Operating lease liabilities	$ 1,355,518	$ 819,034

Income Taxes (Details) - USD ($)	9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 0	$ 0

Equity (Details)				3 Months Ended		9 Months Ended
Equity (Details)	Jul. 22, 2024 $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Sep. 09, 2022 USD ($) tradingDay $ / shares shares	Sep. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2024 USD ($) shares	Sep. 30, 2024 USD ($) tradingDay $ / shares shares	Sep. 30, 2023 USD ($)	Jul. 21, 2024 shares	Sep. 18, 2023 $ / shares	Jun. 22, 2023 $ / shares
Derivative [Line Items]
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001		$ 0.0001		$ 0.0001
Stock split conversion ratio	0.028
Common stock, shares outstanding (in shares) \| shares	4,169,679	1,389,884		5,634,942		5,634,942		150,107,598
Common stock decrease as a result of reverse stock split		$ (139)		$ (563)		$ (563)
Reverse stock split round up				$ 0		0
Gross proceeds from offering						9,857,857	$ 0
Commissions and offering expenses						$ 499,903	$ 0
Aggregate amount of share authorized to be purchased		$ 5,000
Sale of price per share (in dollars per share) \| $ / shares		$ 2								$ 2.286
Additional shares of common stock held in escrow (in shares) \| shares			7,499,993
Earnout shares period			5 years
Earnout period, threshold trading days \| tradingDay						20
Common Stock
Derivative [Line Items]
Reverse stock split round up (in shares) \| shares				133,975		133,975
Reverse stock split round up				$ (13)		$ (13)
Additional Paid-in Capital
Derivative [Line Items]
Reverse stock split round up				13		13
Threshold One
Derivative [Line Items]
Earnout shares period			5 years
Earnout shares, stock price trigger (in dollars per share) \| $ / shares			$ 15.00
Earnout period, threshold trading days \| tradingDay			20
Earnout period, consecutive threshold trading days \| tradingDay			30
Percentage of earnout shares released			50.00%
Threshold Two
Derivative [Line Items]
Earnout shares period			5 years
Earnout shares, stock price trigger (in dollars per share) \| $ / shares			$ 17.50
Earnout period, threshold trading days \| tradingDay			20
Earnout period, consecutive threshold trading days \| tradingDay			30
Percentage of earnout shares released			25.00%
Threshold Three
Derivative [Line Items]
Earnout shares period			5 years
Earnout shares, stock price trigger (in dollars per share) \| $ / shares			$ 20.00
Earnout period, threshold trading days \| tradingDay			20
Earnout period, consecutive threshold trading days \| tradingDay			30
Percentage of earnout shares released			25.00%
At The Market Offering
Derivative [Line Items]
Net proceeds from offering					$ 9,357,954
Shares issued in transaction (in shares) \| shares					50,631,263
Gross proceeds from offering					$ 9,857,857
Commissions and offering expenses					$ 499,903
Pro Forma
Derivative [Line Items]
Additional shares of common stock held in escrow (in shares) \| shares			208,333
Pro Forma \| At The Market Offering
Derivative [Line Items]
Shares issued in transaction (in shares) \| shares					1,406,424
Scenario, Plan \| At The Market Offering
Derivative [Line Items]
Net proceeds from offering					$ 9,858,269
Convertible debt
Derivative [Line Items]
Sale of price per share (in dollars per share) \| $ / shares									$ 0.0001
Convertible secured debentures \| Convertible debt
Derivative [Line Items]
Aggregate principal amount			$ 36,530,320
Convertible secured debentures \| Convertible debt \| ATW Special Situations I LLC
Derivative [Line Items]
Aggregate principal amount				3,425,000	2,194,231	3,425,000
Interest expense				$ 96,528	$ 43,167
Convertible debt, number of shares (in shares) \| shares				1,322,604	22,641,909
Convertible secured debentures \| Convertible debt \| ATW Special Situations I LLC \| Pro Forma
Derivative [Line Items]
Convertible debt, number of shares (in shares) \| shares					628,942
Revision of Prior Period, Adjustment
Derivative [Line Items]
Common stock decrease as a result of reverse stock split		$ 4,865		$ 14,460		$ 14,460

Warrants (Details)							1 Months Ended	3 Months Ended			9 Months Ended
Warrants (Details)	Dec. 31, 2023 USD ($) $ / shares	Sep. 18, 2023 $ / shares shares	Aug. 03, 2023 USD ($) $ / shares	Jun. 23, 2023 USD ($) shares	Jun. 22, 2023 $ / shares shares	Sep. 09, 2022 $ / shares shares	Mar. 31, 2024 USD ($) shares	Sep. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2024 USD ($) businessDay tradingDay day $ / shares	Sep. 30, 2023 USD ($) shares	Dec. 30, 2023 $ / shares
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrants assumed (in shares)						8,624,991
Number of public warrants (in shares)						36
Effective period of registration statement within consummation of business combination						120 days
Minimum written notice required for redemption \| day											30
Earnout period, threshold trading days \| tradingDay											20
Earnout period, threshold trading day period \| tradingDay											30
Threshold period, number of business days prior to redemption, \| businessDay											3
Value of warrants on balance sheet \| $	$ 380,531							$ 115,257			$ 115,257
Number of private warrants (in shares)						36
Common stock exercise price (in dollars per share) \| $ / shares						$ 11.50
Remaining term of warrants								2 years 11 months 8 days			2 years 11 months 8 days
Registration statement, period required before closing											15 days
Aggregate shares of common stock (in shares)					2,922,425
Sale of price per share (in dollars per share) \| $ / shares	$ 2				$ 2.286
Interest expense \| $										$ 4,320,690
Closing price (in dollars per share) \| $ / shares			$ 1.95
Agreed upon price per share (in dollars per share) \| $ / shares			$ 2.286
Interest expense assumed into Convertible Senior Secured Term Loan \| $											$ 0	$ 378,116
Shares of common stock from exercisable warrants (in shares)					2,922,425	2,922,425
Common stock shares (in shares)				165,713
Warrants issued (in shares)				165,713
Proceeds from exercise of warrants \| $				$ 338,055							$ 0	338,055
Convertible loan agreement price per share \| $ / shares		$ 6.00
Aggregate amount of share authorized to be purchased \| $	$ 5,000
Measurement Input, Share Price
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Valuation assumptions for warrants								1.41			1.41
Measurement Input, Price Volatility
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Valuation assumptions for warrants								1.978			1.978
Measurement Input, Expected Term
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Valuation assumptions for warrants								8			8
Pro Forma
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Common stock shares (in shares)				4,603
Private Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain (loss) on value of warrants \| $								$ 109,609		(40,973)	$ 265,278	298,536
Debenture Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Common stock price (in dollars per share) \| $ / shares						$ 20.00
Minimum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Effective period of registration statement within consummation of business combination											60 days
Maximum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Effective period of registration statement within consummation of business combination											120 days
Warrant liability - Public Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Common stock price (in dollars per share) \| $ / shares						$ 11.50
Common stock price per share, minimum requirement for redemption of public warrants (in dollars per share) \| $ / shares											$ 16.50
Value of warrants on balance sheet \| $	451,088							127,650			$ 127,650
Gain (loss) on value of warrants \| $								$ 131,100		24,150	$ 323,438	378,638
Warrant liability - Public Warrants \| Minimum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise price per warrant (in dollars per share) \| $ / shares											$ 0.01
Warrant liability - Public Warrants \| Common Stock
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of shares of common stock per each public warrant (in shares)						1
Private Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrants assumed (in shares)						7,175,000
Private Warrants \| Common Stock
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrants exercisable, share conversion (in shares)						1
Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Share price (in dollars per share) \| $ / shares								$ 1.41			$ 1.41
Risk-free rate											3.58%
Implied volatility percentage											197.80%
Warrants \| Minimum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise price per warrant (in dollars per share) \| $ / shares		$ 6.00
Warrant liability - SPA Warrants
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Value of warrants on balance sheet \| $	$ 17,544,561							$ 150,187			$ 150,187
Gain (loss) on value of warrants \| $								$ 374,796		$ 18,097,987	$ 12,759,113	$ (8,721,515)
Warrants issued (in shares)		552,377				2,922,425
Term of shares						10 years
Aggregate shares of common stock (in shares)					1,890,066
Exercise of stock options (in shares)				165,713
Proceeds from exercise of warrants \| $							$ 0		$ 0
Exchange warrants (in dollars per share) \| $ / shares								$ 20.00			$ 20.00
Warrant liability - SPA Warrants \| ATW Special Situations I LLC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise of warrants (in shares)							5,700,000		16,461,186
Warrant liability - SPA Warrants \| SLS Irrevocable Trust
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise of warrants (in shares)								38,230
Warrant liability - SPA Warrants \| Pro Forma \| ATW Special Situations I LLC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise of warrants (in shares)							158,334		457,255
Warrant liability - SPA Warrants \| PIPE Securities Purchase Agreement
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Sale of price per share (in dollars per share) \| $ / shares	$ 2
Exchange warrants (in dollars per share) \| $ / shares	$ 2.00												$ 6.00
Aggregate amount of share authorized to be purchased \| $	$ 5,000
Warrant liability - SPA Warrants \| Minimum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant exercise price (in dollars per share) \| $ / shares		$ 20.00			$ 2.04
Warrant liability - SPA Warrants \| Weighted Average
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise price per warrant (in dollars per share) \| $ / shares					3.28
Warrant liability - SPA Warrants \| Maximum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Exercise price per warrant (in dollars per share) \| $ / shares		3.3333									$ 20.00
Warrant exercise price (in dollars per share) \| $ / shares		$ 6.00			$ 4.64
Warrant liability - SPA Warrants \| Common Stock
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrants exercisable, share conversion (in shares)						1
Warrants issued (in shares)										1,890,066		1,890,066
Interest expense assumed into Convertible Senior Secured Term Loan \| $			$ 635,061

Stock-Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
Stock-Based Compensation (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
RSUs granted (in shares)	201,586
Weighted average grant date fair value (in dollars per share)	$ 4.64
Equity units outstanding (in shares)	333,175		333,175
Stock-based compensation expense	$ 532,539	$ 917,993	$ 1,872,504	$ 3,995,020

Employee Benefit Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
Employee Benefit Plan (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Retirement Benefits [Abstract]
Contributions to the plan, as a percent of employees' gross salaries			3.00%
401(k) cost	$ 41,648	$ 103,446	$ 144,913	$ 262,952

Related Party Transactions (Details)	3 Months Ended			9 Months Ended
Related Party Transactions (Details)	Sep. 30, 2024 USD ($) shares	Jun. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Jan. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Sep. 18, 2023	Sep. 09, 2022 USD ($)
Related Party Transaction [Line Items]
Interest expense			$ 4,320,690
Notes payable outstanding	$ 46,148,307			$ 46,148,307			$ 31,597,649
Value of services	2,845,956		6,704,890	9,502,685	$ 17,478,099
Accounts payable	4,734,093			$ 4,734,093			7,035,450
ATW
Related Party Transaction [Line Items]
Exercise of warrants (in shares) \| shares				615,589
SLS Family Irrevocable Trust
Related Party Transaction [Line Items]
Exercise of warrants (in shares) \| shares				38,230
Related Party
Related Party Transaction [Line Items]
Value of services	270,000			$ 758,000
Accounts payable	90,000			90,000			$ 95,177
Convertible secured debentures \| Convertible debt
Related Party Transaction [Line Items]
Aggregate principal amount									$ 36,530,320
Original issue discount percentage						0.05		0.05
Convertible secured debentures \| Convertible debt \| ATW Special Situations I LLC
Related Party Transaction [Line Items]
Aggregate principal amount	3,425,000	$ 2,194,231		3,425,000
Interest expense	$ 96,528	$ 43,167
Convertible debt, number of shares (in shares) \| shares	1,322,604	22,641,909
Convertible secured debentures \| Convertible debt \| Pro Forma \| ATW Special Situations I LLC
Related Party Transaction [Line Items]
Convertible debt, number of shares (in shares) \| shares		628,942
Convertible secured debentures \| ATW \| Convertible debt
Related Party Transaction [Line Items]
Aggregate principal amount						$ 29,591,600
Convertible secured debentures \| Related Party \| ATW \| Convertible debt
Related Party Transaction [Line Items]
Interest expense	$ 327,682		378,115	1,070,098	1,122,015
Convertible secured debentures \| Related Party \| Material Impact \| Convertible debt
Related Party Transaction [Line Items]
Aggregate principal amount						5,102,000
Interest expense	65,192		65,192	194,159	193,451
Convertible secured debentures \| Related Party \| SLS Family Irrevocable Trust \| Convertible debt
Related Party Transaction [Line Items]
Aggregate principal amount						$ 1,836,720
Interest expense	23,469		23,469	69,897	69,642
Senior Secured Term Loan Agreement \| Convertible debt
Related Party Transaction [Line Items]
Original issue discount percentage						0.05
Senior Secured Term Loan Agreement \| Related Party \| Material Impact \| Convertible debt
Related Party Transaction [Line Items]
Interest expense	145,845		4,167	390,339	4,167
Notes payable outstanding	4,128,594			4,128,594
Senior Secured Term Loan Agreement \| Related Party \| ATW Special Situations I LLC \| Convertible debt
Related Party Transaction [Line Items]
Interest expense	103,635		6,850	251,674	6,850
Notes payable outstanding	2,977,513			2,977,513
Senior Secured Term Loan Agreement \| Related Party \| ATW Special Situations II LLC \| Convertible debt
Related Party Transaction [Line Items]
Interest expense	192,216		$ 3,984	524,531	$ 3,984
Notes payable outstanding	5,748,354			5,748,354
Senior Secured Term Loan Agreement \| Related Party \| ATW Special Situations III LLC \| Convertible debt
Related Party Transaction [Line Items]
Interest expense	40,815			105,544
Notes payable outstanding	$ 1,064,730			$ 1,064,730

Earning (Loss) Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
Earning (Loss) Per Share (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net loss for basic earnings per share	$ (11,356,956)	$ (17,678,787)	$ (16,316,664)	$ (11,144,012)
Adjusted net loss for diluted earnings per share	$ (11,356,956)	$ (17,678,787)	$ (16,316,664)	$ (11,144,012)
Denominator:
Weighted average shares used to compute basic EPS (in shares)	2,676,003	1,143,198	1,910,761	1,123,695
Weighted average shares used to compute diluted EPS (in shares)	2,676,003	1,143,198	1,910,761	1,123,695
Basic loss per share (in dollars per share)	$ (4.24)	$ (15.46)	$ (8.54)	$ (9.92)
Diluted loss per share (in dollars per share)	$ (4.24)	$ (15.46)	$ (8.54)	$ (9.92)
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	13,617,383	1,026,695	13,617,383	1,026,695
Stock options
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	25,023	85,683	25,023	85,683
Restricted and performance stock units
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	333,175	66,989	333,175	66,989
Warrants
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	545,419	530,808	545,419	530,808
Earnout shares
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	208,333	208,333	208,333	208,333
Convertible debt
Anti-dilutive securities excluded from shares outstanding:
Total anti-dilutive securities excluded from shares outstanding (in shares)	12,505,433	134,882	12,505,433	134,882

Fair Value Measurements - Schedule of Fair Value Hierarchy (Details)	9 Months Ended
	Sep. 30, 2024 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 393,094
Warrant liability - Public Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	127,650
Warrant liability - Private Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	115,257
Warrant liability - SPA Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	150,187
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	127,650
Level 1 \| Warrant liability - Public Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	127,650
Level 1 \| Warrant liability - Private Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 1 \| Warrant liability - SPA Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 2 \| Warrant liability - Public Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 2 \| Warrant liability - Private Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 2 \| Warrant liability - SPA Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	265,444
Level 3 \| Warrant liability - Public Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 3 \| Warrant liability - Private Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	115,257
Level 3 \| Warrant liability - SPA Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 150,187

Fair Value Measurements (Details) - Schedule of Changes in Fair Value - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, December 31, 2023			$ 18,376,180
Exercise of warrants			(4,635,257)
Change in fair value of warrant liabilities	$ (615,505)	$ 8,656,392	(13,347,829)	$ (18,775,158)
Balance, September 30, 2024	$ 393,094		$ 393,094

Subsequent Events (Details)				3 Months Ended	9 Months Ended
Subsequent Events (Details)	Nov. 04, 2024 USD ($) day meeting $ / shares shares	Jan. 30, 2024 meeting day $ / shares	Sep. 09, 2022 USD ($) $ / shares	Sep. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 18, 2023
Subsequent Event [Line Items]
Conversion of convertible secured debentures				$ 3,521,528	$ 5,758,926	$ 0
Convertible Secured Debentures \| Convertible debt
Subsequent Event [Line Items]
Original issue discount percentage		0.05					0.05
Aggregate principal amount			$ 36,530,320
Minimum number of stockholder meetings required under convertible debt covenants \| meeting		1
Conversion price (in dollars per share) \| $ / shares		$ 0.4582	$ 15.00
Conversion ratio		1.20	1.20
Conversion price floor (in dollars per share) \| $ / shares		$ 0.0878
Stock price trigger, threshold percentage		98.00%
Number of trading days \| day		10
Subsequent Event \| Convertible Secured Debentures \| Convertible debt
Subsequent Event [Line Items]
Aggregate principal amount	$ 26,180,415
Convertible debt, number of shares (in shares) \| shares	26,180
Minimum number of stockholder meetings required under convertible debt covenants \| meeting	1
Subsequent Event \| Convertible Secured Debentures \| Convertible debt \| Institution One
Subsequent Event [Line Items]
Aggregate principal amount	$ 1,836,720
Subsequent Event \| Convertible Secured Debentures \| Convertible debt \| Institution Two
Subsequent Event [Line Items]
Aggregate principal amount	5,296,159
Subsequent Event \| Convertible Secured Debentures, November 2024 Debentures \| Convertible debt
Subsequent Event [Line Items]
Aggregate principal amount	1,150,000
Additional principal option available	$ 20,000,000
Percentage of promissory note	2.00%
Conversion price (in dollars per share) \| $ / shares	$ 1.23
Conversion ratio	1.20
Conversion price floor (in dollars per share) \| $ / shares	$ 0.246
Stock price trigger, threshold percentage	98.00%
Number of trading days \| day	10