0.480.472.751.4010189000101890001018900010189000P10Y27626264257703600010189000101890000000000000P1Y0001600983--12-312021Q3falsefalse0001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983us-gaap:SeriesBPreferredStockMember2019-09-300001600983us-gaap:SeriesAPreferredStockMember2019-09-300001600983kscp:SeriesSPreferredStockMember2019-09-300001600983kscp:SeriesMPreferredStockMember2019-09-300001600983kscp:SeriesM4PreferredStockMember2019-09-300001600983kscp:SeriesM3PreferredStockMember2019-09-300001600983kscp:SeriesM2PreferredStockMember2019-09-300001600983kscp:SeriesM1PreferredStockMember2019-09-300001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-01-012020-09-300001600983us-gaap:CommonClassBMember2021-01-012021-09-300001600983us-gaap:RetainedEarningsMember2021-09-300001600983us-gaap:AdditionalPaidInCapitalMember2021-09-300001600983us-gaap:RetainedEarningsMember2021-06-300001600983us-gaap:AdditionalPaidInCapitalMember2021-06-3000016009832021-06-300001600983us-gaap:RetainedEarningsMember2020-12-310001600983us-gaap:AdditionalPaidInCapitalMember2020-12-310001600983us-gaap:RetainedEarningsMember2020-09-300001600983us-gaap:AdditionalPaidInCapitalMember2020-09-300001600983us-gaap:RetainedEarningsMember2020-06-300001600983us-gaap:AdditionalPaidInCapitalMember2020-06-3000016009832020-06-300001600983us-gaap:RetainedEarningsMember2019-12-310001600983us-gaap:AdditionalPaidInCapitalMember2019-12-310001600983kscp:SeriesM3PreferredStockMember2018-12-310001600983kscp:SeriesM2PreferredStockMember2018-01-310001600983kscp:SeriesM3PreferredStockMember2017-12-310001600983kscp:SeriesMPreferredStockMember2017-01-310001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-09-300001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-300001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-09-300001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-06-300001600983us-gaap:CommonClassBMemberus-gaap:CommonStockMember2019-12-310001600983kscp:SeriesM1PreferredStockMember2021-09-3000016009832020-01-012020-12-310001600983kscp:EquityIncentivePlan2016Member2016-12-310001600983kscp:EquityIncentivePlan2014Member2014-04-300001600983us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001600983us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001600983us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001600983us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001600983kscp:EquityIncentivePlan2016Member2021-01-012021-09-300001600983us-gaap:ConvertiblePreferredStockMember2021-01-012021-09-300001600983us-gaap:TransferredOverTimeMember2021-07-012021-09-300001600983us-gaap:TransferredAtPointInTimeMember2021-07-012021-09-300001600983us-gaap:TransferredOverTimeMember2021-01-012021-09-300001600983us-gaap:TransferredAtPointInTimeMember2021-01-012021-09-300001600983us-gaap:TransferredOverTimeMember2020-07-012020-09-300001600983us-gaap:TransferredAtPointInTimeMember2020-07-012020-09-300001600983us-gaap:TransferredOverTimeMember2020-01-012020-09-300001600983us-gaap:SubsequentEventMember2022-01-262022-01-2600016009832022-01-262022-01-260001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2020-06-152020-06-150001600983kscp:SeriesSPreferredStockMemberkscp:Regulation2018DOfferingMember2019-01-012019-12-310001600983us-gaap:SeriesBPreferredStockMember2021-01-012021-09-300001600983us-gaap:SeriesAPreferredStockMember2021-01-012021-09-300001600983kscp:SeriesMPreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM3PreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM2PreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM3PreferredStockMember2018-01-012018-12-310001600983kscp:SeriesMPreferredStockMember2017-01-012017-12-310001600983kscp:SeriesM3PreferredStockMember2017-01-012017-12-310001600983kscp:SeriesSPreferredStockMemberkscp:RegulationOffering2020Member2021-01-012021-09-300001600983kscp:SeriesSPreferredStockMemberkscp:RegulationOffering2019Member2021-01-012021-09-300001600983kscp:SeriesM2PreferredStockMember2018-02-280001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2018-07-110001600983kscp:SeriesSPreferredStockMemberkscp:RegulationOfferingMember2021-01-012021-09-300001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2019-12-312019-12-310001600983kscp:PaycheckProtectionProgramMember2020-12-310001600983kscp:FinancingArrangementMember2021-01-012021-09-300001600983kscp:FinancingArrangementMember2020-01-012020-09-300001600983kscp:KonicaMinoltaInc.Member2021-09-300001600983kscp:KonicaMinoltaInc.Member2020-12-310001600983srt:MinimumMemberus-gaap:ConvertibleNotesPayableMemberus-gaap:SubsequentEventMember2021-11-180001600983srt:MaximumMemberus-gaap:ConvertibleNotesPayableMemberus-gaap:SubsequentEventMember2021-11-180001600983kscp:PaycheckProtectionProgramMember2020-04-240001600983kscp:ReliantFundingMember2019-12-310001600983kscp:FinancingArrangementMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMember2019-02-280001600983kscp:FinancingArrangementMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMember2019-02-280001600983us-gaap:ConvertibleNotesPayableMember2021-09-300001600983kscp:PaycheckProtectionProgramMember2021-05-202021-05-200001600983us-gaap:ConvertibleNotesPayableMemberus-gaap:SubsequentEventMember2021-11-180001600983us-gaap:ConvertibleNotesPayableMember2021-07-010001600983us-gaap:ConvertibleNotesPayableMember2021-06-290001600983us-gaap:ConvertibleNotesPayableMember2020-12-310001600983us-gaap:ConvertibleNotesPayableMember2020-06-300001600983us-gaap:ConvertibleNotesPayableMemberus-gaap:SubsequentEventMember2021-11-182021-11-180001600983us-gaap:ConvertibleNotesPayableMember2021-01-012021-09-300001600983kscp:KonicaMinoltaInc.Member2021-01-012021-09-300001600983kscp:KonicaMinoltaInc.Member2020-01-012020-09-300001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesM4PreferredStockMember2019-09-100001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesM4PreferredStockMember2019-06-300001600983us-gaap:CommonClassBMember2020-12-310001600983us-gaap:CommonClassAMember2020-12-310001600983us-gaap:CommonClassBMember2019-09-300001600983kscp:EquityIncentivePlan2016Member2021-09-300001600983kscp:TermLoanAgreementMemberus-gaap:CommonClassBMember2021-09-300001600983kscp:ProductionsLlcMemberkscp:SeriesSPreferredStockMember2019-07-230001600983kscp:SeriesSPreferredStockMemberus-gaap:SubsequentEventMember2021-11-180001600983kscp:ClassOfWarrantsExpirationDateNovember72026Memberus-gaap:SeriesBPreferredStockMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateMay232028Memberus-gaap:CommonClassBMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateJuly312024Memberkscp:SeriesSPreferredStockMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateDecember312021Memberkscp:SeriesSPreferredStockMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateDecember312021Memberkscp:SeriesM3PreferredStockMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateDecember232021Memberkscp:SeriesM1PreferredStockMember2021-09-300001600983kscp:ClassOfWarrantsExpirationDateApril102025Memberus-gaap:CommonClassBMember2021-09-300001600983kscp:ProductionsLlcMember2019-07-230001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesSPreferredStockMember2019-04-3000016009832020-09-3000016009832019-12-310001600983us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001600983us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001600983us-gaap:SeriesBPreferredStockMember2021-01-012021-09-300001600983us-gaap:SeriesAPreferredStockMember2021-01-012021-09-300001600983us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001600983us-gaap:ConvertibleDebtSecuritiesMember2021-01-012021-09-300001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMember2021-01-012021-09-300001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMember2021-01-012021-09-300001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMember2021-01-012021-09-300001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMember2021-01-012021-09-300001600983kscp:WarrantsToPurchaseCommonStockMember2021-01-012021-09-300001600983kscp:SeriesSPreferredStockMember2021-01-012021-09-300001600983kscp:SeriesMPreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM4PreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM3PreferredStockMember2021-01-012021-09-300001600983kscp:SeriesM2PreferredStockMember2021-01-012021-09-300001600983us-gaap:SeriesBPreferredStockMember2020-01-012020-09-300001600983us-gaap:SeriesAPreferredStockMember2020-01-012020-09-300001600983us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001600983us-gaap:ConvertibleDebtSecuritiesMember2020-01-012020-09-300001600983kscp:WarrantsToPurchaseSeriesSClassPreferredStockMember2020-01-012020-09-300001600983kscp:WarrantsToPurchaseSeriesM3ClassPreferredStockMember2020-01-012020-09-300001600983kscp:WarrantsToPurchaseSeriesM1ClassPreferredStockMember2020-01-012020-09-300001600983kscp:WarrantsToPurchaseSeriesBClassBPreferredStockMember2020-01-012020-09-300001600983kscp:WarrantsToPurchaseCommonStockMember2020-01-012020-09-300001600983kscp:SeriesSPreferredStockMember2020-01-012020-09-300001600983kscp:SeriesMPreferredStockMember2020-01-012020-09-300001600983kscp:SeriesM4PreferredStockMember2020-01-012020-09-300001600983kscp:SeriesM3PreferredStockMember2020-01-012020-09-300001600983kscp:SeriesM2PreferredStockMember2020-01-012020-09-300001600983us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001600983us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001600983us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001600983us-gaap:CostOfSalesMember2021-07-012021-09-300001600983us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001600983us-gaap:SellingAndMarketingExpenseMember2020-07-012020-09-300001600983us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001600983us-gaap:CostOfSalesMember2020-07-012020-09-300001600983us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001600983us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001600983us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001600983us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001600983kscp:SeriesSPreferredStockMember2021-07-012021-09-300001600983kscp:SeriesSPreferredStockMember2021-01-012021-09-300001600983kscp:SeriesSPreferredStockMember2020-07-012020-09-300001600983kscp:SeriesSPreferredStockMember2020-01-012020-09-300001600983us-gaap:RetainedEarningsMember2021-07-012021-09-300001600983kscp:SeriesM4PreferredStockMember2021-07-012021-09-3000016009832021-07-012021-09-300001600983us-gaap:RetainedEarningsMember2021-01-012021-09-300001600983kscp:SeriesM4PreferredStockMember2021-01-012021-09-300001600983us-gaap:RetainedEarningsMember2020-07-012020-09-300001600983kscp:SeriesM4PreferredStockMember2020-07-012020-09-3000016009832020-07-012020-09-300001600983us-gaap:RetainedEarningsMember2020-01-012020-09-300001600983kscp:SeriesM4PreferredStockMember2020-01-012020-09-300001600983us-gaap:SeriesBPreferredStockMember2021-09-300001600983us-gaap:SeriesAPreferredStockMember2021-09-300001600983kscp:SeriesSPreferredStockMember2021-09-300001600983kscp:SeriesM4PreferredStockMember2021-09-300001600983kscp:SeriesM3PreferredStockMember2021-09-300001600983kscp:SeriesM2PreferredStockMember2021-09-300001600983us-gaap:SeriesBPreferredStockMember2021-06-300001600983us-gaap:SeriesAPreferredStockMember2021-06-300001600983kscp:SeriesSPreferredStockMember2021-06-300001600983kscp:SeriesMPreferredStockMember2021-06-300001600983kscp:SeriesM4PreferredStockMember2021-06-300001600983kscp:SeriesM3PreferredStockMember2021-06-300001600983kscp:SeriesM2PreferredStockMember2021-06-300001600983us-gaap:SeriesBPreferredStockMember2020-12-310001600983us-gaap:SeriesAPreferredStockMember2020-12-310001600983kscp:SeriesSPreferredStockMember2020-12-310001600983kscp:SeriesMPreferredStockMember2020-12-310001600983kscp:SeriesM4PreferredStockMember2020-12-310001600983kscp:SeriesM3PreferredStockMember2020-12-310001600983kscp:SeriesM2PreferredStockMember2020-12-310001600983us-gaap:SeriesBPreferredStockMember2020-09-300001600983us-gaap:SeriesAPreferredStockMember2020-09-300001600983kscp:SeriesSPreferredStockMember2020-09-300001600983kscp:SeriesMPreferredStockMember2020-09-300001600983kscp:SeriesM4PreferredStockMember2020-09-300001600983kscp:SeriesM3PreferredStockMember2020-09-300001600983kscp:SeriesM2PreferredStockMember2020-09-300001600983us-gaap:SeriesBPreferredStockMember2020-06-300001600983us-gaap:SeriesAPreferredStockMember2020-06-300001600983kscp:SeriesSPreferredStockMember2020-06-300001600983kscp:SeriesMPreferredStockMember2020-06-300001600983kscp:SeriesM4PreferredStockMember2020-06-300001600983kscp:SeriesM3PreferredStockMember2020-06-300001600983kscp:SeriesM2PreferredStockMember2020-06-300001600983us-gaap:SeriesBPreferredStockMember2019-12-310001600983us-gaap:SeriesAPreferredStockMember2019-12-310001600983kscp:SeriesSPreferredStockMember2019-12-310001600983kscp:SeriesMPreferredStockMember2019-12-310001600983kscp:SeriesM4PreferredStockMember2019-12-310001600983kscp:SeriesM3PreferredStockMember2019-12-310001600983kscp:SeriesM2PreferredStockMember2019-12-3100016009832019-09-300001600983srt:MinimumMemberkscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2021-01-012021-09-300001600983srt:MaximumMemberkscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2021-01-012021-09-300001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2019-01-012019-12-310001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2021-09-300001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2020-12-310001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2020-09-300001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2019-12-310001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesM4PreferredStockMember2019-06-012019-06-300001600983kscp:SeriesMPreferredStockMember2021-09-300001600983kscp:WallStreetFundingMember2020-03-192020-03-190001600983kscp:ReliantFundingMember2019-12-092019-12-090001600983kscp:TermLoanAgreementMember2018-05-012018-05-310001600983us-gaap:CommonClassAMember2019-09-300001600983kscp:TermOfStockOptionsIfPriceOf110OfFairMarketValueMemberkscp:EquityIncentivePlan2016Member2021-01-012021-09-300001600983kscp:TermOfStockOptionsIfPriceOf100OfFairMarketValueMemberkscp:EquityIncentivePlan2016Member2021-01-012021-09-300001600983kscp:SeriesMPreferredStockMember2016-12-232016-12-230001600983kscp:WallStreetFundingMember2020-03-190001600983kscp:ReliantFundingMember2019-12-090001600983kscp:FinancingArrangementMember2019-02-280001600983kscp:TermLoanAgreementMember2018-05-310001600983kscp:SeriesSPreferredStockMemberkscp:RegulationOffering2020Member2020-06-152020-06-150001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2019-05-212019-05-210001600983kscp:SeriesSPreferredStockMemberkscp:RegulationDOfferingMember2018-07-112018-07-110001600983kscp:SeriesMPreferredStockMember2017-01-012017-01-310001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2020-01-012020-09-3000016009832020-01-012020-09-300001600983kscp:FinancingArrangementMember2019-02-282019-02-280001600983us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2021-01-012021-09-300001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesSPreferredStockMember2021-01-012021-09-300001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesSPreferredStockMember2019-04-302019-04-300001600983us-gaap:ConvertibleNotesPayableMember2019-04-302019-04-300001600983kscp:PaycheckProtectionProgramMember2021-05-200001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesM3PreferredStockMember2019-06-300001600983us-gaap:ConvertibleNotesPayableMemberkscp:SeriesM3PreferredStockMember2019-06-100001600983kscp:SeriesMPreferredStockMember2018-02-280001600983us-gaap:CommonClassBMember2021-09-300001600983us-gaap:CommonClassAMember2021-09-300001600983srt:MinimumMember2021-01-012021-09-300001600983srt:MaximumMember2021-01-012021-09-300001600983srt:MinimumMember2020-01-012020-09-300001600983srt:MaximumMember2020-01-012020-09-300001600983us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001600983us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001600983us-gaap:CostOfSalesMember2021-01-012021-09-300001600983us-gaap:SellingAndMarketingExpenseMember2020-01-012020-09-300001600983us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001600983us-gaap:CostOfSalesMember2020-01-012020-09-3000016009832021-09-3000016009832020-12-3100016009832021-04-200001600983us-gaap:ConvertibleNotesPayableMember2019-04-300001600983kscp:FinancingArrangementMember2021-03-310001600983us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-3000016009832021-04-212021-04-2100016009832022-03-0400016009832021-01-012021-09-30xbrli:sharesiso4217:USDxbrli:purekscp:classkscp:paymentkscp:itemiso4217:USDxbrli:shares

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

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: 024-11680

Knightscope, Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-2482575

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

1070 Terra Bella Avenue

Mountain View, CA 94043

(Address of Principal Executive Offices)

(650) 924-1025

(Registrant’s telephone number)

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 such filing requirements for the past 90 days.   Yes      No  

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      No  

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.

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

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

Title of Each Class

Trading symbol

Name of Exchange on which registered

Class A Common Stock, par value $0.001 per share

KSCP

Nasdaq Global Market

As of March 4, 2022, there were 23,716,098 of the registrant’s Class A common stock outstanding.

Table of Contents

TABLE OF CONTENTS

Page

Part I

Financial Information

5

Item 1.

Financial Statements

5

Condensed Balance Sheets as of September 30, 2021 (Unaudited) and Balance Sheets as of December 31, 2020

5

Condensed Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

6

Condensed Statements of Stockholders’ Deficit for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

7

Condensed Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (Unaudited)

9

Notes to Condensed Financial Statements (Unaudited)

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

39

Item 4.

Controls and Procedures

39

Part II

Other Information

41

Item 1.

Legal Proceedings

41

Item 1A.

Risk Factors

41

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

50

Item 3.

Defaults Upon Senior Securities

51

Item 4.

Mine Safety Disclosures

51

Item 5.

Other Information

51

Item 6.

Exhibits

52

Signatures

53

2

Table of Contents

Cautionary Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in 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”). All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including but not limited to, statements regarding our future operating results and financial position, including projections of our future financial performance, our business strategy and plans, market growth, our objectives for future operations, industry trends, anticipated trends in our business and other characterizations of future events or circumstances are forward-looking statements. Words such as “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

The success of our products and product candidates will require significant capital resources and years of development efforts;
Our limited number of deployments and the risk of limited market acceptance of our products;
Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand;
Our limited operating history by which performance can be gauged;
Our ability to operate and collect digital information on behalf of our clients, which is dependent on the privacy laws of jurisdictions in which our Autonomous Security Robots (“ASR”) operate, as well as the corporate policies of our clients, which may limit our ability to fully deploy our technologies in various markets;
Our ability to raise capital, our rolling closes of equity infusions for our financings, and the availability of future financing;
Unpredictable events, such as the COVID-19 pandemic, and associated business disruptions could seriously harm our future revenues and financial condition, delay our operations, increase our costs and expenses, and impact our ability to raise capital; and
Our ability to manage our research, development, expansion, growth and operating expenses.

We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward- looking statements are subject to a number of risks, uncertainties, and assumptions and other factors that could cause actual results to differ materially from those stated, including those described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, as such factors may be updated in our filings with the Securities and Exchange Commission, ("the SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In particular, the impact of the current COVID-19 pandemic on economic conditions and the physical security industry in general and our financial position and operating results in particular have been material, are changing rapidly, and cannot be predicted.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to update any of these forward-looking

3

Table of Contents

statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations, except as required by law.

In this Quarterly Report on Form 10-Q, the words "we," "us," "our," and "Knightscope" refer to Knightscope, Inc., unless the context requires otherwise.

4

Table of Contents

PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

KNIGHTSCOPE, INC.

Condensed Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

    

September 30,

    

December 31,

2021

2020

ASSETS

(Unaudited)

(1)

Current assets:

  

  

Cash and cash equivalents

$

9,670

$

7,057

Restricted cash

 

100

 

100

Accounts receivable (net of allowance for doubtful accounts $250 and $279 as of September 30 2021 and December 31, 2020, respectively)

 

971

 

874

Prepaid expenses and other current assets

 

1,109

 

757

Total current assets

 

11,850

 

8,788

Autonomous Security Robots, net

 

2,874

 

2,290

Property, equipment and software, net

 

111

 

22

Operating lease right-of-use-assets

 

1,220

 

1,624

Other assets

 

78

 

220

Total assets

$

16,133

$

12,944

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

564

$

232

Accrued expenses

 

425

 

864

Deferred revenue

 

859

 

522

Debt obligations

 

5,598

 

Operating lease liabilities

 

625

 

560

Preferred stock warrant liability

 

1,319

 

Other current liabilities

 

642

 

460

Total current liabilities

 

10,032

 

2,638

Debt obligations

 

 

4,579

Preferred stock warrant liabilities

 

16,675

 

5,617

Operating lease liabilities

 

657

 

1,133

Total liabilities

 

27,364

 

13,967

Commitments and contingencies (Note 9)

 

  

 

  

Preferred Stock, $0.001 par value; 43,405,324 shares authorized as of September 30, 2021 and December 31, 2020; 27,626,264 and 25,770,360 shares issued and outstanding as of September 30 2021 and December 31, 2020, respectively; aggregate liquidation preference of $93,261 as of September 30, 2021

 

82,258

 

65,162

Stockholders' deficit:

 

  

 

  

Class A common stock, $0.001 par, 114,000,000 shares authorized as of September 30 2021 and December 31, 2020; 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

 

Class B common stock, $0.001 par, 30,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 10,189,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

10

 

10

Additional paid-in capital

 

3,928

 

3,051

Accumulated deficit

 

(97,427)

 

(69,246)

Total stockholders' deficit

 

(93,489)

 

(66,185)

Total liabilities, preferred stock and stockholders’ deficit

$

16,133

$

12,944

(1)The condensed balance sheet as of December 31, 2020 was derived from the audited balance sheet as of that date.

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

5

Table of Contents

KNIGHTSCOPE, INC.

Condensed Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended September 30, 

Nine months ended September 30, 

    

2021

    

2020

    

2021

    

2020

Revenue, net

$

784

$

720

$

2,561

$

2,358

Cost of revenue, net

1,309

1,299

 

3,826

 

3,485

Gross loss

(525)

(579)

 

(1,265)

 

(1,127)

Operating expenses:

 

  

 

  

Research and development

1,238

986

 

3,894

 

2,284

Sales and marketing

697

1,718

 

7,327

 

4,557

General and administrative

1,534

628

 

3,199

 

1,608

Total operating expenses

3,469

3,332

 

14,420

 

8,449

Loss from operations

(3,994)

(3,911)

 

(15,685)

 

(9,576)

Other income (expense):

 

  

 

  

Interest expense, net

(858)

(699)

 

(1,992)

 

(1,782)

Change in fair value of warrant liabilities

 

(10,737)

 

(2,424)

Other income, net

(43)

15

 

778

 

47

Total other income (expense)

(901)

(684)

 

(11,951)

 

(4,159)

Net loss before income tax expense

(4,895)

(4,595)

 

(27,636)

 

(13,735)

Income tax benefit (expense)

(3)

 

 

(4)

Net loss

(4,895)

(4,598)

 

(27,636)

 

(13,739)

Preferred stock dividends

(186)

(165)

 

(545)

 

(485)

Net loss attributable to common stockholders

$

(5,081)

$

(4,763)

$

(28,181)

$

(14,224)

Basic and diluted net loss per common share

$

(0.50)

$

(0.47)

$

(2.77)

$

(1.40)

Weighted average shares used to compute basic and diluted net loss per share

10,189,000

10,189,000

 

10,189,000

 

10,186,802

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

6

Table of Contents

KNIGHTSCOPE, INC.

Condensed Statements of Stockholders’ Deficit

(In thousands, except share and per share data)

(Unaudited)

    

Series m

    

Series m2

    

Series m3

    

Series m4

    

Series S

    

Series A

    

Series B

    

Class A

    

Class B

    

Preferred

Preferred

Preferred 

Preferred 

Preferred

Preferred 

Preferred

common

common

Additional

Total

    

stock

stock

stock

stock

stock

stock

stock

stock

stock

 Paid-in-

Accumulative

 Stockholders’

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

Deficit

    

Deficit

Balance at June 30, 2020

 

5,339,215

$

13,866

 

1,660,756

$

4,982

 

16,757

$

46

 

1,432,786

$

5,487

 

1,575,586

$

11,312

 

8,936,015

$

3,865

 

4,653,583

$

9,442

 

$

 

10,189,000

$

10

$

2,720

$

(58,708)

$

(55,978)

Stock based compensation

 

  

 

  

 

  

 

  

105

 

  

105

Stock options exercised

 

  

 

  

 

 

  

Issuance of Series s Preferred stock, net of issuance costs

1,886,660

13,566

 

  

 

  

 

  

 

  

 

  

 

  

Series m‑4 accrued dividend

165

 

  

 

  

 

  

 

  

 

  

(165)

(165)

Net loss

 

  

 

  

 

  

 

  

 

  

(4,598)

(4,598)

Balance at September 30, 2020

5,339,215

$

13,866

1,660,756

$

4,982

 

16,757

$

46

 

1,432,786

$

5,652

 

3,462,246

$

24,878

 

8,936,015

$

3,865

 

4,653,583

$

9,442

 

$

 

10,189,000

$

10

$

2,825

$

(63,471)

$

(60,636)

    

Series m

    

Series m2

    

Series m3

    

Series m4

    

Series S

    

Series A

    

Series B

    

Class A

    

Class B

    

Preferred

Preferred

Preferred 

Preferred 

Preferred

Preferred 

Preferred

common

common

Additional

Total

    

stock

stock

stock

stock

stock

stock

stock

stock

stock

 Paid-in-

Accumulative

 Stockholders’

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

Deficit

    

Deficit

Balance at December 31, 2019

 

5,339,215

$

13,866

 

1,660,756

$

4,982

 

16,757

$

46

 

1,432,786

$

5,167

 

781,870

$

5,604

 

8,936,015

$

3,865

 

4,653,583

$

9,442

 

$

 

10,179,000

$

10

$

2,529

$

(49,247)

$

(46,708)

Stock based compensation

 

  

 

  

 

  

 

  

293

 

  

293

Stock options exercised

 

  

 

  

 

10,000

$

3

 

  

3

Issuance of Series s Preferred stock, net of issuance costs

2,680,376

19,274

 

  

 

  

 

  

 

  

 

  

 

  

Series m‑4 accrued dividend

485

 

  

 

  

 

  

 

  

 

  

(485)

(485)

Net loss

 

  

 

  

 

  

 

  

 

  

(13,739)

(13,739)

Balance at September 30, 2020

5,339,215

$

13,866

1,660,756

$

4,982

 

16,757

$

46

 

1,432,786

$

5,652

 

3,462,246

$

24,878

 

8,936,015

$

3,865

 

4,653,583

$

9,442

 

$

 

10,189,000

$

10

$

2,825

$

(63,471)

$

(60,636)

7

Table of Contents

    

Series m

    

Series m2

    

Series m3

    

Series m4

    

Series S

    

Series A

    

Series B

    

Class A

    

Class B

    

Preferred

Preferred

Preferred 

Preferred 

Preferred

Preferred 

Preferred

common

common

Additional

Total

    

stock

stock

stock

stock

stock

stock

stock

stock

stock

 Paid-in-

Accumulative

 Stockholders’

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

Deficit

    

Deficit

Balance at June 30, 2021

 

5,339,215

$

13,866

 

1,660,756