Knightscope Sells Just 1 Net New Robot In 6 MonthsBy John Honovich, Published Oct 04, 2019, 09:44am EDT
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52 to 53 total.
Inside this note, we examine the financials, the challenges Knightscope faces and Knightscope CEO's admonishment to 'All the haters'.
See Knightscope's FORM 1-SA / H1 2019 for full details / source.
Poor Sales Growth
Over the last year, Knightscope has fewer customers and, in the past 6 months, just 1 more robot in service:
As of December 31, 2018, we had 23 customers and 52 machines-in-network. This compares to 21 customers and 36 machines-in-network at December 31, 2017.
As of June 30, 2019, we had 25 customers and 53 machines-in-network. This compares to 32 customers and 45 machines-in-network as of June 30, 2018.
Far Off From Projections
At the end of 2016, Knightscope was aiming to have 1,500+ robots in service in 2019 yet halfway through the year, they are just at 53:
Loss $19,486,662 In 18 Months
Despite the poor growth, the company's loss from operations over the last 18 months is just under $20 million (2018 loss from operations $14,371,194 + 2019 H1 loss from operations $5,115,468).
The company is losing ~$1 million a month while struggling to sell even slightly more robots.
Less Than Million Cash On Hand
The company's liquidity and solvency are at risk, as the company acknowledges:
As of June 30, 2019, the Company also had an accumulated deficit of approximately $43.1 million, negative working capital of $2.4 million and stockholders’ deficit of $40.8 million. These factors raise substantial doubt regarding our ability to continue as a going concern... As of September 23, 2019, the Company had cash on hand of approximately $0.7 million. The Company has projected operating losses and negative cash flows of approximately $1 million per month for the next several months. [emphasis added]
Employees Down 26% In Past 6 Months
Linked shows that Knightscope headcount is down 26% in the past 6 months:
Retirement Money Into Knightscope, Says Knightscope
While Knightscope is struggling to stay afloat, they have been encouraging people to put their retirement funds into Knightscope:
Haters, Says Knightscope CEO
At the same time, in a new blog post, Knightscope's CEO took aim at the 'haters' saying:
All the haters and naysayers can pick apart every little bit of Knightscope they want – but we accomplished what we were told countless times we could not do.
But what has Knightscope 'accomplished'? They have burned through $40+ million of investor funds to acquire just 25 customers and nearly flat robot sales while facing imminent risk of bankruptcy.
And to save themselves, they have taken to encourage people to put their retirement into Knightscope.
If Knightscope can convince lots of customers to buy/rent/lease their robots, everything else will work out, 'haters' be damned. But their own financials show otherwise.
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