After announcing last November its plans to go public, Knightscope will officially begin trading on the Nasdaq exchange tomorrow under the ticker KSCP. Knightscope operates as an autonomous security robot (ASR) company that was founded in 2013 by William Li and Stacy Stephens. However, Knightscope isn’t taking the traditional initial public offering (IPO) path. Instead, the company offered shareholders a chance to purchase shares on its website before being publicly listed.
KSCP Stock to Make Its Public Debut Tomorrow
Knightscope’s slogan is “Long Knightscope. Short the Criminals.” By allowing shareholders to purchase shares early, Knightscope has raised $22.3 million from the sale of 2.23 million shares for $10 each. Initially, the company offered a total of 40 million shares for $10 each. The robotics company will use these proceeds to further accelerate its ASR offerings. Chairman and CEO William Li added that:
“We’ve brought on thousands and thousands of new investors in Knightscope as we embark on the 2nd chapter of a very long book in helping to make the United States of America the safest country in the world. I am forever grateful for our relentless team and the 28,000+ investors that helped write the 1st chapter in our journey — a heartfelt and sincere thank you.”
What Else Should You Know About Knightscope?
Knightscope’s first commercial customer was a shopping center in 2015. By 2020, the company had received its first federal order. Today, Knightscope seeks to serve airports, shopping centers, law enforcement agencies and more. Li stated that the inspiration for Knightscope came to him after witnessing the horrible events of 9/11.
Knightscope highlighted several internal risks in a U.S. Securities and Exchange Commission (SEC) filing. For starters, the company remains unprofitable and has “incurred a net loss and generated limited revenues since inception.” Knightscope continues to expect net losses in the future. Furthermore, Knightscope’s revenue comes from a small number of clients. Any negative changes in client relationships could have an adverse effect on revenue and cash flows.
Looking forward, Knightscope’s relevancy is based on how many clients they can offer their products to. Currently, Knightscope has 80 to 90 ASRs under contract in the U.S., which is also Knightscope’s only active market. To grow, Knightscope should seek to offer their products to as many commercial and private customers as possible. Expansion outside the U.S. is certainly plausible, since ASRs are seen as a universal product. However, expenses are likely to rise if Knightscope pursues global expansion, which could hurt shares of KSCP stock in the short term.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.