- Knightscope, Inc. designs, engineers, builds, deploys, and services autonomous data machines (“ADMs”) also known as security robots
- It currently offers three operational robots in the U.S.: K1 Stationary, K3 Indoors, and K5 Outdoors
- The robots are cheaper for clients per hour compared to human guards and run 24/7
- Knightscope charges between $4 and $11 per hour for its machines on annual contracts, while security companies can charge between $15 and $35 an hour for an unarmed guard and about $85 per hour for an armed guard, according to Knightscope’s CEO
- Investors can purchase shares in Knightscope through its Reg A+ offering
- Since its inception in 2013, Knightscope has generated over $10 million in revenue
Knightscope, a private company that designs, engineers, builds, deploys, and services security robots under the Machine-as-a-Service (“MaaS”) model, aims to woo clients and investors with its cost-effective autonomous data machines (“ADMs”). The California-based company, which was established in 2013, has so far raised $70 million from over 20,000 investors and four major corporations. It is eyeing a possible public listing on NASDAQ under the ticker symbol ‘KSCP’.
Knightscope currently offers three operational autonomous machines, namely K1, K3, and K5. K1 is a stationary ADM ideal for indoor and outdoor use at ingress and egress areas, while the latter two are mobile. K3 is designed for indoor usage, while K5 is an outdoor-only ADM. According to its Securities and Exchange Commission (“SEC”) filings, Knightscope earns a revenue ranging between $4,500 and $6,000 per month per ADM. It has so far generated over $10 million in revenue since its inception in 2013 from clients who include hospitals, Fortune 1000 companies, and law enforcement agencies (https://ibn.fm/n7x0i).
In a bid to drum up support for its Reg A+ offering, which allows investors to purchase shares in Knightscope today, and to show why clients would be interested in the security robots, William Santana Li, Knightscope’s Chairman and Chief Executive Officer, compared his company’s products to human security guards. According to Li, clients would pay about $85 per hour for an armed guard and between $15 and $35 an hour for an unarmed guard if they chose to go that route. However, in an interview with IPO Edge, Li claimed that his company offers “a technology and a Machine-as-a-Service business model at an effective price of $4 to $11 an hour.”
“Most security teams look like a cost center for their clients. They don’t generate revenue, (are) not necessarily brand-enhancing, are usually on the chopping block, and (get) limited budget and resources until something goes wrong. Then they get accused of not doing their job.” Li continued. He termed such a situation as difficult for an organization. He further noted that his company is an attractive option for clients, given that “Folks are either limited on budget or looking genuinely for cost reduction. So, if you’re burning $150 million a year on security guards, you’re going to want to look at it (Knightscope’s services and products)” (https://ibn.fm/QsV10).
Li also debunked the conjecture that $4 and $11 an hour would be too low an amount to compel someone to invest in Knightscope. “We sign year-long contracts running 24/7. So, each machine will generate on the order of $70,000 and $100,000 per annum. It costs us less than $60,000 to build the machine. So, the idea is to recover the cost of the machine in the first calendar years, and then the second, third, fourth, fifth year you are basically printing money.” Taking maintenance and service costs, cellular charges, and system upgrade costs into account, Santana estimates that each machine could generate up to $250,000 in profit over five years.
The ADMs have numerous capabilities. They provide real-time access to data round the clock. For example, in a year, the machines generate over 90 terabytes of data that can be used for analysis purposes. And that’s not all. They also have features such as 360-degree eye-level HD video streaming, thermal anomaly detection, automatic license plate recognition (at a rate of 1,200 plates per minute), people detection, facial recognition (even for people wearing masks), and automatic signal detection.
While the CEO’s utterances show promise and demonstrate Knightscope’s ideal prospects, the SEC filings tell a different story. Knightscope has been operating in the red. In the six months ending June 2019 and June 2020, the company reported net losses of $6.99 million and $9.14 million, respectively. Further, in the six months that followed, Knightscope posted $11.96 million and $13.39 million in net losses for the period ending December 2019 and December 2020, respectively. Knightscope CEO stated that the Company has built all of its technology from scratch and is now raising capital to scale the business to profitability.
For more information, visit the company’s website at www.Knightscope.com.
Visit www.Knightscope.com/invest for a summary of Knightscope as an investment, with a blue Instant Messaging button for direct contact with their CEO.
DISCLAIMER: You should read the Offering Circular and risks related to this offering before investing. This Reg A+ offering is made available through StartEngine Primary, LLC. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.
NOTE TO INVESTORS: The latest news and updates relating to Knightscope are available in the company’s newsroom at https://ibn.fm/Knight
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