Company: KITTW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001849820-25-000278
Chunk: 59

Company: Nauticus Robotics, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 such alternate conversion price; and (e) an option by the holder to extend the maturity date by an additional year.On the closing of the Amendment and Exchange Agreement the existing 5% Original Issue Discount Senior Secured Convertible Debentures were extinguished. The Company has elected to measure the new convertible debentures at fair value under the fair value option in accordance with ASC 825-10, Financial Instruments – Fair Value Option which eliminates the requirement to separately account for embedded conversion features that would otherwise be bifurcated under ASC 815-15, Derivatives and Hedging – Embedded Derivatives. The new convertible debentures were measured at a fair value of $99,195,791 as of January 30, 2024, estimated using Monte Carlo simulations with the following assumptions: stock price of $16.52, a risk free rate of 4.23%, implied volatility of 121% and a remaining term of 2.61 years. A loss on extinguishment of debt of $78,734,949 was reported in the condensed consolidated statements of operations for the nine months ended September 30, 2024. The fair value of the New Convertible Debentures at September 30, 2024 was estimated at $53,222,499 using Monte Carlo simulations with the following assumptions: stock price of $1.41, a risk free rate of 4.11%, implied volatility of 123% and a remaining term of 1.94 years. A gain on change in fair value $24,199,071 

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Table of ContentsNAUTICUS ROBOTICS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

and $36,113,800 was reported in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024.Second Amendment and Exchange AgreementOn November 4, 2024, the Company entered into the Second Amendment and Exchange Agreement by and among the Company and ATW I, SLS and MIF pursuant to which such investors would exchange the remaining portion of the amount outstanding under the New Convertible Debentures and certain other amounts outstanding with respect thereto, into shares of Series A Preferred Stock (see Note 13 - "Equity"). On December 27, 2024, the Company and ATW I closed the exchange transaction, and the Company issued 27,588 shares of Series A Preferred Stock to ATW I in