Company: KITTW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001849820-25-000278
Chunk: 8

Company: Nauticus Robotics, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 8
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 2021, we identified a material weakness in our internal control over financial reporting, as defined in the standards established by the Sarbanes-Oxley Act of 2002. This material weakness related to a lack of qualified accounting and financial reporting personnel with an appropriate level of experience and inadequate procedures for the accounting close process including obtaining information supporting significant accounting estimates and judgments affecting the financial statements on a timely basis. 

Through the years ended December 31, 2022 and 2023, we continued to implement remediation initiatives in response to the previously identified material weakness, including, but not limited to, hiring additional experienced accounting and financial reporting personnel and modifying a new Enterprise Resource Planning (ERP) System which assisted in the automation of processes, including standardizing workflows, enhancing segregation of duties, and ensuring compliance with policies. As a result of the significant turnover of key finance personnel at the end of 2023 and limited handover to the new finance team, we concluded there was a gap in the implementation of the above remediation initiatives. 

In 2024, the Company identified material weaknesses in its internal controls over financial reporting related to: (1) ineffective design and operation of controls over significant complex transactions, which resulted in restatements of all 

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interim periods of 2024 and (2) failure to remediate previously reported material weakness over ineffective design and operation of user access controls. 

Remediation Plan. The company continues to implement remediation actions, including: (1) establishing a formal Significant and Complex Transaction review process that will identify transactions that should be reviewed by third party experts to ensure proper treatment and (2) enhancing user access controls and proper segregation of duties for all critical accounting systems, supported by formal policies and training for all Information Technology personnel. This will be fully implemented by the end of 2025. 

Changes in internal control over financial reporting. During the fiscal quarter ended September 30, 2025, except as described above in "Remediation Plan" there were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitation on the effectiveness of internal control. The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating