Knightscope, Inc. Commitments Disclosure

NOTE 9: Commitments and contingencies

Leases

The Company leases facilities for office space under non-cancelable operating lease agreements. In April 2025, the Company entered into a new operating lease for its current headquarters in Sunnyvale, California, with a lease term through June 30, 2030. Upon commencement of this new lease in April 2025, the Company paid a refundable lease deposit of $0.5 million on and recognized operating lease right-of-use asset and operating lease liability of $2.9 million, each. The annual base rent under the new lease is $0.9 million.  In addition to base rent, the Company is also responsible for covering its share of the common area expenses and property taxes associated with the building.

The components of leases and lease costs are as follows (in thousands):

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As of December 31, 2025, future minimum operating lease payments for the year is as follows (in thousands):

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Weighted average remaining lease term is 4.4 years. The weighted average discount rate of 14.8% ranges from 5.75% to 15.0% dependent upon the assets underlying the operating lease and its term.

Rent expense totaled $1.5 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively, included in the Company’s Statements of Operations. There were two month to month lease agreements for each of the years ended December 31, 2025 and 2024.

Purchase Commitments

The Company executed a purchase agreement on September 13, 2024, in order to secure the acquisition of raw materials essential to ASR manufacturing. This agreement stipulates a total expenditure of $0.8 million before December 31, 2026. During the year ended December 31, 2025, the Company made payments totaling $0.2 million pursuant to this commitment.

Legal Matters

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business; however, no such claims have been identified as of December 31, 2025 that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

The Company from time to time enters into contracts that contingently require the Company to indemnify parties against third party claims. These contracts primarily relate to: (i) arrangements with clients which generally include certain provisions for indemnifying clients against liabilities if the services infringe a third party’s intellectual property rights, (ii) the Regulation A Issuer Agreement where the Company may be required to indemnify the placement agent for any loss, damage, expense or liability incurred by the other party in any claim arising out of a material breach (or alleged breach) as a result of any potential violation of any law or regulation, or any third party claim arising out of any investment or potential investment in the offering, and (iii) agreements with the Company’s officers and directors, under which the Company may be required to indemnify such persons from certain liabilities arising out of such persons’ relationships with the Company. The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the financial statements as of December 31, 2025 and 2024.

Sales Tax Contingencies

The Company has historically not collected state sales tax on the sale of its MaaS product offering but has paid use tax on all purchases of raw materials. The Company’s MaaS product offering may be subject to sales tax in certain jurisdictions. If a taxing authority were to successfully assert that the Company has not properly collected sales or other transaction taxes, or if sales or other transaction tax laws or the interpretation thereof were to change, and the Company was unable to enforce the terms of their contracts with clients that give the right to reimbursement for the assessed sales taxes, tax liabilities in amounts that could be material may be incurred. Based on the Company’s assessment, the Company has recorded a use tax liability of $42 thousand and $0.4 million as of December 31, 2025 and 2024, respectively, which has been included in accrued expense and other current liabilities on the accompanying Balance Sheets. The Company continues to analyze possible sales tax exposure but does not currently believe that any individual claim or aggregate claims that might arise will ultimately have a material effect on its results of operations, financial position or cash flows.