8-K/A: Nauticus Robotics Amends SEC Filing to Disclose SeaTrepid Acquisition Financials and Pro Forma Impact

Nauticus Robotics, Inc. has filed an amended 8-K to provide the audited financial statements of its recently acquired subsidiary, SeaTrepid International, LLC, and unaudited pro forma combined financial information, detailing the $14.4 million asset acquisition.

Summary

• Nauticus Robotics, Inc. (KITT) completed the acquisition of substantially all assets and certain liabilities of SeaTrepid International, L.L.C. and its subsidiaries on March 20, 2025.
• The total consideration for the acquisition was $14.4 million, comprising $4 million in cash paid at closing, $3.5 million in cash due by September 30, 2025, and $6.9 million in Earn-Out Shares.
• This Form 8-K/A amends the original March 25, 2025 filing to include the required audited financial statements of SeaTrepid for the years ended December 31, 2024 and 2023, and unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025, and the year ended December 31, 2024.
• SeaTrepid International, LLC reported a significant turnaround, with revenue increasing from $3.947 million in 2023 to $7.296 million in 2024, and net income shifting from a loss of $(514) thousand in 2023 to a profit of $1.187 million in 2024.
• As of December 31, 2024, SeaTrepid's total liabilities were $3.161 million, down from $5.031 million in 2023, and its Members Deficit improved from $(1.235) million to $(108) thousand.
• Due to non-compliance with financial covenants and the asset sale to Nauticus, SeaTrepid reclassified $2.4 million in outstanding loan principal balances from long-term to short-term liabilities as of December 31, 2024, making these amounts potentially callable by lenders in 2025.
• The unaudited pro forma combined statements show a net loss of $(134.669) million for the year ended December 31, 2024, and a net loss of $(8.216) million for the three months ended March 31, 2025, for the combined entity.

Sentiment

Score: 4

Explanation: While SeaTrepid's individual financial performance improved significantly in 2024, the reclassification of its entire debt to current liabilities due to covenant breaches and the asset sale presents a significant financial risk. The pro forma combined results show a mixed impact, with the most recent quarter's combined loss being worse than Nauticus's historical loss. The strategic rationale is positive, but the immediate financial implications and ongoing legal disputes for the acquired entity introduce notable concerns.

Positives

• SeaTrepid International, LLC demonstrated significant financial improvement in 2024, with revenue increasing by 84.9% to $7.296 million from $3.947 million in 2023.
• SeaTrepid achieved a net income of $1.187 million in 2024, a substantial turnaround from a net loss of $(514) thousand in 2023.
• The acquisition is strategically aimed at integrating Nauticus' AI-driven autonomy technologies, including its proprietary ToolKITT software, into SeaTrepid's existing fleet of Remotely Operated Vehicles (ROVs), which is expected to enhance operational capabilities and service offerings.
• Former SeaTrepid leadership will assume key roles within the combined entity, suggesting continuity and leveraging existing expertise.

Negatives

• SeaTrepid International, LLC was not in compliance with financial covenants (debt-to-net worth ratio and debt service coverage ratio) for its AmeriState Bank loan as of December 31, 2024, constituting an event of default.
• As a result of the asset sale to Nauticus Robotics, SeaTrepid's lenders (AmeriState Bank and U.S. Small Business Administration) may demand immediate repayment of $2.4 million in outstanding principal balances during 2025, leading to the reclassification of all long-term debt to current liabilities.
• The unaudited pro forma combined net loss for the three months ended March 31, 2025, is $(8.216) million, which is worse than Nauticus' historical net loss of $(7.567) million for the same period.

Risks

• The non-compliance with debt covenants by SeaTrepid and the subsequent asset sale could lead to lenders demanding immediate repayment of approximately $2.4 million in outstanding principal balances, potentially impacting Nauticus' liquidity or requiring refinancing.
• SeaTrepid is involved in ongoing litigation related to a May 2023 incident involving damaged subsea equipment, with an accounts receivable provision of $258 thousand, and the ultimate outcome remains uncertain.
• A pre-litigation commercial dispute with a third party regarding a subcontract from July 2024 could result in potential damages of up to $300 thousand, with an accounts receivable provision of $146 thousand, and the financial impact is currently uncertain.
• SeaTrepid has significant customer concentration, with two customers accounting for 68% of total revenues in 2024 and five customers representing 96% of total accounts receivable as of December 31, 2024; the loss of any of these key customers could materially adversely affect the combined company's financial condition and results of operations.

Future Outlook

The acquisition is intended to integrate Nauticus' AI-driven autonomy technologies, including its proprietary ToolKITT software, into SeaTrepid's existing fleet of Remotely Operated Vehicles (ROVs), thereby enhancing operational capabilities and service offerings in the offshore robotics sector. The allocation of the purchase price is preliminary and subject to adjustment during the measurement period, not to exceed one year from the acquisition date, as the Company finalizes valuations for tangible and intangible assets and earnout shares.

Management Comments

• Management believes that the resolution of the May 2023 litigation matter will not have a material adverse effect on SeaTrepid's consolidated financial position, results of operations, or cash flows, with each party potentially bearing its own losses.

Industry Context

This acquisition positions Nauticus Robotics to expand its footprint in the offshore robotics sector by integrating its advanced AI and autonomy technologies with SeaTrepid's established fleet and operational expertise in gas and oil exploration. The move reflects a broader industry trend towards automation and AI-driven solutions to enhance efficiency, safety, and cost-effectiveness in hazardous subsea environments, particularly within the energy sector.

Comparison to Industry Standards

• NA

Management Changes

Legal Proceedings

• Litigation initiated in May 2023 involving a chartered vessel incident that damaged Company-owned subsea equipment (ROV), resulting in approximately $258 thousand due from a customer. SeaTrepid has asserted counterclaims against multiple parties, including the vessel operator, alleging breach of contract, negligence, and vessel unseaworthiness. Trial is expected later in the current fiscal year.
• A pre-litigation commercial dispute with a third party related to a subcontract entered into in July 2024, where the counterparty alleges breach of contract and/or negligent performance, claiming potential damages of up to $300 thousand. SeaTrepid disputes the allegations, and settlement discussions are ongoing.

Related Party Transactions

• As of December 31, 2024, SeaTrepid had a net receivable balance of $73 thousand from Abita Skies, LLC, a related party with the same Members and ownership percentages as SeaTrepid.
• SeaTrepid maintained an employment relationship with one of its Members, who received annual gross compensation of $11 thousand for the years ended December 31, 2024 and 2023.

Stakeholder Impact

• Shareholders of Nauticus Robotics will see the financial results of the combined entity, including the impact of SeaTrepid's debt reclassification and ongoing legal disputes, which could affect share price volatility.
• Employees of SeaTrepid will be integrated into Nauticus Robotics, with former SeaTrepid leadership assuming key roles, potentially offering new opportunities within a larger, technologically advanced organization.
• Customers of both Nauticus and SeaTrepid may benefit from enhanced operational capabilities and service offerings due to the integration of AI-driven autonomy technologies into ROV services.
• Creditors of SeaTrepid, particularly AmeriState Bank and the U.S. Small Business Administration, may demand repayment of approximately $2.4 million in outstanding principal balances due to covenant breaches and the asset sale, impacting their financial exposure.

Next Steps

• Nauticus Robotics, Inc. will finalize valuations for tangible and intangible assets and earnout shares for the acquisition during the measurement period, not to exceed one year from the acquisition date.
• Nauticus Robotics, Inc. is scheduled to pay the remaining $3.5 million cash portion of the acquisition consideration on or before September 30, 2025.
• The litigation involving SeaTrepid's damaged subsea equipment is expected to proceed to trial later in the current fiscal year.
• Settlement discussions are ongoing for the subcontract dispute, with no formal legal proceedings initiated yet.

Key Dates

Keywords

Nauticus Robotics, SeaTrepid International, Acquisition, SEC Filing, 8-K/A, Financial Statements, Pro Forma, Robotics, Underwater Vehicles, ROV, AUV, Offshore Services, Debt Covenants, Asset Purchase Agreement, Corporate Governance, Risk Management