Nauticus Robotics replaces CEO, overhauls C-suite and furloughs workers

A Houston robotics company that went public recently has terminated several members of its executive staff and furloughed workers.

Nauticus Robotics Inc. (Nasdaq: KITT) said in a recent 8-K filing with the Securities and Exchange Commission that co-founder and CEO Nicolaus Radford had departed the company. John W. Gibson Jr., who has served as president of Nauticus since taking over that role from Radford in October, was named interim CEO on Jan. 4.

According to the Jan. 5 SEC filing, Radford’s departure was treated as a termination without cause, and he resigned from Nauticus’ board of directors. Radford’s resignation from the board, along with the earlier departure of director Mark Mey, led Nauticus to reduce the size of its board to seven directors.

Gibson’s salary is unchanged in his role as interim CEO. According to a separate SEC filing when he took the post as president, he received a base salary of $120,000 and a sign-on equity grant of $222,000 in restricted stock units.

Prior to joining Nauticus, Gibson was most recently president and CEO of Houston-based chemicals company Flotek Industries Inc. (NYSE: FTK), serving in that role from 2019 to January 2023. He was succeeded as Flotek CEO by Ryan Ezell last January. Gibson was also the chairman of energy technology at Houston-based investment bank Tudor, Pickering, Holt & Co. before leaving for Flotek.

Other departures from Nauticus’ upper leadership include COO Donnelly Bohan, whose replacement was not named in the filings. Bohan’s departure was also treated as a termination without cause.

The exits of Radford and Bohan follow executive turnover for Nauticus in late 2023 as well. At the start of December, the company removed CFO Rangan Padmanabhan and Chief Legal and Administrative Officer M. Dilshad Kasmani from their positions.

They were replaced by former Weatherford International PLC director Victoria Hay as interim CFO and Nicholas Bigney as general counsel. According to SEC filings, Hay will draw a $30,000 monthly compensation, and Nauticus has engaged financial consulting firm Flexible Consulting LLC, which she co-owns, for $446,000 worth of services as of December.

Nauticus also said in its Jan. 5 filing that 14 workers would be furloughed to align the company with its current liquidity needs and fundraising efforts. Nauticus will not pay salary or wages to the affected workers, and they will not be allowed to work on company projects, but certain benefits will still be paid. Nauticus said in the filings that it could not predict how long the furlough would last and that employees may return at different times.

According to its most recent annual report, Nauticus had 93 employees as of Dec. 31, 2022.

New financing in 2024

Along with its announcement of Gibson as interim CEO in January, Nauticus also said it secured new investments before 2023 came to an end. According to a press release dated Jan. 10, the investment consists of two tranches of funding, the second of which Nauticus anticipates executing to fund the company for the year. The first tranche came from existing investors, according to Nauticus. The press release did not elaborate on the specifics of the funding.

In its Jan. 5 SEC filing, Nauticus said it entered into an amendment to a term loan agreement, a common stock PIPE (private investment in public equity) securities purchase agreement, and a second lien restructuring agreement, all on Dec. 31. The amendment provided Nauticus with an incremental loan of $695,000, and up to $5,000 of the shares of common stock will be purchased under the PIPE agreement, per the 8-K.

In Nauticus’ most recent quarterly report, filed in November, the company said it had more than $6.77 million in cash on hand as of Sept. 30, 2023, down from nearly $17.79 million as of Dec. 31, 2022.

Nauticus produces oceangoing robots that can provide maintenance for offshore installations. Despite announcing contracts with companies such as Shell PLC (NYSE: SHEL) and Brazil-based energy giant Petrobras last year, the company said in its quarterly report that it had not made any product sales for the nine-month period ending in September 2023.

In the company’s press release, Gibson said the engagement of the Nauticus’ board would help turn its prototypes into solutions in the coming year.

“Team Nauticus is now laser-focused on converting our intellectual property, including both patents and trade secrets, into differentiated solutions that bring significant value to both commercial and government customers,” Gibson said. “We are shifting from prototypes to creating reliable solutions for the blue economy.”

Nauticus went public through a SPAC merger in September 2022. Nauticus merged with New York-based CleanTech Acquisition Corp., a special purpose acquisition company looking for deals in clean energy and climate tech, in a deal valued at $561 million. Nauticus' stock began trading on Sept. 13.

The company was founded in 2014 by a group of ex-NASA engineers, including Radford, as Houston Mechatronics. Radford previously led spaceflight and defense robotics engineering efforts while working at NASA's Johnson Space Center.