A Houston-based technology company that went public in recent years is still navigating the risk of delisting amid struggles to generate revenue.
Nauticus Robotics Inc. (Nasdaq: KITT) was first informed on Feb. 15 that its market value of listed securities had been below the Nasdaq Stock Market's minimum requirement of $35 million for 32 days, according to U.S. Securities and Exchange Commission filings.
Nasdaq gave Nauticus 180 days to regain compliance. That time period expired on Aug. 13, and Nasdaq told the company it was not eligible for a second 180-day period, according to an Aug. 20 filing.
However, Nauticus also noted in the Aug. 20 filing that it has requested a hearing before Nasdaq’s Hearings Panel. Requesting a hearing automatically stays any suspension or delisting action pending the hearing, according to the filing.
The company did not respond to a Houston Business Journal inquiry through the phone number or digital form on its website prior to publication.
Nauticus, which was previously known as Houston Mechatronics, was founded in 2014 by a group of former NASA Johnson Space Center engineers, including then-CEO Nicolaus Radford. The company develops offshore robotics products, called Aquanauts and Hydronauts, and an automated software platform, ToolKITT, for commercial and government clients through a robotics-as-a-service model.
Nauticus' robots are built to operate in hard-to-reach underwater locations for customers in traditional oil and gas, renewable energy, aquaculture, subsea mining, offshore data centers, port management and other offshore sectors.
Nauticus announced in early August that it was partnering with Florida Atlantic University to test its second Aquanaut model, which is set to begin commercial operations in the Gulf of Mexico later this month.
The company’s stock began trading in September 2022 when Nauticus closed a merger with New York-based special purpose acquisition company CleanTech Acquisition Corp.
While not directly acknowledging the Nasdaq inquiries, CEO John W. Gibson Jr. said during a second-quarter earnings call Aug. 13 that the company was at a turning point, investor-wise.
"I think we’re at an inflection point, and we’re working to turn the corner," Gibson said. "It’s not that point where I can really say much, but I think all of the indicators are there that we’re on the right track."
Despite announcing deals with Shell (NYSE: SHEL), which has its U.S. headquarters in Houston, and Brazilian giant Petrobras, Nauticus has struggled to generate enough revenue to cover its expenses. For the second quarter, Nauticus recorded a net loss of nearly $5.4 million, down from net income of $20.7 million a year earlier.
Also in its second-quarter report, Nauticus said that “a current investor” has committed to provide cash for the next 12 months. Nauticus had $8.1 million in cash and cash on hand as of June 30, the company said.
The company has made some changes to its operating structure, with Radford departing as CEO in January to be replaced by former Flotek Industries CEO Gibson. Nauticus also furloughed 14 workers to boost liquidity and fundraising needs. The company had 72 employees at the end of 2023, according to its annual report, down from 93 at the end of 2022.
During the company's Aug. 13 earnings call, Gibson said the company is negotiating a defense contract and plans to build a third Aquanaut version in 2025, though he could not share more details.
"The discussions are ongoing technically and commercially," Gibson said. "And so as soon as we have something that is concrete, then we’ll get a press release out to you on that. But the right thing to say is extremely interested in defense work and pursuing that and believe that we’ll have information on that for you as we go forward."
Earlier this year, Nauticus also announced a 1-for-36 reverse stock split to bring its share price up. The split was enacted to satisfy a separate Nasdaq compliance notice, which found in January that Nauticus’ stock price had been below $1 for 30 consecutive trading days.
Following the July 22 stock split, the stock price jumped to $3.79 by the end of July before dropping to around $2 through August. KITT opened at $2.10 on Aug. 26.
In response to an analyst's question on the call, Nauticus' then-general counsel, Nicholas Bigney — who departed the company later in August — said the company was working with Nasdaq to regain compliance.
"We’re working with them on that. They will look at certain criteria. But yes, we think we have a path forward there," Bigney said.
After leaving Nauticus, Radford cofounded a new startup, Persona AI, which plans to manufacture humanoid robots. Radford told the HBJ in a previous interview that leaving Nauticus affected him deeply.
"Leaving Nauticus wasn’t the easiest thing to do; it was 10 years of my life from my living room to Nasdaq,” Radford said. “It was a difficult market and a difficult macro environment. I had a lot of emotion wrapped up in leaving it.”
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