Business Context and Reporting Period
This Form 8-K Current Report, dated October 2, 2023, details a material definitive agreement entered into by Nauticus Robotics, Inc. (Nauticus). The filing announces a proposed merger with 3D at Depth, Inc. (3DAD), a Delaware corporation specializing in underwater robotics and inspection technologies. Nauticus is an emerging growth company with its principal executive offices in Webster, Texas.
Key Financial Metrics and Transaction Terms
The filing does not provide specific revenue, profit, cash flow, or debt figures for Nauticus or 3DAD. Instead, it outlines the financial mechanics of the proposed merger:
- Consideration: 3DAD shareholders will receive Nauticus common stock based on a "Per Share Equity Consideration."
- Valuation Basis: The calculation uses a stipulated 20-day Volume Weighted Average Price (VWAP) of $2.04 for Nauticus stock.
- Base Equity Value Adjustments: The final equity value is subject to adjustments based on Net Working Capital deviations exceeding $37,500, outstanding company fees, company debt exceeding permitted amounts, and specific underwriting and broker fees.
- Options Treatment: All unexercised 3DAD options will be accelerated to full vesting and subject to mandatory cashless or cash exercise prior to the merger effective time.
Material Changes and Transaction Structure
The primary material change is the execution of the Merger Agreement, which will result in 3DAD becoming a wholly-owned subsidiary of Nauticus. Key structural elements include:
- Stock Conversion: Existing 3DAD common stock will be cancelled and converted into the right to receive Nauticus shares.
- Appraisal Rights: Dissenting 3DAD shareholders may demand appraisal under Delaware General Corporation Law (DGCL) rather than receiving the equity consideration.
- Insurance: Nauticus has secured a buyer-side representations and warranties insurance policy (RWI Policy), which serves as the sole remedy for breaches (excluding fraud or gross negligence).
- Related Agreements: The transaction includes a Stockholder Support Agreement, Lock-Up Agreements (90 or 180 days), and a Director Designation Letter Agreement with Schlumberger Technology Corporation (SLB).
Guidance, Outlook, Risks, and Contingencies
Conditions to Closing: The transaction is contingent upon Nauticus stockholder approval, 3DAD stockholder approval, regulatory approvals, the absence of a Material Adverse Effect, and the effectiveness of a Form S-4 registration statement.
Termination Rights: Either party may terminate if conditions are not met within 180 days (the "Outside Date"), if there are uncured breaches, or if Nauticus stockholder approval is not obtained.
Risks and Forward-Looking Statements: The filing includes standard disclaimers regarding forward-looking statements concerning product commercialization, customer interest, and capital needs. Actual results may differ materially due to risks detailed in Nauticus's Form 10-K and 10-Q filings.
Management Commentary: The Nauticus Board has unanimously approved the agreement and recommends it to stockholders. A proxy statement/prospectus will be filed to solicit votes.
Investor Verification Checklist
- Verify the final "Per Share Equity Consideration" once the Net Working Capital and other adjustments are finalized in the Closing Statement.
- Review the upcoming Form S-4 proxy statement/prospectus for detailed financial data on 3DAD and the full risk factors associated with the merger.
- Confirm the outcome of the Nauticus stockholder vote required to approve the transaction.
- Monitor the status of the 180-day "Outside Date" to ensure the transaction closes before the termination deadline.
- Check for any updates regarding the Director Designation from Schlumberger Technology Corporation (SLB).