EX1A-13 TST WTRS 13 v454344_ex13.htm EXHIBIT 13

Exhibit 13

Help fund the next generation of visible and concealed gun detection capabilities on the Knightscope security platform. Knightscope's long-term vision is to predict and prevent crime utilizing autonomous robots, analytics and engagement. Crime has a $1+ trillion negative economic impact on the U.S. economy every year and Knightscope is on a mission to cut it in half.

We started Knightscope because we were horrified by the mass shooting at Sandy Hook and the impact of 9/11 on our country. And now the ongoing daily increase in violence globally has intensified our efforts. We want to build something great for our country and we believe down to our bones that we can use technology to help build safer, engaged communities while significantly reducing costs and reducing crime. That spark has turned into a grander vision to cut the annual $1 trillion negative economic impact of crime on the U.S. in half!

Founded in April 2013 in Silicon Valley, and now with 30 employees, Knightscope is a leader in developing autonomous physical security solutions. The Knightscope "Hardware + Software + Humans" approach reduces costs for our clients, provides a 24/7 force multiplier effect as well as advanced anomaly detection capabilities. Our solution includes providing an autonomous physical presence, gathering data from the environment in real-time, and pushing anomalies to our user interface, the Knightscope Security Operations Center (KSOC).

Knightscope raised a $1.5M seed round in April 2014 which was oversubscribed which then converted into a $5.3M Series A that closed in January 2015 which was also oversubscribed. With the technology now deployed at clients in Palo Alto, San Francisco, Fremont, and San Diego, Knightscope is completing its $10M Series B round of financing and is well-positioned to consider alternatives for its future Series C round of funding. Key strategic investors include NTT DOCOMO, Konica Minolta, Flextronics and NetPosa. Additionally, to date, over 7,000 people have applied to work at Knightscope.

Product & Service

Both the Knightscope K5 (outdoors) and Knightscope K3 (indoors) operate autonomously (meaning not remote-controlled) within a geo-fenced area and provide alerts generated by 360-degree HD video and thermal imaging as well as people, license plate and signal detection. The machines also provide two-way live intercom calling and live/pre-recorded audio broadcasts (i.e., mobile public address system) in addition to parking meter and parking utilization features. Data is accessible through the Knightscope Security Operations Center (KSOC), an intuitive, browser-based user interface. Clients can recall, review, and save the data for forensic or event documenting purposes. And with Knightscope's mobile apps, a security professional can have the power of the the technology at their fingertips. As we drop new software code every two weeks and new hardware every few months, our clients also enjoy unlimited free software, firmware and hardware upgrades.

Product & Service

Meet the Founders

William Santana Li

CHAIRMAN & CEO

Bill is an American entrepreneur with over 25 years of experience and has a broad and deep range of expertise gained from several global assignments in the automotive sector and a number of startups. During his career at Ford Motor Company, Bill held over 12 business and technical positions, focused on 4 continents, cutting across each functional area.

These positions ranged from component, systems, and vehicle engineering with Visteon, Mazda, and Lincoln; to business & product strategy on the US youth market, India, and the emerging markets in Asia-Pacific and South America; as well as the financial turnaround of Ford of Europe. In addition, he was on the AMAZON team, which established an all-new modular plant in Brazil. Subsequently, he served as Director of Mergers & Acquisitions.

After internally securing $250 million, Bill founded and served as COO of GreenLeaf LLC, a Ford subsidiary that became the world’s 2nd largest automotive recycler. Under his leadership, GreenLeaf grew to a 600-employee operation with $150 million in sales - now part of $8 billion LKQ Corporation.

After successfully establishing GreenLeaf, Bill was recruited by SOFTBANK Venture Capital to establish Model E Corporation as its President and CEO, a new car company where the "Subscribe and Drive" philosophy was first pioneered in California. He subsequently co-founded Build-To-Order Inc. (BTO) as its President and CEO, a new car company based on the direct distribution of build-to-order products. Bill also founded Carbon Motors, and as its Chairman and CEO, focused it on developing the world's first purpose-built law enforcement patrol vehicle. He also built an advisory board comprised of senior officials that had worked directly for 3 different U.S. Presidents.

Bill earned a BSEE from Carnegie Mellon University and an MBA from the University of Detroit Mercy. He is fluent in Spanish and conversant in Portuguese.

Stacy Stephens

VP MARKETING & SALES

Stacy was a co-founder of Carbon Motors Corporation where he led marketing operations, sales, product management, partnership marketing and customer service. As part of its marketing operations, Stacy oversaw Carbon’s branding, corporate communications, media and industry relations, advertising and licensing, as well as market and customer research. He also led the Company’s advertising responsibilities which included organizing and overseeing trade show exhibiting, printed promotions and electronic promotions such as photo shoots, video production, website development and social media.

While at Carbon, Stacy was responsible for creating and launching the Carbon Council, an innovative and breakthrough customer interface and users group consisting of over 3,000 law enforcement professionals across all 50 states and actively serving over 2,200 law enforcement agencies. Upon completion of Carbon’s concept demonstration vehicle in 2008, Stacy coordinated the Pure Justice Tour – a 76-stop march across 25 U.S. States, Dubai and Abu Dhabi that introduced Carbon Motors to law enforcement agencies at the local, state, federal and international levels generating a $1.2 billion backlog of pending vehicle sales.

As a former police officer for the Coppell (Texas) Police Department, Stacy brings a first-hand understanding of protecting lives and property, as well as the wants and needs of first responders. His keen attention to safety in all aspects, strict adherence to rules and regulations, and law enforcement training blend well with his over 24 years of experience in operations, customer service and account management. In recognition of his efforts, Stacy was named one of Government Technology magazine’s Top 25 Doers, Dreamers & Drivers in 2011 for his vision and commitment to advancing the law enforcement mission.

Stacy studied aerospace engineering at the University of Texas in Arlington. He subsequently earned a degree in criminal justice and graduated as valedictorian from Tarrant County College in Fort Worth, Texas. He is a member of the International Association of Chiefs of Police (IACP) and also sits on the IACP Division of State Associations of Chiefs of Police (SACOP) SafeShield Project, which seeks to critically examine existing and developing technologies for the purpose of preventing and minimizing officer injuries and fatalities.

Financial Discussion

Knightscope operates on a Machine-as-a-Service (MaaS) business model. Our all-inclusive $7 per hour per machine compares favorably to a human guard at $25 per hour while contributing more and consistently. We sign year long contracts running 24/7 which generate over $61,000 per annum in revenue per machine or $300,000+ over a 5-year period. We target to recover the variable costs of the machine within the 1st calendar year, and the 2nd, 3rd, 4th, 5th year are effectively pure profit. One of our strategic investors, Konica Minolta, has over 2,000 technicians across the U.S. and we have begun training them to service, maintain and support our machines-in-network to allow us to scale nationwide. Our growth plan is to focus on California for 2016/2017 and then march across the rest of the U.S. during 2017 to 2019 with a target global launch set for the 2020 Tokyo Olympics.

Globally the 200+ countries around the world spend over $500 billion per annum on security in the public and private sector with approximately $300 billion addressable by Knightscope's plans and aspirations. We believe it to be possible to build a $30 billion company focused on advanced physical security technologies with a portfolio of products around the world. As the global population grows from 7 billion to 9 billion people, we believe the worldwide security and law enforcement apparatus will not scale and will require new solutions.

In the U.S. there are 8,000+ private security firms and 17,985 law enforcement agencies - a fragmented marketplace which we believe offers numerous opportunities for disruption. There are 3 major private security firms in the U.S. and Knightscope is partnered with 2 of them: Allied Universal and Securitas. Knightscope can help our channel partners in the private security industry with margin expansion, competitive advantage in the marketplace and long-term employee and client retention by providing a 'sticky' technology set. Globally, G4S employs 600,000 people, Securitas 300,000 people and the new Allied Universal will employ a combined 140,000 people.