Company Overview - Richtech completed its initial public offering on November 21, 2023, with shares trading on the Nasdaq under the symbol "RR" [19]. - The company is classified as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect the attractiveness of its Class B common stock to investors [185]. - The company is expanding its global presence through joint ventures and distributor partnerships, with plans currently in various stages of planning [57]. - The company is expanding its global footprint, with installations in the U.S., Canada, Mexico, Australia, and new partnerships in the Middle East and Europe [75]. - As of January 10, 2025, directors, executive officers, and principal stockholders own approximately 81.35% of the outstanding common stock, allowing them significant control over corporate decisions [212]. Product Development and Innovation - The Titan line of delivery robots has become one of the best-selling product families since its launch in 2024, expanding its applications significantly in retail automotive, warehousing, and manufacturing environments [35]. - The Matradee robot can perform over 1,000 deliveries per month in busy restaurant settings, enhancing operational efficiency for food service businesses [25]. - The Dex humanoid robot, designed for manufacturing and logistics, is expected to launch in early 2026, combining mobility with advanced AI capabilities [43]. - Richtech's Data Services will support the development of AI solutions by generating high-value datasets for training future robotic systems [44]. - The company is committed to building deep expertise in robotic data generation and AI training, which is crucial for improving the performance and reliability of its robots [61]. Business Model and Revenue - Richtech's RaaS model allows end users to pay monthly for robotic hardware and AI software, significantly reducing implementation costs and providing day one ROI [45]. - The company generated approximately $602 thousand in revenue from restaurant operations in 2025 through its robotic franchise brand, Clouffee & Tea [62]. - RaaS revenue reached approximately $692 thousand in fiscal year 2025, with 55 new RaaS contracts secured, indicating significant growth in long-term contract value [74]. - The company's transition to a RaaS business model has created a predictable, recurring revenue stream, enhancing customer relationships and fostering product improvement [62]. - The company aims to increase the number of robots deployed under the RaaS model, focusing on sectors like manufacturing and logistics [76]. Financial Performance - In fiscal year 2025, total revenue increased to $5,045 million, up $805 million from $4,240 million in fiscal year 2024 [72]. - Product sales rose to $2,309 million in fiscal year 2025, primarily due to non-recurring customer orders for earlier-generation delivery robotic systems [74]. - Research and Development expenditures were $2,432 thousand in fiscal year 2025, up from $2,021 thousand in fiscal year 2024, focusing on innovative solutions for humanoid and AMR robotic platforms [86]. Market Trends and Growth Potential - The global robotics market is projected to grow from $64.8 billion today to $375.82 billion by 2035, reflecting a CAGR of 17.33% [48]. - Richtech is focusing on scalable applications in mid-sized businesses, aiming to unlock the potential of embodied AI in sectors that have not yet adopted complex automation [52]. - The company aims to operate over 100,000 intelligent robots connected through a unified AI ecosystem, enhancing productivity across various sectors [18]. Challenges and Risks - The company faces challenges such as competition, customer education, labor shortages, and rising raw material costs, which could impact profit margins [64]. - The company is vulnerable to component shortages and price fluctuations, which could impact its ability to meet customer orders [146]. - Political events and trade disputes, especially between the U.S. and China, could adversely impact component availability and manufacturing capacity, affecting the company's ability to deliver products [155]. - The company has limited experience operating robots in diverse environments, which poses risks of safety issues and potential negative publicity [131]. - The company may face significant liabilities related to product warranties, which could adversely affect financial results [150]. Corporate Governance and Compliance - The dual-class structure of the company's common stock results in approximately 66% of the voting power being concentrated in the hands of two co-founders [204]. - Anti-takeover provisions in the company's articles of incorporation and Nevada law could delay or prevent undesirable acquisitions [213]. - The company is subject to U.S. governmental export controls and sanctions, which could impair its ability to compete internationally and may lead to liability if not compliant with applicable laws [174]. - Compliance with numerous laws and regulations is critical, as failure to do so could result in product recalls, increased costs, and adverse effects on financial condition [167]. Operational Efficiency and Management - Operating as a public company incurs significantly increased costs and requires substantial management time, impacting operational efficiency [191]. - The company may face challenges in managing its anticipated growth and expansion, particularly in international markets, which could strain its resources [184]. - The company is actively evaluating opportunities to expand its U.S.-based assembly and manufacturing footprint over time [95]. - The company is investing in various strategic initiatives, including expanding sales and marketing efforts and enhancing manufacturing processes [141]. Intellectual Property - The company has five issued U.S. patents and three pending applications, along with five trademark registrations [97][99]. - The company has three approved patents and nine pending patents, emphasizing the importance of intellectual property for its competitive advantage [157]. - Litigation related to intellectual property rights could result in substantial costs and divert management resources, adversely affecting business operations [162]. Stock Performance and Market Dynamics - The trading price of the company's Class B common stock fluctuated from an intra-day high of $7.43 on October 7, 2025, to an intra-day low of $0.52 on November 15, 2024 [200]. - The company received a notice from Nasdaq on October 25, 2024, regarding non-compliance with the minimum bid price requirement, but regained compliance by January 6, 2024 [210]. - The market price of the company's Class B common stock may be adversely affected by exclusion from major stock indices due to its dual-class structure [206].
Richtech Robotics (RR) - 2025 Q4 - Annual Report