Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $3.1 million, representing a growth of 23.5% compared to the prior year, driven by an 82% increase in product revenue and a modest 2% growth in services revenue [9][12] - Gross loss was $1.6 million, influenced by a $600,000 write-off of slow-moving inventory and higher material costs [10] - Operating expenses increased by nearly 13% to $7.9 million, primarily due to heightened investment in R&D for the K7 robot [10] - Net loss was $10 million, which was $1 million better than the previous year, with EPS at negative $0.98 compared to a loss of $3.58 in the prior year [12] - Cash balance improved significantly to $20.4 million from $5.3 million year-over-year [12] Business Line Data and Key Metrics Changes - Services revenue grew modestly by 2%, while product revenue surged by 82%, indicating a strong recovery from previous component shortages [9] - The ECD devices accounted for approximately 60% of overall revenue, with a focus on growing service revenue alongside product sales [104][108] Market Data and Key Metrics Changes - The company is experiencing uneven adoption in the robotics industry, which is still in its early stages despite excitement around the technology [8][72] - The company aims to penetrate existing markets and explore new ones with innovative technologies [8] Company Strategy and Development Direction - The company is overhauling its product delivery and manufacturing processes to prepare for the next phase of growth [9] - Three growth strategies were outlined: organic growth, new product development-led growth, and inorganic growth through mergers and acquisitions [40][42] - The K7 robot is set to begin limited series production in the second half of 2026, which is expected to enhance the company's market position [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, emphasizing the importance of execution and innovation for growth [38][76] - The company is focused on addressing the challenges of uneven adoption of robotics in the security sector and is working to educate potential clients [72][98] - Management acknowledged the need for a national robotics strategy to facilitate the adoption of robotics in government and other sectors [98] Other Important Information - The company is committed to maintaining compliance with the Buy American Act, ensuring that its products are designed and manufactured in the U.S. [58] - The company is actively pursuing government contracts, although progress has been hindered by government shutdowns [49] Q&A Session Summary Question: What is the company’s strategy for inventory management? - The company traditionally sold products first and then built them, but is shifting towards building inventory to meet demand more efficiently [21][29] Question: How does the company justify executive salaries given stock performance? - Management stated that stock price does not reflect company performance and that compensation is determined by the board based on performance and future potential [30] Question: What capabilities does the K7 have? - The K7 can reach speeds of up to 10 miles per hour and is designed for more challenging terrains, with ongoing R&D for off-grid capabilities [31][32] Question: What is the company doing to drive shareholder value? - The company is focused on execution, market penetration, and improving margins as part of its strategy to enhance shareholder value [37][38] Question: Are there any M&A opportunities being pursued? - The company is actively looking at M&A opportunities, particularly in software and human resources to enhance its technology and capabilities [42][43] Question: What is the company’s approach to government contracts? - The company has local, state, and federal contracts but faces challenges due to government shutdowns affecting progress [49] Question: How does the company plan to overcome the fear of robots? - Management emphasized the importance of communication and education to alleviate concerns about robotics [97][98] Question: What are the challenges in achieving the goal of 100-plus K5s in the field? - The primary challenge is adoption, as potential clients need time to become comfortable with new technologies [90]