RR 10-K & 10-Q changes, risk factors and insider trading
Richtech Robotics Inc. · Nasdaq · General Industrial Machinery & Equipment, Nec · CIK 1963685 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The Company’s business can be impacted by political events, trade and other international disputes, geopolitical tensions, conflicts, and other business interruptions.”
New heading “We have identified a material weakness in our internal control over financial reporting as of September 30, 2025. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.”
Largest changes
“We have identified a material weakness in our internal control over financial reporting as of September 30, 2025. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.”see in full comparison
“Political events, trade restrictions, tariffs, international disputes, geopolitical tensions, armed conflict, and other business disruptions may have a material adverse effect on the Company and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners. A significant portion of the Company’s operations depends on the importation of manufactured components from China. …”see in full comparison
“Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Measures to remediate material weaknesses may be time-consuming and costly and there is no assurance that such initiatives will ultimately have the intended effects. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. …”see in full comparison
“We have identified a material weakness in our internal controls over financial reporting as of September 30, 2025 relating to the design and consistent operation of certain entity-level and process-level controls supporting complex accounting judgments and transaction processing. These controls support, among other areas, inventory accounting, revenue recognition, investments, intangible assets, and certain payroll-related processes. …”see in full comparison
“The Company’s business can be impacted by political events, trade and other international disputes, geopolitical tensions, conflicts, and other business interruptions.”see in full comparison
Our future success depends in part on recruiting and retaining key personnel and if we fail to do so, it may be more difficult for us to execute our business strategy.see in full comparisonTheWeeconomy is currently experiencing a labor shortage and we willmay need to hire additional qualified personnel to effectively implement our strategic plan, and if we are unable to attract and retain highly qualified employees, we may not be able to continue to grow our business.
Full comparison: every changed paragraph (17)
We operate in an emerging market, which
makemakes it difficult to evaluate our business and prospects. If markets for service robotics develop more slowly than we expect, or long-term
end-customer adoption
rates and demand are slower than we expect, our operating results and growth prospects could be harmed.
Our product offerings compete
in a broad competitive landscape that includeincludes incumbent actors, and emerging players in the service robotics space, particularly in the
cleaning and indoor delivery automation. Our competitor base may develop new technologies or products that provide superior features or
are less expensive than our products. Our competitors may respond more quickly to new or emerging technologies, undertake more extensive
marketing campaigns, have greater financial, marketing, manufacturing and other resources than we do, or may be more successful in attracting
potential customers, employees and strategic partners. If we are not able to compete effectively, our business, prospects, financial condition,
and operating results will be negatively impacted.
While we are near
profitability profitability
today, we intend to expand operations outside the United States and continue to invest in the research and development
of our AI
Cloud Platform.products We anticipate that we will continue to incur expenses for the foreseeable future as we continue to advance our
products products
and services, expand our corporate infrastructure, including the costs associated with being a public company and further
our research
and development initiatives for our products. We are subject to all of the risks typically related to the development
of robotics, and
we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may
adversely affect our business.
We believe that our existing cash will fund our current operating plans through at least the next twelve months. We anticipate that
we will need additional funding in connection with our continuing operations after twelve months. Until we can generate a sufficient amount
of revenue from the commercialization of our products and
services, if ever, we expect to finance our future cash needs through public
or private equity or debt financings, third-party
(including government) funding and marketing and distribution arrangements, as
well as other collaborations, strategic alliances and
licensing arrangements, or any combination of these approaches.
OurSome of our products incorporate certain
components components
from sole source suppliers, and if our contract manufacturers are unable to source these components on a timely basis, due
to fabrication
capacity issues or other material supply constraints, or if there are interruptions in our, or our contract manufacturers’,
relationships relationships
with these third-party suppliers, we may not be able to deliver our products to our distributors and customers, which may
adversely impact
our business.
We depend on sole source
suppliers for certain components in our products, such as batteries and touchscreens.robotic arm. We have strategically chosen to sole source some
of our supplies in order to ensure the best quality at the best prices. While we believe none of our sole source suppliers are irreplaceable
and that our business is not substantially dependent on any one supplier, a small degree of risk may still exist in terms of cost and
delay involved in switching to new suppliers. For example, these sole source suppliers could be constrained by fabrication capacity issues
or material supply issues, stop producing such components, cease operations or be acquired by, or enter into exclusive arrangements with,
our competitors or other companies. In many cases, we do not have long-term supply agreements with these suppliers. Instead, our contract
manufacturers typically purchase the components required to manufacture our products on a purchase order basis. As a result, most of these
suppliers can stop selling to us at any time, requiring us to find another source, or can raise their prices, which could impact our gross
margins. Any such interruption or delay may force us to seek similar components from alternative sources, which may cause a delay in our
product shipments. In the event we are unable to procure components from our current supplier, we may switch to a different supplier and
our products can be redesigned to work with different components. Such redesign may involve engineering changes and time and effort, which
may cause delays in shipment of our products and adversely affect our operating results. We plan to continue to diversify our suppliers
and implement contingency plans in order to minimize any potential supply disruptions.
Our future success depends in part on recruiting
and retaining key personnel and if we fail to do so, it may be more difficult for us to execute our business strategy. TheWe economy is
currently experiencing a labor shortage and we willmay need
to hire additional qualified personnel to effectively implement our strategic
plan, and if we are unable to attract and retain highly
qualified employees, we may not be able to continue to grow our business.
The Company’s business can be impacted by political events, trade and other international disputes, geopolitical tensions, conflicts, and other business interruptions.
Political events, trade restrictions, tariffs, international disputes, geopolitical tensions, armed conflict, and other business disruptions may have a material adverse effect on the Company and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners. A significant portion of the Company’s operations depends on the importation of manufactured components from China. Heightened geopolitical tensions, tariffs and other trade disputes between the United States and China could adversely impact component availability, manufacturing capacity, procurement costs, and delivery timelines for the Company’s robotic products. In the event of an armed conflict involving China or a material escalation of trade restrictions or tariffs, trade between the United States and China could be severely limited or suspended, which could prevent the Company from delivering products to customers for a prolonged period or indefinitely if suitable alternative suppliers are not available. Any such disruption to international trade could result in substantial recovery time, increased operating costs to reestablish supply chains, and the loss of significant sales.
Our success depends in large
part upon the continued service of key members of our senior management team. In particular, each of our Chief Executive Officer and co-founder,
Zhenwu Huang, Chief Financial Officer and co-founder, Zhenqiang Huang, and Chief Operations Officer, Phil Zheng, President,
Matt Casella,Zheng is critical to our overall
management, as well as the continued development of our robotics technology, our culture and
our strategic direction. All of our executive
officers are at will employees, and we do not maintain any key person life insurance policies.
The loss of any member of our senior management
team could harm our business.
We are an “emerging
growth company,” as defined in the JOBS Act and, for as long as we continue to be an “emerging growth company,” we intend
to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to “emerging
growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. We could be an “emerging growth company” for up to five years, or until the earliest
earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the
date that we become a
“large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act,Act of 1934, as amended (the “Exchange
Act”), which would occur
if the market value of our Class B common stock that is held by non-affiliates exceeds $700 million as
of the last business day
of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1
billion in non-convertible
debt during the preceding three year period.
We are a “controlled
company” as defined under the Nasdaq Stock Market Rules, as our co-founder and Chief Executive Officer, Zhenwu (Wayne) Huang, beneficially
owns over 50% of the total voting power of our issued and outstanding shares of common stock as of the date of thisthe Original Report. For
so long
as we remain a “controlled company” under that definition, we are permitted to elect to rely on, and may rely on,
certain certain
exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must
be independent
directors. As a result, you may not have the same protection afforded to stockholders of companies that are subject to
these corporate
governance requirements.
We have identified a material weakness in our internal control over financial reporting as of September 30, 2025. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
We have identified a material weakness in our internal controls over financial reporting as of September 30, 2025 relating to the design and consistent operation of certain entity-level and process-level controls supporting complex accounting judgments and transaction processing. These controls support, among other areas, inventory accounting, revenue recognition, investments, intangible assets, and certain payroll-related processes. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Measures to remediate material weaknesses may be time-consuming and costly and there is no assurance that such initiatives will ultimately have the intended effects. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and adversely affect our business and operating results. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
The market price and trading
volume of our Class B common stock has fluctuated widely since the beginning of the calendar year.widely. During the periodfiscal from January 1, 2024
to the dateyear of this Report,2025, the trading price of our Class B common stock
has fluctuated from an intra-day high of $12.29$7.43 on JanuaryOctober 24,
20247, 2025 to an intra-day low of $0.30$0.52 on AugustNovember 6,15, 2024.
In addition, the trading
price and trading volume of our Class B common stock has very recently and at certain other times in the past exhibited, and may continue
to exhibit, extreme
volatility, including within a single trading day. Such volatility could cause purchasers of our Class B common stock
to incur substantial
losses. For example, on July 22, 2024, the trading price of our Class B common stock ranged from an intra-day high
of $2.59 to an intra-day
low of $1.31, on trading volume of approximately 100 million shares, and on August 7, 2024, the trading price
of our Class B common stock
ranged from an intra-day high of $0.728 to an intra-day low of $0.5413, on trading volume of approximately
188 million shares. With respect
to certain such instances of trading volatility, we are not aware of any material changes in our financial
condition or results of operations
that would explain such price volatility or trading volume, which we believe reflect market and trading
dynamics unrelated to our operating
business or prospects and outside of our control. We are thus unable to predict when such instances
of trading volatility will occur
or how long such dynamics may last. Under these circumstances, we would caution you against investing
in our Class B common stock unless
you are prepared to incur the risk of incurring substantial losses.
Our Class B common stock
has one (1) vote per share, and our Class A common stock has ten (10) votes per share. Our issued and outstanding share
capital consisted
of 39,934,846 shares of Class A common stock and 72,117,398175,161,127 shares of Class B common stock as of January 10,
2025.20, 2026. Our Chief Executive
Officer and co-founder, Zhenwu Huang, and our Chief Financial Officer and co-founder, Zhenqiang Huang,
beneficially own an aggregate of
approximately 81.02%66% of the voting power of our outstanding shares of common stock as of SeptemberJanuary 30,
2024,20, 2026, and as such, these stockholders,
individually or together, may be able to significantly influence matters submitted to our stockholders
for approval, including the election
of directors, amendments of our articles of incorporation, as amended, and any merger or other major
corporate transactions that require
stockholder approval. See “PrincipalITEM Stockholders12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Our existing stockholders, including
Zhenwu Huang and Zhenqiang Huang, individually or together, may vote in a way with which you disagree
and which may be adverse to your
interests. This concentrated voting power may, by changing the directors of the Company, have the ultimate
effect of delaying, preventing
or deterring a change in control of our Company, could deprive our stockholders of an opportunity to receive
a premium for their shares
of common stock as part of a sale of our company and might ultimately materially and adversely affect the market
price of our Class B
common stock.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “New Product Launch - Dex Humanoid Robot”
New heading “R&D Collaboration”
New heading “Subsequent Capital Raise – At-The-Market Offering”
New heading “Charter Amendment”
New heading “Investment Income”
Removed heading “Results of Operations”
Largest changes
“Subsequent to September 30, 2025, we entered into a non-commercial technology collaboration agreement with Microsoft Corporation through the Microsoft AI Co-Innovation Lab to support the evaluation and development of certain artificial intelligence workflows.”see in full comparison
Full comparison: every changed paragraph (79)
We are a robotics company focused on the development of embodied AI systems for manufacturing, retail, hospitality, and other sectors. We develop proprietary hardware and software that employ the latest robotics and AI innovations. Our goal is to deploy robotics at scale in business operations across our target markets.
Richtech Robotics, Inc. is
a leading innovator and provider of advanced robotics solutions designed to address the growing need for automation in the service industry.
We develop, manufacture, and deploy cutting-edge robots that streamline operations, enhance efficiency, and alleviate labor shortages
across a diverse range of sectors, including restaurants, hotels, casinos, senior living facilities, and retail centers. Our commitment
to technological advancement and customer-centric solutions has positioned us as a key player in the rapidly evolving robotics landscape.
Fiscal year 2025 was a transformative period for us, defined by the accelerated execution of our strategic shift toward a high-margin, recurring revenue business model.
Strategic and Operational Milestones
Financial and Capital Milestones
Recent Developments
New Product Launch - Dex Humanoid Robot
October 28, 2025, we announced Dex, our next-generation humanoid robot. Built on the NVIDIA Jetson Thor platform, Dex integrates a comprehensive suite of advanced AI capabilities designed to transform the industrial workforce. With sophisticated perception and manipulation abilities, Dex can interact with and operate in real-world environments, enabling it to perform tasks once considered too complex to automate.
Dex is expected to be deployment-ready for industrial applications by mid-2026, and we anticipate that it will become a significant driver of the company’s future growth.
R&D Collaboration
Subsequent to September 30, 2025, we entered into a non-commercial technology collaboration agreement with Microsoft Corporation through the Microsoft AI Co-Innovation Lab to support the evaluation and development of certain artificial intelligence workflows.
Subsequent Capital Raise – At-The-Market Offering
Subsequent to September 30, 2025, we utilized our at-the-market offering program (the “September ATM”) to issue and sell an aggregate of 15,156,685 shares of Class B common stock, receiving aggregate gross proceeds of $71,622,886.31. A portion of such proceeds was generated through a direct sale of shares to a large institutional investor under the September ATM. We intend to use the proceeds to accelerate the build-out of our RaaS asset fleet.
Charter Amendment
On November 10, 2025, we filed an Articles of Amendment to our Articles of Incorporation, as amended, with the Nevada Secretary of State to effect an increase the number of shares of Class B common stock that we are authorized to issue from 200,000,000 to 1,000,000,000, effective upon filing.
Results of Operations
Revenue, net, increased by $805 thousand, or approximately 19.0%, from $4,240 thousand for the year ended September 30, 2024, to $5,045 thousand for the year ended September 30, 2025.
This significant full-year growth demonstrates the effectiveness of our ongoing strategic initiatives and indicates a successful ramp-up in the latter half of the fiscal year. This performance is consistent with the anticipated long-term benefits of our strategic shift towards a leasing and recurring revenue model, which is designed to build a more stable and predictable revenue foundation. The overall increase, despite transitional challenges, reflects strong underlying customer demand for our robotics solutions.
The breakdown of revenue is as follows:
Business Model Transition and Revenue Recognition
Historically, we generated revenue primarily through Product Revenue (outright hardware sales), resulting in immediate revenue and immediate Cost of Revenue recognition.
During fiscal 2025, the Company fundamentally shifted its approach to emphasize long-term relationships and recurring revenue through leasing and service arrangements.
This strategic change significantly impacts the financial statements:
The increase in Product Sale percentage in fiscal 2025 was primarily attributable to occasional, non-recurring customer orders for earlier-generation delivery robotic systems, which temporarily increased one-time product sales. This activity does not reflect a shift in our long-term revenue strategy.
Our long-term focus remains on expanding recurring revenue through service, rental, and leasing arrangements. The relative decreases in Service/Rental Sale and Leasing percentages in fiscal 2025 compared to fiscal 2024 were largely attributable to the impact of these non-recurring product sales and certain prior-year revenue reclassifications. Excluding these items, underlying adoption of recurring arrangements continues to increase.
Detailed Revenue Streams and Recognition
The Company’s revenue is classified into four primary streams:
1. Product Revenue
2. Leasing/Service/Rental Revenue
3. RaaS Revenue
4. AlphaMax (Cloutea)
Strategic Initiatives and Growth Channels
The following initiatives demonstrate the Company’s active execution of its long-term growth and franchise model strategy:
Expansion of Robotic Restaurant Locations in Walmart Stores
The Company is actively executing a strategic plan to integrate its robotics technology into high-traffic retail environments through franchise agreements.
On October 17, 2024, the Company announced plans to launch a total of 20 robotic restaurant locations within Walmart stores across the country. This initiative is designed to demonstrate the scalability and reliability of our technology in a demanding, quick-service retail setting, thereby generating both recurring revenue and acting as a high-visibility marketing platform. As of the date of this report, two locations within Walmart stores are currently in operation. We intend to prudently evaluate the performance of these existing locations and, based on operating results, selectively pursue potential collaboration opportunities at additional locations.
Clouffee & Tea Restaurant Brand
Clouffee & Tea is our first self-owned restaurant brand, designed to showcase our robotics-as-a-service model directly to consumers. The concept seamlessly blends innovative robotic technology with a vibrant coffee and tea culture to create an engaging customer experience.
Strategic Purpose:
The total revenue
for the fiscal year ended September 30, 2024 and 2023, was $4,240 thousand and $8,759 thousand, respectively. The $4,519 thousand decrease,
or 51%, for fiscal year 2024 is primarily attributed to the strategic transition to the RaaS model, which impacts the timing of revenue
recognition. While this transition may initially reduce revenue, it is expected to generate a more predictable and recurring revenue stream
over the long term.
In 2024, the Company generated
$4.2 million in total revenue, a decrease from $8.8 million in 2023. This decrease was primarily driven by a decline in product revenue
within our Robotics category, partially offset by an increase in leasing revenue. The shift towards service and leasing reflects the ongoing
transition to our Robot-as-a-Service model, which is expected to generate more predictable and recurring revenue streams in the long term.
The following table summarizes the RaaS sales numbers (in thousand):
Cost of revenue, net, increased by $236 thousand, or approximately 15.5%, from $1,520 thousand in 2024 to $1,756 thousand in 2025. This increase was driven by an overall increase in net revenue of $805 thousand and significant growth in Product Revenue.
Depreciation of Rental Assets: For the fiscal year ended September 30, 2025, depreciation expense attributable to our RaaS fleet was $79 thousand. We expect this non-cash expense to increase in future periods as our installed base of leased robots expands, creating a predictable cost structure that scales with recurring revenue.We continue to focus on optimizing our manufacturing and supply chain processes to maintain a competitive cost structure.
Our gross profit decreased
significantly in 2024, declining by 55% from $6.0 million in 2023 to $2.7 million in 2024, our gross margin remained relatively stable.
Our gross margin was 64% in 2024, compared to 69% in the prior year. This slight decrease in gross margin is primarily attributed to adjustments
and write-offs related to our inventory. During the year, we conducted a thorough review of our inventory and identified certain obsolete
and slow-moving items that required adjustments and write-offs. These adjustments impacted on our cost of goods sold and, consequently,
our gross margin. We have implemented measures to improve our inventory management practices and minimize the risk of future inventory
obsolescence.
Despite this slight margin compression, we are pleased with the overall stability of our
gross margin, which reflects the inherent profitability of our business model. We believe that our strategic shift towards an RaaS model,
with its higher-margin recurring revenue streams, will further enhance our profitability in the long term.
Gross profit increased by $569 thousand, or approximately 20.9%, from $2,720 thousand in 2024 to $3,289 thousand in 2025.
The resulting expansion of our gross margin is a direct reflection of the full-year impact of the strategic shift to a RaaS model. By capitalizing the cost of leased assets rather than recognizing them as immediate cost of goods sold, our gross margin profile has significantly improved, leading to a higher gross profit despite the ongoing business model transition.
We anticipate that this trend of improved gross margin will continue as the recurring revenue from our leasing portfolio matures.
Despite the decrease in revenue, our gross profit remained relatively
stable, decreasing from $6.0 million in 2023 to $2.7 million in 2024. This resulted in a gross margin of 64% in 2024, compared to 69%
in the prior year. This slight decrease in gross margin is primarily attributed to a shift in our revenue mix. As we transition towards
a Robot-as-a-Service (RaaS) model, a higher proportion of our revenue is now generated from service and leasing arrangements. These arrangements
generally have lower gross margins compared to product sales, as they involve ongoing service costs and the amortization of the robot’s
cost over the contract term. However, we believe this strategic shift towards RaaS will benefit us in the long run by creating more predictable
recurring revenue streams and fostering stronger customer relationships.
Research and development (R&D) expenses increased by $411 thousand, or approximately 20.3%, from $2,021 thousand in 2024 to $2,432 thousand in 2025. This increased investment demonstrates our commitment to maintaining technological leadership and fueling future growth. The increase is primarily attributable to:
Increased Headcount and Compensation: Higher personnel costs, including the hiring of specialized engineers, data scientists, and AI developers necessary to support complex platform upgrades and new product development like ADAM and TITAN. We also undertook compensation adjustments to ensure retention of key talent in a competitive market.
New Product Development and Platform Upgrades: Significant expenses related to the development and successful launch of the DEX product line and substantial core robotics platform enhancements. This includes costs for prototyping, testing environments, and integration of cutting-edge components.
Technology Licensing and Infrastructure: Increased investment in new R&D equipment, advanced simulation software licenses, and expanded cloud computing services necessary for concurrent and rapid product development cycles. This infrastructure spending is designed to shorten time-to-market for future iterations.
Our sustained R&D investment is critical to maintaining a long-term competitive advantage, driving product innovation, and expanding the functional capabilities of our robotics fleet.
We remain committed to investing
in research and development to drive innovation and maintain our competitive edge. R&D expenses increased from $1.9 million in 2023
to $2.0 million in 2024 was due primarily to our increased expenditure in developing new products.
Sales and marketing (S&M) expenses decreased by $53 thousand, or approximately 4.0%, from $1,315 thousand in 2024 to $1,262 thousand in 2025. This slight decrease, despite an overall increase in net revenue, is primarily the result of:
Strategic Shift Efficiency: A reduced need for high-cost, upfront sales campaigns typically associated with achieving single large product sales. Resources were strategically reallocated to focus on the lower-cost, recurring customer acquisition model required for leasing. The marketing focus shifted from volume-based lead generation to quality, relationship-based lead nurturing.
Marketing Optimization and Digital Focus: Successful optimization of digital marketing channels, yielding better results at a lower cost-per-acquisition. We reduced expenditures on less effective traditional advertising formats while increasing investment in targeted digital platforms and content marketing efforts, resulting in a more efficient spend.
We anticipate S&M expenses to remain relatively stable as a percentage of revenue in the near term as we balance recurring revenue growth with the need for efficient new customer acquisition.
Our sales and marketing expenses
increased significantly, from $238,000 in 2023 to $1.3 million in 2024. This increase is directly related to our strategic initiatives
to expand our market reach and promote our RaaS (Robot-as-a-Service) offerings.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our (i) registration statement for our initial public offering and (ii) 2025 Annual Report. Any of these factors could result in a significant or material adverse effect on the results of our operations or financial condition. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Largest changes
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our (i) registration statement for our initial public offering and (ii) 2025 Annual Report. Any of these factors could result in a significant or material adverse effect on the results of our operations or financial condition.see in full comparisonAdditional risks could arise that may also affect our business or ability to consummate an initial business combination.We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Full comparison: every changed paragraph (1)
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our (i) registration statement for our initial public offering and (ii) 2025 Annual Report. Any of these factors could result in a significant or material adverse effect on the results of our operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial business combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Management's Discussion & Analysis (MD&A)
Removed heading “Recent Developments”
Largest changes
“In January 2026, we launched a strategic transformation initiative referred to internally as “AI Across All” (“AAA”), under which we are transitioning our operations, software platforms, and technology infrastructure to an AI-native architecture. As part of this initiative, we undertook a comprehensive redevelopment and modernization of our existing software assets. We evaluated the impact of this transformation on the expected future economic benefits associated with certain software-related intangible assets. …”see in full comparison
“For the three months ended March 31, 2026, sales and marketing expenses decreased by $22 thousand, or approximately 5.9%, to $348 thousand, compared to $370 thousand for the same period in 2025. The slight decrease reflects our ongoing cost discipline and expense management efforts, which largely offset routine inflationary pressures. Recurring stock-based compensation expense remained relatively flat compared to the prior-year period, as the one-time equity incentive award recognized in the first quarter of fiscal 2026 was not present in the current quarter. …”see in full comparison
Non-cash adjustments to reconcile net loss to net cash used in operating activities for the current period mainly included stock-based compensation ofsee in full comparison$8.6$9.0 million, allowance for credit loss of $0.9 million, depreciation and amortization of$0.8$1.2 million, impairment of long-lived assets of $9.5m, a $0.1 million loss on disposition of a subsidiary, and a$0.4$0.6 million gain from the change in fair value of warrant liabilities, compared to a$21.8$22.1 million loss in the prior-year period.TheseThe net amount of these adjustments positively contributed to the year-over-year improvement in operating cash flow.
“In January 2026, we launched a strategic transformation initiative referred to internally as “AI Across All” (“AAA”), under which we are transitioning our operations, software platforms, and technology infrastructure to an AI-native architecture. As part of this initiative, we undertook a comprehensive redevelopment and modernization of our existing software assets. We evaluated the impact of this transformation on the expected future economic benefits associated with certain software-related intangible assets. …”see in full comparison
“The overall variance reflects the structural shift in our revenue mix toward recurring service-based models. The increase in cost of revenue for the nine-month period was primarily driven by higher deployment activities, expanded logistics and installation efforts, and increased depreciation associated with our growing base of robotic equipment under active RaaS and Event Services contracts. These cost increases are directly correlated with the revenue growth in these recurring service lines. …”see in full comparison
Full comparison: every changed paragraph (51)
Recent Developments
On April 1, 2026, we entered into a purchase and sale agreement with PSIF EBS Rainbow LLC to acquire a building of approximately 79,325 square feet located at 9530 S. Rainbow Blvd., Las Vegas, Nevada for a purchase price of $21,180,000, including a $600,000 earnest money deposit. The agreement provides for a 45-day inspection period during which we may terminate the agreement and receive a refund of the earnest money. Closing is expected to occur within 15 days after the inspection period, subject to customary closing conditions. The purchase was closed on May 29, 2026.
In January 2026, we launched a strategic transformation initiative referred to internally as “AI Across All” (“AAA”), under which we are transitioning our operations, software platforms, and technology infrastructure to an AI-native architecture. As part of this initiative, we undertook a comprehensive redevelopment and modernization of our existing software assets. We evaluated the impact of this transformation on the expected future economic benefits associated with certain software-related intangible assets. Based on the accelerated deployment of our next-generation AI-native systems, we determined that the remaining useful lives of certain existing software platforms have been significantly shortened. We completed the transition, redevelopment, and deployment of substantially all affected software platforms by June 30, 2026. Accordingly, we concluded that the remaining carrying value of such software-related intangible assets will no longer provide future economic benefit beyond June 30, 2026. As a result, we intend to fully amortize, write off, or otherwise recognize the remaining carrying value of these assets as research and development expense during the period ending June 30, 2026. We believe this accounting treatment appropriately reflects the successful completion of our transition to an AI-native technology platform and the replacement of legacy software assets with newly developed AI-enabled systems.
Key Business Highlights for the SecondThird Quarter of Fiscal Year 2026
Financial and Capital Milestones
Comparison of the sixnine and three months ended MarchJune 31,30, 2026 and 2025
The following table summarizes our results of operations (in thousands) for the sixnine and the three months ended MarchJune 31,30, 2026 and 2025, together with the dollar change in those items from period to period:
For the six months ended March 31, 2026, net revenue increased by $0.1 million, or approximately 6.1%, to $2.6 million, compared to $2.4 million for the same period in 2025.
For the threenine months ended MarchJune 31,30, 2026, net revenue increased by $0.3 million, or approximately 28.6%,9.6%, to $1.5$3.9 million, compared to $1.2$3.6 million for the same period in 2025.
For the three months ended June 30, 2026, net revenue increased by $0.2 million, or approximately 16.7%, to $1.4 million, compared to $1.2 million for the same period in 2025.
Event Services Revenue: Event Services revenue increased for the nine months ended June 30, 2026, driven by higher customer activity, while revenue for the three-month period declined modestly, reflecting the timing of event scheduling rather than a change in underlying demand:
Event Services Revenue: Event Services revenue increased significantly, reflecting increased customer activity:
RaaS Revenue: RaaS revenue showed a notable increase over the six-monthnine-month period, demonstrating the growing adoption of our RaaS model:
Cost of revenue, net, increased for both the sixnine and three months ended MarchJune 31,30, 2026:
For the sixnine months ended MarchJune 31,30, 2026, cost of revenue, net, increased by $0.6$0.5 million, or approximately 50.8%,23.0%, to $1.9$2.5 million, compared to $1.2$2.0 million for the same period in 2025.
For the three months ended MarchJune 31,30, 2026, cost of revenue, net, increaseddecreased by less than $0.1 million, or approximately 4.2%,23.5%, to $0.8$0.6 million, compared to $0.8$0.7 million for the same period in 2025.
The overall variance reflects the structural shift in our revenue mix toward recurring service-based models. The increase in cost of revenue for the nine-month period was primarily driven by higher deployment activities, expanded logistics and installation efforts, and increased depreciation associated with our growing base of robotic equipment under active RaaS and Event Services contracts. These cost increases are directly correlated with the revenue growth in these recurring service lines. For the three-month period ended June 30, 2026, the decline in cost of revenue was primarily attributable to our strategic shift toward increased leasing arrangements, where the cost associated with the robots is recognized differently over the lease term rather than as an immediate cost of goods sold upon an outright sale. The quarter-over-quarter fluctuation reflects the variability in the timing of deployments and customer demand across periods.
This overall variance is driven by shifting dynamics across our core revenue channels:
Gross profit experienced mixed trends for the sixnine and three months ended MarchJune 31,30, 2026:
For the sixnine months ended MarchJune 31,30, 2026, gross profit decreased by $0.5$0.1 million, or approximately 41.1%,7.0%, to $0.7$1.5 million, compared to $1.2$1.6 million for the same period in 2025. Gross margin decreased to approximately 27.0%37.9% for the sixnine months ended MarchJune 31,30, 2026, compared to approximately 48.6%44.7% for the same period in 2025.
For the three months ended MarchJune 31,30, 2026, gross profit increased by $0.3$0.4 million, or approximately 82.2%,86.1%, to $0.7$0.8 million, compared to $0.4 million for the same period in 2025. Gross margin improved to approximately 44.3%58.4% for the three months ended MarchJune 31,30, 2026, compared to approximately 31.3%36.6% for the same period in 2025.
The decrease in gross profit for the nine-month period was primarily driven by a $0.5 million increase in cost of revenue, which outpaced the $0.3 million increase in revenue. The decline in gross margin primarily reflected higher costs associated with the expansion of our operations and service capabilities as we continued to invest in the resources, infrastructure, and operational support needed to accommodate future growth. These investments are expected to strengthen our capacity to support greater business volumes and the continued expansion of our service offerings.
The improvement for the three-month period was primarily driven by a $0.2 million increase in revenue, combined with a $0.2 million decrease in cost of revenue. Gross margin improved significantly, largely attributable to the growing revenue contribution from our RaaS and event services categories, which benefited from improved operational efficiency and better cost absorption as volumes increased during the quarter. The higher revenue base enabled these service lines to absorb fixed costs more effectively, resulting in improved margin performance. This improvement reflects the positive impact of our ongoing efforts to enhance cost efficiency across our service operations.
The decrease in gross profit for the six-month period primarily reflects our strategic investments in scaling operations and expanding our service capabilities, which resulted in higher cost of revenue as we continue to build the infrastructure necessary to support future growth.
The improvement for the three-month period was primarily driven by higher revenue volumes across our three business lines, including Event Services, RaaS, and Others. Meanwhile, the improvement in gross margin was mainly attributable to the growing revenue contribution from our Others category, which carries a higher margin profile.
Research and development expenses increased for both the sixnine months and three months ended MarchJune 31,30, 2026:
For the six months ended March 31, 2026, research and development expenses increased by $1.4 million, or approximately 172.9%, to $2.2 million, compared to $0.8 million for the same period in 2025.
For the threenine months ended MarchJune 31,30, 2026, research and development expenses increased by $0.7$1.8 million, or approximately 232.2%,135.2%, to $1.1$3.1 million, compared to $0.3$1.3 million for the same period in 2025.
For the three months ended June 30, 2026, research and development expenses increased by $0.4 million, or approximately 78.2%, to $0.9 million, compared to $0.5 million for the same period in 2025.
Sales and marketing expenses showed mixed trendsincreased for both the sixnine and three months ended MarchJune 31,30, 2026:
For the sixnine months ended MarchJune 31,30, 2026, sales and marketing expenses increased by $2.8$3.1 million, or approximately 454.3%,344.2%, to $3.4$4.0 million, compared to $0.6$0.9 million for the same period in 2025. The increase was primarily attributable to two factors: (i) higher non-cash stock-based compensation expense, which included a significant one-time equity incentive award granted to employees and management within our sales and marketing organization during the first quarter of fiscal 2026, and (ii) increased spending on industry trade shows and events to promote our sales and enhance brand visibility. The equity award was designed to recognize performance achievements and support key talent retention within the commercial team. As stock-based compensation is a non-cash item, this component of the increase did not impact our operating cash flows for the six-monthnine-month period. Excluding the impact of the one-time equity award and the incremental trade show and event-related investments, the remaining increase in sales and marketing expenses for the six-monthnine-month period was largely in line with our normal operating cost structure, reflecting disciplined spending across other expense categories. The one-time equity award was recorded entirely in the first quarter and did not recur in the second and third quarter; accordingly, it affected the year-to-date comparison but not the three-month comparative period discussed below.
For the three months ended June 30, 2026, sales and marketing expenses increased by $0.3 million, or approximately 109.0%, to $0.6 million, compared to $0.3 million for the same period in 2025. The increase was primarily driven by continued investments in industry trade shows and events to enhance brand visibility and generate new business opportunities. This increase is consistent with our strategic focus on expanding market presence and driving revenue growth through targeted marketing initiatives.
For the three months ended March 31, 2026, sales and marketing expenses decreased by $22 thousand, or approximately 5.9%, to $348 thousand, compared to $370 thousand for the same period in 2025. The slight decrease reflects our ongoing cost discipline and expense management efforts, which largely offset routine inflationary pressures. Recurring stock-based compensation expense remained relatively flat compared to the prior-year period, as the one-time equity incentive award recognized in the first quarter of fiscal 2026 was not present in the current quarter. Overall, sales and marketing expenses for the three-month period were broadly in line with the prior-year comparable period, reflecting our continued focus on optimizing go-to-market spend while maintaining investment in strategic growth initiatives.
General and administrative expenses increased for both the sixnine months ended March 31, 2026, but decreased for theand three months ended MarchJune 31,30, 2026.2026:
For the sixnine months ended MarchJune 31,30, 2026, general and administrative expenses increased by $3.7$5.4 million, or approximately 42.5%,52.7%, to $12.5$15.5 million, compared to $8.8$10.1 million for the same period in 2025. The increase was primarily attributable to three factors: (i) higher non-cash stock-based compensation expense, which included a significant one-time equity incentive award granted to employees and management during the first quarter of fiscal year 2026.2026; This award was designed to recognize performance achievements and support key talent retention. General and administrative expenses for the six months ended March 31, 2026 also included(ii) an approximately $0.9 million provision for expected credit losses, primarily associated with a limited number of past-due customer receivables. The one-time equity award was designed to recognize performance achievements and support key talent retention. As both stock-based compensationcompensation, accelerated amortization, and the provision for expected credit losses are non-cash items, these increases did not impact our operating cash flows for the six-monthnine-month period. Excluding these impacts, the remaining increase in G&A for the six-monthnine-month period was largely in line with our normal operating cost structure, reflecting disciplined spending across other expense categories. ThisThe one-time equity award was recorded entirely in the first quarter and did not recur in the second quarterand third quarters; accordingly, it affected the year-to-date comparison but not the three-month comparative period discussed below.
For the three months ended June 30, 2026, general and administrative expenses increased by $1.6 million, or approximately 116.4%, to $3.0 million, compared to $1.4 million for the same period in 2025. The increase was primarily attributable to expanded facility operations and enhanced infrastructure to support our growing business, including higher utilities and building maintenance costs, increased information technology and software expenses, and a strategic decision to optimize our facility footprint.
For the three months ended March 31, 2026, general and administrative expenses decreased by $0.5 million, or approximately 9.9%, to $4.3 million, compared to $4.8 million for the same period in 2025. The decrease was primarily attributable to our continued cost discipline and effective expense management across the organization. We achieved meaningful reductions in personnel-related costs as part of our ongoing efficiency initiatives. Recurring stock-based compensation expense remained relatively flat compared to the prior-year period, as the one-time equity incentive award recognized in the first quarter of fiscal 2026 was not present in the current quarter. The decrease in SG&A reflects our commitment to aligning operating expenses with current business priorities while maintaining investment in key growth areas.
Impairment of long-lived assets
In January 2026, we launched a strategic transformation initiative referred to internally as “AI Across All” (“AAA”), under which we are transitioning our operations, software platforms, and technology infrastructure to an AI-native architecture. As part of this initiative, we undertook a comprehensive redevelopment and modernization of our existing software assets. We evaluated the impact of this transformation on the expected future economic benefits associated with certain software-related intangible assets. Based on the accelerated deployment of our next-generation AI-native systems, we determined that the remaining useful lives of certain existing software platforms have been significantly shortened. We completed the transition, redevelopment, and deployment of substantially all affected software platforms by June 30, 2026. Accordingly, we concluded that the remaining carrying value of such software-related intangible assets will no longer provide future economic benefit beyond June 30, 2026. As a result, we fully impaired the remaining carrying value of $9.5 million for these assets during the three months ended June 30, 2026. This impairment was a non-cash charge and did not impact our operating cash flows.
Investment income increased substantially for both the sixnine and three months ended MarchJune 31,30, 2026.
For the sixnine months ended MarchJune 31,30, 2026, investment income increased by $6.0$8.7 million to $6.7$9.8 million, compared to $0.7$1.1 million for the same period in 2025.
For the three months ended MarchJune 31,30, 2026, investment income increased by $2.9$2.7 million to $3.3$3.1 million, compared to $0.4 million for the same period in 2025.
Gain (Loss) from Change in Fair Value of Warrant Liabilities For the sixnine months ended MarchJune 31,30, 2026, we recognized a gain of $0.4$0.6 million from the change in fair value of warrant liabilities, compared to a loss of $21.8$22.1 million in the same period of the prior year. The favorable variance of $22.2$22.7 million was primarily driven by a decrease in the fair value of the underlying warrants during the current period. The change in fair value is a non-cash item and does not impact our operating cash flows.
For the three months ended MarchJune 31,30, 2026, we recognized a gain of $1.6$0.2 million from the change in fair value of warrant liabilities, compared to a gainloss of $4.1$0.3 million in the same period of the prior year. The unfavorablefavorable variance of $2.5$0.5 million was primarily attributable to changes in the Company’s stock price. This non-cash gain did not affect our operating cash flows for the period.
Our primary sources of liquidity are cash and cash equivalents and short-term investments, which consist of cash on hand and highly liquid short-term investments. As of MarchJune 31,30, 2026, our cash and cash equivalents and short-term investments totaled $362.6$339.6 million, representing an increase of $110.6$87.7 million from $251.9 million at September 30, 2025. This increase was primarily driven by net proceeds of $105.0 million received from the issuance of new shares. These proceeds significantly strengthened our balance sheet and enhanced our financial flexibility to invest in growth initiatives, including expanding our research and development team and purchasing property and equipment to support our growing operations. The increase was partially offset by cash used in operating activities, primarily attributable to our net loss and investments in working capital.
Net cash used in operating activities was $2.0$3.6 million for the sixnine months ended MarchJune 31,30, 2026, compared to $4.9$5.4 million for the same period in 2025. The $2.9$1.8 million improvement in operating cash flow was primarily attributable to a significantly reduced net loss of $10.4$20.4 million in the current period, compared to a net loss of $30.1$31.8 million in the prior-year period, partially offset by changes in working capital.
Non-cash adjustments to reconcile net loss to net cash used in operating activities for the current period mainly included stock-based compensation of $8.6$9.0 million, allowance for credit loss of $0.9 million, depreciation and amortization of $0.8$1.2 million, impairment of long-lived assets of $9.5m, a $0.1 million loss on disposition of a subsidiary, and a $0.4$0.6 million gain from the change in fair value of warrant liabilities, compared to a $21.8$22.1 million loss in the prior-year period. TheseThe net amount of these adjustments positively contributed to the year-over-year improvement in operating cash flow.
Changes in net operating assets and liabilities resulted in a net outflow of approximately $1.7$3.4 million for the current period, primarily driven by an increase in inventory of $0.9$1.1 millionmillion, an increase in prepaid expenses and other current assets of $1.1 million, and a decrease in accrued expenses and other payables of $1.1$1.2 million, partially offset by aan decreaseincrease in grossdeferred accounts receivablerevenue of $0.1 million and other changes in operating assets and liabilities. In the prior-year period, changes in net operating assets and liabilities resulted in a net outflow of approximately $0.3$0.2 million, primarily due to increases in accounts receivable and increase in operating lease right-of-use asset, partially offset by an increase in accounts payable and lease liabilities.million.
Net cash provided by investing activities was $7.0 million for the nine months ended June 30, 2026, compared to net cash used in investing activities wasof $45.9 million for the six months ended March 31, 2026, compared to $15.3$41.7 million for the same period in 2025. The $30.6$48.7 million unfavorablefavorable variance was primarily driven by $67.0 million in purchases of short-term investments, partially offset by $21.3$96.8 million in proceeds from maturities and sales of short-term investment.investments, partially offset by $21.7 million in purchases of property and equipment and $68.3 million in purchases of short-term investments. In the prior-year period, cash used in investing activities was primarily attributable to $14.8$36.7 million in purchases of short-term investmentsinvestments, and $0.4$4.8 million in purchasepurchases of equipment.property and equipment, and $0.1 million in purchases of long-term investments.
Net cash provided by financing activities totaled $113.0 million for the sixnine months ended MarchJune 31,30, 2026, compared to $16.8$65.5 million for the same period in 2025. The increase was primarily due to $110.3 million in proceeds from the issuance of ordinary shares and $9.8 million in proceeds from warrant exercises, partially offset by $1.7$5.3 million in issuance costs of ordinary shares and $1.8 million of payments of settlement of employee tax liabilitieswithholdings in connection with treasuryrestricted stock transaction. Overall, these activities reflect our successful capital raising activities during the period.awards. In the prior-year period, cash provided by financing activities primarily consisted of $18.0$48.7 million in proceeds from the issuance of ordinary shares and $18.0 million in proceeds from warrant exercises, partially offset by $1.2 million in issuance costs of ordinary shares.
In particular, the fair value of warrant liabilities is determined using the Black-Scholes option pricing model, which requires significant assumptions, including expected volatility, expected term, risk-free interest rate, and dividend yield. The expected volatility is based on a combination of the implied volatility of our publicly traded common stock and the historical volatility of ourcomparable commonpublicly stock,traded andcompanies thewith similar expected term is estimated based on the remaining contractual term of the warrants.terms. Changes in thesesignificant assumptionsunobservable inputs, particularly expected volatility, could result in significanta fluctuationssignificantly inhigher theor lower fair value of warrant liabilities,measurement, which could have a material impact on our financial statements.
RR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding RR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 3,067,710 | $6.5M | 0.0% | Reduced 4% |
| Two Sigma Investments | 2026-06-30 | 1,124,240 | $2.4M | 0.0% | Reduced 50% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 470,100 | $991.9K | 0.0% | Reduced 43% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 252,800 | $533.4K | 0.0% | Reduced 55% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 28,083 | $59.3K | 0.0% | Reduced 36% |
| D. E. Shaw & Co. | 2026-06-30 | 28,168 | $58.9K | — | Sold out |