Realbotix Corp.

Hello, and welcome to the Realbotics Financial Update Call. My name is Jennifer, and today we are joined by CEO Andrew Kegel and CFO Scott Myers. At this time, everyone is in a listen-only mode. Later, we will be conducting a question-and-answer session. If you have a question, please submit it into the Q&A section located at the bottom of your screen. I will now try to call over to Andrew.

Thanks, Jennifer. Welcome, everybody, to our call, I guess, for year-end in Q1. As people know, I don't do sort of the traditional thing, but I sort of wanted to just chat about the business and some various things. I want to talk first about some of the areas in the business or business that need work, and then talk somewhat about the positives and then outlook. So not in any particular order, but our reporting and finance structure certainly proved last year, certainly proved to be a weakness for the company. Our previous CFO was a contractor, not an employee. and in retrospect, not well equipped to handle the business as it was growing and we were pivoting out of crypto. He also had a bunch of personal issues to deal with and this had a negative impact in a few ways, primarily in us not having the adequate controls to ensure a smooth and efficient audit within the reporting timeline, which is why we need to request those extensions. What we've done since then, we really had to start our audit on the back foot, just being late. Like I saw from the numbers, there were no issues. There's no money missing or anything like that. It was just really a function of starting late with our new CFO and a new audit firm. Our prior CFO has been replaced by a full-time employee, Scott, who's been working out extremely well. He has over 20 years of experience in working with public companies. We've also augmented his team with another finance professional. And at this point, we're feeling very confident that The prior issues related to sort of controls and reporting, again, not related to the business, but really just having those controls are behind us and new improved systems are in place. With Scott's experience and the team that we're building, we'll have more timely and consistent financial reporting and standards. Second area I would say to bring up is revenue. You know, we have a new product, like really we're selling AI, we're selling robots. This is a new market that's being established. I've said this before, but we need to do more to generate revenues, more marketing, advertising, trial tests in real world situations. Our revenue story is more about the future, obviously. You're not going to wake up and have us report $20 million for a quarter this year, but we're building towards greater revenue numbers. It takes time. I note that we have lost some revenue because we pivoted away from crypto staking. That business was discontinued last year. We've augmented the sales team. We're starting to establish our ability to scale. We're going to lean more into our efforts to do more advertising and marketing and putting the robots in different places. So we are aware that that is an area that we need to continue to deal with. Next on my list, in terms of, again, areas where we, you know, of improvement or areas we need to address would be the deal with Onco, the NASDAQ vehicle. The market has not reacted positively to this deal. I'll reiterate that this is a very good deal for our shareholders. We currently own two operating subsidiaries. I'm not going to get too much into this because we've press releases before, but in this transaction, we would move our ownership from one of those subsidiaries from being privately held by us to it being held in a NASDAQ vehicle. This is commonly referred to as a reverse takeover. What we give up in the most likely scenario is 10% ownership in that subsidiary. In return, we'll own 90% of the vehicle, appoint four out of five directors, and there is a minimum cash requirement on the other side of the $12.5 million. The easy math on that, excluding the value of the vehicle means that they're valuing 10% of our business for $12.5 million, Or, simple math, a gross value of $125 million. That's multiples of where the entire company trades now. And we retain the upside in the business. It's not leaving. It's not a sale of the business. We still retain the upside and the ownership. So, again, this is a good deal. If the market chooses to not understand it, then that's on us. but I think in this we receive a superior valuation, cash, a NASDAQ vehicle, and we do all that without issuing a share. There's no share consolidation. And if the market needs to optically vote down this transaction, and we don't, for whatever reason, move ahead with this, the result is we'll just need to finance the growth of the robotics business internally, which would require us having to issue shares at some point. Again, as part of this transaction, there's no action required by robotics shareholders. But to combat misinformation, we are working on a marketing communication strategy. This is not a deal that closes tomorrow. We still have a few months, and there's several approvals and things that are required. And we hope that as the market learns more about it, and that technically we'll be the first pure play humanoid robot to be listed on the NASDAQ, that the value in our business becomes apparent, which leads me sort of to the next point, which is our share price. As many investors have messaged me, it's been a poor start to the year. There's just been more sellers than buyers. Despite us putting out positive news, having amazing technology with really no competition, we continue to lose value. Some things are market sentiment, macro events that are out of our control. Micro caps have had a hard time this year. Other things like operations and news flow are in our control and we're working on improving those and that communication to make sure. What I can say is that myself and our people that work for us feel that we are grossly undervalued in the market. There's certainly other things that stake there. I speak to people from other robot companies or people that know intimately about other robot companies. And while our robots don't have the same physical characteristics as other robots because they don't need to for the purposes they are built, I think everyone recognizes outside that we are ridiculously undervalued here. Our limited physical capabilities in the robots are an advantage. It means longer battery, the ability to plug in, the ability to work 24-7 as concierges, receptionists, the ability for them to look human, integrate vision and AI is unique and an all-in-one solution. And I've said before, I think our end markets are likely larger and today we have no real competition in North America. Many private companies in the robotics space have multi-billion dollar valuations and in some ways they're ahead, maybe bigger facilities a little bit ahead of us in terms of things like manufacturing. But in many other ways, particularly with respect to the most valuable parts, which is the technology, there's behind. And there's no question in my mind we're undervalued by the capital markets today. And obviously that's a disappointment to us because we are trying. And, you know, we can't control the share price, but what we can do is try to control it, keep building the momentum. I'll give you an example of something somebody sent me today. There's a company called AMI that just raised a billion dollars at a $3.5 million pre-money valuation, meaning their valuation prior to raising money was $3.5 billion. Their mission that I read, this was about 20 minutes before this call, their mission is to build AI systems that understand real-world environments, retain memory, and can act based on reasoning. And I sort of look to what we're doing. I'm like, hey, we've already done that. We don't need – we've built it. And not only have we built that, but we've integrated into a robotic AI vision system, and we build robots that look like humans. And, you know, I can look at our market cap. It's probably somewhere between, you know, 40 and 50 million U.S. today. These kids have a billion-dollar valuation to build a portion of our business we've already built and so again i'm sure they're doing things in a different way and that's very high level but on a comparable basis to where you know valuations these private companies are getting um we're certainly you know there's a there's a massive gap we recognize that we're working on strategies it's you know like i said people message me all the time we don't control the share price i wish the share price would can you know go up It's just based on how many buyers versus sellers and what other things happen out there. On the positive side, we've upgraded our staff in many areas. We have more announcements for new staff coming, but we've had a couple of big new hires. I talked about augmenting on the finance and accounting side. We also hired Eric Olson, our new COO. He came from Agility Robotics. That's one of those companies with multi-billion dollar valuations. And he saw the value in what we're doing, our end markets, the fact that we are so undervalued and what we can do with our technology. And he's super excited. He's been on the job now for about a month and working out extremely well. We're continuing to get calls from people working at other robotics companies who are looking to come and want to talk to us because, A, they're unhappy, they see the progress maybe not moving as quickly where they are, and they see that we have, I think, a pretty good culture and we're working on some pretty cool things. We continue to put our robots into groundbreaking-type environments and placements. We recently put Aria in a car, and she drove around with a tech influencer by the name of Ashley Vance. He also wrote an Elon Musk biography that's quite popular. He was blown away by the technology. We've done other things like having two robots speak to each other. We did that at CS, which is, you know, embodied AI, speaking to embodied AI. I don't know that anybody has ever done that before publicly. I think that's a revolutionary thing. But, you know, again, I think some of this stuff gets lost. Our vision system is top notch and we're so confident in it that we don't hold that back. We don't hide it. A lot of our peers that talk about having vision systems never display it, never post it, which makes me feel maybe they're not as confident in it as we are in ours. Other things that we've done, we sold the tokens.com domain name for close to $2.5 million to Bed Bath & Beyond. That adds extra cash. We exited crypto last year at a very good time, certainly with prices far higher than they are today. As I always said, it's very hard to plan of operating business when you're using crypto as, you know, where you keep your treasury because, you know, one day you have, you know, six months of cash flow or six months of burn available and the next day you have 12 months and it keeps moving around. It was the right decision for our business to exit, you know, I still am a fond of crypto, but the right decision for us to exit and have that certainty of having cash. I just, people who would see from the press release, we're sitting on a good amount of cash. I've spoken already about the positive of the Onco deal. I think once we are listed on the NASDAQ, that's a gateway for us to open up value when institutions and retail from all over the world can start investing in us. Right now, to invest in us in U.S. dollars, you can only use our OTC listing. Many areas and firms and people are prohibited from investing there, and so we think our ability to open up and should lead to people being able to invest more freely in us. We're debt free and we have cash on hand to last a long time. Our balance sheet is strong. We have the ability to grow the business without having to go desperately to the market or worry about debt repayments or things like that. That was a key thing that we did. And so again, that's not entirely reflected in this last quarter because it preceded the final payments. But as of today, A balance sheet looks good and we have no debt and I think that's pretty good for a company like ours. We have a unique set of IT and valuable patents that I believe down the road are gonna really show their worth. Again, our tech is unique and we can see it resonating with people we speak to on the client side in various areas. So we're excited. The future and what to expect. This will be the last area and then I'll turn it over to some questions. We're deep in conversations with several groups around new sales. It's a key area for us. We're going to be launching AI-only products this year, meaning that one of the great things about what we're building is, again, we want to emphasize we're an AI company and a robotics company. Our AI is portable, so you can access it via, you know, your phone, your computer, your laptop, or your robots. And what we're seeing is that I think there'd be an interesting demand for people as an entry product to just have the AI as a starting point. So you can have your companion or friend or product expert or teacher or tutor on your computer. It gives us a source of recurring monthly revenue. And then you can choose to transport that up to the robot. The robots are also should be viewed as a robot as a platform. And what I mean by that is that our robots certainly have the capability to run our AI that we have, but it can also run other AIs. And so, you know, right now we have it sometimes running ChatGPT, Gemini, Claude, whatever it is, and our AI. And many companies have proprietary AI that they want to use. And, you know, there's a lot of AI companies out there, thousands. There's not a lot of robot companies out there. There's probably, I would say, you know, half a dozen real robot companies based in North America. We plan to have more robots in interesting and commercial locations this year. You know, we're speaking to schools, nursing homes. There's more products being delivered to Ericsson. We continue to have a good relationship with them as sort of a landmark commercial client. I don't know if anybody saw they launched their 6G initiative a couple weeks ago, and the robot they purchased from us, Aria, it was front and center in their marketing, global marketing. Now, sort of, again, you know, We're doing all these things. We're moving to a new location in April. That will allow us to scale better, put functional teams together in the right environment so they can collaborate better and we can continue to build this business. But all the things that we're doing is, you know, we're managing sort of growth, building a new market, figuring out how to scale and thinking, you know, not just about today, but, you know, where are we going to be in 12 months, two years, five years with the view of building, you know, a multi-billion dollar business. So with that, I'd say, look, no road is without cracks. The path is going to have speed bumps. We're probably going to fall into some potholes. We are a micro-cap company seeking to build in what many people estimate, including myself, to be the largest businesses in the world over the course of the next decade, and that's being AI agents and humanoid robots. I feel our solution is better use cases in a larger end market than what everybody else is doing. I think the more we talk to people, they see the vision, and it's pretty clear and obvious. The risk is on me and this team to execute. There's obviously risk involved in our being this ambitious. We're not out raising a billion dollars at $3 billion valuations. We're still a small company. We need to get over that hump that people think we're a novelty. We're not. I actually think the other robots are novelties. There's not much you can do with a robot that does karate chops into the air. There's a lot you can do with a robot that speaks 100 languages, can see you, understand the environment, and communicate information. So, you know, look, our shares aren't going to go straight up. If it was easy and without risk, everybody would do it. We obviously want the shares to go up, but the capital markets, I have found, are impossible to predict and control. Certainly, a lot of the initiatives we've done, including the Onco deal, this deal with Nasdaq, which we thought would receive a very positive market reaction, didn't. So, you know, What I do know is that I think our shares and our stock and our company is worth a lot more than we are trading. And I think a lot of people would agree. You just have to look at the private markets to see where those valuations are for companies looking to build things we already have to get a very clear indication. So just gonna wrap up here and say morale internally is super strong. We're all extremely positive. We feel we're building a strong special company that can be a giant in the future. We get validation on our products weekly from visitors, media, and clients. While from a capital markets perspective, it's hard to gauge because you see the share price going down, that's certainly not how we feel internally. That's not the feeling I get when I'm walking around our facility and everyone's excited and we're continuing to build and recruit more people. But with that, you know, I thank everybody for their patience. It's been a rocky start to the year for sure and to the reporting. We're aiming to improve. It's not an easy road to build a business. And, you know, we are aligned with the shareholders. So maybe with that, I'm going to turn it over to Jen, who will provide instructions and questions.

So on the bottom of your screen, there will be a Q&A box. You can type in your question into that box.