RR
Richtech Robotics INC
NASDAQ
10-Q: Richtech Robotics Inc. Reports First Quarter 2024 Results, Revenue Up 11% Amid Strategic Shift
Sentiment:
Quarterly Report
14 May 2024 5:41 PM
Richtech Robotics Inc. saw a revenue increase of 11% in the first quarter of 2024, driven by service revenue growth, while transitioning its sales model and upgrading its product line.
Worse than expected
The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
Product revenue decreased by 59%, which is a significant drop and worse than expected.
Capital raise
The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., which could provide up to $50 million in funding over 24 months.
The company issued three convertible promissory notes for $1 million each, with the first two in February and March 2024, and the third in April 2024.
The company issued 259,350 shares of Class B common stock to the investor as a commitment fee.
Summary
- Richtech Robotics Inc. reported a net loss of $3.868 million for the six months ended March 31, 2024, compared to a net loss of $1.879 million for the same period in 2023.
- Total revenue increased by 11% to $2.272 million for the six months ended March 31, 2024, up from $2.054 million in the same period of 2023.
- The increase in revenue was primarily driven by a 250% increase in service revenue, which reached $899 thousand, while product revenue decreased by 59% to $670 thousand.
- The company's gross profit margin was 57% for the six months ended March 31, 2024, compared to 56% for the same period in 2023.
- Operating expenses increased to $4.498 million for the six months ended March 31, 2024, up from $3.024 million in the same period of 2023, primarily due to increased sales and marketing and general and administrative expenses.
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., potentially providing up to $50 million in funding over 24 months.
- As of March 31, 2024, the company had $8.195 million in cash and cash equivalents, compared to $433 thousand as of September 30, 2023.
Sentiment
Score: 5
Explanation: The document presents a mixed picture. While there is positive revenue growth and a significant increase in cash, the substantial net loss and decrease in product revenue are concerning. The company is undergoing a strategic shift, which introduces both opportunities and risks. The sentiment is neutral to slightly negative due to the increased losses.
Highlights
- Total revenue increased by 11% year-over-year to $2.272 million for the six months ended March 31, 2024.
- Service revenue saw a significant increase of 250%, reaching $899 thousand for the six months ended March 31, 2024.
- The company's gross profit margin improved slightly to 57% for the six months ended March 31, 2024.
- Richtech entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., which could provide up to $50 million in funding.
- The company issued two convertible promissory notes for $1 million each in February and March 2024, with a third note issued in April 2024.
- Cash and cash equivalents increased significantly to $8.195 million as of March 31, 2024, compared to $433 thousand as of September 30, 2023.
- The company is transitioning to a Robotics-as-a-Service (RaaS) model, which is expected to generate recurring revenue streams.
Positives
- The company experienced a significant increase in cash and cash equivalents, reaching $8.195 million.
- Service revenue grew substantially, indicating a successful shift towards a RaaS model.
- The company secured a Standby Equity Purchase Agreement, providing access to potential funding of up to $50 million.
- Gross profit margin improved slightly, suggesting better cost management.
- The company is actively upgrading its product line to remain competitive in the robotics market.
Negatives
- The company reported a net loss of $3.868 million for the six months ended March 31, 2024, which is an increase from the $1.879 million loss in the same period of 2023.
- Product revenue decreased by 59%, indicating a potential challenge in direct product sales during the transition period.
- Operating expenses increased significantly, primarily due to higher sales and marketing and general and administrative costs.
- The company incurred substantial interest expenses of $660 thousand due to short-term loans.
- The company is experiencing a temporary decrease in product sales due to the product line upgrade.
Risks
- Increased competition in the robotics market could lead to price competition and reduced profit margins.
- A potential recession could decrease customer demand for the company's products and services.
- Supply chain disruptions, particularly from suppliers in China, could delay product delivery.
- The company's general and administrative expenses are expected to increase due to the costs of being a public company.
- Inflationary pressures could increase component costs and affect profit margins.
- Rising interest rates could increase borrowing costs and reduce consumer spending.
- The company's ability to secure enterprise clients and deals is not guaranteed.
- Unanticipated regulations of robots and automation could negatively impact the business.
- The company's ability to obtain and maintain intellectual property protection is crucial for its success.
Future Outlook
The company anticipates a temporary decrease in product sales during the transition to a RaaS model and the upgrade of its product line, which is expected to last for the remainder of the year. This will be mitigated by the launch of a new product line later this year. The company expects to finance future cash needs through various means, including founder investment, public or private equity or debt financings, the Purchase Agreement, third-party funding, and strategic alliances.
Management Comments
- Many of our clients see our robotic solutions as crucial to expanding and scaling their businesses.
- We are currently upgrading our product line to ensure we remain at the forefront of robotics technology.
- The RaaS model allows us to build stronger customer relationships, generate recurring revenue streams, and potentially achieve higher margins through premium services.
Industry Context
The company operates in the service robotics industry, which is experiencing rapid growth due to labor shortages and the increasing need for automation. The company's focus on hospitality and other labor-intensive industries aligns with the current market trends. The transition to a RaaS model is a common strategy in the industry to generate recurring revenue and build stronger customer relationships.
Comparison to Industry Standards
- While specific competitor data is not provided in the document, the shift to a RaaS model is a common trend among robotics companies, such as Knightscope and Bear Robotics, who are also focusing on recurring revenue streams.
- The reported revenue growth of 11% is moderate compared to some high-growth tech companies, but it is important to consider the company's transition phase and product line upgrade.
- The net loss is significant, but it is not uncommon for companies in the early stages of growth, especially those investing heavily in R&D and sales and marketing.
- The increase in cash and cash equivalents is a positive sign, but the company will need to manage its expenses carefully to achieve profitability.
- The Standby Equity Purchase Agreement is a common financing method for companies seeking growth capital, similar to agreements used by other emerging tech companies.
Stakeholder Impact
- Shareholders may be concerned about the increased net loss and decreased product revenue, but the potential for future growth through the RaaS model and new product line may be encouraging.
- Employees may be affected by the company's strategic shift and potential changes in compensation.
- Customers may benefit from the company's new product line and RaaS model, which could provide more flexible and cost-effective solutions.
- Suppliers may be affected by the company's transition and potential changes in demand for specific components.
- Creditors may be concerned about the company's increased net loss and reliance on short-term loans.
Next Steps
- The company will continue to transition to a RaaS model.
- The company will launch a new product line later this year.
- The company will continue to monitor and improve its internal controls over financial reporting.
- The company will continue to evaluate the impact of the Standby Equity Purchase Agreement.
- The company will continue to manage its expenses and seek additional funding as needed.
Related Party Transactions
- The company had related party balances with Uplus Academy LLC, Uplus Academy NLV LLC, Bison Systems LLC, and executive officers Zhenwu Huang and Phil Zheng.
- The company made an interest-free and non-maturity loan of $39 thousand to Zhenwu Huang in March 2024.
Key Dates
- July 19, 2016: Richtech Creative Displays, LLC, the predecessor of Richtech, was established in Nevada.
- June 22, 2022: Richtech was converted from Richtech Creative Displays, LLC to Richtech Robotics Inc.
- October 2022: The company completed a 4-for-1 forward stock split and re-designated common stock into Class A and Class B common stock.
- January 22, 2024: Richtech entered into financial services and finders fee agreements with Revere Securities, LLC.
- February 15, 2024: Richtech entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. and issued the first convertible promissory note.
- March 14, 2024: Richtech and YA II PN, Ltd. amended the terms of the convertible promissory notes.
- March 18, 2024: Richtech issued the second convertible promissory note to YA II PN, Ltd.
- March 31, 2024: End of the reporting period for the quarterly report.
- April 15, 2024: Richtech issued the third convertible promissory note to YA II PN, Ltd.
- April 22, 2024: Richtech issued 259,350 Commitment Shares to YA II PN, Ltd.
- May 13, 2024: Date of share information provided in the report.
- May 14, 2024: Date of the quarterly report.
- May 28, 2024: Reset date for the conversion price of the convertible promissory notes.
- February 16, 2025: Termination date of the Standby Equity Purchase Agreement, unless the $50 million is reached earlier.
Keywords
robotics, service robots, automation, RaaS, financial results, revenue, net loss, equity purchase agreement, convertible notes, operating expenses, cash flow, product development, supply chain, public company
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Richtech Robotics INC
NASDAQ
Sector: Industrials
Filings with Classifications
Worse than expected
3 March 2025 10:38 PM
Annual Report Amendment
- The company's total revenue decreased from $8,759 thousand in 2023 to $4,240 thousand in 2024.
- The company experienced a net loss of $8,140 thousand in 2024, compared to a net loss of $339 thousand in 2023.
Capital raise
3 March 2025 10:38 PM
Annual Report Amendment
- On September 3, 2024, the Company issued the following securities to certain institutional investors, pursuant to that certain Securities Purchase Agreement, dated as of August 29, 2024, and to certain retail purchasers (together with the institutional investors, the Investors), pursuant to the Companys prospectus, dated August 29, 2024, as filed with the SEC on August 30, 2024, in a public offering: (i) an aggregate of 13,242,963 shares of the Companys Class B common stock, (ii) pre-funded warrants to purchase up to 2,312,594 shares of Class B common stock (the Pre-Funded Warrants), and (iii) warrants to purchase up to 15,555,557 shares of Class B common stock (the Common Warrants), at a purchase price per share and accompanying Common Warrant of $1.35.
Worse than expected
14 February 2025 4:05 PM
Quarterly Report
- The company reported a net loss of $3.548 million, which is worse than the net loss of $2.750 million in the same period last year.
Capital raise
14 February 2025 4:05 PM
Quarterly Report
- The company issued an aggregate of 3,814,611 shares of Class B common stock and received aggregate proceeds of $5,149,724.85 in January 2025.
- The company entered into a warrant exercise inducement offer letter with a holder of Existing Warrants exercisable for an aggregate of 2,699,797 shares of its Class B common stock, to exercise its Existing Warrants at the existing exercise price of $1.35 per share, generating gross proceeds of approximately $3,644,726 before deducting financial advisory fees.
- In consideration for the immediate exercise of the Existing Warrants, the Company issued to such holder 2,699,797 new warrants (the Inducement Warrants) with an exercise price of $4.00 per share, which are immediately exercisable and valid for five years from issuance (the Armistice Warrant Inducement).
Capital raise
10 February 2025 8:01 PM
Current Report
- Richtech Robotics is set to receive approximately $3.64 million in gross proceeds from the exercise of existing warrants.
- The company is issuing new warrants with an exercise price of $4.00 per share as an inducement for the warrant holder to exercise their existing warrants.
Worse than expected
14 January 2025 4:53 PM
Annual Results
- The company's revenue decreased significantly due to the transition to a RaaS model.
- The company's net loss increased substantially compared to the previous year.
Worse than expected
31 October 2024 4:30 PM
Current Report
- The company's stock price falling below $1.00 for 30 consecutive days is worse than expected and triggers a delisting notice from Nasdaq.
Capital raise
5 September 2024 4:58 PM
Public Offering Announcement
- The company completed a public offering of 13,242,963 shares of Class B common stock, pre-funded warrants for 2,312,594 shares, and warrants for 15,555,557 shares.
- The offering generated approximately $19.4 million in net proceeds for the company.
- The company is restricted from issuing common stock or equivalents for 90 days and from variable rate transactions for one year, with some exceptions.
Capital raise
29 August 2024 9:50 PM
Registration Statement
- Richtech Robotics is seeking to raise up to $1,087,502.30 through the sale of Class B common stock, pre-funded warrants, warrants, and placement agent warrants.
- The offering is being conducted to raise additional capital for the company.
- The Placement Agent is acting as the placement agent on behalf of the Company on a best efforts basis.
Capital raise
27 August 2024 9:24 AM
Registration Statement
- Richtech Robotics is conducting a public offering to sell up to 14,492,753 shares of Class B common stock and warrants to purchase an equal number of shares.
- The company is also offering pre-funded warrants as an alternative to shares for investors who might exceed beneficial ownership limits.
- The assumed combined offering price is $1.38 per share and accompanying warrant, based on the stock's price on August 23, 2024.
- The company aims to raise up to $20 million through this offering.
Capital raise
14 August 2024 6:16 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company received $3 million in pre-advances via convertible promissory notes, which were fully repaid in July 2024.
- The company issued 259,350 shares of Class B common stock as a commitment fee.
Worse than expected
14 August 2024 6:16 PM
Quarterly Report
- The company reported a net loss of $5.181 million for the nine months ended June 30, 2024, which is worse than the loss of $2.543 million for the same period in 2023.
- Product revenue decreased by 55% due to the transition to a RaaS model, which is worse than the previous period.
Capital raise
14 May 2024 5:41 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., which could provide up to $50 million in funding over 24 months.
- The company issued three convertible promissory notes for $1 million each, with the first two in February and March 2024, and the third in April 2024.
- The company issued 259,350 shares of Class B common stock to the investor as a commitment fee.
Worse than expected
14 May 2024 5:41 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
- Product revenue decreased by 59%, which is a significant drop and worse than expected.
Capital raise
22 April 2024 5:50 PM
Debt Financing Agreement
- The promissory note represents a $1 million capital raise for Richtech Robotics.
- The company may need to raise additional capital through share sales to meet its monthly payment obligations under the note.
- The conversion feature of the note could result in a future capital raise through the issuance of new shares to the investor.
Capital raise
29 March 2024 8:23 PM
S-1/A Filing
- Richtech Robotics has a standby equity purchase agreement with YA II PN, Ltd. for up to $50 million.
- The company may issue up to 12,983,208 shares of Class B common stock to the investor.
- The company can obtain pre-advances up to $3 million via convertible notes.
Better than expected
26 March 2024 8:43 PM
Annual Report Amendment
- The company's revenue increased by 45% year-over-year, indicating better than expected growth.
- The company's gross profit margin increased from 65% to 69%, indicating improved profitability.
- The company's net loss decreased from $507 thousand to $339 thousand, indicating improved financial performance.
Capital raise
22 March 2024 5:02 PM
Debt Financing Agreement
- The company has raised $1 million through a promissory note.
- The note can be converted into Class B common stock, potentially leading to further equity issuance.
- The company may need to issue shares to cover monthly payments if it does not have sufficient cash.
Capital raise
15 March 2024 6:13 PM
S-1 Filing
- The document details a potential capital raise of up to $50 million through a standby equity purchase agreement with YA II PN, Ltd.
- The agreement allows Richtech to sell shares of Class B common stock to the investor over a 24-month period.
- The company can also receive pre-advances of up to $3 million via convertible promissory notes.
Capital raise
15 March 2024 4:15 PM
Material Definitive Agreement Amendment
- The agreement involves a potential $50 million share purchase agreement with YA II PN, Ltd.
- The company has received a $1 million pre-advance and is expected to receive two additional $1 million pre-advances upon the satisfaction of certain conditions.
Capital raise
15 March 2024 4:05 PM
Financing Agreement Announcement
- Richtech Robotics has entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company has also secured a pre-advance facility of up to $3 million.
- The company will issue shares to the investor as part of the agreement.
Capital raise
21 February 2024 4:08 PM
Standby Equity Purchase Agreement
- The document details a Standby Equity Purchase Agreement for up to $50 million.
- The agreement includes a pre-advance of up to $3 million, with the first $1 million already advanced.
- The company can issue shares to the investor over a 24-month period, subject to certain conditions and limitations.
Worse than expected
14 February 2024 5:01 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
Capital raise
11 January 2024 5:28 PM
Annual Report
- The company anticipates that it will need additional funding in connection with its continuing operations after twelve months.
- The company expects to finance its future cash needs through public or private equity or debt financings, third-party funding, and other arrangements.
- The company will continue seeking additional capital to expand its operations, advance its products, and scale its sales and marketing capabilities.
- The company will continue seeking additional financing sources to meet its working capital requirements, make investment in research and development and make capital expenditures needed to maintain and expand its business.
- If the company raises additional funds through further issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution.
Worse than expected
11 January 2024 5:28 PM
Annual Report
- The company reported a net loss of $339 thousand in 2023, compared to a net loss of $507 thousand in 2022, indicating that while losses have decreased, the company is still not profitable.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.