Item 1. Business
ITEM 1. Business
Overview and Recent Developments
We are a developer of advanced
robotic technologies focused on transforming labor-intensive services in hospitality and other sectors currently experiencing unprecedented
labor shortages. With a global R&D team based out of China and the United States, we design, manufacture and sell robots to
restaurants, hotels, senior living centers, casinos, factories, movie theaters and other businesses. Our robots perform a variety of services
including restaurant running and bussing, hotel room service delivery, floor scrubbing and vacuuming, and beverage and food preparation.
We design our robots to be friendly, customizable to client environments, and extremely reliable. For example, our food service delivery
robots typically make over 1000 deliveries every month in busy environments. Our current customer base includes major hotel brands, national
chain restaurants, leading senior care facilities, and top casino management companies.
Our mission is to integrate
robotics and automation into our everyday lives. We envision ourselves becoming the first robotics “Super-operator,” where
thousands of our robots are deployed out in the field and managed by Richtech’s AI Cloud Platform (ACP). As a Super-operator, our
robotic fleet will be performing a wide variety of tasks within a business, from completing deliveries and scrubbing floors to cooking
noodles and preparing drinks. Our ACP platform will allow businesses to plug in their robots and immediately leverage an immense amount
of data to optimize workflows, lower management complexity, and minimize labor dependency.
In 2022, we executed a Master
Service Agreement (“MSA”) with a major hotel brand with over 5,000 properties worldwide. As of September 30, 2023, we have
begun a nationwide rollout of our products to this customer’s hotel locations under this MSA. We also entered into an MSA with one
of the nation’s largest restaurant chains with over 2,000 locations in the United States. As of September 30, 2023, we have
received a lease order of $9,000 under this MSA. Additionally, we entered into an MSA with one of the top casino companies in the United
Sates. As of September 30, 2023, we have recognized $306,914 in revenue under this MSA. For more details on the MSAs, please see section
entitled “— Material Contracts.” We are in pilot/testing phases with over a dozen other national enterprises in
the hospitality sector. These enterprise customers, which is defined as companies with annual revenues over $1 billion, have placed service
automation as one of their top innovation priorities as they struggle to adapt to the ongoing labor shortage. Percentage of sales attributable
to our enterprise customers in fiscal year 2023 and 2022 were 3.82% and 2.06%, respectively. Percentage of sales attributable to our MSA
customers in fiscal year 2023 and 2022 were 3.40% and 0.77%, respectively. All of our MSAs are with enterprise customers.
In 2022, we successfully launched
our ADAM food and beverage automation system. We deployed ADAM at multiple events around the country including for companies such as one
of the “Big Four” accounting firms and a global alcoholic beverage company and for major U.S. celebrities.
In 2023, we have made significant
progress in continuing to expand our reach into the market. Notable events include being nominated best of CES (formerly known as the
Consumer Electronics Show) by Fortune in January, hosting executive events for the largest U.S. banks in Miami, partnering with hospitals
to explore applications in the healthcare sector, and being featured on the Saturday broadcast of the most watched morning show in America,
Fox and Friends on Fox News. We continue to roll out ADAM in stores across the country, with deployments completed in Los Angeles, New York,
Las Vegas and additional deployments ongoing in New Jersey, San Francisco, and Oakland. Our R&D efforts have also been progressing
at a steady pace, and we are on track to reveal new versions and new models of robots by end of year. We continue to connect with new
customers and explore new applications as we steadily add more and more deployments nationwide.
The ADAM system we exhibited
at these events was a proof of concept for a truly autonomous food and beverage system which would allow restaurants to eventually fully
automate their back-of-house operations. This is major step in bringing restaurant automation to the next level. Looking to the future,
we plan to rapidly expand our operations in the commercial B2C space by leveraging the ADAM system, and the innate advantages of a robotics
enabled business.
2
We launched three locations
with ADAM in late 2022 and the first half of 2023, in Los Angeles, Las Vegas and New York. We also deployed a mobile ADAM trailer that
attended a New York parade in May 2023. These deployments represent a variety of beverages and venues. We have ADAM making coffee in a
hotel lobby in Los Angeles, brick-and-mortar coffee shops in Greenpoint and Broadway in New York City, another coffee shop in Oakland
California, boba tea inside The Forum Shops at Caesars in Las Vegas, and a smoothie stall upcoming in New Jersey inside a mall. This is
a great representation of the wide applicability of environments that ADAM can be deployed in. We look forward to continuing to deploy
ADAM across the country directly and through our partners.
Corporate History and Corporate Structure
Richtech Robotics Inc. was
originally founded as Richtech Creative Displays LLC in Nevada in July 2016. The primary business at the time of incorporation was
product development work related to machine vision used to process video feed and produce usable outputs. Applications of this work included
interactive projection systems, facial recognition applications such as for temperature screening, and eventually environmental image
recognition, obstacle avoidance recognition, and virtual positioning analysis necessary for indoor robot navigation. From 2019 to 2020,
we designed, developed, and built indoor delivery robots. In response to COVID, we pivoted to providing temperature screening robots that
utilized AI algorithms to detect a face and pinpoint the location of the forehead to take an accurate temperature measurement. As fears
around COVID subsided and the labor shortage took hold, we pivoted back to providing delivery robots and other service-related robots.
Our Products and Services
Our products are categorized
into three kinds of service automation: indoor transport and delivery, sanitation, and food and beverage automation. Our target market
is the hospitality sector, which includes restaurants, hotels, casinos, resorts, senior care, hospitals, and movie theaters. We also plan
to leverage our expertise in food automation to bring services directly to the consumer with the ADAM system which is discussed below.
The majority of our robots
can be characterized as Autonomous Mobile Robots (AMRs), meaning that our robots can understand and move through their environment independently.
AMRs differ from their predecessors, Autonomous Guided Vehicles (AGVs), which rely on tracks or predefined paths and often require operator
oversight. Our AMRs understand their environment through an array of advanced sensors, with the primary sensor being a LiDAR which stands
for Light Detection and Ranging. The LiDAR is able to create a 2D map of the environment by sending out laser pulses and measuring the
time it takes to bounce back, similar to sonar but far more accurate. Secondary sensors such as RGBD cameras that detect color and depth
of images, ultrasonic proximity sensors, and standard AI machine vision that can recognize objects are used in sync to create an in-depth
understanding of the robot’s environment. These sensors, combined with a robust navigation software stack based on AI algorithms,
provides our robots the ability to perform dynamic path planning through their environments.
3
The ACP service is a business
optimization tool that allows customers to benefit from the rich operational data generated by the robots. Each AMR can operate independently
in the real world and report data up to the ACP. The ACP can then utilize the data to optimize workflows, enhance guest experiences,
and minimize waste. The ACP will store robot utilization metrics for analyses and reporting, providing clients with detailed operational
data.
Indoor Transport and Delivery
In the transport and delivery
category we have two main product lines, the Matradee line of server assistant robots geared towards restaurants and restaurant-like environments,
and the Richie and Robbie line of room service robots that can service hotels, resorts, casinos, and health care facilities.
Matradee is a
robot designed for dining spaces that can be used for bussing, serving, hosting, advertising, and entertaining. For example, Matradee
will transport food from the kitchen to the table where a waiter can come by and serve the guests. The waiter could then load the Matradee
with dirty plates and send it to the dish washing zone in the kitchen. This keeps the waiter on the floor serving guests and reduces physical
stress on the waiter. The robot is designed to operate in narrow and busy environments, navigating around tables and people in order to
get to its destination. Typically, a Matradee will perform over 1000 deliveries per month in a busy restaurant. On the ACP, clients can
review number of deliveries, distance traveled, hours of operation, utilization patterns over time, and manage their robotic fleet.
Matradee was designed to have
a large carrying capacity and to be able to carry as much food as three to four waiters combined per trip. The robot is designed to be
extremely stable so that it can carry wine glasses and delicate food items without spilling. It can also be used to greet guests at the
reception area and lead them to their table. With a battery life of eight to fourteen-hours between charges, the Matradee can run for
the entire day without taking a break. When multiple robots are deployed in the same space, the robots communicate over short-range
radio waves to coordinate and make way for each other.
4
One of the biggest advantages
of the Matradee is the ease of deployment and reliability. Standard deployments involving full installation and staff training are typically
completed within three to four hours. The robot is not connectivity dependent and can operate fully offline. These features decrease
the difficulty of deployments and dramatically increase the variety of environments in which the Matradee can be deployed successfully.
This allows more deployments, lower costs, and faster scaling.
The Matradee is currently deployed
in restaurants, hotels, casinos, senior living homes, and factories. Many of these businesses have either restaurants or have restaurants-like
businesses so the primary task the robot performs is delivering food from the kitchen to the tables, and bussing dirty dishes back to
the dishpit. Some factory clients also utilize the Matradee for delivery of parts by making use of the remote summoning feature to call
the robot to specific stations to pick up items for delivery.
Richie and Robbie
are our room service delivery robots, that are elevator enabled and can traverse over 850,000 sq. ft. This robot is able to make deliveries
to any destination inside a building. The robot can call the elevator to travel up and down floors, and once it gets to its destination,
it notifies the guest that their delivery has arrived. These robots navigate using the same principles as the Matradee, a combination
of sensors and AI-based navigation algorithms.
Richtech also provides a number
of accessories that work to further optimize Richie and Robbie. An automated vending machine (AVM) can be deployed to automatically dispense
commonly requested items such as water or toothpaste directly into the compartment of the robot, allowing for a fully automated delivery
process. Guests can place orders directly through their phone via a client app or scannable QR code menu. Fully automated deliveries are
expected to be fast and reliable, without the need to heavily engage staff. In addition to being a great labor-saving tool, these robots
can increase hotel revenue by broadening room service availability hours and making it easier for guests to place orders.
All data is reported back to
the ACP for reporting and analysis. The ACP provides clients with detailed breakdowns of delivery metrics including, but not limited to,
travel distance, number of deliveries, duration, and status of the robots. The ACP also provides additional advanced features such as
delivery playback, remote deployment, and instrument preemptive maintenance scheduling.
Other advanced features of
these room service robots include:
● Advanced door access control functions that will open doors
via short range communication protocols;
● Advanced “anti-trip” safety mechanisms for when
a person attempts to block the robot with their feet;
● 360-degree sensor field of view at all times;
● Delivery security features including pin-based and biometric
access methods;
● High-gradient tolerance of up to 13 degrees;
5
● Intelligent AI recognition technologies that allows speed adjustments
depending on environmental factors; and
● Auto-docking to charging port when not in use to maximize uptime
Richie and Robbie were launched this year, and are currently being
tested by our and hospital clients. Our first deployment in a Marriot Courtyard in Florida was successful and the client is looking to
add additional robots. We have found that Richie and Robbie are extremely suited for daily pharmacy deliveries in hospitals. Typically,
these deliveries are done by pharmacy techs who push carts around the hospital. The delivery volume is usually extremely high (at least
once an hour) over very long distances, so an enclosed and locked robot that can navigate elevators is a perfect replacement for this
labor.
Sanitation
CX
SX
MX
DUST-E is our
autonomous commercial cleaning robot product line that features three distinct models, the CX, SX and MX.
The CX is our smallest robot
designed to perform routine vacuum and mopping in spaces less than 10,000 sq. ft. The CX is tailored to indoor hard floor office environments.
The system incorporates a base station tower that charges the robot, automatically exchanges dirty water for clean water, and empties
the dust bin for maximum coverage and convenience. The CX, as with all robots in this line, has a pressurized mop and comes with optional
UV disinfection.
The SX is for larger and more
challenging environments under 100,000 sq. ft. The primary use case for the SX is in open commercial spaces such as lobbies of hotels
and more challenging surfaces such as those of restaurants where there may be food debris and spills. The SX utilize a high-power vacuum
and multi-roller system that categorizes the debris it picks up for a one-pass cleaning efficiency. The SX comes with a number of advanced
features including a charging station with a ten-gallon clean water tank for automatic water exchange, scheduled cleaning functions, and
precise localization that brings down the wall gap to just three centimeters.
Future models are expected
to include an AI driven categorization system that adjusts the cleaning routine according to the type and intensity of the mess being
cleaned.
The MX is our largest unit
capable of cleaning spaces up to 500,000 sq ft. Designed with professional cleaning in mind, the MX is a floor scrubber tailored to large
industrial and commercial spaces such as warehouses, factories, large hotel floors, event spaces, schools and universities, and department
stores. The MX comes in a variety of configurations that accommodate different floor types from bare concrete to more sensitive vinyl
tiles. Designed for heavy-duty cleaning, the MX comes with a 30-gallon water tank, weighs over 600 lbs., and provides a brush pressure
of 13.2g/cm 2 .
Data collected by the ACP provide
clients with utilization metrics as well as a cleaning maps which show the path the robot took during its cleaning routine. The ACP is
expected to provide reminders for routine replacement of consumable and renewable components, and preemptive maintenance alerts for all
robots.
6
Food and Beverage Automation
ADAM is our food
and beverage automation robot. The core concept of ADAM is to develop a fully independent food and beverage business based entirely on
robots and automation. The dual six-degree-of-freedom robotic arms are designed to provide the same level of flexibility as a human arm,
allowing ADAM to easily emulate human movements. We designed ADAM to be friendly and approachable by giving it a white and round exterior,
and designed it to look more like a robot than a human to avoid the “uncanny valley” effect. (The uncanny valley is a concept
that suggests that humanoid objects that imperfectly resemble actual human beings provoke uncanny or strangely familiar feelings of uneasiness
and revulsion in observers. “Valley” denotes a dip in the human observer’s affinity for the replica, a relation that
otherwise increases with the replica’s human likeness.) Future features are expected to include adding natural language processing
to allow customers to directly speak their orders to the robot as they would with an employee.
ADAM is capable of making a
wide variety of beverages including coffee, craft cocktails, and Boba tea autonomously. In 2022, we rented the ADAM bartending system
out for corporate and celebrity events. Clients included one of the “Big Four” accounting firms, a global alcoholic beverage
company and a major U.S. celebrity. ADAM is a robotic development platform. On top of making a wide variety of beverages, the system
is also able to perform deep frying tasks, and we plan to add noodle making functionality in Q2 of 2024. We plan to provide a software
development kit (SDK) to third party developers to widen the applications in which ADAM can be deployed.
Our Industry
Our product family was designed
to provide labor-intensive businesses with robotic automation solutions. We believe hospitality is the most labor-intensive industry,
which is why we have deployed our robots across restaurants, hotels, casinos, hospitals, bars, event spaces, and senior living homes.
The nonindustrial service robotics
market includes warehouse picker robots, self-driving floor scrubbers, customer service robots, delivery robots, surgery robots, food
harvesting robots for agriculture, underground and underwater inspection robots, security robots, military defense robots, drug research
robots and others. The market is currently in the phase where end-users and system integrators are still gaining experience in adoption
and implementation of nonindustrial service robots. In North America, the primary driver for adoption is expected to be the ongoing trend
to automate menial or non-value-adding-tasks. These tasks include cleaning, transport and delivery, and food preparation.
7
Market Opportunities
The primary market for our
robots and automation tools are businesses that cannot find affordable or reliable labor to perform certain task. We believe that the
current economic environment provides conditions that should drive growth. As of April 2023, the number of open job opportunities nearly
doubles the number of unemployed Americans with over 10 million job openings. Two of the largest markets for our service robots are restaurants
and hotels. As of 2022, there are over 660,000 restaurants operating in the U.S. employing almost 15 million people. As of 2022,
there are over 130,000 hotels and motels currently in operation in the U.S. representing over five million hotel rooms. According
to an American Hotel and Lodging Association survey, 97% of its members reported a worker shortage. Federal Reserve Chair
Jerome Powell stated in his speech on November 30 th , 2022 that there is a “current labor force shortfall of roughly 3-1/2 million
people.”
We believe our products not
only provide a solution to the labor challenges faced by businesses today, but also a way to improve guest experience, lower operation
costs and complexity, and provide a path to growth and scalability.
Our Competitive Strengths
We believe we are one of the
current leaders in the service robotics market for the following reasons:
● First Mover Advantage: The nonindustrial service robotics
market has no clearly defined market leader. Our Matradee robot is one of the earliest restaurant service robots to launch in the U.S. market,
and we believe we are recognized by customers and competitors as an established brand in the restaurant service robotics space. We believe
that there is only one other competitive product that was launched for room service delivery prior to our Richie and Robbie being introduced
to the market. Based on our extensive knowledge of the service robotics industry, we believe ADAM to be one of the earliest commercialized
humanoid robots in the U.S. that can be utilized to serve both food and beverages in a real-world environment. We have not seen any other
robot like ADAM that has come to market and been deployed at any scale.
● Reliable Technology: Our reliable AI navigation
and obstacle recognition algorithms provides our robots with what we believe is best-in-class reliability and performance. The combination
of advanced sensors and redundant obstacle avoidance protocols makes our robots extremely safe and intelligent. The ACP maximizes the
potential of the data generated by these robots to provide clients a level of insight into the day-to-day operation of their businesses.
Advanced features of the ACP include robot control and analysis systems, preemptive maintenance systems, and business optimization systems.
8
● Broad Product Offerings and Synergies: Unlike our competitors
that only provide one robot or one type of robot, we have a breadth of robotic solutions to deploy depending on a client’s needs.
This is very advantageous as we can bring in new customers from a variety of different use cases and attempt to encourage customers to
consider our other robotic solutions, providing a holistic approach to our client’s needs. If a hotel client is having difficulty
finding servers for their restaurants, they are most likely also experiencing shortages in cleaning staff, front desk staff, room service
staff, cooks, greeters, bartenders etc. Having a variety of products not only provides clients with a one-stop-shop for their service
robotic needs, it also creates the impression that we are a reliable resource to consult as they approach the general adoption and implementation
of robotic solutions across different sectors of their business.
● Distribution: We have an extensive network of distribution
channels with over 30 regional and national distributors. These distribution partners span across a broad array of sectors including
healthcare, senior living, hotels, and restaurants. Distribution partners are engaged after a review of market opportunities they bring
to Richtech and their company’s capabilities as a distributor. During this engagement process distribution terms are discussed
and a distribution agreement is eventually signed. In 2022, 20-30% of total revenue was generated through these distribution channels.
● Enterprise Partnerships: We have executed MSAs with several
large enterprise customers that in total represent over 9,000 restaurant and hotels. We have on-going pilot programs with ten enterprises
that represent over 40,000 locations. Our enterprise customers represent the largest players in the restaurant, hotel, senior living,
and casino industries. We believe our ability to form enterprise level partnerships will be a major differentiating factor between us
and competitors over the next two-three years.
● Business Model: Richtech is at the forefront of the service
robotics market with its current technology and resources to launch a robotics-based franchise business. We believe this is the best
way to capitalize on our technology allowing us to produce food and beverage delivery products at a lower cost than competitors. This
business model also solves for two of the significant problems the hospitality industry currently faces, labor and quality control.
● Market Coverage: Richtech currently provides deployment
and maintenance services to the entire continental United States and Hawaii. We have deployments in 37 states and anticipate adding
more on a monthly basis. Our ability to maximize the addressable market should accelerate the growth of our business. With a larger market
share, we can utilize economies of scale to better compete against our competitors.
Our Strategies
We intend to establish ourselves
as the leading provider of service robotic solutions by developing, manufacturing, and deploying novel products that address the growing
need for automation in the service industry. The key components to our growth strategy include:
● Building our commercial organization: We plan
to expand our sales teams to increase our coverage across all hospitality sectors. We have already begun connecting with external regional
sales teams in the food and beverage space and having them introduce our products to their existing customer base. This effort is being
spearheaded by our Vice President of External Sales, who has over 30 years’ experience launching technology products.
● Penetrate the hotel market with Richie and Robbie: We
will continue to work with hotel clients to implement room service robots. Our hotel enterprise customer is planning to make our robots
a brand standard across all their hotels. We will also be launching the AVM to assist in proving the use case and improving return on
investment for clients. Once we enter into a formal agreement with our hotel enterprise customer we expect adoption to scale quickly
as we expect to deploy thousands of robots across the United States.
● Launch and scale our robotics franchise brand: We
have already secured a space inside The Forum Shops at Caesars Palace in Las Vegas, NV, as the first location of our robot restaurant
franchise. A robotics-based restaurant business addresses the two biggest challenges facing franchisees of traditional restaurants today,
which are labor and quality consistency. This opens the way for a wide variety of scalable businesses based on the ADAM system. We plan
to prove this concept in Las Vegas and invite franchisees to purchase ADAM systems to deploy across the United States. We expect
that this will generate significant recurring revenue.
● Establish enterprise partnerships: We plan to
continue to place strong emphasis on forming enterprise relationships in the hotel, restaurant, casino, and senior living sectors. We
see enterprise adoption as the biggest stepping stone towards our success. By securing enterprise clients, we will be able to represent
ourselves as the most qualified vendor in the service robotic market.
9
● Penetrate the education and government markets: We
plan to expand our marketing and sales efforts in the education sector as schools and universities represent a significant share of the
commercial cleaning robot market. We also plan to form a specialized public sector sales team specifically to target education opportunities
and other governments contracts.
● Expanding our R&D team: We intend to continue
to invest heavily in the technical development of new robots and expand our service offerings. This will require us to form additional
technical teams to support this development. For example, we plan to launch a senior care focused line of robotic solutions as we have
identified senior living is one of the most understaffed sectors in the United States. This new line of robotics will be focused
on alleviating skilled nursing duties and substituting for strenuous repetitive tasks that are necessary to keep elderly guests healthy.
Our Challenges
The challenges the Company
currently faces include the following:
● Market Competition: Like with all companies, we face
pressure from competitors particularly in the restaurant space. This puts pressure on our margins and increases marketing and sales costs.
These competitors are listed in the next section.
● Customer Education and Adoption: Since service robotics
is still very new, customers are slow to make decisions and must go through a testing process to ensure the robots work for their business.
This slows down the sales process which increases the cost of sales.
● Service Coverage and Costs: Our customers are spread
across the country, and we have not yet reached the scale where we can support a nation-wide maintenance network. Therefore, currently
have to rely on local third-party resources which are costlier.
● Labor Shortage: Even though we are a robotics company,
we are not immune to the labor shortage. It has been challenging to staff certain technical and non-technical positions. It has also
gotten costlier to attract good talent.
● Rising Cost of Raw Materials: Inflationary pressures
are also a concern as it is difficult to make reliable projections for the cost of components. This means profit margins could be affected,
and our pricing would need to re-evaluated on a regular basis.
Competition
The service robotics market
is new so there is only a limited number of competitors. With the quality of our products, first mover advantages, enterprise partnerships,
and a holistic approach to customer needs, we believe we are in a strong position to win a large portion of the market and establish ourselves
as the premier provider of service robotics in the hospitality space. Our ACP platform also provides a unique advantage as we believe
no competitor is able to match the breadth of information we can collect through implementing robots in multiple sectors of a client’s
business.
The companies which pose the
greatest competitive challenges to us, by product line, are listed below:
● Matradee
● Bear Robotics, Inc.: Bear Robotics, based in Redwood
City, California, offers the Servi robot. This robot is a round restaurant robot that is smaller, costlier to own, and less reliable
than our Matradee. This is because Bear only offers customers a Robot-as-a-Service (RAAS) pricing model while we offer customers the
ability to own the robot. The tray on our Matradee is 40% larger and we have one extra tray, which means our robot provides 60% more
capacity than Servi. Additionally, Matradee is network independent while Servi requires constant network connectivity to function reliably.
● Pudu Technology Inc.: Pudu is robotics company based
out of China that manufactures a variety of delivery robots. While Pudu robots are cheaper, they only operate in the United States
through a distributor network and have no direct customer support or service network.
10
● Richie and Robbie
● Savioke, Inc.: Founded in 2014, their Relay robot performs
similar room service delivery tasks as Richie and Robbie. However, their robot has continued to face technical challenges which has stifled
their growth. Our robots have larger carrying capacities and accessory functions such as the AVM which we believe provides more value
to customers. Savioke was acquired by Relay Robotics Inc. in May 2022. ( https://www.hospitalitynet.org/news/4110253.html )
● DUST-E
● Avidbots Corp: Avidbots is a Canadian company that designs
and manufactures Neo, which is a functional equivalent of the DUST-E MX. The MX offers similar functionality for over $10,000 less,
and lower maintenance costs. Avidbots do not manufacture any other models of cleaning robots outside of Neo, limiting their ability
to compete with us to only large public and commercial spaces.
● Tennant Company: Based in Minnesota, Tennant’s
T7AMR and equivalent robotic ride-on floor scrubbers are direct competitors to the MX. Tennent does not provide smaller cleaning
robots limiting their ability to compete with us to only large public and commercial spaces. Additionally, the T7AMR is extremely bulky
as it is designed to have a seat for the rider which severely limits its applications in environments that have narrow hallways such
as schools, hospitals, and universities.
● ADAM
● Miso Robotics Inc.: Miso Robotics produces single robotic
arm food restaurant automation robot, Flippy. Miso has only a handful of live deployments, and the majority of deployments they do have
are in test environments with partners. We expect that ADAM will be serving hundreds of real customers every day before Flippy gets
out of development and testing.
● Cafe X Technologies, Inc.: A Silicon Valley startup,
Cafe X is a robotics coffee bar company that has implemented two robotic kiosks inside the San Francisco airport and one inside
a museum in Dubai. ADAM is able to provide a wider array of food and beverage choices to customers.
Our Operations
The Company is organized in
a functional structure with sales, marketing, tech support, customer service, product development, creative design, manufacturing, procurement,
accounting, and administration departments. Executive decisions are communicated to department managers to execute. The CEO directly oversees
the product development, creative design, and administration teams. He also provides directives to other departments and executives as
he sees fit. The COO has primary responsibility over the sales, marketing, tech support, and customer service teams as well as the coordination
of different departments on large-scale projects. The CFO has primary responsibility for procurement, manufacturing, and accounting departments.
Product development teams
carry out research and development tasks and are organized according to product category. Each development team is comprised of several
engineers linked with a product manager, and work closely with the creative design and manufacturing teams. Employees may belong to multiple
product development teams at the same time as there is significant technical overlap in AMR development. The development teams are overseen
directly by the CEO and is are responsible for the ideation, engineering, and testing of new robots.
Customer facing departments
which include sales, marketing, tech support, and customer service utilize a variety of technology tools to keep clear customer records
and respond to customer requests. These tools include Salesforce CRM, ClickUp, Zoominfo, Apollo.io, Jotform, Zendesk, Zoom, and Google
Workspace. Salesforce is used as the preferred CRM for sales recordkeeping. ClickUp, Zendesk and Jotform are used by the customer service
and tech support team to keep track of customer requests and schedule robot installations. Zoominfo and Apollo.io are utilized for lead
generation by the sales and marketing teams. Zoom and Google Workspace are used across the company for meetings, email, and filesharing.
The technical support department also provides feedback to the product development team regarding any issues customers experience with
the robots out in the field, as well as requests for additional features.
Internal departments which
include procurement, manufacturing, and accounting are overseen by the CFO. The manufacturing and procurement departments primary
focus is maintaining supply chains and delivery timelines specified by the CFO based on projections made according to sales data. The
accounting team processes accounts payables and receivables, audits internal accounting records, and generate financial reports.
11
Our Revenue Model
Our business model is currently
a combination of direct sales and robotics-as-a-service (RAAS). We both sell and lease our robots to customers and provide accompanying
services such as deployment, maintenance, and warranty services. To provide an effective comparison, the table below shows the sales made
under Richtech.
FY2023
FY2022
Product Sale
91.0 %
61.7 %
Service Sale
5.7 %
31.0 %
Lease
2.3 %
7.3 %
Other
1.0 %
0.0 %
Our Customers
Most of our clients are in
the hospitality sector, which is an extremely diversified B2B market where the clients range from individual mom and pop restaurants to
large national or global enterprises. We have deployed close to 200 robots in the last two fiscal years. These robots are currently
operating in the field across 34 states in the U.S., providing services in diverse environments including restaurants, casinos, hotels,
as well as factories, schools, and senior living.
Clients come from four
main sources, one is our inbound website and phone line from online marketing, the second is outbound sales activity such as via
emails, phone calls, LinkedIn, door-knocking, the third is through conventions and networking, the fourth being referrals and
word-of-mouth.
Customers are often referred
to us by other companies because of our proven track record of successful robotic deployments. For example, when we deployed 28 robots
for Flix Brewhouse, we were asked to perform an integration with their ticket management system which was operated by another vendor.
This integration was a success, which led to this vendor inviting us as a speaker to their annual customer conference in February 2023.
Another example of this is with a tax consulting firm. After meeting through a mutual customer, they invited us to speak in front of
their customers about the implications of robotics and how they could leverage robots in their businesses. The robotics industry is extremely
hot right now, and as experts in this field, other companies see us a valuable resource to introduce to their customers and provide value.
For customers that order in
bulk quantities such as distributors and larger clients, we provide between 5% to 30% discount depending on quantity and customer type.
This price is negotiated with each customer individually and not public. For some customers, we also add additional services such as extended
warranties and carry out integrations with their existing systems. For referrals, we provide 10% of revenue generated as commission to
the referral customer or agent. There are also some sales events we run near the end of our fiscal year and around the holiday season
in November and December to push customers we have been talking to throughout the year over the line.
While our current customer
base is in the B2B sector, we anticipate expanding into the consumer sector with the launch of the ADAM robotic franchise. We plan to
grow our customer base in both the B2B and B2C markets by making full use of our strategic advantages in each sector and leveraging relationships
of our distribution network.
Customer Services
As a company, we place strong
emphasis on providing a positive customer experience for the client and their customers. We provide nationwide installation, shipping,
maintenance, and warranty services. Shipping and installation are coordinated with the client by our customer service and technician teams.
Maintenance services are provided for customers to prolong the longevity of the robots including onsite assistance as needed. Maintenance
visits typically encompass an overall health check on the robot, removal of debris and cleaning, edits to mapping or settings, and training
of client staff.
12
For warranty claims, our customer
service department works with the customer to verify the validity of the warranty claim, and if valid, schedules for the exchange of the
robot as quickly as possible. We endeavor to complete all exchanges within five business days.
The customer service team
also reaches out to our clients on a regular basis to ensure they are enjoying their use of their robot, and to inquire about any service
requests they may have.
All robots support remote diagnostic
functions so our technicians can provide quick and effective remote troubleshooting. All customers are provided lifetime remote customer
support.
Customer satisfaction also
depends on whether a client is getting a product that is right for them and suits their space. To this end, we have a full in-house design
team that provide customers with custom wrap designs, graphical user interfaces (GUIs), creates 3D renderings of buildouts, and promotional
materials for their staff and customers.
Suppliers (Materials, Products and Other Supplies)
Richtech has more than 20 major
suppliers primarily located in the United States and China. For the Matradee, Richie, Robbie, and DUST-E products, Richtech outsources
manufacturing to contract factories. These factories manufacture the robots to our specifications and installs our software. For the ADAM
system, the finished body components are manufactured in China and shipped to the United States where it is assembled. These assembled
components are then combined with materials purchased in the United States to complete the system.
Currently the largest supplier, SUNWING INDUSTRIES LIMITED, provided $486,284 in materials in 2023. The second largest was NANJING YUDINGXIN
ELECTRONIC, with a purchase amount of $80,900 in 2023. The third was UFACTORY TECHNOLOGY, with a purchase amount of $71,500 in 2023. The
fourth was MINGSHILI INTELLIGENT SYSTEM, with a purchase amount of $70,700 in 2023. The fifth was ARO ROBOTICS, in 2023 with a purchase
amount of $69,613.
We depend on sole source
suppliers for certain components in our products, such as batteries and touchscreens. 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. See “Risk Factors — Risks Related to Our Industry and Business — Our products incorporate
certain 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 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.” and “Risk Factors — Risks Related to Our Industry and Business — We rely on third
party manufacturers/suppliers and expect to continue to do so for the foreseeable future. This reliance on third parties increases the
risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost, which could delay, prevent
or impair our development or commercialization efforts.”
Marketing and Sales, Distribution and Logistics
Our sales strategies aim to
scale revenue as quickly as possible without relying on high expenditure of capital or human resources. These strategies involve forming
relationships, leveraging partner resources, and finding the most effective methods to grow revenue. First, we form relationships with
companies that have the most influence and resources in each of the restaurant, hotel, and senior living sectors. For restaurants, this
means companies like major food distribution and point-of-sale companies that have a large distributed sales force and a massive customer
network in the United States. Hotel and senior living sectors are much more concentrated, so we primarily focus on companies that
set industry standards, and leverage our success with these companies to promote our brand and products. Second, we build out networks
of referral agents, independent sales agents, and distributors that provide high penetration into the market at a local and regional level.
Companies that wish to become our distributors or resellers must provide evidence they have the technical know-how and financial capability
to effectively represent our brand. Potential distributors are asked to provide evidence of strong sales revenue, adequate technical support
capabilities, and a list of customers they will be approaching with our product. Distributors are only certified once we find that their
customer base is a good fit for our products and they have the capabilities to represent our brand. We currently have 12 certified distributors
operating in the U.S., 35 certified independent sales agents, and an internal enterprise sales team of 5. Third, we build and retain a
professional internal enterprise sales force that is creative, driven, and believes in the mission and values of the company. This sales
force is our liaison with our partners and customers, who foster these relationships and build a solid foundation for the company.
13
We market our products primarily
through digital marketing, sales outreach, industry exhibitions, and client referrals. Direct online inquiries are the main source of
our leads. Over the last two years, we have exhibited at national conferences such as the Consumer Electronics Show (CES), National
Restaurant Association Show, Future Travel Experience Global, Leading Age Annual Expo, Leading Age Leadership Conference, National Restaurant
Association Leadership Conference, and the Bar and Restaurant Exhibition. We also hosted sessions at these shows to educate attendees
on the value preposition around service robotics. In 2023, we attended CES, the National Restaurant Association Show, the Bar and Restaurant
Exhibition, Leading Age, The Hospitality Show, and a few others.
Client referrals and testimonials
have also been a strong accelerant to our growth. At one of our recent conventions, we hosted a session where two of our clients went
on stage and spoke about the positive impacts of our robots. This included statistics such as how each robot was saving them $36,856 per
year in labor costs. As we mentioned, many of our clients also come through referrals from other companies we meet via mutual customers.
These companies introduce us to their clients as a resource for customers to learn about robotics and automation, and how they can apply
these solutions to their business.
Order processing and logistics
is managed internally. We currently have five people on our sales team. The sales team earns a flat 5% gross sales commission on top of
base salary and bonuses. Orders are created by the sales team and approved for shipping by the Office General Manager. The Office General
Manager checks that the order has been paid for, address information has been entered correctly, all required documentation and approvals
are uploaded, and generally ensures all proper procedure have been followed before placing into queue. When an order is placed into queue,
our logistics team is made aware of the order and move to ready the products for shipping. All robots are quality control tested before
packaging and leaving our warehouse. When fully packaged, a robot typically weighs between 200 to 700 pounds so a freight carrier is used.
We utilize a selection of freight carriers including FedEx, TrumpCard, and Pegasus Logistics Group among others for shipping. Tracking
information and freight costs are uploaded into our system by the logistics team to ensure this data is readily available if needed.
Research and Development (“R&D”)
In FY 2023 and FY2022, we spent
$1,980 thousand and $1,772 thousand on R&D, respectively. As many of the technologies of AMRs are similar, we utilize our Universal
Smart Mobile Platform (USMP) to speed up development of new robots.
The USMP encompasses the majority
of common technologies behind AMRs such as LiDAR, camera systems, and the AI algorithms used for mapping and route planning. The USMP
takes care of the navigation elements while the system that is built on top can be specialized to specific tasks, such as hotel room service,
bussing and running, or autonomous floor cleaning.
Our mission is to utilize a
systematic and cost-effective approach to developing new robotic solutions. The USMP architecture and speed of development across our
ARM solutions gives us a competitive edge over other companies as we can quickly broaden our family of robots to address emerging needs.
We are well positioned to take full advantage of the rapid growth of the service robotics market in the next five to ten years.
14
For 2023, the main focus of
our R&D efforts was on the ADAM system and its commercialization. ADAM is very special as this is the first non-AMR robot we have
developed. The effective value of ADAM is far higher than the AMR robots as ADAM can independently provide a service, as opposed to assisting
in just one part. One of the primary challenges of service robots is customer education and adoption rate. With ADAM, we can go directly
to consumers and educate the market on robotics and automation. With sufficient marketing, we can speed up the robotic adoption in the
service sector. We are also working on iterations of our DUST-E and Richie/Robbie.
We will also continue to push
forward with more AMR applications based on our market research and client feedback. We are currently developing a new line of medical
delivery robots to serve healthcare facilities like hospitals and senior care. Our market research has also pointed out the lack of skilled
nurses in senior care as a strong business case for automation.
While we take care of the majority
of R&D in-house, we do outsource some basic development tasks. We retain all intellectual property rights on work done for us by third
parties.
Production/Manufacturing
Our product manufacturing process
starts with finding suitable suppliers. The company’s internal product development and procurement teams will search for suppliers
according to technical requirements and consultation with existing suppliers. We require all prospective suppliers to sign confidentiality
agreements before discussing details of the products and parts requirements. The procurement team performs a comprehensive comparison
of suppliers based on product specifications, reputation, delivery cycle, price and other factors. Through this process, we identify a
preferred supplier and two alternative suppliers as backup. Once suppliers are confirmed and contracted, we move to the next step.
The next step in our manufacturing
process is the selection of a manufacturing partner. Richtech does not own and operate our own manufacturing plants, instead we use Original
Design Manufacturer (ODM) and Original Equipment Manufacturer (OEM) partners that manufacture the products according to our specifications.
We identify and contact factories that qualify as potential OEM and ODM partner candidates to discuss product of prototypes of our products.
Factories are qualified by our procurement team using a process similar to how we select suppliers, checking the capabilities, reputation,
quality, delivery cycle, and price of these factories. Our product development and procurement teams work with the factory to finalized
the Bill of Materials (BOM) list, and provide technical specifications and other requirements to these factories for the production of
several prototypes. These prototypes are then rigorously tested by our development teams and we go through an iterative process to refine
the prototypes to make sure they meet our production standards. Both the software and hardware of the robots go through multiple rounds
of stress testing, with a final round of testing in a real-world application. Once the prototypes pass internal stress tests, the product
is then ready for the mass production stage.
A production schedule is formed
around sales projections on a rolling three-month window. These sales projections are assembled by the COO and sent to the CEO for approval.
Once the schedule is approved, the procurement team reviews pricing according to the BOM list, clarifies delivery timelines, signs the
purchase contracts, and sends payments. After the production of the product is completed, our procurement team will conduct an on-site
quality inspection before the product is packaged and shipped to our warehouse in Las Vegas, NV. Once the product arrives at our
warehouse, the technical department will conduct a last round of software and hardware quality control checks. This is to ensure nothing
was damaged in shipping and that all elements of the product meet our requirements before delivery to customers.
Global Operations
Our business operations are
based mainly in the U.S, except for some of our R&D work, which is based in China. We currently employ a team of 16 engineers through
a third-party human resource company in China for R&D work. The majority of our ODM and OEM partners are also located in China.
15
Intellectual Property
Patents
APPLICATION NUMBER
TITLE
COUNTRY
FILING DATE
STATUS
17549815
TRAY STABILIZER SYSTEM FOR FOOD DELIVERY ROBOTS
U.S.
December 13, 2021
Pending
29790385
SERVICE ROBOT
U.S.
November 24, 2021
Pending
29790387
CLEANING ROBOT
U.S.
November 24, 2021
Pending
17817639
AUTONOMOUS CLEANING ROBOT SYSTEM AND METHOD
U.S.
August 4, 2022
Pending
29846011
VENDING MACHINE ASSEMBLY FOR AN AUTONOMOUS DELIVERY ROBOT
U.S.
July12, 2022
Pending
29791849
CLEANING ROBOT
U.S.
February 12, 2022
Pending
29836627
DEBRIS GATHERING BRUSH ASSEMBLY FOR A CLEANING ROBOT
U.S.
April 28, 2022
Pending
Trademarks
Trademark
Application
Number
Status
Jurisdiction
RICHTECH
90869957
Registered
U.S.
RICHTECH ROBOTICS
97553162
Registered
U.S.
Domain Names
The company currently owns
and operates three domain names:
● www.richtechrobotics.com
● www.richtechrobot.com
● www.richtechsystem.com
Employees
As of September 30, 2023, we
had 51 full-time employees of which 16 were dispatched workers accounting for 31.4% of our total workforce. These dispatched workers are
employees we have contracted through a third-party and are managed directly by us. We believe that we maintain a good working relationship
with our employees and to date, we have not experienced any labor disputes.
All employees are located in
three different office locations: Las Vegas with 33 employees, Austin with 2 employees, and China with 16 employees.
16
The following table provides
a breakdown of our employees by function as of September 30, 2023:
Function
Number of
Employees
% of
Total
R&D
24
47.1 %
Tech Support & Customer Service
3
5.9 %
Sales & Marketing
5
9.8 %
Business Operation
14
27.4 %
Administration
5
9.8 %
Total
51
Properties
The company currently leases
properties in Austin, TX and Las Vegas, NV. We lease space for our ClouTea store in Las Vegas, Nevada through January 2024. After the
ClouTea store lease term ends in January 2024, the new lease term will change to month-to-month, and landlord can choose to terminate
the lease by sending a notice two month in advance. The table below provides details on our leases.
Lessor
Lessee
Location
Area
(Square Feet)
Annual
Rent
Current
Term Expires
Use
Utopia Village, L.P.
Richtech Robotics Inc.
13706 Research Blvd, Suite 200, Austin, TX 78750
2,580
$ 37,200.00
April 30, 2024
Sales and Marketing Office
Cameron Industrial Park, LLC
Richtech Robotics Inc.
4175 Cameron St, Ste 1 & 2 & A1 & 5, Las Vegas,
NV 89103
11,222
$ 139,554
August 31, 2027
HQ
Forum Shops, LLC
Richtech Robotics Inc.
3500 Las Vegas Blvd. So. Unit 0R06A, Las Vegas, NV 89109
1,971
$ 60,002
January 31, 2024
Boba Tea store
Forum Shops, LLC
Richtech Robotics
3500 Las Vegas Blvd. So. Unit TT7, Las Vegas, NV 89109
100
$ 10,002
January 31, 2024
Boba Tea store
Insurance
Richtech is insured by Kaercher
Insurance for Commercial General Liability (General Aggregate: $3,000,000), Automobile Liability ($1,000,000), Umbrella Liability ($2,000,000),
Workers Compensation ($1,000,000), Property ($870,000), and Directors & Officers ($1,000,000).
Material Contracts
Richtech expects to derive
significant revenue from sales to enterprise customers as part of our long-term strategy. We define “enterprise” customers
as companies with annual revenues of over $1 billion. Throughout 2022 and 2023, we have proven the value proposition and reliability of
our robots to many of our enterprise clients by running extended pilot programs. We are currently running pilot programs with ten enterprises
that represent over 40,000 locations. These pilot programs aim to allow larger or enterprise customers to experience the benefits of adding
automation and robotics to their operations. The concept of robotics is foreign to the vast majority of operators in the hospitality space,
so a method is needed to build client confidence in our product. Under the pilot program, we grant to our customers a limited, revocable,
non-exclusive, non-transferable license to use our robotic products and related software for the purpose of a limited evaluation of their
features and operations. The evaluation period is typically between 14 to 30 days. At the end of the pilot period, the customers
must return all robots or face additional charges. The Company has a strict no-free-trial policy. Given the complexity and time required
to execute a successful enterprise pilot, customers are required to commit capital to show actual interest in our products. The amount
we have charged for each pilot program ranges between $500 and $17,000, depending on the product and services involved. Pilot programs
are run typically close to cost, and the amount charged to the client roughly covers our employee travel and product shipping expenses.
We may not charge the client for additional site visits that may be required (e.g. for product maintenance or support), but the Company
incurs no additional material costs to run these pilot programs. At the end of the pilot period, customers will decide whether they want
to enter into a longer-term contract with us for our products, either for purchase and/or lease to purchase programs. Purchase orders
placed after the pilot program constitute market orders reflecting fully commercialized products at market pricing. Several of our pilot
clients have already chosen to move forward with large scale purchase or lease orders following the pilot program.
17
The usage of service robots
is a very new concept in the United States, and currently many companies are taking a wait-and-see approach to adoption. Larger corporations
and national franchises in particular generally take more time to test out and vet the application of new technologies such as service
robots. However, in spite of these challenges, we were still able to close several Master Service Agreements (“MSAs”) with
national chain enterprises (as described below) due to the necessity of our products for their operations. The majority of companies that
have adopted the service robot technology are smaller businesses that have a much shorter chain of command and make decisions faster.
As a result, the vast majority (over 90%) of our existing revenue currently result from purchase or lease contracts from smaller companies
with one or two locations, primarily in the hospitality industry. Contracts generally fall into the following categories: (i) lease agreements
(with and without trials, straight lease and lease-to-purchase), (ii) purchase agreements, and (iii) maintenance service agreements (for
maintenance service on our products). The increase in our revenue in 2022 largely results from an increase of orders from smaller companies,
due to the diversity of our client base, no single contract represents a significant portion of our current or expected future revenue.
No single customer constitutes greater than 10% of our revenue, and as a result, we are not financially dependent on any one customer.
Our long-term strategy as we
scale up is to secure MSAs with larger corporations and franchises that operate multiple locations, so that we can roll out our products
and services across numerous locations. Percentage of sales attributable to our enterprise customers in fiscal year 2023 and 2022 were
3.82% and 2.06%, respectively. Percentage of sales attributable to our MSA customers in fiscal year 2023 and 2022 were 3.4% and 0.77%,
respectively. All of our MSAs are with enterprise customers. While currently our MSAs do not represent a significant source of revenue,
we expect to generate a significant portion of our future revenues from our MSAs. We are currently in the early stages of our partnerships
with our existing MSA customers, but the framework has been established for us to build trust with these customers, and we expect that
revenues from the MSAs will increase as we roll out more products across their national locations. We anticipate that MSAs will become
more important in the future as the service robot technology is proven out in the market and becomes more visible. Our pilot programs
and MSAs indicate interest from larger enterprises and demonstrate that there is demand in the market for our technology and products,
and that the problem we are looking to solve is important to our client base. We strongly believe that the enterprise interest in our
technology signals that our solutions are well-aligned with the current needs of our customers.
We currently have three MSAs
in place, all from successful pilot programs. In September 2022, we entered into an MSA with one of the nation’s largest restaurant
chains with over 2,000 locations in the United States (the “Restaurant MSA”). As of the date of this Report, we received
a 6-month lease order lease order for our Richie robot under the Restaurant MSA for an aggregate payment of $9,000, which we received
during the fiscal quarter ended December 31, 2022. The Restaurant MSA has a term of two years with the option to extend on a month-to-month
basis on the same terms and conditions. The agreement may be terminated by the customer with or without cause upon 30 days’ written
notice to us.
In September 2022, we also
entered into an MSA with one of the top casino companies in the United States (the “Gaming MSA”), for the purchase of our
Matradee L and other robots. As of the date of this Report, we have recognized $344,270 in revenue under this MSA. $306,914 is reflected
in our financials as of September 30, 2023. We received additional purchase orders totaling $127,626.50 under this MSA during the
remainder of 2023. We expect more purchase orders to come in 2024. The current term of the Gaming MSA terminates on the later of December
31, 2026 or the completion of services under the agreement. Either party may terminate the agreement in the event of breach or default
and failure to cure such breach or default within 30 days after receiving written notice of such breach or default Pursuant to the Gaming
MSA, we have granted to the customer a perpetual, non-revocable, fully paid license (or fully paid sub-license, as the case may be) to
allow the customer to use our intellectual property that may be embedded in or associated with any work product delivered under the agreement.
18
Additionally, in January 2023,
we executed an MSA with a major hotel brand with over 5,000 properties worldwide (the “Hotel MSA”) for purchases of our Matradee
L robot. We anticipate that the products covered under the Hotel MSA will expand to our other robots, such as cleaning and room service
robots, and a nationwide rollout of our products to the other hotel locations in the rest of 2023. As of the date of this Report, we have
not yet received any orders under the Hotel MSA. Under the Hotel MSA, we have agreed to offer the customer prices, charges, benefits,
warranties and terms at least as favorable of those offered to any other customer within the first 24 months of the agreement term. We
agreed to grant to the customer and its affiliates a non-exclusive, irrevocable, perpetual, royalty-free, fully paid-up, transferable,
unrestricted, worldwide license for internal and external purposes, to use, modify, copy, display, support, and operate the Company’s
products, software or intellectual property. The term of the Hotel MSA is perpetual until terminated by either party. The customer may
terminate the Hotel MSA at any time with or without cause upon 30 days’ prior written notice to us; the Company may only terminate
the agreement upon written notice for the customer’s failure to make payment under the agreement (and failure to cure within 30
days following receipt of written notice of non-payment). Under the Hotel MSA, we provide a one-year manufacturer’s limited product
warranty, with option to extend to two or three years for additional payments.
Government Regulation
Our operations are subject
to numerous governmental laws and regulations, including those governing antitrust and competition, the environment, collection, recycling,
treatment and disposal of covered electronic products and components.
In addition, a number of data
protection laws impact, or may impact, the manner in which we collect, process and transfer personal data. U.S. laws that have been
applied to protect user privacy (including laws regarding unfair and deceptive practices) may be subject to evolving interpretations or
applications in light of privacy developments. Compliance with enhanced data protection laws requires additional resources and efforts,
and noncompliance with personal data protection regulations could result in increased regulatory enforcement and significant monetary
fines and costs.
Legal Proceedings
From time to time, we may become
involved in actions, claims, suits and other legal proceedings arising in the ordinary course of our business, including assertions by
third parties relating to personal injuries sustained using our products and services, intellectual property infringement, breaches of
contract or warranties or employment-related matters. As of the date of this Report, we are not currently a party to any actions, claims,
suits or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material
adverse effect on our business, financial condition and results of operations.
Available Information
Our website is located at www.richtechrobotics.com,
and our investor relations website is located at ir.richtechrobotics.com. Access to copies of our SEC filings, corporate governance information,
and other items that may be material or of interest to our investors is available via our investor relations website. The contents of
our websites are not incorporated by reference into this Report or in any other report or document we file with the SEC, and any references
to our websites are intended to be inactive textual references only.
19