Richtech Robotics Inc.: Form 10-Q/A for the period ended Dec 31, 2025

The following discussion should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Report and in our other filings with the SEC. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” in our 2025 Annual Report and elsewhere in this Report. These risks could cause our actual results to differ materially from any future performance suggested below. Amounts are in thousands of dollars unless otherwise stated in this section.

Overview

We are a robotics company focused on the development of embodied AI systems for manufacturing, retail, hospitality, and other sectors. We develop proprietary hardware and software that employ the latest robotics and AI innovations. Our goal is to deploy robotics at scale in business operations across our target markets.

Recent Developments

On January 27, 2026, we entered into the Purchase Agreement with an institutional investor. Pursuant to the Purchase Agreement, we agreed to issue and sell to the investor, and the investor agreed to purchase from us, in the Private Placement, 8,500,000 shares of our Class B common stock, at a purchase price of $4.55 per share, for aggregate gross proceeds of $38,675,000, prior to deducting placement agent’s fees and other offering expenses payable by us. The Private Placement closed on January 29, 2026. The net proceeds from the Private Placement were approximately $36.2 million, after deducting placement agent fees and estimated offering expenses payable by us. We intend to use the net proceeds for working capital, general corporate purposes, including the further development of our product capabilities, and the procurement of inventory, specifically for robotic hardware.

Key Business Highlights for the First Quarter of Fiscal Year 2026

Strategic and Operational Milestones

• RaaS Contract Acceleration: Successfully expanded our Robots-as-a-Service (RaaS) footprint, demonstrating continued market adoption of our recurring revenue model. This growth validates our long-term strategy to shift away from one-time hardware sales toward a high-quality, predictable revenue base.
• Continued Investment in Research and Development: During the first quarter of fiscal year 2026, we continued to invest in research and development focused on artificial intelligence, system autonomy, and intelligent human-machine interaction across our robotic platforms. As a member of the NVIDIA Connect program, we have continued to utilize NVIDIA-based AI computing platforms and robotics software frameworks to enhance real-time perception, decision-making, and on-device autonomy. In addition, during the quarter, we continued development activities under a previously disclosed non-commercial technology collaboration agreement with Microsoft Corporation through the Microsoft AI Co-Innovation Lab, supporting the evaluation and development of certain artificial intelligence workflows. Subsequent to the end of the quarter, Microsoft published a blog post on its website referencing this engagement. These efforts are intended to enhance product functionality and support scalable commercial deployment across multiple industry verticals.
• Expansion of Hospitality Management Segment (AlphaMax): Advanced the strategic rollout of our proprietary hospitality concepts by commencing development of a new Clouffee and Tea location in the San Francisco Financial District. Site preparation and operational workflows are currently in progress, with the location scheduled to officially commence operations in the second quarter of fiscal year 2026.

Financial and Capital Milestones

• Net loss attributable to common stockholders was $(10.1) million for the quarter ended December 31, 2025, compared to $(29.3) million in the prior year period. The improvement was primarily attributable to the absence of the substantial non-cash loss related to changes in the fair value of warrant liabilities recognized in the prior year period. Basic and diluted net loss per share improved to $(0.05) from $(0.31) per share in the prior year quarter.
• Balance Sheet Strengthening: We successfully utilized our ATM offering program and exercise of warrants to raise $46.5 million in gross proceeds, substantially strengthening our liquidity and providing capital to accelerate the build-out of the RaaS asset fleet. A portion of these proceeds was generated through a direct sale of shares to a large institutional investor under the ATM program.

Factors and Trends Affecting Our Business and Results of Operations

The following trends and uncertainties either affected our financial performance historically or are likely to impact our results of operations in the future:

• As our robotic products’ market potential is seen by others, more competitors could enter the market, which may lead to price competition and a decline in profit margins;
• A recession could lead to a decline in customer demand in our robotic products and services;
• Some of the products are currently assembled by suppliers in China, which may delay the supply if they are affected by international shipping, epidemic, geopolitical conflicts and other factors;
• We anticipate that our general and administrative expenses will continue to increase in the future as a result of increased costs associated with being a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, attorneys, and accountants, and personnel-related stock-based compensation costs, among other expenses, and, in the case of public company-related expenses, services associated with strengthening our internal control over financial reporting, maintaining compliance with Nasdaq listing and SEC reporting requirements, director and officer liability insurance costs, and investor and public relations costs, among other expenses; and
• 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 be re-evaluated on a regular basis.

Results of Operations

Comparison of the three months ended December 31, 2025 and 2024

The following table summarizes our results of operations (in thousands) for the three months ended December 31, 2025 and 2024, together with the dollar change in those items from period to period:

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Adjusted net loss attributable to common stockholders and adjusted basic and diluted net loss per share are non-GAAP financial measures. Refer to the Non-GAAP Financial Measures section below for a reconciliation of our financial results reported in accordance with GAAP to non-GAAP financial results.

Revenue

Revenue, net, for the three months ended December 31, 2025 was $1,071 thousand, a decrease of $186 thousand, or approximately 14.7%, compared to $1,257 thousand for the three months ended December 31, 2024.

This decrease was primarily due to a reduction in one-time product sales and other revenue, partially offset by significant growth in our recurring revenue streams, including leasing, services, and RaaS.

The breakdown of revenue is as follows:

Business Model Transition and Revenue Recognition

Historically, we generated revenue primarily through Product Revenue (outright hardware sales), resulting in immediate revenue and immediate Cost of Revenue recognition.

During fiscal 2025, we fundamentally shifted our approach to emphasize long-term relationships and recurring revenue through leasing and service arrangements.

This strategic change significantly impacts the financial statements:

1. Revenue: Upfront product revenue is reduced.

2. Assets: The cost of leased robots is capitalized as a long-term asset (Assets held for Lease), not immediately expensed.

3. Profitability: This results in a materially lower Cost of Revenue and an expanded Gross Margin, as the cost is recognized over the lease term via depreciation instead of immediate Cost of Goods Sold.

The decrease in Product Sale revenue for the three months ended December 31, 2025, compared to the same period in 2024, was directly attributable to our strategic focus on reducing one-time hardware transactions in favor of recurring contracts. This activity aligns with our long-term revenue strategy.

Our long-term focus remains on expanding recurring revenue through service, rental, and leasing arrangements. The increases in Leasing, Service, and RaaS revenue during the three months ended December 31, 2025, were driven by the successful deployment of robots under these recurring models. Underlying adoption of these recurring arrangements continues to increase, validating our transition away from capital-intensive direct sales.

Detailed Revenue Streams and Recognition

Our revenue is classified into four primary streams:

1. Product Revenue

• Description: Revenue from traditional, outright sales of hardware where the customer takes ownership.
• Recognition: Recognized at a point in time (transfer of control, per ASC 606).
• Impact: The decrease for the three months ended December 31, 2025, was driven by our strategic shift away from one-time hardware sales. We anticipate this mix will continue to stabilize at lower levels as we prioritize long-term recurring revenue models.

2. Leasing/Service/Rental Revenue

• Description: Revenue from short-term rentals, maintenance contracts, subscriptions, and installation services.
• Recognition: Recognized over time or at a point in time, based on contract specifics.
• Impact: This category experienced substantial growth, increasing to $405 thousand for the three months ended December 31, 2025. The increase was primarily attributable to the expansion of our event robot rental services, as we supported a higher volume of short-term deployments across promotional and commercial events.

3. RaaS Revenue

• Description: Revenue from long-term operating agreements for the robotics fleet.
• Recognition: Recognized over the term of the lease agreement.
• Impact: This stream increased to $319 thousand for the three months ended December 31, 2025, demonstrating accelerated adoption. As our primary long-term growth engine, RaaS continues to drive predictable, recurring revenue, central to our long-term value creation strategy.

4. AlphaMax (Cloutea)

• Description: Revenue generated from the AlphaMax subsidiary, which operates as a hospitality management company overseeing various cafes and restaurants.
• Recognition: Recognized according to the performance obligations outlined in the specific management or operating contracts.
• Impact: This segment contributed $166 thousand in total revenue for the three months ended December 31, 2025. This revenue is non-robotics related, and the decrease compared to the prior year period reflects fluctuations in the specific hospitality operations managed by this subsidiary.

Clouffee and Tea Restaurant Brand

Clouffee and Tea is our first self-owned restaurant brand, designed to showcase our RaaS model directly to consumers. The concept seamlessly blends innovative robotic technology with a vibrant coffee and tea culture to create an engaging customer experience. We are currently in the process of opening a new store in the San Francisco Financial District, which is scheduled to officially open in the second quarter of fiscal 2026. There are three stores open in the San Francisco area as of December 31, 2025.

Cost of Revenue

Cost of revenue, net, increased by $598 thousand, or approximately 135.0%, from $443 thousand for the three months ended December 31, 2024 to $1,041 thousand for the three months ended December 31, 2025. This increase was primarily driven by the expansion of our service and support infrastructure to support the growing RaaS fleet, as well as increased depreciation expenses associated with deployed assets.

Depreciation of Rental Assets: For the three months ended December 31, 2025, depreciation expense attributable to our RaaS fleet was approximately $47 thousand. We expect this non-cash expense to increase in future periods as our installed base of leased robots expands, creating a predictable cost structure that scales with recurring revenue. We continue to focus on optimizing our manufacturing and supply chain processes to maintain a competitive cost structure.

Gross Profit

Gross profit decreased by $784 thousand, or approximately 96.03%, to $30 thousand for the three months ended December 31, 2025, from $814 thousand for the three months ended December 31, 2024. Gross margin was 2.80% for the three months ended December 31, 2025, compared to 64.8% for the three months ended December 31, 2024.

The variance in gross margin is primarily attributable to the structural difference in our operating model between the two fiscal periods:

• Comparison to Prior Year Low Cost Base: The gross margin in the first quarter of fiscal 2025 (ended December 31, 2024) was exceptionally high, reflecting a leaner cost structure with minimal fixed overhead. During that period, revenue was derived primarily from direct sales that did not require the extensive service, support, and fleet maintenance infrastructure we have since established.
• Current Period Infrastructure Investment: In the current quarter (fiscal 2026), our Cost of Revenue includes significant upfront investments in the technical support and field service teams necessary to support our growing Robots-as-a-Service (RaaS) fleet. While these costs dampen margins in the near term, they are essential scalability investments that do not scale linearly with revenue.

We expect gross margins to remain below the exceptional levels seen in the first quarter of fiscal 2025 as we continue to scale our RaaS operations. However, we anticipate margin stabilization and improvement over the long term as our recurring revenue base grows to absorb these expanded infrastructure costs.

Research and Development Expenses

R&D expenses increased by $647 thousand, or approximately 133.7%, to $1,131 thousand for the three months ended December 31, 2025, from $484 thousand for the three months ended December 31, 2024. This increase primarily reflects higher personnel and development-related costs incurred to support ongoing product development activities, including software and technology enhancements associated with our robotic solutions. Consistent with our accounting policy, certain costs incurred during the preliminary project phase of software development are expensed as research and development.

Sales and Marketing Expenses

Sales and marketing (S&M) expenses increased $2,816 thousand, or approximately 1,149.0%, to $3,061 thousand for the three months ended December 31, 2025, from $245 thousand for the three months ended December 31, 2024. The increase was primarily attributable to higher stock-based compensation expense recognized during the period, including amounts associated with restricted stock awards granted during December 2025.

General and Administrative Expenses

General and administrative (G&A) expenses increased by $4,458 thousand, or approximately 118.8%, to $8,209 thousand for the three months ended December 31, 2025, from $3,751 thousand for the three months ended December 31, 2024.

The increase was primarily attributable to:

• Stock-Based Compensation: We recognized approximately $6.8 million in stock-based compensation expense related to equity grants for employees, reflecting our commitment to retaining top talent and aligning employee incentives with shareholder value.
• Professional Services: We incurred approximately $1.4 million in contract and consultant service fees, driven by increased requirements for legal, audit, and strategic consulting services associated with our status as a public company and our ongoing business transformation.

Investment Income

Investment income increased significantly by $3,068 thousand to $3,401 thousand for the three months ended December 31, 2025, from $333 thousand for the three months ended December 31, 2024. This increase was primarily driven by higher returns on our cash equivalents and short-term investment holdings, reflecting the effective management of our capital resources following recent financing activities.

Non-operating income (Expense)

Interest expense, net, decreased by $2 thousand to $2 thousand for the three months ended December 31, 2025, from $4 thousand for the three months ended December 31, 2024. Nominal changes from period to period are primarily due to the repayment of outstanding interest-bearing debt during the fiscal year.

Other income (loss) increased $24,784 thousand, from a loss of $25,965 thousand for the three months ended December 31, 2024 to a loss of $1,181 thousand for the three months ended December 31, 2025, which is due to the change in fair value of the warrant liability. The Company’s warrant liability is remeasured at fair value at each reporting period, and the resulting non-cash gain or loss is recognized within other income (loss). The change was driven by fluctuations in the underlying inputs to the fair value measurement for the warrant liability for the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

Non-GAAP Financial Measures

Adjusted net loss attributable to common stockholders and adjusted basic and diluted net loss per share are non-GAAP financial measures which exclude share-based compensation for employees from general and administrative expense. Share-based compensation is considered non-cash expense. We believe these non-GAAP measures aid investors by providing additional insight into our financial performance and help clarify trends affecting our business. For comparability of reporting, management considers non-GAAP measures in conjunction with GAAP financial results in evaluating business performance. These non-GAAP financial measures presented should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

The following table reconciles our financial results reported in accordance with GAAP to non-GAAP financial results:

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Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, which consist of cash on hand and short-term investments that are readily convertible to cash. As of December 31, 2025, our cash and cash equivalents totaled $271.80 million. This represents a significant increase from $19.80 million at the end of December 31, 2024. The substantial increase in our cash position is primarily attributable to the net proceeds received from issuance of shares of Class B common stock and from the exercise and issuance of warrants. These proceeds significantly strengthened our balance sheet and provided us with financial flexibility to invest in our growth initiatives, including expanding our R&D team, and purchasing property and equipment to support our expanding operations. This increase was partially offset by cash used in operating activities, primarily due to our net loss and investments in working capital.

During the three months ended December 31, 2025, we issued an aggregate of 15,156,685 shares of Class B common stock through our ATM offering program for aggregate proceeds of $69.10 million, and 4,485,946 shares of Class B common stock pursuant to the exercise of investor warrants for aggregate proceeds of $9.20 million.

Comparison of the three months ended December 31, 2025 and 2024

The following table summarizes our cash flow information (in thousands) for the three months ended December 31, 2025 and 2024, together with the dollar change in those items from period to period:

Operating Activities

Net cash used in operating activities for the three months ended December 31, 2025 was $1,610 thousand, driven by a net loss of $10,153 thousand, offset by non-cash charges of $10,389 thousand and a negative net change in operating assets and liabilities of $1,846 thousand. Non-cash charges primarily included $8,202 thousand of stock based compensation expense and $1,810 thousand of loss on the change in the fair value of the warrant liability. The cash flow impact from changes in net operating assets and liabilities was mainly driven by a decrease in accrued expenses and other payable of $1,217 thousand and an increase to inventory of $583 thousand.

Net cash used in operating activities for the three months ended December 31, 2024 was $2,358 thousand, primarily due to a net loss of $29,302 thousand which is offset by non-cash charges of $27,427 thousand and a negative net change in operating assets and liabilities of $483 thousand. Non-cash charges primarily include a $25,965 thousand increase in the fair value of the warrant liability. The cash flow impact from changes in net operating assets and liabilities of $483 thousand was primarily driven by a decrease in accounts receivable of $755 thousand, offset by an increase in accounts payable of $380 thousand.

Investing Activities

Net cash used in investing activities was $124,189 thousand for the three months ended December 31, 2025, primarily driven by $126,220 thousand in purchases of short-term investments and $71 thousand in purchase property and equipment, partially offset by $2,116 thousand in proceeds from maturities and sales of short-term investments.

Net cash used for investing activities was $440 thousand for the three months ended December 31, 2024, primarily due to $175 thousand in purchases of long-term investments, $138 thousand in purchases of property and equipment and $127 thousand in purchases of short-term investments.

Financing Activities

Net cash provided by financing activities totaled $78,248 thousand for the three months ended December 31, 2025, mainly due to $69,066 thousand from issuance of shares of common stock and $9,184 thousand from proceeds from warrants exercise.

Net cash provided by financing activities totaled $8,059 thousand for the three months ended December 31, 2024. We received $8,063 thousand from issuance of common stock.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Trend Information

Other than as disclosed elsewhere in this report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

Seasonality

Seasonality does not materially affect our business or the results of our operations.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements.

Recent Accounting Pronouncements Not Yet Adopted

See Note 3 to our audited financial statements included elsewhere in this report for more information.

Critical Accounting Policies and Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Management bases its estimates on historical experience, market and other conditions, and various other assumptions it believes to be reasonable. See Note 3 to our audited financial statements included elsewhere in this Report for more information.

JOBS Act

Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period.

For as long as we remain an “emerging growth company” under the recently enacted JOBS Act, we will, among other things:

• be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal controls over financial reporting;
• be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act and instead provide a reduced level of disclosure concerning executive compensation; and
• be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

Although we are still evaluating the JOBS Act, we currently intend to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth company,” including the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. As a result, investor confidence in our company and the market price of our common stock may be materially and adversely affected.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer, Chief Financial Officer, and Vice President of Finance (our “Certifying Officers”), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2025.

In our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (“2025 Annual Report”), management concluded that our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting. This material weakness related to the design and operation of controls over the identification, evaluation, and accounting for complex and non-routine transactions, including equity-linked financial instruments and derivative accounting, as well as certain controls over financial statement account classification and disclosures, and the controls over the application of U.S. GAAP to specific transactions and account balances.

Based on the evaluation performed as of December 31, 2025, and notwithstanding the remediation measures implemented during the quarter as described below, our Certifying Officers have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report because the material weakness had not been fully remediated and sufficient time had not elapsed to test the operating effectiveness of the enhanced controls.

(b) Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2025, we continued implementing remediation measures to address the material weakness previously identified in our 2025 Annual Report. These remediation measures include enhancing technical accounting resources and review procedures; strengthening controls over the evaluation and accounting for complex and non-routine transactions, including equity-linked financial instruments, derivative accounting matters, and significant estimates and judgments; improving documentation standards; implementing additional review and approval controls over financial reporting and account classifications; and providing additional training to personnel responsible for the preparation and review of financial information.

While these remediation efforts are ongoing, the material weakness cannot be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Other than the continued implementation of the remediation activities described above, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c) Ongoing Monitoring

Management recognizes the importance of ongoing monitoring and continuous improvement of our internal control over financial reporting. We have established a process for regularly evaluating the effectiveness of our controls, including periodic self-assessments, internal audits, and ongoing monitoring activities. This process allows us to identify and address any emerging risks or control deficiencies in a timely manner.

Changes in Internal Control over Financial Reporting

Other than as disclosed above, there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Internal Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our (i) registration statement for our initial public offering and (ii) 2025 Annual Report. Any of these factors could result in a significant or material adverse effect on the results of our operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial business combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.