Hello and welcome to the Tokens.com investor call where Andrew Kiguel and Matt McMullen will be going over the Simulacra acquisition. My name is Jen and I'll be your moderator. We also have our COO Eric and CFO Martin here today. At this time, everyone is in a listen-only mode. Later we will be conducting a question-and-answer period. If you have a question, please click the raise hand button located at the bottom of the screen. I would like to introduce you today to Aria. She is the newest member of our team, so I will play her intro here.
Hello, I am Aria. Welcome to our investor call. I look forward to sharing many more updates for investors in the coming months. Welcome to the future.
Here are also some behind-the-scenes photos or videos of Aria's robotics that I'd like to show everybody.
My name is Aria. I am a prototype of a mobile platform robotic contractor. I can entertain, inform, and assist in a great number of situations.
[crosstalk]
Great. Thanks, Jennifer. Hopefully people got an idea there of some of the technology that we're going to be acquiring. So to start this off, we have entered into a share purchase agreement for the acquisition of Simulacra. It's expected the transaction will close on or about April 16th. We're just working through some of those final details. To get into sort of the overall, this transaction would mark the completion of the strategic review we announced last November. Highlights of the changes made since announcing the strategic review include the disposition of unprofitable early-stage businesses in a manner that still provides shareholders with upside exposure to Web3 and the metaverse. Successful move to the TSX Venture Exchange to enhance liquidity and profile.
Obviously, this expansion into AI and robotics, including this transaction, which is revenue accretive, and as well the listing of the domain name, Tokens.com, and the related domain names we have with a view to rebrand the organization in a manner that captures more what our evolving profile is, our business interests. We will be feeling out various potential names with shareholders and getting feedback, but likely that'll happen in June or July. With respect to this transaction, we're going to issue 75 million shares to the Simulacra shareholders in consideration for the acquisition. This equates to approximately 38% of our outstanding common shares post-transaction. There is also an earnout available if Simulacra achieves revenue targets of $8 million within any 12-month period and another $10 million if they achieve a $10 million revenue number within a 12-month period between months 24 and 48 following the closing date.
Subsequent to this transaction, we will have approximately 196 million common shares outstanding and about 1.5 million in-the-money options outstanding. So Simulacra owns and operates three subsidiaries focused on the integration of AI and high-quality humanoid robots. We say that they improve the human experience through connection, learning, and play. Since 1997, the company has been producing these realistic humanoid figures, and in the last four years, they've generated revenues of $15.6 million or about CAD 21 million, with gross profit of $12.1 million and about CAD 16.3 million. With that, I'm going to turn it over to Matt, who I'm pleased to welcome on board. I'm going to just show a little bit of a presentation here that he will walk you through that'll have a little bit more about the company. So with that, I'll welcome Matt to the call.
Hello. Nice to be here today, and I'll just briefly go through kind of what we're about in our background. A company called Simulacra is a holding company for three entities. We are now fully focused on AI and robotics. That's kind of the evolution that we've followed and fits very nicely kind of with the outline that Andrew just put forth. We're really looking into the personal connection that's possible with technology utilizing robotics and AI. Once again, we have three subsidiaries. They are Abyss Creations, Realbotix, and AFD. Abyss was my first company. I founded in 1997 where I really kind of learned a lot of the fundamental skills that I now use in creating the figures that you see in some of those video clips. We've been in business since 1997.
We have hundreds of thousands of customers and continue to be very well-known all over the world. Realbotix is a company that was founded in 2016, and that is where we really started to focus more on the AI and robotic aspects and being able to integrate those with some of the artwork that we had mastered over the previous two decades. Some of the things we're working on right now are integrating higher-level ChatGPT large language models with our AI, super hyper-realistic facial expressions, adding a lot of micro-expressions and small motors that enable us to get very subtle changes in mood on the robots' faces, realistic eyes with modular fronts that are going to be equipped with cameras for not only face tracking but actual recognition of what someone's mood might be.
We also have a customizable face system, so we're able to very easily create custom faces for our clients. This is an example of one of those that we created for a client overseas. We also did a similar product for comedian Whitney Cummings. She had a robot of herself created to use in a Netflix special. We also have our own very unique AI system that continues to evolve almost daily. One of the most, I think, unique features of it is that it's not filtered. We try to keep it open. We try not to censor the content, and we want people to be able to interact in a realistic way much as you would a real person.
And by taking some of those filters out that are typical in a lot of the chatbot and ChatGPT models, we're able to get a much higher level of connection on a personal level. We also have a third subsidiary, Anthropomorphic Figure Dynamics. It's much easier to call it AFD. We do work for government and education and medical. We've done several pilot projects such as the one you see here, which was a highly realistic silicone figure, fully articulated and realistically weighted for training of soldiers in the field. Basically, they had to move the simulated wounded soldier from the point of injury, get them to an ambulance, and then transport them to the hospital. And the figure that we created then allowed them to collect data to optimize that process. This is a picture here of Whitney with her robot that she used in her Netflix special.
We've also done a lot of work in the entertainment realm, different documentaries with people like Robert Downey Jr. We did several episodes of Nip/Tuck. We were with Katie Couric. We also consulted on the Westworld series prior to them actually putting it out there. So we've worked quite a bit in the entertainment business and feel that there's still lots of work to do in that realm. Our growth is to our strategy is to actually penetrate further into some of these areas that we've just kind of scraped the surface on, such as healthcare. We believe that personalized robots that look and behave similar to humans could be used in healthcare facilities, training robots for surgeons.
We could put all kinds of sensors for collecting data, as well as therapy robots for mental health patients, not to mention the fact that robots can interact with critically ill patients and not have to worry about any spreading of germs. We also feel that robots can definitely find a deeper place in education. We can have robotic teachers' assistants, AI-powered university professors, and the like. And then again, the entertainment realm that I just spoke on briefly, I think there is probably a huge amount of penetration that we will find in that market as well.
One thing I'll note that in this presentation, all the images that you see are actual products. So for example, I mean, I don't know how well you can see the detail, but these are extremely detailed, artistic, and realistic humanoid robots.
So we feel kind of to highlight on some of this stuff, we feel there are tons of opportunity in some of these sectors with AI and robotics. It's well established that the growth in these realms is going to be astronomical in the coming 5-10 years ahead of us. We feel that we're uniquely positioned to penetrate some key areas of this market. We already have a very, very high reputation in multiple areas and feel that we can capitalize on that further as we continue our development process.
Great. Thanks, Matt. I'm going to just stop the chair here and carry forward. One of the things I really like about this company is there are other robotic companies out there that are solely focused on the robotics without really the integration of AI. Companies out there that are really building robots to go into an Amazon warehouse and move boxes from one place to another. This is a different type of robot. These robots have a lot of features that make them feel realistic. They're more things that you could use in your home. You can use in a hospital, in a school, or even as we say, we've been talking about is using it at the C-suite. The ability for AI to do things in a superior fashion to humans, such as potentially dealing with governance issues, is pretty high.
And so we're looking very closely at areas like that as well. Subsequent to the completion of this transaction, Tokens.com will have exposure really to a few different areas. Blockchain still via our cryptocurrency inventory. We've been pleased with how that's been growing. Obviously, that's a lot out of our hands, but we seem to be still in the midst of a bull market there. Social media, Web3 gaming, and the Metaverse, we still have exposure there via our 15.3% ownership in StoryFire. StoryFire, we communicate with those guys weekly, and they seem to be doing extremely well. We're excited that that could end up being a really big home run for us. Obviously, remains to be seen, but everything is pointing in the right direction. Then obviously now AI and robotics via our 100% ownership of all three of these subsidiaries.
I think that makes us a very unique public company that's out there. We've been shifting here and through these transactions away from what I would say were earlier stage businesses. Now we sort of have this collection of assets with much greater existing revenue as well as what I would say potential growth revenue. I mean, we're pretty excited about the upside here and what we're seeing. We continue to sort of define ourselves as looking for opportunities in areas that what I would say are not common to other technology companies. We think this is important to sort of find things that are unique and different for us. Maybe with that, Jennifer, we'll can open this up to some questions from who's on the line.
Definitely. So if you have a question, go ahead and click that raise hand button on the bottom of the screen, and it'll put you into queue, and I can give you access to speak. So we have the first question here from Kevin Dede. Hi, Kevin.
Hey, Kevin.
Hi, Andrew. Thanks so much for having me on. A few things. Could you give us an idea of the headcount there at Simulacra? I know you offer four years revenue, but maybe last 12 months or just last 2023, maybe some indication of cyclicality given your earnout is 12-24 months, maybe they're good years, bad years, some indication of that, and then maybe a view to CapEx and what you think that company's gating factors to growth are.
Okay. Let me start with some of the financial questions first and say we are going to be producing more. We've given sort of a high level, but we will be producing more numbers soon. We don't want to give guidance, but what I would say is that the earnouts were structured in a way that management should be hitting those. And so I think that gives you sort of a view as to where we think operations are going to be going in the near term. Matt, I don't know if you want to talk about CapEx from a high level.
Well, this is normally not my area, but can you help me understand exactly what CapEx is?
Capital expenditure. What I would say is if we were to go back and look at the stuff, I think where we would be looking at CapEx is in terms of some of these expansions. Looking to potentially build a cheaper manufacturing facility. That would be some of the areas. But in terms of our annual spend in terms of building this stuff, it's probably $2 -3 million a year.
Oh, yeah. So I think that's a very accurate number, actually. And that would also account for obviously pretty aggressive research and development back on track with some of the software and hardware stuff. For the most part, we're pretty break-even, even in a bad case. And we're definitely looking at ways to lower our overhead significantly by manufacturing some or all of our products elsewhere besides domestically. I think that's a completely untapped option for us as well.
Yeah. The other thing is that the company has never really optimized its marketing. A lot of these areas are brand new. We're sort of breaking ground with some of these robotic use cases in places like hospital and education. It's all really come to the forefront of the last 12-18 months with the rise of AI Large Language Models that are available to the mass market. So we've got some good existing revenue business, but as well, there's a lot of things we're excited about in terms of the future areas that we can penetrate, which I think the largest parts of revenue and things that we're going to go into are probably still on the common things that will be developed over the next 24 months.
So maybe Matt will indulge me here. Given your long-tenured history in developing these, how have you seen the end market change, and where do you see your most intense demand coming?
Well, yes, you're correct. I've been doing this a while. Especially, I would say over the last three years, I've seen a tremendous shift in the way that people perceive this type of technology. I've definitely seen a shift in kind of people having a little bit more of an open mind when it comes to thinking about things like robots and AI. Previous to the last few years, I think there was a knee-jerk reaction for people to be afraid of what AI was going to do or what robots were going to do. Now that they're really being present in the world and we're seeing them, I think a lot more people have an open mind to them.
As such, I think for our robots specifically, where they're going to excel and shine the most is in areas where they have to actually interface with people on a more personal or a more friendly layer of communication versus talking to your Tesla or perhaps an AI-equipped thing like an Alexa in your house. I think there's something that happens. It's different when you're speaking to a robot that actually comes across as a character. You start to sort of think of them as a person. And I think that's going to go a long way in customer-facing situations and personal situations, could be therapeutic or otherwise. Hope that answers your question.
Yeah, it definitely helps. Is there any one aspect that really has you excited and where you might see devoting more resources to address?
Yeah, I think definitely what is really exciting to me is that we have a very stable hardware platform. And so what excites me is really plunging deeper into the software side of things. And what's really interesting about what we do is that you can have four or five different applications that all run on similar subsets of AI, but they all do different things. And I'm excited to see where we can go as we start adding more feeds, sort of sensors or a nervous system, if you will, giving the robot the ability to have a very elaborate ability to sense the world around it, to see and hear and touch and take those little snippets of data and incorporate it into kind of the conversation or the interaction that's happening.
Well, thank you very much, Matt. Thank you, Andrew. I appreciate the opportunity. Congratulations.
No problem. Maybe just want to answer a question here from the thing before we move back to the queue. But Matt, somebody asked here, how can Simulacra compete against Elon Musk and his robotics company, which will also use AI?
Well, I think for starters, Elon's goals are probably vastly different than ours. I think their strengths are also going to be vastly different. In fact, it wouldn't be a stretch to say that at some point, Elon might approach us and want to do some kind of a deal where he could license some of our technology because clearly, what we do is create a figure that really comes across as a human. I don't think they're going to try to go there. I think they're looking at creating a workhorse. I think they're looking at creating something that can do hard tasks like moving things around and perhaps taking care of physical tasks in the workplace or in the home. So I think it's two different use cases, two different worlds. But I don't think it's a stretch to think they'll overlap at a future point.
Back over to you, Jennifer.
Yeah. So if anybody else has a question, go ahead and press that raise hand button. We'll be happy to answer those. There's another one.
Okay. Go ahead.
In the Q&A box here. So it says, "Excellent presentation. You mentioned it's revenue accredited, but I'm also curious what the projected EBITDA pro forma [crosstalk] cash on hand and operations without having to raise capital.
Okay. So I'll take that question. So we're not providing so it's revenue accretive because I think for the number of shares that we're issuing versus the revenue we're getting back, it's certainly going to be a lot higher per share. We're not providing projected figures right now, EBITDA. There will be a pro forma balance sheet available, I would assume. Our quarter ended about a week and a bit ago. We will provide pro formas in the updated presentation after this closes, so I would say early May. In terms of cash on hand and how long we can fund operations, that's a great question. So right now, we still have about $3 million of cash, but we also have about 20 million or so in tokens. Most of that is available to us except for the stuff held at Genesis, which is another question here.
So we don't need to raise any capital here. This is done in such a way we haven't raised capital since 2021, which is pretty rare for companies in the crypto space or anywhere else. And one of the things I like about this deal is, yes, obviously, there's, I think, smart dilution through this acquisition, but there's no forthcoming capital raise that we are planning to do or need to do. To answer a question up here about updates on the assets tied up with Genesis, we continue to sort of get the information from them. They're working through a payout and releasing the funds and making everybody whole. The latest that I saw was something in the 90% range, paid in kind.
There's still a very viable resale market for claims out there that's currently paying between, I believe I saw this morning, 88%-93% for Genesis claims. So we feel pretty comfortable that we will get those assets back. I think the big risk there is when. And does the market change between now and when we get those back? Unfortunately, that's a risk we have to take. It's not ideal, but it could be a lot worse. We feel pretty confident we'll be able to recover the majority of that back. The other part of that question was, will your end products be whole humanoid robots, or will you be supplying or licensing the technology to other manufacturers? I would leave that with Matt.
I think primarily our target and all the work that we're doing right now is to create our own ecosystem, our own full-body robots and software. But at the same time, we're also exploring APIs. We're also exploring ways to allow developers who perhaps are working on their own AI systems to actually interface with our hardware. I think there's a massive market there because a lot of people who are really good at AI haven't really the first clue how to build a robot. And I think it's extremely important for anyone trying to develop a human-like AI to actually put the AI into a human-like body that occupies a human-like space in the world because that's going to provide the system a very realistic worldview coming from a human perspective. So I think there's opportunities in both of those scenarios.
I am not opposed to selling hardware or software licensing to other people who are in the space. I think it's always good to connect with those types of similar opportunities. So I guess we'll take it as it comes.
Yeah. It's interesting. Some of those robots, including some of the ones we showed that have been shipped overseas, connect to other groups' AI. So for example, some of those that are sold into places like Saudi Arabia will connect to their specified platform AI platforms and speak Arabic. So the hardware can be separated from the AI. It's really just one of the flexibilities that the company has.
Awesome. I don't see any other questions coming in through the queue. So if you have a question, this is your last chance. I think we're going to wrap up the question period here, then.
Okay. I'll wrap it up. Look, I want to just thank everybody for continued interest in what we're doing. We believe really strongly in this acquisition. We think this is going to be great for investors. I think we are a very unique company here with what we have, possibly the only public company in the world that gives people exposure to blockchain, social media, and robotics and AI. I think the future looks very exciting for us. And I continue to hope we'll continue to build interest here and get our share price up to where we think it should be. So with that, thank you very much, everyone.