Good afternoon, everyone. Welcome to Day 1 of the Sidoti MicroCap Conference. I am Aashi Shah, an analyst here at Sidoti. With me today, I have Realbotix. It trades under the ticker XBOT. I'm happy to welcome Andrew Kiguel, CEO of the company. We have about 30 minutes today, including the Q&A section. If you have any questions, please submit them at the Q&A function at the Q&A section at the bottom of your screen. With that, Andrew, I will let you take over. Thank you.
Great. Thank you very much and welcome to the people in the audience. Can you confirm my screen is shown right now?
Yes.
Great, so I'm just going to get into the presentation. Our company is Realbotix, and we make realistic humanoid robots, and we have our own proprietary companionship AI. I'll flip here through some of these pages, and by the way, these pictures are all of our actual robots. These are not animations. These are pictures that we've done, and so what is it that we do sort of at a high level where we're going is we make human-sized, full-bodied robots that are AI-enabled, meaning that you can integrate in our AI or a third-party AI. They're AI-agnostic, and we get the question often, how are your robots different from what, for example, Tesla is building? And I think the best way I can describe it is Tesla and Figure AI are building robots to replace physical human labor. That's not our approach.
We're building robots that are socially intelligent that can really be there to replace whether it's a human emotion and human interaction. And I'll get into what some of those areas are. We have three product lines, and I'm going to walk through each one of them, but it's humanoid figures, the humanoid robots, and then our companionship and social AI. So humanoid figures is the initial product line. We create what are considered the world's highest quality, most realistic silicone figures. We use proprietary technology and engineering to create what are very lifelike areas. The skin in our materials looks and feels very real. The average cost of one of these is about $9,000. Historical sales in this area are between $3 million and $4 million. Excuse me. And we price them in with a 60% gross profit margin. People buy these for entertainment. Maybe they're seeking companionship.
They've experienced the death of a loved one. There's various reasons why they may want something like this. We also are able to integrate these in with the robotics as well, so our robots, and I'll play a small video here as we speak. I'll turn on the volume switch and keep talking but our robots, which are very proprietary and unique, are built with modular body parts, which means that they can come together and as you can see in the video, the faces and the heads come apart so that we can replace the robot architecture with different characters. That's very unique to us. We have patents on this, which means you can buy one robot platform and integrate in several different characters. Why that's useful? For a few reasons. Number one, you can integrate in different characters.
But number two, if there are repairs or upgrades that need to be made to the robots, it's very easy to do without pulling the entire robot apart. Again, they're integrated to work with various AI platforms and large language models. One of the areas that we really surpass our competitors is in facial movements. Our robots have many micro motors in the face, which allows them to make expressions: smiling, upset, surprise, anger, sadness. That's unique to our robots. If you look at the competitors, like again, Tesla, great robot, but it's got one expression. It doesn't change. We also have realistic eyes that blink. They have micro cameras embedded in there that can make facial recognition and follow you as you move around. And again, the faces are all customizable.
That's unique to us in that we can replicate a celebrity, a historical figure, or whatever your vision is, as opposed to some of our peers that just have one robot. And when you order that robot, you get that exact thing, and that's all it is. Who are the customers for our robots? There's many, but we've mostly been targeting the entertainment space. I'll walk through some of the use cases later, but the robots cost anywhere from $15,000 for just the robotic head bust to $200,000 for a full-bodied bust. We have customers within entertainment, amusement parks, the military. And as I said before, we've sold hundreds of the robotic busts that are attached to the static bodies, which means we're responsible for likely putting more robots in U.S. households than any other company. Let's chat for a second about our AI.
Our AI is different than ChatGPT or Grok or some of the other ones that are out there. Our approach is different. While those AIs are built to be task-based, like, "Hey, can you plot this on the x-axis and this on the y-axis, or can you provide me information on this topic?" Our AI is meant to be a friend. It's meant to be social, interactive. It asks you questions. It has a memory. So it can say, "Hi, Andrew, how are you today? Do you still have a sprained ankle?" It engages you in conversation. The other thing that we've done is we've made it unfiltered for adult conversation. What this means is that it can act as a boyfriend or a girlfriend if that is something that you desire.
Again, we're targeting a very specific sector here, which is more of an emotional connection as opposed to one that is like, "Hey, move the box from one end of the warehouse to the other." We have many IP and trade secrets. I'll play this quick video here as I speak.
Welcome to Realbotix.
But you can see this is our robots. Some of the things are very unique as you can see the lips moving in conjunction to the way it speaks. The robots, again, full-bodied. They can articulate their fingers. There's various things. We put a lot of artistry into what we make. And you can see from these videos, we put a lot of care into it. We want to make sure that our robots look and feel very real. So who's buying this? Who are we targeting? We get that question. And so number one, adult amusement and entertainment. Think about amusement parks, museums. Think about a robotic greeter maybe at a hotel or at a casino. Those are the types of areas we're targeting. We've already made sales to theme parks and places for promotion.
I would say, imagine you were at a conference and you have a robot there with a T-shirt with your brand, and it's been uploaded to know exactly all there is to know about your product, your management team, company information, and anybody can walk up to it and ask questions. It will look you in the eye and answer those questions for you. I mean, that's a great way to elevate your brand because everywhere we've ever had a robot, there's fascination and people lined up to take pictures. In the near and midterm, areas that we're going to start pushing forward on next year are going to be, for example, healthcare, so imagine a companion robot in a senior's home that goes from room to room and keeps the senior's company. It will listen to them, hear them out.
It can relay information back to a doctor if they're not feeling well. And it has a memory. So it goes in and it'll remember what you talked about the day before. There's a loneliness epidemic in North America, and we're very focused on that area as a use case for our robots. We also think about things like training robots for surgeons, things with data collectors, AI-enabled robots for mental health. A lot of people see therapists, but we can upload an entire professional therapist into one of our robots and into our AI that can interact with you. And for a lot of people, if you're geographically isolated or maybe you have a fear of confiding in a human, this is a great way to have some alternatives in terms of that. Education.
We're talking to some schools right now who are interested in using our robots to upload our course knowledge. And students can go at any time of the day and ask questions of the robot. "Hey, can you re-explain this concept? Can you explain it to me in a different way?" And the robots, because they have machine learning, have the ability to do that. Some case studies. We built a robotic head with a body for Whitney Cummings. She did an entire Netflix special, comedy special with her and this robot. And then afterwards, she took it on to the Joe Rogan Experience, as well as many other what I would call very famous TV shows. And it was a big hit. She got millions of views and a lot of fans because she was using this. And we built this for her.
You can still find it on Netflix. We did another project for the United States Military and Johns Hopkins Hospital. Essentially, what they were trying to do is find better ways of transporting injured military in combat zones. Now, obviously, that's very hard to do using a human, even in a scenario, but we built a robot like this, which was loaded with accelerometers, which could communicate back information to them as it was being carried and moved through these combat situations, so obviously, you could never put a human through that, but this was a great proxy where they were able to learn more effective ways of helping wounded soldiers in combat. The last case study here is more of a marketing case study. These are a couple of robots that we've sold to the Middle East. We sell them AI-agnostic.
So these robots actually speak Arabic, and they're used in various sort of conference and promotional settings, like the opening of a new festival or a new convention center or things like that, where people get fascinated, see the robots, and they can walk up and have conversations with them. Whether you see us or not, we've been a big part of pop culture and robotics for the last few years. We've been consultants on major TV shows. Our robots have appeared on major shows. For an American company, we are, I believe, the only publicly traded company that is solely focused on the hardware and the software in the robotics and AI space, meaning we do both. And I think we have taken a different angle to it, but we're very good at it. We have one of our robots named Aria.
She has her own social media that you can see here. And we take her, we use her as sort of an example of what can be done with a robot. In fact, we took her on Fox Business News. We did a live interview with her and Liz Claman, which is still available. This was just about a month ago. And I'm going to play this video here so you can see exactly how realistic she looks. I mean, this does not look like the robot that other companies are building. So there's lots of companies. I'm not going to go through this slide. I think lately it's become very obvious that robotics is a sector that is quite important. Elon Musk predicts that there's going to be in 10 years more robots than humans on the planet. The industry statistics are quite large.
You would never think this, but it's projected that the companionship AI market, it's going to be $85 billion within eight years. That's a massive market. And while all the other AI companies are very focused on task-based AI, we're using what we have to be more on the companionship side. So you can access it through your computer or your phone or through one of our robots. The conclusion we say here is we're positioned perfectly to capitalize on both the robotics market and the AI market because we're one of the only people who are building both with a specific purpose in mind, realistic robots for social purposes. Here's a quick sort of look at what some of the other robots look like. And you can see that our robot looks 10,000% more human than anything else out there.
And that's because we start with the human form and build the robotics from there. The other companies start with building the robotic components and then try to shape them to look human. And so that's one of the advantages that we have. Our company as a whole, we're well capitalized. The balance sheet here is a little bit old. And the reason why is we have a September year-end. So we're going through our audit right now, and that will be out soon. But what I would say is that the balance sheet hasn't changed very much from this one. It's very similar. And what I would add to this is to say we're well capitalized. And that's unique for companies of our size in that we probably have another three to four years of capital on the balance sheet through our cryptocurrencies and our cash.
I think we will look to dispose of the cryptocurrency here in this next bull run and just sit on the capital. We have an experienced board and management team. We're all investors, and we're all believers here in what we're doing. To sort of start wrapping it up, why should you consider investing in our company? Number one, we're one of the few developers of AI that's focused on intimacy and companionship. We are not filtered for those adult topics that all the other AI is focused on. That gives us a huge heads-up because that's not an area that ChatGPT or Google or other companies are going to focus on. We have patented skin technology that looks and feels real. Our robots have the most realistic human features, and they're all integrated with machine learning. It's a massive market.
We're at the very early stages here, but we feel very well positioned in this market because we have the most realistic-looking robots in the world. Not a ton of competition, and the management team here is aligned. The insiders have about 42% ownership in the business. Our share s outstanding, just under 200 million. There's not a lot of diluted securities, and what I would say is right now, as of my last look, we were trading at about a $25 million market cap. About half of our market cap is cash and cash equivalents, and so what you're really getting a chance to do here is buy in at a very favorable valuation, and I think the reason why is that we completed the reverse takeover for this business back in July, so we've only been public and marketing for a very short period of time.
I think as people start to see and learn more about what we're doing, especially at the Consumer Electronics Show, CES in January, I think we're going to get a lot more attention here, not just from an operational standpoint and orders, but also to our share price. Our website is realbotix.ai. Maybe with that, I'll turn it to Aashi for questions from the audience.
Thank you so much for the presentation, Andrew. At this point, I would like to remind the audience, if you have any questions, please submit them at the Q&A function at the bottom of your screen. Andrew, I have one question. What is the biggest challenge you face right now, in terms of getting to make the product?
So there's no technology challenges. I feel that on the technology front, we're quite advanced in where we want to be. The challenge is when you're building a business like this where revenue positive, our robots are available now as opposed to other companies, but really it's just a function of sequencing things. We're not going to invest into a huge factory to build thousands and thousands of robots until we start selling the initial product that we can sell. And so I think once we hit sort of 15-20 robots in sales, we'll scale up to be able to build 300 or 400 in sales. But really, the biggest challenge that we have is timing. Especially as a public company, you want to manage your capital properly, and you want to get the timing right.
Right. And you said you were attending CES in January. So if a company comes and gives you an order for 10 robots, how long does it take for you to make those 10 robots?
It's a longer sales cycle than that. The robots, again, if they're full-sized robots, they're about $200,000 each with the customization. So we would work with them, and our team would work with them to be like, "Exactly what do you want? What do you want them to look like? What AI do you want?" Okay? And so it's not an off-the-shelf product. We're talking to theme parks and museums to make custom robots. And so I believe if somebody put an order for 10 robots, that would probably take about six months for us to deliver. But again, it's a customized product that we're selling. I think as we continue to grow, we'll have more off-the-shelf products. If it was just a robotic head, that we could probably deliver in four to six weeks and attach to the body. So really, it depends on what you're ordering.
Right. Okay. And can you talk a little bit about the team that you have? How many engineers do you have in your team, and how are they working right now? And what does the day-to-day for an engineer at the firm look like?
So we have about 25 employees in total. Some of them are on the manufacturing line. Some of them are AI specialists. Some of them are engineers. But we do everything in-house. And so really, for us, it's about, again, as I said, the timing and sequencing. I mean, I'm not an engineer. I don't know what the day-to-day looks like. I assume that's a lot of time behind a computer and with components. But our R&D, we continue to innovate things that make our robots more realistic. I'll give you an example. We've developed this new camera in the eye technology that can sort of catch your eye and then move with you as you move, which is pretty unique. Other robots have the camera in the chest cavity, which means the robot could move this way. You could be over here, and it's looking the other way.
We're really trying to mimic the human experience, and we're having fun with that. Like I said, the entire company right now is about 25 people. Historical sales, the last 12 months would probably be about $4 million. We expect to continue to ramp up and grow as we move forward and hopefully have multiples of that revenue in the next couple of years.
Right. And you said all the robots right now are customized. So how does the technology expand then? How do you plan on scalability, and does economies of scale help the business in profitability? Can you talk a little bit about that?
Yeah, sure. So think about it this way. The internal component of the robot, the skeleton, is always the same. We scale that. On the face stuff, the way we scale it is we have a list of eight pre-made faces or characters that you can choose, or you can engage us to pay us to build exactly what you want. And so the best analogy I can give you, and it's not perfect, it's kind of like when you buy a car. The engine and the motor is the same, but you can customize the color, the sunroof. Do you want leather seats or cloth seats? The things that provide the exterior, a sunroof, no sunroof, the things that make up the exterior of the car, what it looks like, that's the part that we're customizing. We're not creating a new engine for every car or for every robot.
It's always the same internally. We just have modular parts that can be added on.
Right. And so for the internal part, the software, is it self-trained or is it a third-party solution like OpenAI or something like that?
So we build on top of open solutions like OpenAI, but our software is different. It's proprietary. And because, as I said before, those AI programs are based on you asking task questions. You're looking for information, or you're looking for it to do something. The AI that we've built has the capability to provide that information, but really, it's meant more to interact. So it will ask you questions like, "How are you feeling today? Tell me more about that. What kind of food do you like? Or tell me about your family." ChatGPT doesn't do that. And so we have our proprietary AI that is layered on top of the open-source platforms that achieves that. What I would say, we take that interaction to the next level where the person feels like they're communicating with someone that is alive or there.
And part of this is through history, even through pop culture, you think about Star Wars or other movies. Robots have always taken on sort of a human personality where they become friends with the protagonist in the movie. And that's sort of what we're trying to build, the robot that can be your friend that you can talk to and feels real. We're giving this AI a personality.
Right. And what would you say your go-to-market strategy is, and which is the biggest market that you're looking at? We've spoken about theme parks or hospitals or schools, but what is the biggest market you think the robots will be used for?
Right, so I already answered that question, but so I'll go to the side, so our verticals are right here. So the first one is entertainment. And the reason we're targeting entertainment is because there's a lot of money in that space. We know we can increase foot traffic and audience size for clients using robots. So that might be a greeter at a casino, for example. Well, you might want to go to that casino versus another one because they have a robotic greeter or sets of robotics greeters there. The next stage is that we're targeting our healthcare. So as I mentioned before, it could be somebody, a robot helping senior citizens or people who maybe have a disability and can't move, or they don't have family, or they're isolated for various reasons. And then as well, education.
But those would be our three main verticals that we're going to target. But midterm or near-term, it's going to be entertainment because that's where the money is and where we're finding the most interest.
Right. And how are you generating these sales leads? What is the go-to-market strategy?
So it depends on which product. So our retail product has quite a following, and so that is just through digital advertising. The corporate product, the full-size robot is more new. And we do that. It's all really been inbound. So we did the live interview on Fox Business News, and we received a lot of people who saw that and said, "Wow, I'd like to find out more about that." As we continue to grow, we'll build out a sales team. But right now, we are finding that organic inquiries from doing things like this or CES really just very CES has close to 200,000 people there. I suspect we're going to have one of the nicest booths there. We're going to have four robots at our booth. I don't know anybody else who can do that.
I think we'll have a lineup of people wanting to take pictures with the robots.
Right. No, that sounds very interesting. Speaking on the financial side a little bit, can you tell us what level of revenue do you expect to be profitable? And can you give us a timeline to that timeline and path, actually?
We price everything we sell with a 60% gross profit margin. But that doesn't mean we're profitable because we're investing in marketing and R&D. I would expect. I'm not going to give a forecast here. We're too small. I would expect it will be if I was to say, I would say that the next 12 months would be somewhere between $5 million and $ 10 million in sales as a starting point, but it could be higher. I would expect us to lose about $2 million. That's primarily because when you're developing and growing and spending money on marketing, that's just part of the game. I think for us to be profitable, we need to continue to scale up and get there. We're probably at least two more years away from break-even.
Okay. And can you talk a little bit on the balance sheet? What is the cash right now on hand? Do you have any debt, and will you require any more capital to be raised?
No. I said already before, we don't need any capital. We're well-capitalized at least for the next two or three years. So there's no dilutive things that are happening. We've been pretty conservative with how we use the cash. But as of right now, we probably have cash equivalents in the $12 million-$14 million range, depending on the day and what we're using it for. And like I said, I expect we're going to lose this coming year $2 million-$2.5 million. And so based on those numbers, I think we're pretty good for the next few years without having to worry about raising any money. The biggest issue we have is making people aware of who we are and what we do because we're trading at such a very low market cap. Half of our market cap is cash and cash equivalents.
And so you're really getting to buy into the robot business at about a $12 million for $12 million for a revenue-positive AI robotics company is darn good. Our peers all have billion-dollar market caps.
Right. And we have a few questions from the audience. One of them is asking, what is the monthly subscription service that you are developing?
So it's got a couple of components. One is with the hardware. So let's say you buy a robot or a robotic head and you want to use our AI. We would charge for something like that. We're still determining it right now. I think we're offering it about $10. But as we make it, the unique part is to have it sync with the lips. So if the robot is speaking, that it's got perfect movement with the lips. And that's a very unique hardware to software that we have. And so I suspect it'll continue to be about $20 a month. The next step with that would be to make it available on a subscription service on your computer or your phone. And I suspect that'll be about the same amount, maybe even less.
And that can be like a friend, a boyfriend, a girlfriend, a companion that you can access on your computer with the memory. You log in, and it knows you. It would talk to you on a microphone just like this. You would design your avatar, male or female, and there's your companion. And so again, we think that'll be in that probably $10-$20 range.
Right. And do you expect to have any unique robots at CES, a celebrity or something like that?
No, we're not going to have celebrity robots there. We have our four. So Aria will be there, our main robot. We'll have two full-size robots and two robotic busts, two males, two females. But unless we are commissioned to build the robot of a celebrity, we're not going to be building that. That is, we don't want to infringe on people's privacy. That would be pretty strange for us to just build a robot of someone. I think if we were asked to build it and someone paid us to do it, we could do that very well. But for now, we're going to use our own unique characters to demonstrate the product.
Right. And as just my final question, can you tell us about three main key catalysts that we should look forward to for the stock and the company?
Yeah. I think, look, we're an early-stage company. We've just started marketing. We've only been public as this business since July. So it hasn't been a long time. So the catalyst number one is, as people start to see what we're doing, I think they're going to get excited, and you're going to attract people to the stock. Number two, when we do CES, we've had multiple media requests from all over the world for people who want to check out and interview the robots. I think as we do that and we continue to make more and more sales, we want to build this as a real business. We think we can build this into a multi-billion-dollar business. And that's going to really come from showing the market, "Hey, the revenue is going up. The company is working its way to profitability.
Okay. Thank you so much for your time today, Andrew. Thank you. It was a pleasure speaking to you. Hope you have a great rest of the conference. Thank you.
Thank you. Bye.
Bye.