Good morning, ladies and gentlemen. Thank you for joining today's conference call with the management of FFR. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will open the call for questions- and- answers. Please note that today's conference call is being recorded. I'll now pass the call over to Jimmy Xia, Head of Investor Relations at FFR. Please go ahead.
Good morning, everyone. Thank you for joining today's call. I'm Jimmy Xia, Head of IR at FFR, that's FF EAI Robotics Ecosystem, Inc. With me is our Chief Executive Officer, Jerry Wang. Early this morning, we announced that FFR has signed definitive agreements to acquire Faraday Future's full EAI Robotics Ecosystem business, and that we have secured a common stock only PIPE financing up to $10 million. The press release and the presentation are on our IR website and in our filings with the SEC. Before we begin, today's remarks include forward-looking statements, including statements about the acquisition, its expected timing and benefits, the PIPE financing, and the five-year business plan for the robotics business.
They are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially. These include the conditions to closing, the dilution from the shares we will issue in the acquisition and the PIPE, our liquidity, and the going concern disclosure in our periodic reports, and other risks described in our Form 10-K, 10-Q, and 8-K.
The projections we refer to were prepared by Faraday Future management for the robotics business on a standalone basis. They have not been audited or independently verified, and they are not guidance. We undertake no obligation to update forward-looking statements except as required by law. Nothing on this call is an offer to sell or a solicitation of an offer to buy any security. With that, I'll turn the call over to Jerry.
Thank you, Jimmy, and good morning, everyone. Two weeks ago, FFR and Faraday Future announced a term sheet. Today, I'm pleased to report that we have signed the definitive agreements. Let me start with how this fits together. Faraday Future describes itself as a Physical AI investment and holding platform benchmarked on Berkshire Hathaway, controlling stakes in focus businesses held for the long term. FFR is its robotic business. Its EAI Cabin and Robotaxi business is another. As its own Nasdaq-listed company, FFR gives investors a clear view of the robotic business profitability, growth, funding needs, and capital allocation.
Here is the transaction. Faraday Future contributes its full robotic ecosystem business, held in a company called FF EAI Robotics, Inc, to FFR at an agreed valuation of approximately $200 million. We pay entirely in FFR stock at $2.246 per share, approximately 89 million shares, including options assumed for the robotic team. When the transaction closes, we believe FFR will be the first Nasdaq-listed pure-play robotic ecosystem company built on a Four-Core Full-Stack AI model. The final terms are close to the term sheet.
Three things changed, and together they simplify the structure and support closing. First, the transaction price is fixed at $2.246 per share, a premium to the market. Our closing price on October 12th was $1.50, a premium of about 50%. Because the shares are issued at a higher price, about 89 million shares are needed instead of roughly 133 million at that market price. Second, there is no special stock dividend. Under the previously disclosed term sheet, the dividend applied only if the issuance price came in below $2.246.
The final price is a full $2.246, so there is no gap to close. Third, we have secured a common stock-only PIPE of up to $10 million at $1.5 per share with no warrant and no discount. Our value. The agreements that FFR's full diluted equity value at approximately $60 million and the robotic business at approximately $200 million. FFR brings a Nasdaq-listed platform and existing shareholder base, a relatively clean balance sheet, RoboShare, and financial assets. The robotic business brings product, customers, and revenue.
Neither value is based solely on market prices. A special committee of our Independent Directors negotiated the term sheet and approved the definitive agreements supported by a fairness opinion from its own independent valuation expert. The transaction is expected to close soon and is subject to customary conditions. We believe the structure helps FFR grow. Faraday Future remains our largest stockholder and long-term partner.
Upon closing, we believe FFR is the first U.S. Embodied AI robotic OEM to deliver both humanoid and bionic four-legged robots, and the leader in U.S. shipments to date. It applies Faraday Future's 12 years of U.S. R&D, AI, software, supply chain, manufacturing, quality, and compliance work through robotics, and one intelligent brain powers multiple robot forms. Our Built in USA program is building U.S. robotics manufacturing with assembly at Faraday Future's Hanford facility, and the first robot off our U.S. line targeted of February 2027.
Our five-year targets are top three position among U.S. companies in global EAI device sales and in industry ecosystem revenue. After closing, FFR is a full-stack Embodied AI company built on four cores: EAI Brain and Developer Platform, EAI Devices, Industry Productivity Solutions, and the EAI Data Factory. Each operates on its own and reinforces the others. That is the internal flywheel. More device produce more data. More data makes a stronger brain. A stronger brain supports more deployments. More deployments drive more sales. There is an external flywheel too, because all four cores are open. Partners to buy our device to build skills and solutions.
We license brain capabilities. We sell data and training service to AI companies. We open our industry solutions to system integrators. Each step widens the ecosystem and sell more devices. Each core is already working. The EAI Brain and Developer Platform shows 100% deployment with about 100 skills and 200 developers. Its models are fine-tuned on NVIDIA's GR00T, and its commercialization framework is in place. Our Soul framework, Brain Blocks and SDK. EAI Devices have shipped 817 units as of the end of September 2026, each with a positive gross margin.
Industry Productivity Solutions turn those capabilities into repeatable solutions for education in industrialization, security, and commercial services, with year end 2026 as the milestone. The Data Factory captured about 2,100 hours of real-world data a month in August. It is targeting 20,000 hours a month by year end and surpassed $400,000 of data revenue. Our devices span three form factors, five series and 24 models: humanoids, quadrupeds, and mobile manipulators. Prices run from $1,990 for our Navi learning quadruped to $137,900 for the Aegis Hyper industrial quadruped. Our one brain multi-form approach ties them together.
We believe it is the broadest Embodied AI device portfolio by form factor in the U.S. market. RoboShare, the business FFR already runs, is a robot-sharing marketplace with these participants: customers who rent before they buy, robot owners who put their asset to work, and local operators who deploy and support the robot. It is asset-light, earning platform and service fees on a multi-brand supply of robot owned by customers, dealers, and third parties. Rentals are starting to lease at scale. In one early example, an education customer placed a one-year rental order of about 33,000.
After the rental is planned to buy five robots, it became assigned order for 23 across three models. Rental value is not recognized revenue, but this is the flywheel we are building. Rental demand drives sales. From March through September, we shipped 817 units, and every month since shipments began has set a new record, from 22 in March to 265 in September. Each unit shipped generated positive gross margin. We manage the business by units because every robot we place brings a customer for software and services and data for the Brain.
We price hardware to build the installed base, which is why the plan assumes a gross margin of about 10% for 2026. Management plan targets 2,001 units and $7 million of revenue for 2026, with 817 shipped. The fourth quarter needs about 1,200 more, roughly 400 a month, against 265 in September. We remain confident in our full-year targets and look forward to updating the investment community of our progress. From there, the plan calls for 7,400 units in 2027 and 60,000 units by 2030. About 134,000 units from 2026- 2030, with gross margin rising to 54% by 2030. Our five-year plan prepared by Faraday Future management.
Revenue grows from about $7 million this year to about $45 million in 2027 and about $1 billion in 2030, close to $2 billion over the five-year span. EBITDA is projected to run positive in late 2028 and reaching about $361 million in 2030. Three things drive it. First, mix. Education is our entry point and higher value security, industrial, and commercial robots follow. Second, ecosystem and software revenue, which grows from 22% of revenue this year to 49% in 2030 and lifts gross margin. Third, U.S. production at Hanford from early February 2027. The plan also includes about $300 million of R&D over five years.
The business model is asset-light, with cumulative funding requirements prior to any financing expected to peak at approximately $150 million in the third quarter of 2028, at which point quarterly operating cash flow is projected to turn positive. We do not want to incur dilution at an overly low valuation, and we aim to minimize dilution to the greatest extent possible. Any future funding will be decided on market conditions, our needs at the time, and dilution to maximize shareholder value. Benchmarking FFR against the two U.S. humanoid companies investors ask us about most.
The $200 million for our robotic business is about 4.4x 2027 estimated revenue. Agility Robotics is going public through a SPAC at a $2.5 billion pre-money valuation, about 12.5x that on 2025 revenue of $1.78 million at a negative gross margin. Figure AI was valued privately at $39 billion, about 195x higher than us. Each is built around a single humanoid. FFR has one brain across three forms, 817 units delivered, and positive gross margin. We believe FFR is the only one that combines deliveries, a positive contribution margin, and public market liquidity.
These companies demonstrate that FFR represented a public-listed, revenue-generating, full-stack robotic company whose valuation does not fully reflect its position relatively to its U.S. peers. This page shows our illustrative pro forma capitalization. The final table will be in our filings. At closing, Faraday Future receives common stock and restricted preferred stock. Until shareholder approval, it holds at about 33% of the vote. Once approval is in effect, which we expect around December, the preferred converts into common. After that, on a fully diluted basis, Faraday Future would hold at about 66% of FFR and about 72% of the voting stock.
RobotCo employees about 18%, including options, and existing public stockholders about 11%, and private investors about 5.5%. Faraday Future is taking all of its consideration in stock under an 18-month lockup with registration rights only after 12 months and a 12-year non-compete, and a two-year non-compete in robotics. Its interests are tied to our share price. Employees share carry an 180-day standoff and vest over three and half years, and key employees are expected to sign employment agreements as a condition to close.
We also expect to adopt a governance framework similar to the arrangement between FF Global Partners and Faraday Future, supporting leadership continuity and long-term execution under the founding team's leadership with additional board-level protections. The details will be in our filings. To sum up, we have signed the definitive agreements. The final terms are simpler than the term sheet, with a fixed premium issuance price and no special dividend. We have secured a common-only PIPE, and the business we are acquiring has set a shipment record every month since March. We expect to close soon and look forward to updating the investment community as we achieve additional milestones. Thank you for your support. Jimmy, let's open the line for questions.
All right. Question one, the robotics business has about $1.35 million of cumulative revenue in the first half of 2026. How can it be worth $200 million?
It's a fair question. We're valuing a business at the stage at the start of its ramp, not on its trailing revenue. In seven months, it went from 22 units in March to 265 units in September, 817 in all, with a gross margin of about 31% in the first half of 2026. The $200 million is about 4.4x the 2027 revenue in the five-year business plan. That is far below what U.S. humanoid companies command today. Agility is going public at a $2.5 billion pre-money valuation on $1.78 million of 2025 revenue. Figure AI was valued privately at $39 billion.
A special committee of Independent Directors negotiated the number and received a fairness opinion from its own independent valuation expert. The plan is a projection prepared by Faraday Future management, unaudited and not guidance, which is why we report units every month. You can judge the ramp for yourself. Faraday Future took stock rather than cash at a price above where we trade. So it is underwriting that ramp alongside the public investors.
Question number two, FFR has no operating revenue. Why is it worth $60 million more than its market value?
Mechanically, $60 million is our roughly 26 million existing shares as converted at average $2.246 per share. The real question is why Faraday Future accepted that price, about 50% more where we trade. There are three reasons. First, the platform. FFR is an established Nasdaq company with an existing stockholder base and a relatively clean balance sheet with minimal debt and no outstanding convertible notes, which gives the robotic business direct access to the U.S. capital markets without the cost, time, and execution risk of its own IPO or SPAC. Second, RoboShare, an asset-light rental marketplace that fits the robotic strategy. Third, our financial assets, including cash and cash equivalents, notes receivable, and certain investment, including our investment in Faraday Future.
Question three, where does $2.246 come from, and why did you drop the special dividend that was meant to protect existing holders?
$2.246 isn't a new number. It's the price at which Faraday Future invested about $30 million in this company in September 2025. And it's the conversion price of our outstanding preferred stock. The new shares are now issued at that same price, about 50% above our recent trading. Under the term sheet, the price would have been the lower of $2.246 and our five-day average, and the stock dividend applied only if that price came in below $2.246. In the definitive agreement, the price is full $2.246, so there is no gap and no dividend. That keeps the transaction structure simple. And because the price is above the market, about 89 million shares are issued instead of roughly 133 million at our recent price.
Question four, you need about 1,200 units in Q4, then 7,400 the next year, and 60,000 by 2030. How is this achievable?
To be very honest, we don't ask you to take it on faith, which is why we publish units every month. Every month since shipments began in March has been a record, from 22 to 265 in September. Third quarter shipments of 575 were more than double the first half. For the fourth quarter, we have new devices launching, a larger partner network, early signs that RoboShare rentals leads to new device launch, new device purchase, and markets such as Middle East.
Management's plan target 2,001 units and $7.1 million of revenue this year and will remain confident in it. The longer-range plan rests on three things you'll be able to see as they happen. A richer mix of security, industrial, and commercial robots. Ecosystem and software revenue grow from 22% of revenue this year to 49% by 2030. U.S. production at Hanford from February 2027. The plan was prepared by Faraday Future management and is not guidance. It's not guidance, and we'll update you as each piece shows up in the numbers.
Question five. Slide 10 shows a peak funding need of about $150 million and a $10 million PIPE barely dents it. How much more dilution should we expect?
Let me be direct about how we think about capital. First, the $150 million is a business plan's peak cumulative funding need on an operating basis before any financing, reached in the third quarter of 2028, when quarterly operating cash flow is projected to run positive. It is not a financing plan. The robot business model is an asset-light, with about $98 million of capital spending over five years. For context, Agility used about $102 million in 2025 alone.
Second, the PIPE is the kind of financing we're willing to do. Common stock only, no warrant coverage, and our preliminary estimates less than 10% of incremental dilution. Third, we do not want to incur dilution at an overly low valuation, and we aim to minimize dilution to the greatest extent possible. Future funding will be evaluated on market conditions, our funding needs at the time, and dilution.
A final question. How big can this industry get, and why should FFR rather than Tesla, Figure, or other robotics company capture that growth?
Two forces drive the industry. AI models that let robots perceive, reason, and act are improving quickly, and they need real-world data from many kinds of robots to learn from. Demand is broad. Labor shortages, safety and training needs in education, security and inspection, logistic and services. Third-party research points to a very large long-term market. Morgan Stanley Research estimated in May 2025 that humanoid would become a market of more than $5 trillion by 2050, including supply chains and support, with adoption accelerating from the late 2030s.
We don't build our plan on forecasts like that, but we believe FFR can benefit in four ways. First, breadth. One brain across humanoids, quadrupeds, and mobile manipulators let us serve many use cases and collect more verified data than a single-form company. Second, data. The Data Factory turns deployments into training data we sell, and the plan takes ecosystem and software revenue to 49% of revenue by 2030.
Third, access. Education is our entry point, and RoboShare lets the consumers rent before they buy. Fourth, Built in USA. In July, the FCC added foreign-produced humanoids and quadrupeds to its Covered List, which bars new foreign-made models from authorization. We believe U.S.-built supply will be scaled as our Hanford lines comes online. Larger companies will compete hard, which is why we focus on being open, broad, and U.S.-based rather than on a single flagship robot. Thank you.
There are no more questions. Operator?
Thank you. We appreciate your participation and interest in FFR. You may now disconnect your line.