ROBO.AI INC.

Robo.ai Inc. is undergoing a significant business transformation, shifting its focus from primarily developing smart electric vehicles to building a decentralized, AI-powered intelligent asset platform that connects AI terminals across various sectors. The company's mission is to empower users with intelligent infrastructure and reshape value creation and exchange globally, with a vision to pioneer an intelligent future through an AI-powered smart mobility, smart device, and smart asset ecosystem. This strategic pivot, initiated in August 2025, involves substantial changes to its business model, technology architecture, and target markets, including expansion into AI-driven intelligent mobility, decentralized computing, and smart logistics, areas where the company has limited operating experience. The cessation of its major product line of Rabdan branded vehicles in March 2024, due to a directive from UAE authorities, has materially and adversely affected its business, financial condition, and results of operations, leading to a workforce reduction of 222 employees and severance charges of US$1.7 million ¹ in 2024.

The company's core business model is evolving from EV sales to an AI-powered intelligent asset platform. Historically, revenue was generated from sales of smart electric vehicles and auto parts and materials. The new model aims to integrate smart vehicles, robotics, and blockchain, with a focus on B2B business for autonomous logistics vehicles and specialty vehicles. Primary customer segments are shifting to corporate clients, including travel companies, corporate fleets, luxury hotels, and passenger service companies, for smart mobility solutions, alongside individual customers who value technological innovation and luxurious travel. The company plans an asset-light manufacturing model through strategic partnerships to lower initial capital expenditures and efficiently ramp up production.

Robo.ai Inc. is developing several key products and technologies. MUSE is planned as a full-sized SPV with Level 2.5 autonomous driving technology and an AI-NAS operating system, designed to offer a comprehensive passenger experience. GHIATH is a purpose-built vehicle tailored for public service and law enforcement, developed in collaboration with Dubai Police. Astra is a commercial-grade driverless vehicle intended for intelligent logistics, automatic delivery, and shared travel solutions, with a mission to deploy over 100,000 ² Robo-vehicles in its B2B business by 2030. The company has historically engaged in SKD production of NWONE (SUV), Rabdan One (SUV), and Rabdan Seven (MPV) in the UAE since 2023, but plans to shift resources to MUSE, GHIATH, and Astra models. Its AI-NAS ecology system aims to transform vehicles into mobile living spaces with features like a Five Senses System, Comprehensive Data System, and Cloud Control System, complemented by modular pure electric platforms and high-density battery pack systems, including CATL's 3rd Generation CTP battery system for MUSE.

For the fiscal year ended December 31, 2025, Robo.ai Inc. reported net revenue of US$950 thousand ³, a significant decrease of 92.1% ⁴ from US$11.995 million ⁵ in 2024. The cost of revenues also decreased by 96.2% ⁶ to US$356 thousand ⁷ in 2025 from US$9.327 million ⁸ in 2024. The company recorded a gross profit of US$594 thousand ⁹ in 2025, compared to US$2.668 million ¹⁰ in 2024 and a gross loss of US$11.681 million ¹¹ in 2023. Operating expenses totaled US$157.704 million ¹² in 2025, leading to a loss from operations of US$157.110 million ¹³. Net loss for 2025 was US$167.567 million ¹⁴, compared to US$172.726 million ¹⁵ in 2024 and US$266.695 million ¹⁶ in 2023. The company had negative operating cash flows of US$5.066 million ¹⁷ in 2025 and US$138.046 million ¹⁸ in 2023, with a positive inflow of US$33.577 million ¹⁹ in 2024. As of December 31, 2025, cash and cash equivalents and restricted cash stood at US$5.327 million ²⁰, and the company reported working capital deficits of US$116.6 million ²¹ and an accumulated deficit of US$904.4 million ²².

Year-over-year, net revenue declined by US$11.0 million ²³ or 92.1% ²⁴ from 2024 to 2025, primarily due to the strategic transformation and repositioning of the business. Cost of revenues decreased by US$8.9 million ²⁵ or 96.2% ²⁶ in line with the revenue decline. General and administrative expenses increased by US$66.0 million ²⁷ or 72.6% ²⁸ in 2025, mainly due to a US$117.0 million ²⁹ increase in share-based compensation expenses, partially offset by decreases in allowance for credit losses, payroll, professional services, and rental fees. Selling expenses decreased by US$1.9 million ³⁰ or 74.1% ³¹ due to business downsizing. Research and development expenses decreased by US$4.4 million ³² or 98.6% ³³ in 2025, reflecting reduced vehicle development activities and R&D headcount. Interest expense, net, increased by US$7.1 million ³⁴ from US$2.7 million ³⁵ in 2024 to US$9.8 million ³⁶ in 2025, driven by interest on overdue third-party loans and litigation-related payables. Financial expenses were nil in 2025, a decrease from US$36.1 million ³⁷ in 2024, which was related to a guaranteed annual return on a PIPE investment. Loss of impairment on investments was nil in 2025, compared to US$15.9 million ³⁸ in 2024, which was attributed to the full impairment of a long-term investment in W Motors.

Significant operational developments during the period include the ongoing business transformation since August 2025, shifting to an AI-powered intelligent asset platform. The company ceased production of Rabdan branded vehicles in March 2024 and was notified to refrain from selling them in the UAE in June 2024, leading to re-badging of approximately 320 ³⁹ vehicles. In January 2025, Robo.ai Inc. entered into a joint venture agreement with W Motors to establish a company for automobile modification, customizations, vehicle distribution, and car services, with Robo.ai Inc. holding a 51% ⁴⁰ stake and contributing intellectual property valued at US$100 million ⁴¹. On October 9, 2025, a partnership agreement was signed with W Motors Dubai Branch for joint development and deployment of electric and autonomous vehicle solutions, with a commitment from W Motors Dubai Branch to procure 30,000 ⁴² vehicles over five years. An asset contribution and share issuance agreement was made with JW International LLC-FZ on August 8, 2025, to acquire exclusive operational rights to a manufacturing facility in Pakistan with an annual production capacity of 50,000 ⁴³ vehicles, in exchange for 10,000,000 ⁴⁴ restricted Class B ordinary shares at US$1.41 ⁴⁵ per share. Two additional joint venture agreements were signed with JW Global Holding L.L.C-FZ and Ferox Investment L.L.C. on September 4, 2025, and with JW Global Holding L.L.C-FZ on September 19, 2025, focusing on industrial ecosystems and commercial vehicle sales, respectively. A cooperation agreement with EVT Aerotechnics (Nanjing) Co., Ltd. was signed on September 6, 2025, to establish a joint venture for global sales and manufacturing of eVTOLs under the "RoVtol" brand, with Robo.ai Inc. holding 51% ⁴⁶ equity. Strategic investments include a share purchase agreement on September 18, 2025, to acquire 16.58% ⁴⁷ of Aitos.io Pte. Ltd. for US$8.29 million ⁴⁸ in Class B ordinary shares, and an equity acquisition agreement with Astra Mobility Meta (Cayman Islands) Limited on February 28, 2025, to acquire 100% ⁴⁹ equity for 15,000,000 ⁵⁰ Class B ordinary shares. The company also secured a convertible note facility of up to US$80 million ⁵¹ and an equity purchase facility of up to US$100.0 million ⁵² in December 2025.

Management's specific revenue, margin, or EPS guidance for the upcoming period is not explicitly stated in the filing.

The company is strategically shifting its focus to AI-powered intelligent mobility, decentralized computing, and smart logistics, aiming to build a global AI asset platform that connects AI terminals across industries. This transformation involves leveraging existing products like MUSE and Astra, which are still under development, to support the new platform model. The company plans to commence mass production of its first full-sized SPV, MUSE, in 2027 ⁵³, and specialty vehicles and autonomous logistics vehicles at the end of 2025 ⁵⁴. The partnership with W Motors Dubai Branch includes a commitment to procure 30,000 ⁵⁵ vehicles over five years, focusing on last-mile delivery, multi-purpose autonomous vehicles, and electric utility vehicles. The asset contribution and share issuance agreement with JW International LLC-FZ grants exclusive operational rights to a manufacturing facility in Pakistan with an annual production capacity of 50,000 ⁵⁶ vehicles and access to sales networks for no less than 50,000 ⁵⁷ passenger and commercial vehicles over four years. The joint venture with EVT Aerotechnics (Nanjing) Co., Ltd. aims for global sales and manufacturing of eVTOLs under the "RoVtol" brand, with Robo.ai Inc. contributing assembly facilities, government relations, regulatory approval support, market access, global market development, and R&D funding. A joint venture with DaBoss.AI Inc. is planned to establish an Embodied AI Data Collection Center in the Gulf Cooperation Council region, with the first major project being the deployment of an initial distributed data collection network within the UAE. Another joint venture with Tachyon9 Corporation is planned for the development and operation of a data center facility with a target design capacity of approximately twenty megawatts (20 MW) ⁵⁸ in the Asia-Pacific or Middle East and North Africa regions.

Operationally, the company expects to scale up both its in-house R&D and collaboration with external R&D partners to enhance and commercialize its products and technologies. R&D efforts are focused on vehicle design, product engineering, manufacturing engineering, intelligent seating design, intelligent network, vehicle body engineering, vehicle safety engineering, data and data security, supply quality engineering, CAD, and supply chain management. The company plans to implement full-cycle quality control covering design, procurement, production, sales, and after-sales services, utilizing tools like APQP, DFQ, DFMEA, and PFMEA, and rigorous incoming quality inspection methodology. Vehicle electrical systems are planned to be monitored via PLM system and industry 4.0 methodology for real-time tracking of aftersales repair and warranty issues.

The company's planned capital allocation includes significant capital for research and development, ramping up production capacity, and building sales and service networks. It expects its level of capital expenditures to be significantly affected by user demand for its vehicles and other services. The company has entered into an equity purchase facility with SZOP Opportunities I LLC, providing potential access to up to US$100.0 million ⁵⁹ in newly issued Class B ordinary shares, and a convertible note facility with JAK Mobility Ventures II LLC for up to US$80.0 million ⁶⁰. The 2022 Equity Incentive Plan and the 2026 Equity Incentive Plan authorize the issuance of Class B ordinary shares as equity awards, with the 2026 Plan reserving Class B ordinary shares equal to fifteen percent (15%) ⁶¹ of outstanding ordinary shares as of February 27, 2026, plus Class A ordinary shares equal to fifty percent (50%) ⁶² of outstanding ordinary shares as of the same date. The company does not currently intend to pay any dividends in the foreseeable future, planning to retain future earnings.

The company explicitly flagged several structural headwinds and execution risks to its growth plan. Its ability to continue as a going concern is subject to significant uncertainty due to deteriorating financial condition, recurring operating losses, negative operating cash flows in 2025 and 2023, working capital deficits, and an accumulated deficit of US$904.4 million ⁶³ as of December 31, 2025. The discontinuation of the Rabdan-branded vehicle line has materially weakened commercial prospects without replacement revenue streams. The company is highly dependent on securing external financing, with no assurance of availability on acceptable terms. Unresolved litigation exposures and guarantee obligations create further contingent demands on limited liquidity. The proposed transaction to acquire operational rights to a facility in Pakistan exposes the company to substantial counterparty and regional risks, including volatile macroeconomic climate, energy shortages, currency devaluation, and shifting foreign investment regulations. Delays in establishing new SKD vehicle manufacturing bases could negatively affect production. Dependence on single-source suppliers for certain components poses risks of disruption, increased costs, and potential loss of access to important technologies. Delays in the manufacturing and launch of commercial production vehicles like MUSE, specialty vehicles, and autonomous logistics vehicles could adversely affect growth prospects.

Geographic, regulatory, and macro factors identified as constraints include risks associated with international operations in the UAE and Mainland China, such as unfavorable regulatory, political, trade, tax, and labor conditions. Uncertainties with the UAE legal system and changes in laws and regulations, including the implementation of the Federal Corporate Tax Law effective June 1, 2023, could increase tax expenses. The economies of several markets in the Gulf Cooperation Council region are highly dependent on the oil and gas industry, making them susceptible to price fluctuations. Escalating geopolitical tensions in the Middle East may adversely affect potential government procurement contracts for GHIATH vehicles and expose the company to uninsured losses from war-related risks. Operations in Mainland China are subject to complex and rapidly evolving laws and regulations, including significant government oversight and discretion, recent regulatory developments regarding offshore offerings and foreign investment, and data privacy and security laws like the PRC Cyber Security Law, Data Security Law, Auto Data Rules, and PIPL, which could restrict business operations and capital raising. Restrictions on subsidiaries in Mainland China and Hong Kong on paying dividends or making other payments may restrict the company's ability to satisfy liquidity requirements.

Robo.ai Inc. faces material risks including its ability to continue as a going concern due to significant and recurring operating losses of approximately US$157.1 million ⁶⁴ in 2025, negative operating cash flows of US$5.1 million ⁶⁵ in 2025, working capital deficits of US$116.6 million ⁶⁶ as of December 31, 2025, and an accumulated deficit of US$904.4 million ⁶⁷. The cessation of the Rabdan branded vehicle line has materially weakened commercial prospects. Geopolitical tensions in the Middle East and Southwest Asia, and the Russia-Ukraine conflict, could lead to market disruptions, supply chain interruptions, increased costs due to constrained capacity or commodity prices, and potential production halts, particularly due to China's export restrictions on rare earth elements and neodymium-iron-boron magnets effective April 4, 2025 ⁶⁸. The proposed acquisition of operational rights to a facility in Pakistan exposes the company to substantial counterparty and regional risks, including volatile macroeconomic conditions and currency devaluation. Dependence on single-source suppliers for critical components, such as lithium and other automotive parts, could lead to production delays and quality issues. The global passenger vehicle market is highly competitive, and demand for EVs may be cyclical and volatile, with many competitors possessing greater financial and technical resources. Changes in government policies favorable to EVs, such as subsidies, could adversely affect the business, as evidenced by policy gaps in the UAE that have slowed EV adoption. The company is subject to complex and rapidly evolving regulatory environments in the UAE and Mainland China, including corporate tax laws, data privacy and security regulations (e.g., PRC Cyber Security Law, Data Security Law, PIPL), and foreign investment rules, which could result in fines up to RMB 10 million ⁶⁹, revocation of business licenses, or criminal sanctions for management. The company's D&O liability insurance policy expired in November 2023 ⁷⁰ and was purchased in December 2024 ⁷¹ retroactively with certain conditions, and it does not maintain business disruption or war insurance, leaving it exposed to significant uninsured losses from geopolitical instability.

Management's message to shareholders conveys a strategic pivot towards building a decentralized, AI-powered intelligent asset platform that integrates smart vehicles, robotics, and blockchain, aiming to pioneer an intelligent future with an AI-powered smart mobility, smart device, and smart asset ecosystem. This transformation is ongoing, with a focus on leveraging existing products like MUSE and Astra to support the new platform model. Management acknowledges the significant challenges, including the material adverse effects from the discontinuation of the Rabdan branded vehicle line and the need to secure external financing to sustain operations, given the substantial doubt about the company's ability to continue as a going concern. Despite these challenges, management intends to obtain additional financing and reduce expenditures, having entered into an equity purchase facility with SZOP Opportunities I LLC for up to US$100.0 million ⁷² and a convertible note facility with JAK Mobility Ventures II LLC for up to US$80.0 million ⁷³. The strategic priorities emphasize scaling up R&D, both in-house and through external partnerships, to enhance and commercialize products and technologies, and expanding market presence internationally, initially focusing on the Middle East, Africa, Europe, and Southeast Asia, to reduce exposure to macroeconomic risks.