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DATE
Friday, Nov. 13, 2026
CALL PARTICIPANTS
- Chairman, CEO, and Founder - Daniel O'Toole
- Chief Financial Officer - Piyush Phadke
- Chief Revenue Officer - Bill Karwoski
- Chief Legal Officer - John Ritchison
- Chief Strategy Officer - Neerav Shah
- Head of Marketing - Tasha Jones
TAKEAWAYS
- Revenue -- $39,700, representing growth from $7,450 in the prior year third quarter, driven by expanded utilization at Hancock Regional Health.
- Installation Fees -- $25,000, reflecting initial setup costs for new customer deployments during the quarter.
- Subscription Revenue -- $14,700, generated from the company's recurring mailbox-as-a-service model.
- Net Loss -- $3.7 million, compared with $4.4 million last year, reflecting a lower noncash loss on the conversion of convertible notes.
- Net Loss Per Share -- $3.37, adjusted for the company's 1-for-48 reverse stock split that became effective on Nov. 12, 2026.
- Operating Expenses -- $3.3 million, increasing from $1.7 million in the third quarter of last year as the company invested in commercial delivery and product development.
- Cash and Cash Equivalents -- $1.1 million at Sept. 30, 2026, compared with $2.1 million at the end of fiscal 2025.
- Fair Value Investments -- $1 million, representing new investment holdings as of the end of the third quarter.
- Monthly Cash Burn -- $1 million, representing management's target for future operating efficiency following an August reduction in force.
- Reverse Stock Split -- 1-for-48, reducing total shares outstanding from approximately 68.8 million to 1.4 million to regain Nasdaq minimum bid price compliance.
- Debt Obligations -- A little under $4 million, remaining outstanding under the conversion terms of the Streeterville Capital agreement.
- Fleet Size -- 16 units, currently available for deployment across various use cases and testing environments.
- 2027 Deployment Goal -- 100 ArrivePoints, representing management's target for total unit installations for the upcoming year.
- Private Placement -- $250,000, raised post-quarter through a transaction with an accredited investor.
- ATM Program Proceeds -- $1.3 million, raised subsequent to the quarter end to support ongoing operations.
- Autonomy Partnership -- Three autonomous robots received, as part of a strategic agreement that allows for the supply of up to 50 ground robots to partner locations.
- Hancock Operations -- Four to five scheduled daily pickups, supported by a new installation at the Parkway Building.
- Product Release -- Oct. 7, 2026, marking the shipping availability of the AP 3 plus unit which features onboard vision and edge computing.
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RISKS
- Phadke stated, "As a cash burning company, we are going to be raising cash in the market," noting the necessity of ongoing capital raises to sustain growth before revenue outpaces expenses.
- Phadke noted that "the minimum bid price requirement" remains a deficiency for the company's Nasdaq listing despite resolving other listing requirements through the reverse split.
- Shah warned that complex security protocols like SOC 2 are "proving timely" and taking 60 to 90 days to complete, potentially delaying commercial contract finalization.
SUMMARY
Arrive AI Inc. (NASDAQ:ARAI) reported a year-over-year revenue increase for the third quarter and outlined a strategic shift toward health care, pharmacy, and defense markets. Management detailed the completion of a 1-for-48 reverse stock split and a transfer to the Nasdaq Capital Market as primary steps to regain regulatory compliance. The company introduced a new chief revenue officer to lead sales efforts in Fortune 1000 sectors while focusing on its "Mailbox-as-a-Service" subscription model. Management stated that current cash reserves and recent capital raises are expected to fund operations through the end of 2026 and into 2027.
- The company established a dedicated defense division to explore military applications for its automated exchange technology. CEO O'Toole stated, "The defense division gives us an opportunity to explore another market for the same underlying technology."
- Management is intentionally limiting current deployments to preserve capital for next-generation hardware. CEO O'Toole noted, "We are iterating our next 2 generations of product, the AP 4 and the APX."
- The company completed a redomiciliation from Delaware to Nevada on Oct. 27, 2026, to align with its long-term corporate structure objectives.
- Management reported that the unified offering of robots and ArrivePoints is creating a competitive advantage. CEO O'Toole stated, "The unified solution is what is rising to the top."
- The company expanded its testing into commercial office settings with a two-unit installation in Central Indiana on Oct. 29, 2026.
- Management confirmed that post-quarter capital raises included $1.3 million through its at-the-market program to bolster liquidity.
INDUSTRY GLOSSARY
- ArrivePoint: A proprietary, climate-controlled smart mailbox unit designed for automated drone and robotic deliveries.
- AP 3 plus: The latest hardware iteration of the ArrivePoint featuring edge computing and onboard vision for package tracking.
- Mailbox-as-a-Service: A subscription-based business model where customers pay recurring fees for the use of automated delivery infrastructure.
- Reverse Stock Split: A corporate action that consolidates existing shares into fewer, more valuable shares to increase the market price per share.
- SOC (Systems and Organization Controls): A suite of security and compliance reports used by organizations to verify internal controls and data protection.
- ATM Program (At-the-Market): A method for a company to raise capital by selling shares directly into the secondary trading market over time.
Full Conference Call Transcript
Operator: Good morning, everyone, and thank you for joining us today. On the call are Daniel O'Toole, Arrive AI's Chairman, CEO, and Founder Piyush Phadke, Chief Financial Officer Bill Karwoski, chief revenue officer, John Ritchison, chief legal officer and Neerav Shah chief strategy officer. Other members of the leadership team are also here to answer questions during the Q&A portion of the call. The earnings press release issued this morning is available in the Investor Relations section of the company's website at investors.Arrive.ai. Before we begin, please note that today's remarks may include forward-looking statements about future financial results, operations and performance.
These statements are not guaranteed and are subject to risks and uncertainties that could cause actual results to differ materially. We encourage investors to review the risk factors in Arrive AI's SEC filings, which are available on the company's website. I will now turn the call over to Daniel O'Toole.
Daniel Steven O'Toole: Thanks, Shannon. Good morning, everyone. This is Daniel O'Toole here. We will keep our prepared comments short so that we can spend most of the time on answering questions. 1 development I am particularly pleased with is our growing relationship with our great partners at Hancock Regional Health. Hancock expanded its use of ArrivePoints during the third quarter and added the connectivity of a second building which drove our third quarter revenue. That expansion shows how we plan to grow. Demonstrate the value of our technology, and then build on that success across our customers' facilities. It also gives us a reference customer as we pursue other hospitals and health care systems.
They have been great partners in opening up their facility to showcase what we have going at their facility, and we are really proud of that. Revenue remains modest but expanding as we would expect relationships with existing customers is an important part of building a recurring revenue base. With that said, I will also be covering broader progress with customers and partners, Piyush, our CFO, will then cover our financial results. Liquidity, and the steps we have taken to address our Nasdaq listing requirements. Nirav will then provide an update on the defense division that we just recently formed. Bill Karwoski, our recently appointed chief revenue officer, is here and will introduce himself as well.
The first part of our prepared remarks from Piyush and me will be delivered using the AI assisted voice as always. Nirav and Bill will then speak live. We will tell you when we switch back to live. Now let me add some more detail on the expansion at Hancock. We added a new ArrivePoint at their Parkway Building. to work with the hospital's existing delivery robot, supporting 4 to 5 scheduled specimen pickups a day for delivery to the laboratory with on demand service for urgent specimens This puts our technology to work in another part of the hospital's daily operations.
And for the first time, it connects a separate building on that work, we are expanding our partnership with Autonomy, the autonomous delivery robot company supporting deliveries at Hancock. As part of our recently announced strategic investment in autonomy, we received 3 autonomous robots, and entered into a supply agreement that contemplates bringing up to 50 ground robots to our partner locations. The partnership gives us a way to bring these technologies together at additional locations extending the approach already in use at Hancock. Outside of health care, on October 29, we announced the installation of 2 ArrivePoints AP 3 plus units in Central Indiana marking our first installation in a commercial office setting.
This will help us understand how people use a delivery point in their daily routines and refine our approach. As we pursue opportunities in the commercial office market. Since July, we have also announced several initiatives that expand the potential applications of ArrivePoint technology. In specialty pharmacy, we signed a nonbinding letter of intent with LifeSpan Pharmacy to explore a drone pharmacy delivery program. In manufacturing, we announced a partnership with DXC Technology to bring Arrive Points into large manufacturing campuses. These give us opportunities in 2 distinct markets. We are also working with Motovolo on automated drone delivery. In parallel, we are in early discussions with Purdue University about testing ArrivePoint technology with robot platforms on campus.
These initiatives with LifeSpan, DXC, Motovolo, and Purdue are at varying stages of development and do not currently include revenue commitments. But they broaden the potential applications of our technology and complement the revenue generating work already underway at Hancock. We are also in active conversations with a number of organizations including venues and local governments, We are not naming them today as we treat an agreement as firm only once it is signed and we will announce each 1 when it is. Supporting these efforts is the continued development of our ArrivePoint technology. The AP 3 plus became available for shipping on October 7, adding edge computing and onboard vision.
These capabilities allow the unit to detect packages and track them through the chain of custody, supporting the secure automated handoffs at the center of our delivery model To date, we have 16 units in our fleet available for deployment. With that, I will hand it over to Piyush.
Piyush Phadke: Thanks, Daniel, and good morning. I will start with the third quarter results and liquidity, then cover our NASDAQ listing. Revenue for the third quarter was $39,700, made up of $25,000 in installation fees and $14,700 in monthly subscriptions, compared with $7450 in the third quarter of last year. Net loss was $3.7 million or $3.37 per share, compared with $4.4 million or $6.39 per share in the third quarter of last year. Per share amounts reflect the recently announced 1-for-48 reverse stock split. The smaller loss mainly reflects a lower noncash loss on the conversion of convertible notes. Partly offset by higher operating expenses.
Cash and cash equivalents were $1.1 million and investments at fair value were $1 million at September 30, compared with cash and cash equivalents of $2.1 million and no investments at December 31, 2025. Total operating expenses for the quarter were $3.3 million compared with $1.7 million in the third quarter of last year. We are managing spending carefully and focusing our resources on our commercial delivery and product development. During the quarter, we streamlined our staffing and cost structure to better align with those priorities. Since quarter end, we completed a $250,000 private placement with an accredited investor and raised $1.3 million through our at the market program.
Based on our current operating plan, we expect our available cash and investments to fund operations through the end of the year and into 2027. On October 27, we completed our redomiciliation from Delaware to Nevada, which we reported on Form 8-K. Now turning to our Nasdaq listing. On October 22, we announced Nasdaq's approval of our transfer to the Nasdaq Capital Market. Effective October 23. The transfer resolves 2 listing deficiencies related to the market value of our listed securities and publicly held shares. Leaving the minimum bid price requirement as the remaining deficiency. To address that requirement, we announced a 1-for-48 reverse stock split on November 10. The split took effect at 12:01AM on November 12.
And our shares began trading on a split adjusted basis that morning under the same symbol, A-R-R-I. This reduced our shares outstanding from approximately 68.8 million to approximately 1.4 million. The reverse split is intended to help us regain compliance with Nasdaq's minimum bid price requirement, which requires a closing bid price of at least $1 for a minimum of 10 consecutive business days. Throughout this process, our focus remains on building the business, managing costs, and growing revenue.
Daniel Steven O'Toole: Nirav, over to you.
Operator: I will now turn it back over to Arrive.
Neerav Shah: Thanks, AI Daniel, and thanks, AI Piyush. We are back to speaking with you live. On October 12, we announced the formation of the Arrive AI Defense Division which I lead. Explore applications of our technology in military defense and national security markets. The idea builds on what we already do. And ArrivePoint provides a secure place where a drone or robot can be stored, charged, and deployed. And where goods can be exchanged without requiring 2 people to be present at the same time. We believe those same capabilities apply to defense applications, including the secure storage and launch of unmanned systems including counter UAS.
Our core business remains focused on commercial delivery, The defense division gives us an opportunity to explore another market for the same underlying technology. Daniel, back to you.
Daniel Steven O'Toole: Thanks, Nirav. I am happy to introduce today for the first time Bill Karwoski. Our chief revenue officer. This is the first time that we have had a CRO chief revenue officer, and I want to note that as a huge positive because that shows our belief in the fact that we have revenue significant enough to support the formation of this role. And I am counting on you, Bill, to bring it home and get us over to where we really want to be doing some big things here. So welcome to the team. And go take it over here, man.
Bill Karwoski: Great, Daniel. Thank you. Thank you so much. Hi, everyone. I am Bill Karwoski. I too am an investor in AI. And recently came on board, as Daniel mentioned, as chief revenue officer. I have got skin in the game, and I really want to see this work just as, you know, everyone in the room and everybody out there does as well. A little bit about me. I spent the last 40 years leading sales teams and working with Fortune 1000 companies in health care, pharma, manufacturing, and retail.
The 1 thing that is kept me going all these years is delivering results you can actually measure both for the clients and for the companies that I have worked for. And that is why I am here. I am working with our team to target the right companies with the right solutions and drive revenue we can actually deliver on, not just talk about. Right now, that means health care systems, pharma, and life sciences is primary. that is where we have got momentum, clients, and real opportunities in motion. Preparing our secure delivery points with our robotics partner to solve everyday problems like lab movement, internal logistics, and keeping chain of custody tight on compliance sensitive materials.
Our job is to turn this into revenue now while we build our bigger pipeline in 2027 for all of us. Onward and upward. Right.
Daniel Steven O'Toole: Thanks, Bill. To wrap up, this quarter, we grew revenue through our expanded relationship with Hancock and advanced our product and partnership efforts. Since the quarter end, we have also launched our defense division and taken steps to address our NASDAQ listing requirements. Our focus remains on building on that progress while managing our resources carefully. Thank you for your support and for your questions. I will now turn it over to Shannon to bring on analyst questions. Go ahead, Shannon.
Operator: Thank you. Now we will take questions from research analysts. To ask a question, please press 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1-1 again. Our first question comes from the line of Jack with Maxim Group LLC. Your line is now open.
Jack Codera: Hi. This is Jack Codera calling in for Jack Vander Aarde. Thanks for taking my questions. it is good to see things keep progressing. You know, just overall, I think it would be good Can you give us an update on how many Arrive points you have in the field then given this, you know, 50-ground robot kind of pipeline, what does your total pipeline of deployment look across all your agreements, and how should that kind of get deployed across the next maybe 18 months?
Daniel Steven O'Toole: Thanks for the question, Jack. This is Daniel O'Toole. I will take that 1. As we mentioned earlier in the narrative, we have at our disposal currently 16 ArrivePoints And what we are doing is while we have units that are ready to go on hand, we are also iterating our next 2 generations of product, the AP 4 and the APX. So to be prudent, and cost effective, what we are doing is we are doing limited deployments for different use cases with ArrivePoints and we are taking those learnings and we are splitting them into the development of those next 2 generations I mentioned. So while we. The numbers are very low, that is by design.
We do not want to put the manufacturer of towing units at a high cost and have those be obsolete going out the door. So we are doing several different use cases. You may have seen we have recently done commercial deployments, our first residential deployment. We were doing a lot of health care and manufacturing, and we are getting great learnings, and we are looking to really leverage that starting in 2027. So that.
And then on the 50 robots what we have learned is there is a huge differentiation in the market for both robots and ArrivePoints when they come together as a unified offering, it is a unified solution, and that is creating a big difference between the offerings that we have in this case with autonomy versus other robot stand alone companies going out of making their offerings or ArrivePoints going out by themselves. The unified solution is what is rising to the top, and we are excited about that. that is why we are able to commit to a large number in the context of you know, just having 16 ArrivePoints right now.
So I think that bodes well for the future. We are seeing a lot of traction with major companies that we are not at liberty to release at this time, but it is an exciting moment. And stay tuned for more updates on that.
Jack Codera: Okay. that is helpful. And then, you know, just touching on the kind of streamlined cost structure. Is this quarter's OpEx a good way to look at what the expected go forward OpEx is? Or maybe how should I look at cash burn on kind of a quarterly and per year basis?
Daniel Steven O'Toole: Thanks, Jack. I have Piyush here to take that 1, our CFO. Go ahead, Piyush.
Piyush Phadke: Sure. Hey, Jack. Thank you. Thank you for joining, and thank you for your support. So I would say that the cash burn and the OpEx that is in our Q3 results is actually probably a little higher than what it is going to be going forward, particularly in Q4 and beyond. You know, before I joined our cash burn was roughly kind of 1.2 to 1.5 per month. We were. We wanted to get that down below 1 or around 1. You know, the reduction in force that we announced in August helped us get to that state. So our goal is to.
When we think of cash burn, our goal is to be, you know, try to be around $1 million a month, if not lower. And I do think for Q4, we will be around that, and that is what we wanna try and continue to optimize going forward.
Jack Codera: Okay. that is helpful. Thank you for taking my questions.
Operator: Thank you. Our next question comes from the line of James Kisner with Water Tower Research. Your line is now open.
James Kissner: Hi. Yeah. Thanks for taking my questions. So you know, you have mentioned that you have got kind of strong inbound interest. Can you say more where it is coming from and, you perhaps kind of which markets are standing out there?
Neerav Shah: Yes. Yeah, thanks for the question. So, we are seeing a lot of interest in at a partnership level. So, you know, we had mentioned DXC as a partner, about a month ago or so. So MSPs, people that cut across different industries, and as we will talk about, as we have been talking about, health care and pharma manufacturing seem to be really the initial places we are seeing a ton of traction. that is Nirav Shah, chief strategy officer.
James Kissner: Thank you. Yeah. that is helpful. And, know, she's obviously been scaling costs. She's you know, can you see more kind of, like, you know, where you are kind of where those costs are kinda coming from. And, you know, you are gonna invest more in the future. I mean, you said you are gonna invest in commercial, obviously, but just some more detail there on how you streamline your costs.
Daniel Steven O'Toole: Yeah. This is Daniel again. Thanks for that. I am going to let Piyush handle this, but I do wanna say 1 thing. You know, you save a dollar, you make a dollar. And, you know, we are looking at every front of this business. We recognize that we are very early and very low on the revenue curve. And frankly, this is what we budgeted from day 1 as a public company. We knew we were not gonna be cash flow positive day 1. We knew we were not we were not gonna be cash flow neutral day 1. We are iterating in a new space. Developing new technology. there is a cost to that.
And so, you know, what we try to do is be very judicious about every dollar we spend. Every dollar that comes in is linear to development. We are really proud of that. And so if you save a dollar, you make a dollar. I think we have got a nice tailwind right now. We are beating budget on our expenses. And I am and I am happy to report that. But, Piyush, why do not you jump in and take it from there, man?
Piyush Phadke: Yeah. Thanks. Thanks, Daniel, and thanks for the question. Yeah, so just to talk a little bit more about I mean, you know, we did highlight this in our press release in 8 ks. We did have a significant reduction in force in August. That was undergone by management to just look at where we can have the most effective team and how do we, you know, everyone's become more productive. And so that was a key component of it. We also looked at every vendor relationship that we had looked at things that were needed, not needed, maybe some excess and just be really efficient in what we are spending our capital on.
Because as Daniel said, obviously, gonna spend money on, you know, on our salaries and benefits. But most importantly, we wanna spend money in research and development and business development Bringing Bill on is a big part of that. And as we continue to grow, our revenue has increased. We continue to, you know, as we continue to increase revenue, obviously, that is gonna help us from a cash perspective. So that is how we look at it. it is helpful.
James Kissner: Just 1 last 1. Just, on your launch of the defense division, maybe just kind of say more about that. You know, why is. You know, what led you to do that? Why is now the time to do that? Can you say, kind of, talk more about the sales cycle on those opportunities.
Daniel Steven O'Toole: Yeah. Thanks for that too, James. You know, 1 of the things is we are not super focused on what we think the market is We are super focused on exploring every opportunity. And what we have seen is a lot of opportunities in the defense industry, not only in The US, but worldwide, think it is a low hanging fruit We think what we are doing and the technology we are developing lends itself very well. To that. And there is also opportunity to bring non dilutive funding into the company. And when you are looking at our share price where it is, that is important to all of us as shareholders.
You know, we wanna maximize opportunities with capital and at the most opportunity to give away or dilute ourselves. So that is something that is really interesting to us But I will turn it over to Neerav Shah who has experience in the defense industry and government contracting that is what made him the natural choice Not too much that he comes out of the drone industry. Go ahead, Nirav.
Neerav Shah: Yeah. Thanks. Thanks, Daniel. Thanks, James. So just to address, I think there was a couple of questions in there, James. Daniel had mentioned some of the experience we have So, you know, we have spent the last 5 years developing a technology that is outdoors climate controlled, has a communication layer, and is able to essentially work in the wild. And so we think that is gonna really apply itself well. In the in the defense space. So regarding the sales cycles, I will talk a little bit about that.
We have already had the experience of showing our technology and proving it out, and we had over 12 countries that we have talked to, so including the United States of course. And regarding sales cycles, we are seeing what we call FMS or foreign military sales as a shorter cycle, things that they can put in quicker. But, you know, again, looking at the US and abroad, we are seeing the foreign sales is more likely to happen fast. US may take a little bit of time, but once we prove that out overseas, I think that is gonna be a really effective tool for us to show domestically. And I will just touch quickly on my experience.
So I had a military contracting business where I made electromechanical assemblies for Crayton Naval Base. Raytheon, among others. And so I did that for 10 years. So very experienced in that world. And so I am happy to kind of dust off my knowledge there and bring it to Arrive.
James Kissner: that is very helpful. And, you know, welcome to the new members of the team, Bill and Piyush. Thank you.
Operator: that is all the time we have for phone questions. I wanna hand the call back over to the Arrive team for online questions.
Tasha Jones: Okay. This is Tasha Jones. I am head of marketing here at Arrive.ai. I am gonna read the questions off so that the team can answer what we have received from the public. First question is from Darren and Nathan. They ask Can you explain in plain terms how the 1-for-48 reverse split works for a shareholder.
Daniel Steven O'Toole: Great. Thanks guys for asking the question. Yeah. A reverse split is not the way you wanna typically be splitting. This is Daniel here. You know, when we. A lot of you are legacy investor community, a thousand shareholders before we went public. 1 of the unique things we did through our crowdfunding days, we did a 2-for-1 split, you know, I would say the right way, forward split during the crowdfunding campaign, and that is something that I think has rarely. If ever been done before other than by us. So that is, you know. And as an old investor myself, that. Those are the kind of stocks I wanna invest in.
Unfortunately, we had to go the other way this time. As many of you know, through our correspondence that we put out, you know, we hung on by our fingernails hoping to not have to do a reverse split. And we were getting down to the wire on the time, and so it became a binary choice. Do we do the reverse split and stay enlisted on Nasdaq, which is very important to all of us? Or do we just go over the cliff and not do it? And it became evident at the end of the day here that we were not gonna get organically our share price above a dollar on its own.
So we end up having to facilitate a reverse split. And then further to that, you know, what is the rate I am now You know, the 1 for 48, is a function of where we closed on a certain day and what that would drive our stock up to on the open. So about 3 or 4 days ago, I cannot remember which exact day it was, but we made the determination to do the 1-for-48, 48, and that would land us in the, you know, mid-$2 to $3 range.
As it turned out, we ended up opening yesterday at $2.83 a share. that is important because we need to be above $1 a share for 10 days to regain compliance on Nasdaq. We had 3 deficiencies as you guys may remember. We have resolved 2 of those in this reverse split, it puts us in a position to resolve the last 1. So happy to report with 10 days of trading above $1, we should be back in full compliance, which I think will be a good tailwind for the company and a proud day then we are just gonna have to roll up our sleeves and move forward positively like we do every single day here.
So thanks for that question. 1 analogy that I like to give is people say, you know, that diluted me or changed my value. It does not change your value. If you had 100 pennies and I said, Hey, can I get 100 pennies from you? And I will give you a $1 bill. that is essentially what we did here. We consolidated the shares and got the share price, the consolidated price up higher. So not a fun thing to talk about. We have owned this the whole way. We have addressed it proactively as a possibility. Transparency communication are things you are always gonna get here.
You may not always like what you hear, but it is always gonna be the truth, and that is what we stand by. So thanks for those questions. What else we got?
Tasha Jones: Thanks, Daniel. That also covered our second question from Thomas and Nathan about after the reverse split, what protections exist? Against further dilution, including the Streeterville Capital. We will go ahead to question 3. What from Thomas, what obligations remain under the Streeterville agreement that could result in more shares being issued?
Daniel Steven O'Toole: Yep. Thanks for those questions. I am gonna ask Piyush, our CFO, to answer that. Piyush?
Piyush Phadke: Sure. Thanks, Thomas, for the question. Yeah. So, you know, we entered into this Streeterville agreement at the time of, you know, prior to our IPO last year. We have drawn on that agreement historically, and they have redeemed shares As we stand right now at the end of Q3, we have a little under 4 million outstanding under the agreement. In the same conversion terms as before. You know, as we mentioned, we do have additional opportunity to draw more on that agreement, but that is. We do not anticipate doing that. Because we have seen you know, we do not need that capital.
So yeah, it is it is the same. it is on the same terms as it was last quarter.
Tasha Jones: Okay. So, on question 4, this 1 is from Nathan and Thomas. Does management expect to issue additional shares after the split and what is the company's general approach to managing shares as it grows?
Daniel Steven O'Toole: Yep. This is Daniel. I will take that, and then I will ask Piyush to chime in as well. Yeah. Obviously, going public as a low to no revenue company requires capital. It has to come from somewhere. And when you when you acquire capital, and you are pre revenue and you are not bringing anything in the door other than investment, it is obviously gonna be dilutive. You are gonna be issuing shares And that is what we have done historically. And even when we did crowdfunding, that is how we facilitated and perpetuated the company. So it will be a part of it.
You know, if you wanna get to the likes of a Google or Amazon or Nvidia, you know, there is a lot of, you know, shares that are issued between now and then, you know, even myself as a super majority holder in the stock when we started, I have been diluted significantly And, you know, I hate to say embrace the dilution, but I have kinda got my mindset to that point because if I really wanna grow this and get this to where it needs to be, it is it is gonna be inevitable.
So, you know, if you watch Shark Tank, and I think Mark Cuban says, would you rather have a 100 you know, 100% of a grape or small percent of a watermelon, and I think I think that is a good analogy and that is kinda how I look at things. So I have embraced the dilution because I know we are we are headed to some bigger things here. And I wanna thank everybody for taking this journey with us and staying the course and being true. You know, it is fun. I would say, you know, I do not know what I wanna say. You know, it is it is tough when. But are great, everything is great.
Right? When things are bad, I think that is when you earn your medal. You know, nothing has changed here. We are we are doing this every day. We are coming with our sleeves rolled up. We are kicking butt. We have got new iterations every day. Today is the best day this company has ever been. If do not look at the share price and you come in here every day, it is better every day than it was the day before, and I am focused on that. And I have not lost any momentum or any drive or enthusiasm And I hope that you guys have not either. So, anyway, just stop here from talking.
Piyush Phadke: Sure. Nathan and Thomas, thank you for the questions. Yeah. I mean, listen. As Dan mentioned, when the company went public, there was no revenue Now we are slowly, you know, getting some revenue. We have. It had a revenue increase this quarter. We have made some key hires to help that out, and Bill gave his background. Listen. We are focused on generating revenue. We know for small cap companies, revenues came. Have revenue that leads to growth and eventually leads to cash flow and needs done, all those all those great things that some of the very mega companies that Daniel mentioned has.
So you know, as a as a cash burning company, we are going to be raising cash in the market. I mean, that is. We have to do that because we want to sustain, you know what, we want to sustain. We wanna build a business. We wanna grow revenue. Eventually, revenue growth kind of outpaces that. You do not need to raise as much capital. So listen. We are gonna be very opportunistic. We are also gonna be very you know, cognizant of our investors. We do not wanna do something super diluted. We did a smaller deal. In October, a small PIPE deal, and then, you know, we had. We did have some ATM conversions.
You know, the way we look at it is, you know, the ATM is probably our most efficient use of capital. Right? It. it is it is very low fee. there is no warrants. there is no kind of bells and whistles attached to it. But I mean, listen, we are always going be opportunistic to do a deal that is good for the shareholders and good for the because we wanna keep growing the business and keep growing revenue.
Tasha Jones: Okay. The next question, question 5. This 1's also from Nathan. Does the company plan any later forward split and would 1 bring back the earlier share count?
Daniel Steven O'Toole: Nathan, thanks for that question. I. You know, I think I mentioned just organically in the earlier question. You know, my mantra, my mind's mindset is to always be splitting the shares the right way forward. that is how I like to invest, and I love to see that. Unfortunately, you know, nobody hates more than I do what we just did, and I am sorry again to everybody.
But, you know, when we get to a point where we are cranking and doing some great things, our share price is appreciating, We wanna we wanna obviously look to not only restore back to everybody's, you know, making them whole on the share account, But, you know, our goal would be to go further beyond that. And these are forward looking statements, you know, just wanna give you kind of a glimpse into how I wanna run this company and what my vision is. You know, I want the share price to go up split. Go back up, split, and have that be a recurring thing, not the opposite.
You know, we are finding our footing as a young company right now. We are finding product market fit. We are creating a brand new paradigm in an industry that people really even know about. So it is a lot to tackle. But once that switch flips, I think you are gonna see it is gonna flip in a big way, and that is what we are really excited about. So thanks for your question. And back to us, what else we got?
Tasha Jones: Number 6 is from Brandon and Thomas. They ask how many ARRIVE points are currently generating revenue from paying customers?
Daniel Steven O'Toole: Yeah. Thanks. Thanks. I think we kind of alluded to that earlier too. You know, we have in our deepest, we have 16 units right now. Those are interchangeably put out at different variables, different use cases. Our 1 static use case is Hancock. And, you know, we refer to them a lot because we are great partners. And they have stepped up big time. They have worked through issues that we have admittedly had as you are trying to build a bulletproof product. You know, I always say you are judged by your failures, not your successes. And, you know, could not have asked for a better partner to withstand those trials and tribulations.
And that is 1 of the reasons that we are doing these use cases on a limited basis. We are putting them out. We got internal people that are able to look at all the different interactions that we have in every use case. So we have got video, how people interact with our units ergonomically, practically, functionally. You know, the standard needs to be every unit needs to operate with the reliability and redundancy of a 47 with 300 people on it. It needs to work every time, not some of the time. The other standard that I wanna see I am not the biggest tech guy in my in the world. I admit that.
And I want the standard to be. If I walked up to an arrive point, I know what it was. I could quickly figure it out and then know how to use it. And that is what I want the standard to be. And so these are things we are working at. We do not get ahead of ourselves on spending a ton of money and putting out units that are can have 1 little tweak that could change them in a way that we have to redo everyone. That would not be a good custodian of the dollars that we are spending to do these. See, that is why we are being so deliberate.
Everything's built on a strong foundation, and then we could build it big from there. So that is our strategy.
Tasha Jones: Okay. Question 7, Thomas asks, what are the company's recurring revenue number of paying customers, and cash requirements today?
Daniel Steven O'Toole: Yep. I will take that quickly, and then I am gonna hand piece the But I think what I just said in the previous question kinda speaks to that. You know, we got lumpy income in and I mean. What I mean by that is we will take it on a new customer and then there would be a deployment cost that is. that is a little lumpy at the beginning and then spreads out over the recurring part of it. You know, it. I think speaking to the fact that we are not giddy to get a bunch of units out there that are gonna create more issues. Human resource requirements, capital requirements for support, all that.
We wanna get this thing standardized and we are standardizing every part of it from pricing to reliability to implementation, installation. there is a whole facet of things that come with our rollout in SOW, and all these kind of things. But, Piyush, take it from my mouth.
Piyush Phadke: Yeah. So, you know, I got a couple questions from the research analyst regarding, you know, cash requirements. And cash burn. We feel pretty good about our cash situation right now. We are fully funded through 2027. 2026 and into 2027. We had cash on the balance sheet at the end of Q3 and subsequent to that, we did 2 capital markets transactions 1 was a small $350,000 investment in the company. And then raised about $1.3 million in our ATM. So we are gonna be opportunistic raising cash. We know that we do. You know, from a cash burn perspective, we kind of target, hey.
We wanna try and be around $1 million a month, so that is $3 million a quarter. We are always working to be more efficient in terms of how can we know, how can we reallocate vendor cost, vendor cost expenses, things like that. So listen, we wanna we wanna save as much money as possible and raise capital to help this business grow. We wanna deploy more RidePoints, get our technology even better, have more customers, And, you know, that is how we are doing kinda targeted moves like bringing Bill on board.
Tasha Jones: Okay. Question 8, Thomas asked, how many announced partnerships and pilots have become recurring commercial contracts?
Daniel Steven O'Toole: Yep. Thanks for the question. I keep hearing an overlying theme of recurring revenue. And, obviously, when we started the company that recurring revenue is something that we wanna have. We know the market really celebrates that and, you know, it is better than a 1-and-done kind of thing. So, you know, our pricing strategy is based on our recurring revenue model. Now having said that, we are playing with other pricing strategies, coupled with the rev share revenue sharing with partners, You know, 1 might be just a simple model of pay per delivery. And, you know, there is different. And this is part of the testing that we are doing. So we can consistently roll out.
And we are trying to. it is interesting because in scenarios we are finding that the users that are really embracing ArrivePoints are the highest volume users which makes sense. But if you went to a pure delivery strategy charging per delivery, the revenue in margin numbers can really could even be bigger than we envisioned. So that is interesting to us So these are some of the things that we are thinking about. You know, a lot of you answer the other side of the question here.
Neerav Shah: Yes. Thanks, Daniel. So 1 of the things that we are really doing a lot of learnings on is dealing with large organizations. there is a lot of complexities. So I will give you an example. We are working with a large health care company, put some units in there, a large hospital, I will say, and we are also working with a pharma company. And 1 of the things that we have to deal with is something called SOC. So it is not socks like Sarbanes Oxley. But it is called SOC, which is systems and organization controls.
So these are things like security testing, penetration testing, and Doug Highline on our engineering team is just doing a wonderful job balancing that. But these things take time. And we are we are learning that it is not, you know, we can agree to a price. We can agree to a date. But, you know, the security stuff, the back end SaaS stuff, all the software stuff, Doug's working on doing a great job, but we are just realizing it is taking time. These are, like, 60, 90-day sprints that we are trying to get this stuff done. But again, with, SOC 2 onboard, it is just proving timely, taking a lot of time.
And so that is just something we deal with.
Tasha Jones: Thanks. And question 9 from Brandon. What measurable revenue milestones does management expect to reach in 2027?
Daniel Steven O'Toole: Thanks, Brandon. You know, I think we have announced some public milestones that we put out over the past, but in 2027, yeah, our goal is gonna be to put 100 ArrivePoints out. We think that we have a clear path to that. Both in supply and partnership opportunities that we see on the horizon right now, and that is what is really exciting to us. You know, I think there is gonna be a moment where the paradigm of where we are shifts 180 degrees where we are gonna be thinking how do we manage the growth opportunity that is in front of us? And I am excited about that for when it gets here.
Think that we are gonna have some really blue sky opportunities in front of us. We think it is gonna be a great year coming into 2027. And I would say stay tuned because nobody wants to share things faster and quicker than we do with our shareholders. And that. that is not just the good stuff. I think you guys know that we are not a vanity company where you can go out and say, hey. We wanna give you this great news and then disappear. We own everything. Our commitment to our shareholders is you are always gonna hear the good, the bad, and the ugly here first. You are not gonna hear it on the street.
You are gonna hear it here And that is the company I wanna invest in, and that is the paradigm. That we set here every day. How do we be the company that we would wanna invest in? that is an important part of it. And, you know, I know I hear a lot of our shareholder. Our legacy shareholders, I hear your frustration. I am right there with you. I am not determining the market The market determines it, and it. it is it is confounding because what I would say is every time I think I put out something that is great news, it is construed the opposite way.
Every time I think something is bad, it is even worse. So it is hard to win I know within these 4 walls, every day we are performing. We are doing great things. We are astounding people that come in here. They cannot believe the tech all the iterating, all the new advancements. I mean, there is so many things we could be doing. it is it is almost overwhelming, but it is exciting too because it shows how open the market opportunity is for what we have and what we are doing here.
Now what I also want to say is to kind of conclude the call here, You know, When we went public, in May 2025, subsequently had our first earnings call. And I wanted to set kind of a tone of how we do earnings calls and, you know, we are an exceptional company. I believe that. I call it, so we, the people, story. We had 5000 investors on our cap table before we even went public, which is just unheard of. I always thought that was a validation of how good the idea was because people invest in things they see themselves being able to use. We had a lot of great investors and I love all you guys.
Whether you lost faith in us or not, I celebrate that you were here, and I do not hold that against you. But when we started out I said, you know what? I wanna do something to represent the spirit of this company. So I told this kind of a silly damn joke. For each earnings call, and I have not broken that streak. And so today, when this earnings call came about, I thought to myself, you know, we are we are. We have 3 deficiencies. Our share price is down. We did this terrible split. I mean, how in good faith can I do that Are people gonna drown on me for that?
And I thought, you know what? I am not gonna buy into the gloom and doom. I am going to be the same company here because that is what we believe every day. We are not doing the thing. We are happy. Excited, and we are iterating every day. So I just wanna leave you with this. When does a joke become a dad joke? Does anybody know the answer to that? I do. When it is a parent. You get it? I know. Come on. So that is Arrive AI We love you guys. We are going forward in a big way. I hope you are with us. Historically, people sell stock at the very low.
And that is a very long time to do it. I do not. You know, I will say what goes down must come up. So we are gonna we are gonna rock into this thing. So thanks guys for being with us. I am gonna give it back to Shannon because I know you wanna hear her. More than me. Shannon, are you gonna take it back? Shannon, go ahead.
Operator: Thank you. This concludes today's conference call. Thank you all for your participation. You may now disconnect.
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