Virtuix Holdings Inc. Class A Common Stock LD Micro 20th Annual Main Event Conference

Thanks so much. You are so welcome.

Thank you. Morning, everyone. Thanks for being here. My name is Jan Goetgeluk. I am the founder and CEO of Virtuix, and we are in the field of full-body simulation, and we do that with our core technology, which is called the Omni. The Omni is an omnidirectional treadmill that lets you walk and run around in 360 degrees inside virtual worlds. We do that for gaming and entertainment on the consumer side, as well as for defense, training and simulation, and other markets. Let me start with showing you a quick video of our core technology and our latest treadmill, the Omni One, and this specific demo is geared towards gaming. Let us take a look. All right. That is Omni One. That is our latest treadmill. Full freedom of movement, crouching, kneeling, jumping, going sideways, backwards, all in 360 degrees. Just a couple of highlights about us.

We are based in Austin, Texas. I am personally not from Texas. I am from Belgium originally. Came to the U.S. for my first job out of college. Decided to stay. I think the U.S. is still the best country in the world for entrepreneurship, for building a company. Out of business school, I worked at JP Morgan for a few years as an investment banker. I thought virtual reality was going to be the next big thing, and I thought the biggest problem that had not been solved yet was how to move around inside the virtual world. I thought you need something like a treadmill, but in 360 degrees, an omnidirectional treadmill, and there was nothing that existed, so I started working on that. Eventually, I left my job at JP Morgan to bring the Omni to market and to start Virtuix. Here we are today. We are public now.

We went public on NASDAQ in January with a direct listing with Maxim. Our share price has come down quite a bit since then, I got to say. Probably a couple of reasons for that. One, sort of a natural recalibration between our private company valuation and public company valuation. As a private company, we raised about $50 million from investors, including big names like Mark Cuban, who invested three times over various rounds, several venture funds, family offices, you name it. Our lock-ups came off in July, 15 million shares added to our float. Anyways, that all resulted in a lot of pressure on our stock price, but I think that is all behind us now. Look, we are at a bottom price now. Could be a good entry point for people to get into our stock and join us. Our technology has three core markets.

One is the consumer market with our Meta product, and I will talk about that. One is defense, training and simulation. We already work with all four major branches of the U.S. military: Navy, Marine Corps, Air Force, and the Army. We use AI to very quickly create virtual worlds based on camera footage and AI-driven 3D reconstruction, and I will show a video about that. Then we have a very strong IP portfolio. Just yesterday, we got a notice for our 27th patent that got allowed, and we keep adding to our IP portfolio. Three core markets, as I mentioned, consumer defense and then enterprise. If you think about industrial training, safety training. We sold units to Tesla, NASA, and so forth. All markets, we approach it with, okay, hardware first, an upfront purchase price for the hardware, but recurring revenues from software.

Software licenses, content, simulation work, and so forth. I will talk about the consumer market first. We just launched a product with Meta, Omni One for Meta Quest headsets. Off to a great start. We have been reporting 3x order growth. Our orders are up threefold since launching that product with Meta, so strong growth there on the consumer side. Meta has sold about 20 million or so Quest headsets, and by recent estimates, they have about 6 million active users, who now for the first time can use our product, the Omni, directly with their existing headset and games. So strong growth there. Great start to our partnership with Meta, and there is still so much more we can do with them from a marketing perspective. We are only scratching the surface. It is gaming for consumers, but it has that fitness element. I want to stress that.

It's gaming with fitness and exercise benefits. You're running, you're active, you're burning calories. One of our users lost 40 pounds in four months using our product every day. If you like gaming and you'd like to be more fit, but you don't like to exercise, this is a product for you. We work with all the big games, all the big VR titles, or at least almost all of them are compatible with our product. On the consumer side, it's a DTC model, direct-to-consumer model. It is an upfront purchase price for about $2,500 per system, more or less, depending on the SKU. Not for everybody, but it's the price of a gaming PC. It's the price of high-end connected exercise equipment. It's that type of product. With Affirm, it becomes a monthly payment, about $90 a month or so.

On that upfront purchase price, we make a target gross margin of about 40%. In addition to the hardware, we make recurring revenues from software, especially with our complete system. You make money from selling games, from selling subscriptions, and that adds to the margin. Defense is a major opportunity for us, a major market. We already work with all four branches of the U.S. Department of War. If you think about it, the military, for the longest time, they've had simulators for aircraft, flying planes. They have simulators for vehicles, driving tanks. Never before have they had a simulator for ground troops, for infantry, where soldiers can physically move around without limits in a virtual environment and get a sense of space, of distance, familiarize themselves with the battlefield before we put boots on the ground.

As I mentioned, we have a project with the Marine Corps, for example. They're coming to our office next week to check out our latest infantry fire team trainer. We're the lead systems integrator on that project for the Marine Corps. We also have a first contract with the Air Force for a Virtual Terrain Walk system. I'll show a video about that. We've sold units to the U.S. Army, to West Point, to the Navy. We have a development agreement with the Navy. So, lots of initial traction in the defense space for our technology. Also, another point I'll make here is that we announced that we're also working on an acquisition in the defense space, and we're looking at targets with revenues from $10 million to $50 million or so.

We announced that we were in advanced negotiations with one acquisition target with revenues at the top end of that range. So, it'll take our revenues in a step change to the $50 million-$60 million range, if completed, at a valuation and a financing structure that, again, if completed, we believe will create a lot of value for us and our shareholders. We hope to announce something there soon, but doing an acquisition in the defense space accelerates the momentum in that space even more. It's not just the revenues. We get access to contract vehicles, past performance, sales channels, and really advance our own technology towards bigger contracts, bigger awards in an accelerated way. Here's that infantry fire team trainer I talked about. That's what we're showing to TECOM, to the Marine Corps next week, and I will take it to Quantico later this year.

We also have a counter drone, counter UAS training system that we're working on also for the Marine Corps. Drones has been the biggest evolution here in warfare in the last five years or so. It's changing the battlefield, and so counter drone training is a top priority of Western militaries. I'll show a quick video of our system here.

You can do that with not just one soldier, but we can put 10 of these in a room and a whole team, a whole squad can train together.