SALT LAKE CITY - Palladyne AI Corp. (NASDAQ: PDYN and PDYNW), a company specializing in artificial intelligence for robotics, has entered into a securities purchase agreement with an institutional investor for a registered direct offering. The deal includes the sale of nearly 2.8 million shares at $2.15 each and the issuance of warrants to purchase an equivalent number of shares at $2.30 per share, exercisable six months post-issuance and expiring after five and a half years.
Simultaneously, company insiders, including the CEO and board members, bought over 430,000 shares at $2.20 each, along with warrants at $0.125 each, under similar terms as the institutional investor.
The combined gross proceeds from these transactions are expected to reach approximately $7 million before fees and expenses. Palladyne AI plans to allocate the net proceeds for general corporate purposes, including further development and commercialization of its AI software products.
A.G.P./Alliance Global Partners (NYSE:GLP) is serving as the sole placement agent for the offerings, which are anticipated to close on November 1, 2024, pending customary closing conditions.
The shares and warrants issued in these offerings are subject to different regulatory frameworks. The shares sold to the institutional investor were offered via a previously declared effective registration statement, while the concurrent private placements rely on an exemption from registration under the Securities Act.
Palladyne AI's software platform aims to enhance robotic capabilities, allowing them to perform tasks with human-like perception and reasoning. The offerings are not open to the public and are only available through a prospectus forming part of the registration statement.
This article is based on a press release statement.
In other recent news, Palladyne AI Corp. has successfully completed Phase I of its contract with the Warner Robins Air Logistics Complex at the Warner Robins Air Force Base in Georgia. This achievement marks a significant milestone in the company's four-year, $13.8 million project involving the integration of its AI software, Palladyne IQ, into robotic platforms for aircraft component maintenance. The software's ability to autonomously prepare surfaces of aircraft components for maintenance has been highlighted by Shane Groves of the Warner Robins Air Logistics Complex, who expressed confidence in the software's potential for industrial automation and productivity.
Ben Wolff, President and CEO of Palladyne AI, underscored the importance of the partnership with the Air Force in advancing the company's software to automate tasks deemed monotonous or hazardous. This collaboration is part of the U.S. Air Force's ongoing engagement with emergent technologies through AFWERX AFVentures, aiming to incorporate disruptive solutions into its operations.
Palladyne AI's software platform, which empowers robots to perceive and adapt to changes in the environment, is expected to have wide applications across various industries, including automotive, aviation, construction, defense, and logistics. These capabilities are anticipated to enhance the efficiency and return on investment for machines used in numerous settings. These are among the recent developments for Palladyne AI Corp.
InvestingPro Insights
Palladyne AI Corp.'s recent capital raise through a registered direct offering and insider purchases comes at a time when the company is experiencing significant market volatility and financial challenges. According to InvestingPro data, Palladyne AI has a market capitalization of $57.02 million USD, reflecting its status as a small-cap company in the competitive AI and robotics sector.
InvestingPro Tips highlight that Palladyne AI is "quickly burning through cash" and is "not profitable over the last twelve months." This context underscores the importance of the recent $7 million capital injection, which could provide crucial funding for the company's AI software development and commercialization efforts.
Despite these challenges, the company has shown remarkable stock performance, with InvestingPro data indicating a 337.08% price total return over the past year. This aligns with another InvestingPro Tip noting a "high return over the last year." The recent insider purchases at $2.20 per share, slightly above the institutional investor price of $2.15, may signal management's confidence in the company's future prospects.
It's worth noting that Palladyne AI's revenue for the last twelve months as of Q2 2024 stands at $8.73 million USD, with a significant revenue growth of 112.45% in the most recent quarter. However, the company faces profitability hurdles, as evidenced by its negative operating income margin of -551.32% for the same period.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Palladyne AI, providing deeper insights into the company's financial health and market position.
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