SAN FRANCISCO - Serve Robotics Inc. (NASDAQ: SERV), a company specializing in autonomous sidewalk delivery, has completed a private placement transaction, securing approximately $20 million in gross proceeds. The deal, which closed today, involved a single institutional investor purchasing pre-funded and common warrants for the company's stock.
The transaction included the sale of pre-funded warrants to buy 555,555 shares of Serve's common stock, along with common warrants to purchase an equivalent number of shares at $10.00 per share. These warrants were sold at a price of $9.00 each and are exercisable immediately, expiring five and a half years from the date of issuance.
Additionally, Serve Robotics has reached an agreement with the same investor for the immediate exercise of existing warrants, which allowed for the purchase of 2,500,000 shares at the original price of $6.00 per share. This exercise generated an additional $15.0 million in gross proceeds. As a part of this deal, the investor received new unregistered warrants to buy up to 2,200,000 shares at an exercise price of $10.00 per share.
Aegis Capital Corp. served as the exclusive placement agent for the transaction, with Orrick, Herrington & Sutcliffe LLP and Sichenzia Ross Ference Carmel LLP providing legal counsel to Serve Robotics and Aegis Capital Corp., respectively.
The securities sold in this private placement are exempt from the registration requirements of the Securities Act of 1933, meaning they cannot be offered or sold in the United States without registration or an exemption. Serve Robotics has committed to filing registration statements with the SEC for the resale of the shares sold in this placement and those issuable upon the exercise of the warrants.
Serve Robotics, established as an independent entity after spinning off from Uber (NYSE:UBER) in 2021, has completed tens of thousands of deliveries with its low-emission delivery robots. The company has agreements to deploy up to 2,000 robots on the Uber Eats platform across various U.S. markets.
The information in this article is based on a press release statement from Serve Robotics Inc.
In other recent news, Shake Shack Inc (NYSE:SHAK). has announced a partnership with Serve Robotics Inc., aiming to use Serve's autonomous robots for food deliveries via Uber Eats in Los Angeles. The collaboration aligns with Serve's strategy to deploy 2,000 delivery robots across the U.S. by 2025. The robots, equipped with advanced GPS and AI, offer a contactless delivery option and aim to reduce the carbon footprint associated with traditional delivery methods.
Simultaneously, Serve Robotics has secured approximately $15 million through a private placement transaction with an institutional investor, facilitated by Aegis Capital Corp. This funding is anticipated to enhance Serve Robotics' technological offerings and expand its market reach in autonomous delivery services. The company has also expanded its delivery operations into Koreatown, Los Angeles, and upgraded its robotic fleet's sensors through an augmented lidar supply agreement with Ouster, Inc.
In leadership changes, Euan Abraham has been promoted to Chief Hardware & Manufacturing Officer at Serve Robotics. Furthermore, the company has strengthened its partnership with Magna International (NYSE:MGA) through an exclusive contract manufacturing agreement, expected to facilitate the expansion of Serve's robot fleet for Uber Eats and other U.S. markets.
At the recent annual stockholders meeting, Sarfraz Maredia and David Goldberg were elected as Class I directors, and both will serve until the 2027 annual meeting of stockholders. The meeting also saw the ratification of the company's public accounting firm and the approval of an amendment to its equity incentive plan. These are the latest developments in the growth and expansion of Serve Robotics.
InvestingPro Insights
Following Serve Robotics Inc.'s (NASDAQ: SERV) announcement of securing $20 million through a private placement, the company's financial health and stock performance metrics provide additional insights. With a market capitalization of $371.94 million, Serve Robotics is navigating a challenging financial landscape, as evidenced by their negative P/E ratio of -8.72, which further declined to -11.64 over the last twelve months as of Q2 2024. This suggests that investors are cautious about the company's earnings potential.
Despite the recent capital raise, Serve Robotics' stock has experienced significant volatility. The company's stock price has seen a sharp decline of 11.58% over the last week and 28.37% over the last month. However, it's worth noting that over the past three months, the stock has had a strong return of 264.23%, highlighting a period of exceptional performance amidst the overall downward trend. Additionally, the firm holds more cash than debt on its balance sheet, which is a positive sign for financial stability and operational flexibility.
InvestingPro Tips indicate that analysts anticipate sales growth in the current year for Serve Robotics, which could be a promising sign for potential investors. Furthermore, the company is a niche player in the autonomous delivery industry, which could offer unique growth opportunities as the sector evolves. For those interested in further analysis, there are 14 additional InvestingPro Tips available, providing a deeper dive into Serve Robotics' financial and operational performance.
Investors considering Serve Robotics as part of their portfolio can explore these metrics and tips in more detail at InvestingPro. The platform offers an extensive range of financial data and expert insights, including a fair value estimation of $9.38 for SERV, which is closely aligned with the previous close price of $9.47.
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