SAN FRANCISCO - Serve Robotics Inc. (Nasdaq: SERV), a company specializing in autonomous delivery robotics, announced today the completion of a $15 million private placement with an institutional investor. The deal involved the sale of pre-funded and standard warrants for purchasing shares of the company's common stock.
The transaction, which closed today, provided Serve with pre-funded warrants to purchase 2,500,000 shares and an equal number of standard warrants, each with an exercise price of $6.00 per share. The warrants are immediately exercisable and will remain valid for five and a half years from the date of issuance.
Aegis Capital Corp. served as the exclusive placement agent for the offering, while legal counsel for Serve was provided by Orrick, Herrington & Sutcliffe LLP, and Sichenzia Ross Ference Carmel LLP represented Aegis Capital Corp.
The funds raised, amounting to approximately $15 million before fees and other expenses, are part of a private placement exempt from the registration requirements of the Securities Act of 1933. As such, the securities may not be offered or sold in the United States without registration or an exemption from registration requirements. Serve has agreed to file registration statements with the SEC for the resale of the common stock involved in the placement.
Serve Robotics, backed by notable companies such as Uber (NYSE:UBER) and NVIDIA (NASDAQ:NVDA), emerged as an independent entity from Uber in 2021. The company has been expanding its footprint in the delivery sector with its AI-powered, low-emissions sidewalk delivery robots. With tens of thousands of deliveries already completed, Serve has secured multi-year contracts, including an agreement to deploy up to 2,000 robots on the Uber Eats platform across various U.S. markets.
Serve Robotics Inc. has secured approximately $15 million through a private placement transaction, bolstering its capacity to expand its market reach and enhance its technological offerings in the field of autonomous delivery services. The company has also expanded its delivery operations into Koreatown, Los Angeles, and enhanced its robotic fleet's sensors through an augmented lidar supply agreement with Ouster, Inc. This aligns with Serve Robotics' plan to deploy up to 2,000 robots by 2025.
Serve Robotics has also announced the promotion of Euan Abraham to Chief Hardware & Manufacturing Officer, who brings over two decades of experience in hardware design to his new role. This strategic appointment is expected to drive innovation as Serve Robotics enters its next phase of growth.
Furthermore, Serve Robotics has solidified its partnership with Magna International (NYSE:MGA), marking the initiation of an exclusive contract manufacturing agreement. This collaboration is expected to facilitate Serve's expansion of its robot fleet for Uber Eats and other U.S. markets. These are the latest developments in Serve Robotics' strategic moves to enhance its robotic fleet and broaden the application of its robotics technology.
InvestingPro Insights
In light of Serve Robotics Inc.'s recent $15 million private placement, a review of key financial metrics and expert analysis from InvestingPro provides a clearer picture of the company's market position and investment potential. With a substantial market capitalization of $345.68 million, Serve Robotics is making strides in the autonomous delivery robotics sector, backed by heavy hitters like Uber and NVIDIA. Despite impressive revenue growth of 742.6% over the last twelve months as of Q1 2024, the company operates with a negative gross profit margin of -53.99%, signaling challenges in maintaining profitability.
An InvestingPro Tip indicates that analysts are optimistic about sales growth in the current year for Serve Robotics, which aligns with the company's expansion efforts and the deployment of its delivery robots on the Uber Eats platform. However, another tip suggests caution as the stock is currently in overbought territory according to the Relative Strength Index (RSI), which could imply a potential pullback in the near term.
Investors should also note the significant price volatility associated with Serve Robotics' stock, as indicated by its high price total return of 301.71% over the last week. While this may be attractive for short-term traders, it's important to consider the company's long-term prospects and underlying financial health. Serve Robotics does not pay dividends, which may influence the investment decisions of income-focused shareholders.
For those considering an investment in Serve Robotics, additional InvestingPro Tips can offer further guidance. There are currently 14 more tips available on InvestingPro. To access these tips and gain a comprehensive understanding of Serve Robotics' financial performance and stock behavior, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/SERV.
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