Arbe Announces Issuance of Convertible Debentures
Arbe Robotics, a global leader in perception radar solutions, announced the issuance of convertible debentures raising approximately $30 million (NIS 110,000,000). The debentures, listed on the Tel Aviv Stock Exchange (TASE) as of June 6, 2024, carry an annual interest rate of 6.5% and mature on May 30, 2028. They are convertible into Arbe's ordinary shares at NIS 9.53 ($2.60) per share. Proceeds are held in escrow and will be released upon meeting specific conditions by March 31, 2025, including being selected as a sole supplier by a major automobile manufacturer and maintaining an average trading price of at least $3.10 on Nasdaq. The deed of trust detailing the debentures' terms will be filed with the U.S. SEC.
Raised $30 million through convertible debentures, enhancing liquidity.
Annual interest rate of 6.5% provides attractive returns for investors.
Convertible into ordinary shares at a favorable conversion price of $2.60.
Dual listing on Nasdaq and TASE enhances stock market presence.
Potential to secure a major automobile manufacturer as a sole supplier.
Funds are held in escrow, contingent on meeting stringent conditions by March 31, 2025.
Requirement to maintain an average trading price of $3.10 on Nasdaq to access funds.
Potential dilution of shares if debentures are converted into ordinary shares.
Insights
Arbe Robotics' issuance of convertible debentures brings notable implications for shareholders and investors. The company raises approximately
For investors, the conversion terms are particularly significant. If the company meets certain conditions by March 31, 2025, including being selected as a sole supplier by a major automobile manufacturer and maintaining specific stock price and volume metrics, the proceeds will be released from escrow. Meeting these criteria would signal strong business performance and market confidence, potentially driving share prices higher.
However, there are risks to consider. If Arbe fails to meet these conditions, the release of funds could be delayed or restricted, impacting cash flow and operational plans. Additionally, a significant conversion of debentures to shares could lead to dilution, affecting existing shareholders' value. Investors should weigh these conditions carefully, considering both the benefits of new capital and the potential downsides of share dilution and reliance on performance-based conditions.
The market dynamics surrounding Arbe Robotics' debenture issuance introduce multiple factors that can influence investor sentiment. The convertible debenture issuance aligns with recent trends in capital raising, where companies opt for instruments that combine debt and equity features. The structured terms, involving performance-based escrow release, reflect a cautious approach, emphasizing business milestones and stock market performance as prerequisites for capital access.
From a market perspective, the requirement to be chosen as a supplier by a major automobile manufacturer underscores the company's strategic focus on penetrating the automotive radar market—a sector experiencing rapid growth due to advancements in autonomous driving and safety technologies. Securing such a partnership would position Arbe favorably within the competitive landscape, possibly enhancing its market share and reputation.
Yet, the stipulated trading conditions also suggest volatility and potential uncertainty in share performance. The average trading price and volume requirements highlight the need for sustained investor confidence and market activity. Investors should monitor these market indicators closely, as they could provide early signals of the company's ability to meet the set conditions and unlock the escrowed funds.
Company Raises Approximately
The debentures were issued pursuant to a deed of trust dated May 30, 2024, with Mishmeret Trust Company Ltd. as trustee. Proceeds of approximately
- Being selected as a sole supplier of imaging radar chips by one of ten major automobile manufacturers.
- Maintaining an average closing trading price of at least
$3.10 - The closing price of Arbe's ordinary shares on Nasdaq not being less than
$3.10
If any debentures are converted into ordinary shares, the corresponding funds in the escrow account will be released to Arbe.
The terms of the debentures, including financial covenants, are set forth in the deed of trust, which is available in Hebrew on the Israel Securities Authority's MAGNA system. An English translation will be filed with the
About Arbe
Arbe (NASDAQ: ARBE), a global leader in Perception Radar solutions, is spearheading a radar revolution, enabling truly safe driver-assist systems today while paving the way to full autonomous-driving. Arbe's radar technology is 100 times more detailed than any other radar on the market and is a critical sensor for L2+ and higher autonomy. The company is empowering automakers, Tier 1 suppliers, autonomous ground vehicles, commercial and industrial vehicles, and a wide array of safety applications with advanced sensing and paradigm changing perception. Arbe, a leader in the fast-growing automotive radar market, is based in
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The words "expect," "believe," "estimate," "intend," "plan," "anticipate," "may," "should," "strategy," "future," "will," "project," "potential" and similar expressions indicate forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to the Company meeting the conditions to the release of the net proceeds of the debenture offering from escrow and meeting the covenants, the effect on the Israeli economy generally and on the Company's business resulting from the terrorism and the hostilities in
Information contained on, or that can be accessed through, the Company's website or any other website or any social media is expressly not incorporated by reference into and is not a part of this press release.
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SOURCE Arbe
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