Arbe Robotics Ltd. Announces $29 Million Underwritten Registered Direct Offering

Rhea-AI Summary

Arbe Robotics (NASDAQ, TASE: ARBE), a global leader in Perception Radar Solutions, has announced a $29 million underwritten registered direct offering of 8,984,375 ordinary shares at $3.20 per share. The company plans to grant underwriters a 30-day option to purchase up to an additional 1,347,656 ordinary shares at the same price.

The offering is expected to close around January 8, 2025, subject to customary closing conditions. Canaccord Genuity is acting as sole bookrunner. The net proceeds will be used for working capital and general corporate purposes. The offering is being made through a registration statement filed with the SEC.

Positive

• Secured $29 million in gross proceeds through share offering
• Additional potential proceeds from 30-day option for 1,347,656 shares

Negative

• Share dilution due to issuance of 8,984,375 new ordinary shares
• Potential further dilution if underwriters exercise their option

Insights

Financial Analyst

This $29 million offering represents a significant capital raising event for Arbe Robotics, priced at $3.20 per share. The dilutive impact is substantial, with 8,984,375 new shares being issued, potentially increasing to 10,332,031 shares if the overallotment option is exercised. This represents approximately 26% dilution to existing shareholders. The pricing shows a discount to recent trading levels, which is typical for registered direct offerings. The timing suggests a strategic move to strengthen the balance sheet, though it comes at the cost of significant shareholder dilution. The working capital allocation indicates the company is focused on operational sustainability rather than specific growth initiatives.

From a market perspective, the involvement of Canaccord Genuity as sole bookrunner suggests institutional interest, though the pricing discount may indicate some challenges in the placement. The quick closing timeline of January 8th points to predetermined investor commitments. This capital raise will likely provide 12-18 months of additional runway, critical for a company in the capital-intensive autonomous vehicle technology sector.

Market Research Analyst

The perception radar solutions market context is important here - Arbe's capital raise comes amid intensifying competition in the autonomous vehicle sensing technology space. The offering's structure and timing suggest defensive positioning rather than aggressive expansion. Three key implications emerge: 1) The company is prioritizing balance sheet strength over immediate growth, 2) The market for perception radar technology remains capital intensive with long commercialization cycles and 3) Institutional investors still see potential in the sector despite current market challenges.

For retail investors, this raises several considerations: while dilution is significant, the enhanced cash position reduces near-term financial risk. However, the discount to market price suggests some pricing pressure. The use of proceeds for working capital rather than specific growth initiatives may indicate a more conservative operational approach in the near term.

TEL AVIV, ISRAEL, Jan. 07, 2025 (GLOBE NEWSWIRE) -- Arbe Robotics Ltd. (NASDAQ, TASE: ARBE) (“Arbe” or the “Company”), a global leader in Perception Radar Solutions, today announced that it has priced an underwritten offering of 8,984,375 ordinary shares at a purchase price of $3.20 per share.

Arbe estimates the gross proceeds from this offering to be approximately $29 million before deducting underwriting discounts and commissions and other offering expenses.  Arbe expects to grant the underwriters a 30-day option to purchase up to an additional 1,347,656 ordinary shares at the public offering price, less underwriting discounts and commissions. The offering is expected to close on or about January 8, 2025, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds from this offering for working capital and general corporate purposes.

Canaccord Genuity is acting as sole bookrunner for the offering.

The securities described above are being offered pursuant to a registration statement on Form F-3 (File No. 333-269235), as amended, originally filed on January 13, 2023, with the Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on February 24, 2023. The offering is being made only by means of a prospectus and a prospectus supplement which forms a part of the effective registration statement relating to the offering. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC. Electronic copies of the final prospectus, when available, may be obtained on the SEC’s website at http://www.sec.gov and may also be obtained, when available, by contacting Canaccord Genuity LLC, Attn: Syndication Department, 1 Post Office Square, 30th Floor, Boston, MA 02109, or by email at prospectus@cgf.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Arbe Robotics, Ltd.

Arbe (Nasdaq: ARBE), a global leader in Perception Radar solutions, is spearheading a radar revolution, enabling 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 is based in Tel Aviv, Israel, and has offices in China, Germany, and the United States.

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. 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 timing and completion of the offering, the grant to the underwriters of the option to purchase additional shares in the offering, the intended use of proceeds from the offering, the ability of Arbe to achieve certain milestone events, Arbe's perception radar performing as anticipated by Arbe, any demonstration of Arbe's perception radar being met in actual traffic conditions, market acceptance of Arbe's perception radar, Arbe meeting the conditions to the release of the net proceeds of its convertible note offering from escrow and meeting the covenants, the effect on the Israeli economy generally and on Arbe's business resulting from the terrorism and the hostilities in Israel and with its neighboring countries including the effects of the continuing war with Hamas and any further intensification of hostilities with others, including Iran and Hezbollah, and the effect of the call-up of a significant portion of Israel's working population, including Arbe's employees, the effect of any potential boycott both of Israeli products and business and of stocks in Israeli companies, the effect of any downgrading of the Israeli economy and the effect of changes in the exchange rate between the US dollar and the Israeli shekel, and the risk and uncertainties described in "Cautionary Note Regarding Forward-Looking Statements," "Item 3. Key Information – D. Risk Factors" and "Item 5. Operating and Financial Review and Prospects" and in the Company's Annual Report on Form 20-F for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the "SEC") on March 28, 2024, as well as other documents filed by the Company with the SEC. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements relate only to the date they were made, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.

Information contained on, or that can be accessed through, Arbe'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.

FAQ

What is the price per share for Arbe Robotics' January 2025 offering?

Arbe Robotics priced its offering at $3.20 per ordinary share.

How many shares is Arbe Robotics offering in its January 2025 financing?

Arbe Robotics is offering 8,984,375 ordinary shares, with an option for underwriters to purchase an additional 1,347,656 shares.

How much money is Arbe Robotics raising in its January 2025 offering?

Arbe Robotics expects to raise approximately $29 million in gross proceeds before deducting underwriting discounts and other offering expenses.

When will Arbe Robotics' January 2025 share offering close?

The offering is expected to close on or about January 8, 2025, subject to customary closing conditions.

What will Arbe Robotics use the proceeds from its January 2025 offering for?

Arbe Robotics intends to use the net proceeds for working capital and general corporate purposes.