Serve Robotics Announces Closing of $15 Million Private Placement

Rhea-AI Summary

Serve Robotics Inc. (Nasdaq: SERV), a leading autonomous delivery robotics company, has closed a $15 million private placement with a single institutional investor. The offering includes:

1. Pre-funded warrants to purchase 2,500,000 shares of common stock
2. Warrants to purchase up to 2,500,000 shares of common stock at $6.00 per share
3. Each pre-funded warrant and warrant combo sold at $6.00

The warrants are exercisable immediately and expire in 5.5 years. Aegis Capital Corp. acted as the exclusive placement agent. The company plans to file registration statements with the SEC for the resale of the shares.

Positive

• Raised $15 million in gross proceeds
• Strengthened financial position through private placement
• Warrants exercisable immediately, providing potential for additional capital

Negative

• Potential dilution of existing shareholders due to new share issuance
• Warrants priced at $6.00, which may cap near-term stock price appreciation

Financial Analyst

Serve Robotics' recent $15 million private placement is a significant development for the autonomous delivery robotics company. This capital injection provides Serve with important funds to fuel its growth and operations in the competitive robotics sector.

The structure of this deal is noteworthy. By offering pre-funded warrants and additional warrants, Serve has created a flexible financing mechanism. The $6.00 exercise price for the warrants suggests confidence in the company's future value, as it represents a premium over the current stock price.

However, investors should be cautious. The dilutive effect of potentially 2,500,000 new shares (about 10% of current outstanding shares) could pressure the stock price in the short term. Additionally, the five-and-a-half-year expiration on the warrants creates a long-term overhang on the stock.

From a balance sheet perspective, this $15 million infusion significantly bolsters Serve's cash position, likely extending its runway and enabling investments in technology and market expansion. This is important in the capital-intensive robotics industry where continuous innovation is key to maintaining a competitive edge.

Overall, while this financing provides Serve with necessary capital, it comes at the cost of potential dilution. The market's reaction will largely depend on how effectively Serve deploys this capital to drive growth and achieve profitability.

Tech Expert

Serve Robotics' $15 million private placement is a vote of confidence in the company's autonomous delivery technology. In the rapidly evolving robotics sector, this capital infusion could be a game-changer for Serve's R&D efforts and market expansion strategies.

The autonomous delivery market is heating up, with players like Starship Technologies and Nuro making significant strides. Serve's ability to secure this funding suggests that investors see potential in their technology to compete effectively in this space. The capital could be used to enhance their robots' AI capabilities, improve navigation systems, or expand their operational range.

However, the real challenge lies in scaling the technology and achieving widespread adoption. Regulatory hurdles, public acceptance and integration with existing delivery infrastructure remain significant obstacles. Serve will need to demonstrate not just technological superiority, but also operational efficiency and cost-effectiveness to gain market share.

The involvement of a single institutional investor is intriguing. It could indicate a strategic partnership or a deep understanding of Serve's technology and market potential. This investor's continued support could be important for Serve's long-term success.

As the autonomous delivery sector matures, we can expect to see more consolidation and strategic partnerships. Serve's ability to leverage this funding to establish a strong market position will be critical in determining whether they become a leader in this space or get left behind in the rapidly evolving robotics landscape.

SAN FRANCISCO, July 24, 2024 /PRNewswire/ -- Serve Robotics Inc. ("Serve") (Nasdaq: SERV), a leading autonomous delivery robotics company, today announced the closing of a private placement with a single institutional investor for the purchase and sale of pre-funded warrants to purchase 2,500,000 shares of Serve's common stock (the "Common Stock"), together with warrants to purchase up to an aggregate of 2,500,000 shares of Common Stock at an exercise price of $6.00 per share. Each pre-funded warrant to purchase one share of Common Stock together with one warrant to purchase one share of Common Stock is being sold at a purchase price of $6.00. The warrants are exercisable upon issuance and will expire five and a half years from the date of issuance.

Aegis Capital Corp. acted as the exclusive placement agent for the offering. Orrick, Herrington & Sutcliffe LLP served as counsel to the Company and Sichenzia Ross Ference Carmel LLP served as counsel to Aegis Capital Corp.

The offering closed on July 24, 2024. The gross proceeds to Serve from this offering were approximately $15.0 million, before deducting placement agent fees and other offering expenses.

The securities described above are being sold in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), and have not been registered under the Act, or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except according to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws. Pursuant to a registration rights agreement with the investor, the Company has agreed to file one or more registration statements with the Securities and Exchange Commission (the "SEC") covering the resale of the shares of Common Stock sold in the private placement and the shares of Common Stock issuable upon exercise of the pre-funded warrants and the warrants sold in the private placement.

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

About Serve Robotics

Backed by Uber and NVIDIA, Serve Robotics Inc. develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. Serve has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.

Safe Harbor Forward-Looking Statements

This press release of Serve Robotics Inc. contains "forward-looking statements". Words such as "may", "will", "could", "should", "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates" and other comparable terminology are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management's current expectations, beliefs and projections, many of which, by their nature are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there could be no assurance that management's expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. Forward-looking statements speak only as of the date the statements are made. Serve assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking statements except to the extent required by applicable securities laws. If Serve does update one or more forward-looking statement, no inference should be drawn that Serve will make additional updates with respect thereto or with respect to other forward-looking statements.

Contacts

Aduke Thelwell
Head of Communications
Serve Robotics
aduke.thelwell@serverobotics.com
347.464.8510

CORE IR
investor.relations@serverobotics.com

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SOURCE Serve Robotics Inc.

FAQ

How much did Serve Robotics (SERV) raise in its recent private placement?

Serve Robotics (SERV) raised approximately $15 million in gross proceeds from its recent private placement, which closed on July 24, 2024.

What securities were offered in Serve Robotics' (SERV) private placement?

Serve Robotics (SERV) offered pre-funded warrants to purchase 2,500,000 shares of common stock and warrants to purchase up to 2,500,000 shares of common stock at $6.00 per share.

When do the warrants issued by Serve Robotics (SERV) expire?

The warrants issued by Serve Robotics (SERV) in the private placement are exercisable upon issuance and will expire five and a half years from the date of issuance, which was July 24, 2024.

Who acted as the placement agent for Serve Robotics' (SERV) private offering?

Aegis Capital Corp. acted as the exclusive placement agent for Serve Robotics' (SERV) private offering.