Serve Robotics Announces Pricing of $15.0 Million Private Placement

Rhea-AI Summary

Serve Robotics Inc. (Nasdaq: SERV), a leading autonomous delivery robotics company, has announced a $15.0 million private placement with a single institutional investor. The deal involves the sale of pre-funded warrants to purchase 2,500,000 shares of common stock, along with warrants to purchase an additional 2,500,000 shares at an exercise price of $6.00 per share. Each pre-funded warrant and $6.00 warrant combination is priced at $6.00. The $6.00 warrants will be exercisable upon issuance and expire after five and a half years.

The offering is expected to close around July 24, 2024, subject to customary closing conditions. Aegis Capital Corp. is acting as the exclusive placement agent. The company plans to file registration statements with the SEC for the resale of the shares involved in this private placement.

Positive

• Secured $15.0 million in gross proceeds through private placement
• Potential for additional capital through exercise of warrants at $6.00 per share
• Strengthened financial position to support company operations and growth

Negative

• Potential dilution of existing shareholders' ownership
• Warrants priced at current market price, not at a premium

Insights

Financial Analyst

The $15 million private placement by Serve Robotics is significant for several reasons. Firstly, the influx of funds can substantially bolster the company’s cash reserves, providing essential capital for R&D, scaling operations, or other strategic initiatives. The involvement of a single institutional investor indicates a high level of confidence in Serve Robotics' business model and future growth potential. The choice of pre-funded warrants and the non-registration under the Securities Act mitigates dilution risk for current shareholders, while also ensuring a quicker, less cumbersome fundraising process.

However, investors should note that the issuance of new warrants could potentially dilute existing shares if exercised. The exercise price of $6 per share sets a benchmark for future stock performance, implying that the institutional investor sees upside potential above this level. The five and a half years expiry on these warrants indicates a long-term outlook.

Overall, this funding round should be seen positively as it positions Serve Robotics to capitalize on growth opportunities in the rapidly evolving autonomous delivery market.

Legal Expert

From a legal perspective, Serve Robotics’ private placement is structured to comply with the Securities Act of 1933 via an exemption, meaning the securities are not registered. This can expedite the fundraising process but imposes restrictions on the resale of these securities. The arrangement includes a registration rights agreement, ensuring the investor can eventually sell the shares, which is a standard practice to provide liquidity assurances.

The involvement of reputable legal counsel, such as Orrick, Herrington & Sutcliffe LLP, lends credibility and ensures compliance with relevant regulations. This legal structuring minimizes the risk of regulatory issues, making it a well-considered move from a corporate governance standpoint.

Market Research Analyst

For retail investors, this funding round can be seen as a positive indicator of Serve Robotics' market potential. The autonomous delivery sector is poised for significant growth, driven by increasing e-commerce activity and the push for contactless delivery solutions. This $15 million infusion can help Serve Robotics expand its technological capabilities and market reach.

However, it's important to keep an eye on how effectively Serve utilizes this capital. The company's ability to turn this investment into scalable growth will be a critical factor for its stock performance. Investors should watch for subsequent financial disclosures and performance metrics to gauge the impact of this funding on the company’s growth trajectory.

In the short term, this announcement may boost investor confidence and potentially lead to a positive movement in Serve's stock price. Long-term implications will heavily depend on the strategic deployment of these funds and the company’s ability to navigate the competitive landscape.

SAN FRANCISCO, July 23, 2024 /PRNewswire/ -- Serve Robotics Inc. ("Serve") (Nasdaq: SERV), a leading autonomous delivery robotics company, today announced that it has entered into a securities purchase agreement with a single institutional investor for the purchase and sale, in a private placement, of pre-funded warrants to purchase 2,500,000 shares of Serve's common stock (the "Common Stock"), together with a 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 $6.00  warrant to purchase one share of Common Stock is being sold at a purchase price of $6.00. The $6.00 warrants will have, will be exercisable upon issuance, and will expire five and a half years from the date of issuance.

Aegis Capital Corp. is acting 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. for the private placement.

The offering is expected to close on or about July 24, 2024, subject to satisfaction of customary closing conditions. The gross proceeds to Serve Robotics from this offering are expected to be 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 pursuant 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 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. For example, the Company is using forward-looking statements when it discusses its vision, its strategy, and its products. 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. The Company 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 the Company does update one or more forward-looking statement, no inference should be drawn that the Company 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

What is the size of Serve Robotics' (SERV) recent private placement?

Serve Robotics (SERV) announced a $15.0 million private placement with a single institutional investor on July 23, 2024.

How many shares are involved in Serve Robotics' (SERV) private placement?

The private placement involves pre-funded warrants to purchase 2,500,000 shares of common stock, along with warrants to purchase an additional 2,500,000 shares at $6.00 per share.

What is the exercise price of the warrants in Serve Robotics' (SERV) private placement?

The warrants in Serve Robotics' (SERV) private placement have an exercise price of $6.00 per share.

When is the expected closing date for Serve Robotics' (SERV) private placement?

The private placement is expected to close on or about July 24, 2024, subject to customary closing conditions.