Serve Robotics Announces Pricing of Private Placement & Warrant Exercise for aggregate gross proceeds of $20 Million

Rhea-AI Summary

Serve Robotics Inc. (Nasdaq: SERV), a leading autonomous sidewalk delivery company, has announced a private placement and warrant exercise expected to generate $20 million in gross proceeds. The transaction includes:

1. A private placement of pre-funded warrants for 555,555 shares and warrants for 555,555 shares at $10 per share, sold at $9 each.

2. Exercise of existing warrants for 2,500,000 shares at $6 per share, with new warrants for 2,200,000 shares at $10 per share issued as consideration.

The deal is set to close on August 28, 2024, subject to conditions. Aegis Capital Corp. is the exclusive placement agent. The securities are being sold in a private placement exempt from SEC registration requirements.

Positive

• Secured $20 million in gross proceeds through private placement and warrant exercise
• Existing warrant exercise provides immediate cash influx of $15 million
• New warrants issued at higher exercise price of $10 per share, potentially generating additional future capital

Negative

• Potential dilution of existing shareholders due to issuance of new shares and warrants
• Securities sold in private placement, limiting public trading availability

Financial Analyst

Serve Robotics' $20 million private placement and warrant exercise is a significant capital raise for the autonomous delivery startup. The deal structure, combining pre-funded warrants and common warrants, provides immediate cash infusion while offering potential for future funding. The $9.00 purchase price for each unit and the $10.00 exercise price for common warrants suggest investor confidence in future growth.

The exercise of existing warrants at $6.00 per share indicates strong investor belief in Serve's potential. However, the issuance of new warrants at a higher $10.00 strike price may dilute existing shareholders if exercised. This capital injection should strengthen Serve's balance sheet, potentially funding expansion or R&D efforts in the competitive autonomous delivery space.

Tech Expert

This funding round for Serve Robotics underscores the growing interest in autonomous sidewalk delivery solutions. The $20 million raise could significantly accelerate Serve's technology development and market expansion. As urban logistics evolve, last-mile delivery robots are becoming increasingly relevant.

The capital infusion might enable Serve to enhance its AI algorithms, improve obstacle detection, or expand its fleet size. However, the company faces challenges in regulatory compliance and public acceptance. The success of this investment will likely hinge on Serve's ability to demonstrate reliable, safe operations at scale and integrate seamlessly into existing urban infrastructures.

Market Research Analyst

Serve Robotics' successful fundraise signals continued investor appetite for autonomous delivery technologies. The $20 million injection could help Serve expand its market presence and compete with giants like Amazon and FedEx, who are also exploring robotic delivery solutions. The timing is opportune, given the surge in e-commerce and contactless delivery demand post-pandemic.

However, the autonomous delivery market is still nascent, with regulatory and technological hurdles to overcome. Serve's ability to secure partnerships with retailers and restaurants will be important for growth. The higher warrant exercise price of $10.00 compared to the previous $6.00 suggests investor optimism, but also sets a higher bar for future performance expectations.

SAN FRANCISCO, Aug. 27, 2024 /PRNewswire/ -- Serve Robotics Inc. ("Serve" or "Company") (Nasdaq: SERV), a leading autonomous sidewalk delivery company, announced today that the Company has entered into a securities purchase agreement expected to result in gross proceeds of approximately $20.0 million to the Company. The transaction is expected to close on or about August 28, 2024, subject to satisfaction of customary closing conditions.

The 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 555,555 shares of the Company's common stock (the "Common Stock"), together with a warrant to purchase up to an aggregate of 555,555 shares of Common Stock at an exercise price of $10.00 per share (the "Common Warrants"). Each pre-funded warrant to purchase one share of Common Stock together with one Common Warrant to purchase one share of Common Stock is being sold at a purchase price of $9.00. The Common Warrants will be exercisable upon issuance and will expire five and a half years from the date of issuance.

In addition, the Company agreed with a single institutional investor to exercise certain outstanding warrants to purchase an aggregate of 2,500,000 shares of Common Stock (the "Existing Warrants"). The Existing Warrants are purchased at their exercise price of $6.00 per share. In consideration for the immediate exercise in full of the Existing Warrants for gross cash proceeds of approximately $15.0 million, the exercising holder received in a private placement new unregistered warrants (the "New Warrants") to purchase up to an aggregate of 2,200,000 shares of common stock with an exercise price of $10.00 per share. The New Warrants will be exercisable upon issuance and will expire five and a half years from the date of issuance.

The total gross proceeds are expected to be approximately $20.0 million, excluding any proceeds that may be received upon the exercise of the Common Warrants and before deducting placement agent fees and other expenses payable by the company.

Aegis Capital Corp. is acting as the exclusive placement agent for the transaction. 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 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

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.

For further information about Serve Robotics (Nasdaq: SERV), please visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.

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

Media

Aduke Thelwell
Head of Communications and Investor Relations
Serve Robotics
press@serverobotics.com

Investors
investor.relations@serverobotics.com

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SOURCE Serve Robotics Inc.

FAQ

What is the total amount of gross proceeds Serve Robotics (SERV) expects from its recent financing?

Serve Robotics (SERV) expects to generate approximately $20 million in gross proceeds from its private placement and warrant exercise transaction announced on August 27, 2024.

When is the private placement for Serve Robotics (SERV) expected to close?

The private placement for Serve Robotics (SERV) is expected to close on or about August 28, 2024, subject to satisfaction of customary closing conditions.

What is the exercise price of the new warrants issued by Serve Robotics (SERV)?

The new warrants issued by Serve Robotics (SERV) have an exercise price of $10.00 per share.

How long will the new warrants issued by Serve Robotics (SERV) be exercisable?

The new warrants issued by Serve Robotics (SERV) will be exercisable upon issuance and will expire five and a half years from the date of issuance.