RR
Richtech Robotics INC
NASDAQ
8-K/A: Richtech Robotics Secures $50 Million Standby Equity Facility with YA II PN, Ltd.
Sentiment:
Financing Agreement Announcement
15 March 2024 4:05 PM
Richtech Robotics has entered into a standby equity purchase agreement with YA II PN, Ltd. for up to $50 million over 24 months, along with a $3 million pre-advance facility.
Capital raise
Richtech Robotics has entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
The company has also secured a pre-advance facility of up to $3 million.
The company will issue shares to the investor as part of the agreement.
Summary
- Richtech Robotics has secured a Standby Equity Purchase Agreement with YA II PN, Ltd., allowing the company to sell up to $50 million of its Class B common stock over 24 months.
- The purchase price for shares will be 96% of the lowest volume weighted average price (VWAP) over a three-day period following an advance notice.
- The company can request a pre-advance of up to $3 million, with the first $1 million already received on February 15, 2024, subject to a 4% discount.
- The pre-advances are structured as convertible promissory notes with an 8% annual interest rate and a maturity date of February 15, 2024, which may be extended by the investor.
- The notes are repayable monthly starting in May 2024, either in cash or through the sale of shares under the purchase agreement.
- The investor can convert the notes into shares at a price of $6.00 per share, which may be adjusted downwards on May 28, 2024, based on the average VWAP of the preceding five trading days.
- Richtech Robotics also paid a $25,000 structuring fee and issued 259,350 shares to the investor as a commitment fee.
- The company has engaged Revere Securities, LLC for financial advisory services at $25,000 per month for six months and will pay finders fees of 7% on pre-advances and 4% on advances.
Sentiment
Score: 6
Explanation: The document indicates a necessary capital raise, which is positive for the company's ability to fund operations, but the terms of the agreement, including potential dilution and fees, temper the overall sentiment.
Highlights
- Richtech Robotics has secured a $50 million standby equity purchase agreement with YA II PN, Ltd.
- The agreement allows the company to sell shares over 24 months at 96% of the lowest VWAP during a three-day pricing period.
- A pre-advance facility of up to $3 million is available, with the first $1 million already received.
- The pre-advances are structured as convertible promissory notes with an 8% annual interest rate.
- The investor can convert the notes into shares at a price of $6.00 per share, potentially adjusted downwards on May 28, 2024.
- Revere Securities, LLC will receive $25,000 per month for six months for financial advisory services, plus finders fees on advances.
Positives
- The $50 million standby equity facility provides Richtech Robotics with significant financial flexibility.
- The pre-advance facility provides immediate access to $3 million in funding.
- The conversion price of the notes may be adjusted downwards, potentially benefiting the company.
- The company has the option to repay the notes in cash or through the sale of shares.
Negatives
- The company will pay a 4% discount on the first pre-advance.
- The investor can convert the notes into shares, potentially diluting existing shareholders.
- The company is paying a structuring fee of $25,000 and issued 259,350 shares as a commitment fee.
- The company is paying Revere Securities, LLC a monthly fee and finders fees.
Risks
- The company's share price could be negatively impacted by the issuance of new shares under the agreement.
- The investor's ability to convert notes into shares could lead to significant dilution of existing shareholders.
- The company's reliance on the equity facility for funding could indicate underlying financial challenges.
- The agreement includes a clause that could reduce the amount of an advance if the VWAP falls below a minimum acceptable price.
Future Outlook
The company plans to utilize the standby equity facility to fund its operations and growth. The company will also be making monthly payments on the pre-advance notes starting in May 2024.
Industry Context
This type of financing agreement is common for companies seeking to raise capital quickly, particularly in the technology sector. The use of a standby equity facility allows for flexible access to funds as needed, but also carries the risk of dilution for existing shareholders.
Comparison to Industry Standards
- Standby equity purchase agreements are a common financing tool for small to mid-cap companies, particularly in the biotech and tech sectors, where access to traditional debt financing can be limited.
- The terms of this agreement, such as the 96% of VWAP pricing and the 8% interest rate on the convertible notes, are within the typical range for such transactions.
- Comparable companies that have used similar financing structures include those in the early stages of development or those with volatile share prices.
- The 4% discount on the first pre-advance is a common feature to compensate the investor for the risk of providing immediate capital.
- The finders fees paid to Revere Securities are also within the typical range for such transactions.
Stakeholder Impact
- Shareholders may experience dilution due to the issuance of new shares.
- The company's financial stability may improve due to the access to capital.
- The company's ability to execute its business plan may be enhanced.
Next Steps
- The company will file a registration statement related to the shares issued under the agreement.
- The company will begin making monthly payments on the pre-advance notes in May 2024.
- The company may issue additional shares to the investor under the purchase agreement.
Key Dates
- 2024-01-22: Date of the financial services agreement and finders fee agreement with Revere Securities, LLC.
- 2024-02-15: Date of the Standby Equity Purchase Agreement with YA II PN, Ltd. and the first pre-advance of $1 million.
- 2024-02-16: The Purchase Agreement will terminate automatically on the earlier of this date or when the Investor has purchased an aggregate of $50 million of the Company's shares of Common Stock.
- 2024-02-21: Date of the original Form 8-K filing.
- 2024-05-28: Reset Date for the conversion price of the promissory notes, which may be adjusted downwards.
- 2026-02-16: The Purchase Agreement will terminate automatically on the earlier of this date or when the Investor has purchased an aggregate of $50 million of the Company's shares of Common Stock.
Keywords
equity financing, standby purchase agreement, convertible notes, share issuance, financial advisory, capital raise, dilution, VWAP, pre-advance, Revere Securities
RR
Richtech Robotics INC
NASDAQ
Sector: Industrials
Filings with Classifications
Worse than expected
3 March 2025 10:38 PM
Annual Report Amendment
- The company's total revenue decreased from $8,759 thousand in 2023 to $4,240 thousand in 2024.
- The company experienced a net loss of $8,140 thousand in 2024, compared to a net loss of $339 thousand in 2023.
Capital raise
3 March 2025 10:38 PM
Annual Report Amendment
- On September 3, 2024, the Company issued the following securities to certain institutional investors, pursuant to that certain Securities Purchase Agreement, dated as of August 29, 2024, and to certain retail purchasers (together with the institutional investors, the Investors), pursuant to the Companys prospectus, dated August 29, 2024, as filed with the SEC on August 30, 2024, in a public offering: (i) an aggregate of 13,242,963 shares of the Companys Class B common stock, (ii) pre-funded warrants to purchase up to 2,312,594 shares of Class B common stock (the Pre-Funded Warrants), and (iii) warrants to purchase up to 15,555,557 shares of Class B common stock (the Common Warrants), at a purchase price per share and accompanying Common Warrant of $1.35.
Worse than expected
14 February 2025 4:05 PM
Quarterly Report
- The company reported a net loss of $3.548 million, which is worse than the net loss of $2.750 million in the same period last year.
Capital raise
14 February 2025 4:05 PM
Quarterly Report
- The company issued an aggregate of 3,814,611 shares of Class B common stock and received aggregate proceeds of $5,149,724.85 in January 2025.
- The company entered into a warrant exercise inducement offer letter with a holder of Existing Warrants exercisable for an aggregate of 2,699,797 shares of its Class B common stock, to exercise its Existing Warrants at the existing exercise price of $1.35 per share, generating gross proceeds of approximately $3,644,726 before deducting financial advisory fees.
- In consideration for the immediate exercise of the Existing Warrants, the Company issued to such holder 2,699,797 new warrants (the Inducement Warrants) with an exercise price of $4.00 per share, which are immediately exercisable and valid for five years from issuance (the Armistice Warrant Inducement).
Capital raise
10 February 2025 8:01 PM
Current Report
- Richtech Robotics is set to receive approximately $3.64 million in gross proceeds from the exercise of existing warrants.
- The company is issuing new warrants with an exercise price of $4.00 per share as an inducement for the warrant holder to exercise their existing warrants.
Worse than expected
14 January 2025 4:53 PM
Annual Results
- The company's revenue decreased significantly due to the transition to a RaaS model.
- The company's net loss increased substantially compared to the previous year.
Worse than expected
31 October 2024 4:30 PM
Current Report
- The company's stock price falling below $1.00 for 30 consecutive days is worse than expected and triggers a delisting notice from Nasdaq.
Capital raise
5 September 2024 4:58 PM
Public Offering Announcement
- The company completed a public offering of 13,242,963 shares of Class B common stock, pre-funded warrants for 2,312,594 shares, and warrants for 15,555,557 shares.
- The offering generated approximately $19.4 million in net proceeds for the company.
- The company is restricted from issuing common stock or equivalents for 90 days and from variable rate transactions for one year, with some exceptions.
Capital raise
29 August 2024 9:50 PM
Registration Statement
- Richtech Robotics is seeking to raise up to $1,087,502.30 through the sale of Class B common stock, pre-funded warrants, warrants, and placement agent warrants.
- The offering is being conducted to raise additional capital for the company.
- The Placement Agent is acting as the placement agent on behalf of the Company on a best efforts basis.
Capital raise
27 August 2024 9:24 AM
Registration Statement
- Richtech Robotics is conducting a public offering to sell up to 14,492,753 shares of Class B common stock and warrants to purchase an equal number of shares.
- The company is also offering pre-funded warrants as an alternative to shares for investors who might exceed beneficial ownership limits.
- The assumed combined offering price is $1.38 per share and accompanying warrant, based on the stock's price on August 23, 2024.
- The company aims to raise up to $20 million through this offering.
Capital raise
14 August 2024 6:16 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company received $3 million in pre-advances via convertible promissory notes, which were fully repaid in July 2024.
- The company issued 259,350 shares of Class B common stock as a commitment fee.
Worse than expected
14 August 2024 6:16 PM
Quarterly Report
- The company reported a net loss of $5.181 million for the nine months ended June 30, 2024, which is worse than the loss of $2.543 million for the same period in 2023.
- Product revenue decreased by 55% due to the transition to a RaaS model, which is worse than the previous period.
Capital raise
14 May 2024 5:41 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., which could provide up to $50 million in funding over 24 months.
- The company issued three convertible promissory notes for $1 million each, with the first two in February and March 2024, and the third in April 2024.
- The company issued 259,350 shares of Class B common stock to the investor as a commitment fee.
Worse than expected
14 May 2024 5:41 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
- Product revenue decreased by 59%, which is a significant drop and worse than expected.
Capital raise
22 April 2024 5:50 PM
Debt Financing Agreement
- The promissory note represents a $1 million capital raise for Richtech Robotics.
- The company may need to raise additional capital through share sales to meet its monthly payment obligations under the note.
- The conversion feature of the note could result in a future capital raise through the issuance of new shares to the investor.
Capital raise
29 March 2024 8:23 PM
S-1/A Filing
- Richtech Robotics has a standby equity purchase agreement with YA II PN, Ltd. for up to $50 million.
- The company may issue up to 12,983,208 shares of Class B common stock to the investor.
- The company can obtain pre-advances up to $3 million via convertible notes.
Better than expected
26 March 2024 8:43 PM
Annual Report Amendment
- The company's revenue increased by 45% year-over-year, indicating better than expected growth.
- The company's gross profit margin increased from 65% to 69%, indicating improved profitability.
- The company's net loss decreased from $507 thousand to $339 thousand, indicating improved financial performance.
Capital raise
22 March 2024 5:02 PM
Debt Financing Agreement
- The company has raised $1 million through a promissory note.
- The note can be converted into Class B common stock, potentially leading to further equity issuance.
- The company may need to issue shares to cover monthly payments if it does not have sufficient cash.
Capital raise
15 March 2024 6:13 PM
S-1 Filing
- The document details a potential capital raise of up to $50 million through a standby equity purchase agreement with YA II PN, Ltd.
- The agreement allows Richtech to sell shares of Class B common stock to the investor over a 24-month period.
- The company can also receive pre-advances of up to $3 million via convertible promissory notes.
Capital raise
15 March 2024 4:15 PM
Material Definitive Agreement Amendment
- The agreement involves a potential $50 million share purchase agreement with YA II PN, Ltd.
- The company has received a $1 million pre-advance and is expected to receive two additional $1 million pre-advances upon the satisfaction of certain conditions.
Capital raise
15 March 2024 4:05 PM
Financing Agreement Announcement
- Richtech Robotics has entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company has also secured a pre-advance facility of up to $3 million.
- The company will issue shares to the investor as part of the agreement.
Capital raise
21 February 2024 4:08 PM
Standby Equity Purchase Agreement
- The document details a Standby Equity Purchase Agreement for up to $50 million.
- The agreement includes a pre-advance of up to $3 million, with the first $1 million already advanced.
- The company can issue shares to the investor over a 24-month period, subject to certain conditions and limitations.
Worse than expected
14 February 2024 5:01 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
Capital raise
11 January 2024 5:28 PM
Annual Report
- The company anticipates that it will need additional funding in connection with its continuing operations after twelve months.
- The company expects to finance its future cash needs through public or private equity or debt financings, third-party funding, and other arrangements.
- The company will continue seeking additional capital to expand its operations, advance its products, and scale its sales and marketing capabilities.
- The company will continue seeking additional financing sources to meet its working capital requirements, make investment in research and development and make capital expenditures needed to maintain and expand its business.
- If the company raises additional funds through further issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution.
Worse than expected
11 January 2024 5:28 PM
Annual Report
- The company reported a net loss of $339 thousand in 2023, compared to a net loss of $507 thousand in 2022, indicating that while losses have decreased, the company is still not profitable.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.