SAN CARLOS, Calif., Feb. 12, 2024 (GLOBE NEWSWIRE) -- Presto Automation Inc. (Nasdaq:PRST) (“Presto” or the “Company”), one of the largest AI and automation technology providers to the restaurant industry, today announced it has closed a financing led by its existing investors, including Remus Capital, a fund controlled by the Company’s Chairman, Krishna K. Gupta, and other investors, involving the sale of $6.0 million of convertible subordinated notes (the “Notes”). One of the existing investors is also exchanging 3.0 million shares of the Company’s common stock which was purchased on November 21, 2023 for $3.0 million of Notes. Chardan acted as the placement agent for the offering.
“This capital injection is a strong signal of my commitment to Presto and its shareholders - we have tremendous belief in the Company’s prospects in its rapidly-growing market and our continuing efforts to enhance shareholder value,” said Mr. Gupta.
“On the commercial side, our Presto AI Voice product serving the drive-thru restaurant market is enjoying significant momentum. Over a period of 2 months, we have more than doubled our total number of live stores on the Presto Voice technology to 145 as of February 1, 2024, including 54 locations that use the most advanced version of our AI technology. Restaurant operators are embracing our solution in part due to the California $20/hour minimum wage mandate which is taking effect on April 1,” Mr. Gupta added.
Presto also announced that its Chief Executive Officer, Xavier Casanova, has resigned effective immediately, and the Company wishes him well. The Company will be announcing a replacement in the near future.
“The board has full confidence in our exceptional executive management team’s experience and ability to continue executing on the commercial scale-up opportunity immediately in front of Presto,” said Mr. Gupta
The Company has on February 8, 2024 received a court order representing the favorable verdict received from the Singapore Court of Appeal in the final hearing of its case against XAC Automation Corp (5490.TWO) on January 16, 2024. The favorable verdict dismissed XAC’s appeal and upheld the award of $11.1 million previously made to the Company adding an additional SGD 50,000 (approximately $32,000) award for costs associated with the appeal. XAC has no further recourse to set aside the award. Domesticating the award in Taiwan may take between several months to more than a year, but the Company is currently exploring alternatives to enforce or monetize the award in a shorter timeline.
In addition, Presto said that it recently entered into an amendment to its Cooperation Agreement with Hi Auto Ltd. (“Hi Auto”) which supplies the AI technology used at 347 Checkers corporate and franchised locations. Commencing on May 1, 2024, the Company and Hi Auto will each be permitted to compete for the Checkers relationship, including franchised locations.
The Notes are convertible into 36 million shares of common stock at an initial conversion price of $0.25 per share and carry an interest rate of 7.5% per annum on a pay-in-kind basis. The issuance of the Notes triggered antidilution adjustments associated with the Company’s previous financing rounds.
The Company projects that the net proceeds from the offering, together with its other cash resources and projected revenue, are sufficient to sustain operations through the end of February 2024. The Company is required to raise at least an additional $6.0 million in gross proceeds on or before March 8, 2024 pursuant to the terms of the Forbearance Agreement it entered into with its lenders in order to receive additional forbearance.
In connection with the recent financing, Presto announced that Matthew MacDonald had joined its Board of Directors. Mr. MacDonald is a Managing Director of Erithmitic Inc., a commercial real estate bridge lending platform, which he joined in June 2022. He is also the founder of Cottage Avenue, a hospitality-focused investment company, and a partner in Great Canadian Heli-Skiing. Mr. MacDonald was a founder of Ventoux Acquisition Holdings, the co-sponsor of Ventoux CCM Acquisition Corporation, the special purpose acquisition company that merged with Presto.
About Presto Automation Inc.
Presto (Nasdaq: PRST) provides enterprise-grade AI and automation solutions to the restaurant industry. Our solutions are designed to decrease labor costs, improve staff productivity, increase revenue, and enhance the guest experience. We offer our AI solution, Presto Voice™, to quick service restaurants (QSR) and our pay-at-table tablet solution, Presto Touch, to casual dining chains. Some of the most recognized restaurant names in the United States are among our customers, including Carl’s Jr., Hardee’s, and Checkers for Presto Voice™ and Applebee’s, Chili’s, and Red Lobster for Presto Touch.
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