Presto Automation Secures $6 Million in Financing
Presto Automation Inc. (NASDAQ:PRST), a leading provider of AI and automation technology for the restaurant industry, has announced the successful acquisition of $6 million through the sale of convertible subordinated notes. The financing round was led by current investors, including Remus Capital.
The company recently saw one of its current investors exchange 3 million shares of common stock, acquired on November 21, 2023, for $3 million of the newly issued notes. Krishna K. Gupta, Presto’s Chairman and a principal investor through Remus Capital, expressed his confidence in Presto’s future, particularly in the growth of Presto’s AI Voice product. The number of live stores using Presto Voice technology has more than doubled to 145 since February 1, 2024.
In other news, Presto announced the immediate resignation of CEO Xavier Casanova, with plans to name a successor in the near future. The company also reported a favorable outcome from the Singapore Court of Appeal. On February 8, 2024, the court issued a final verdict in Presto’s case against XAC Automation Corp, upholding an $11.1 million award in Presto’s favor.
Presto and Hi Auto Ltd. have also made amendments to their Cooperation Agreement. Starting May 1, 2024, both companies will independently pursue opportunities with Checkers’ corporate and franchised locations.
The convertible notes issued by Presto carry a 7.5% annual interest rate and can be converted into 36 million common shares at $0.25 per share. This conversion triggers antidilution adjustments from previous rounds.
Presto estimates that its current financial resources and projected revenue will sustain operations until the end of February 2024. However, the company must secure an additional $6 million by March 8, 2024, as per its Forbearance Agreement with lenders.
To strengthen its leadership team, Presto welcomes Matthew MacDonald to its Board of Directors. MacDonald brings his expertise as a Managing Director at Erithmitic Inc., with a background in commercial real estate lending and hospitality investment.
This report is based on a press release statement from Presto Automation Inc.
Analyst comment
Positive news. Presto Automation secured $6 million in financing through the sale of convertible subordinated notes, led by current investors. The company’s AI Voice product is experiencing significant growth, with the number of live stores using the technology doubling. The court upheld an $11.1 million award in Presto’s favor. Presto and Hi Auto Ltd. will pursue opportunities with Checkers. The company welcomes a new board member. Presto must secure an additional $6 million by March 8, 2024.
