Presto Automation (PRST) has released an update to notify the public and investors about an entry into a material definitive agreement.
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On January 29, 2024, Presto Automation Inc. entered into Purchase Agreements with several investors for the sale of $6.0 million in subordinated notes and an additional $3.0 million in notes in exchange for a Lead Investor forfeiting 3 million shares of common stock. The notes accrue PIK interest at 7.5%, increasing to 12% upon an Event of Default, and are convertible into 36 million shares of common stock. The agreements define “Restructuring Transaction” and “Change of Control” for conversion triggers, and include full ratchet anti-dilution protection until September 30, 2024, with a cap on the number of shares issued upon conversion. Subordination clauses prioritize repayment of Senior Indebtedness, and a Registration Rights Agreement mandates the company to file for resale of shares from the Private Placement. Additionally, the company issued warrants to purchase 5,323,298 shares of common stock to an Agent, with a Fifth Amendment to the Credit Agreement extending forbearance on default events and mandating a shareholder meeting to approve further share issuances and an increase in authorized shares.
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For a comprehensive understanding of the announcement, you can read the full document here.
