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Presto Automation secures $6 million in convertible notes By Investing.com

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SAN CARLOS, Calif. – Presto Automation Inc. (NASDAQ:PRST), a major provider of AI and automation technology for the restaurant industry, has secured $6 million through the sale of convertible subordinated notes. The financing round, which closed today, was led by current investors, including Remus Capital and others. Notably, an existing investor exchanged 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 strong confidence in the company’s future, highlighting the recent growth of Presto’s AI Voice product in the drive-thru market. Since February 1, 2024, the number of live stores using Presto Voice technology has more than doubled to 145, with 54 of these locations employing the most advanced AI version. This growth comes ahead of California’s impending minimum wage increase to $20 per hour starting April 1.

In leadership news, Presto announced the immediate resignation of CEO Xavier Casanova, with plans to name a successor soon. The board expressed confidence in the executive management team to continue the company’s commercial expansion.

Presto also reported a favorable outcome from the Singapore Court of Appeal, receiving a court order on February 8, 2024, for a final verdict in its case against XAC Automation Corp (5490.TWO). The verdict upheld an $11.1 million award in Presto’s favor, adding approximately $32,000 for appeal costs. There are no further appeals available to XAC, and Presto is exploring faster options to enforce or monetize the award.

Additionally, Presto and Hi Auto Ltd. have amended their Cooperation Agreement. Starting May 1, 2024, both companies will be able to independently pursue opportunities with Checkers’ corporate and franchised locations.

The convertible notes, which can be converted into 36 million common shares at $0.25 per share, carry a 7.5% annual interest rate on a pay-in-kind basis. This financing has triggered antidilution adjustments from previous rounds. Presto estimates its current financial resources and projected revenue will sustain operations through the end of February 2024. However, the company must secure an additional $6 million by March 8, 2024, as per its Forbearance Agreement terms with lenders.

In board-related news, Matthew MacDonald has joined Presto’s Board of Directors. MacDonald is a Managing Director at Erithmitic Inc. and…

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