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Arbe Robotics Ltd. this week closed its initial public offering of 8,250,000 ordinary shares or pre-funded warrants in lieu thereof. The developer of perception radar systems said it expects to bring in around $15 million in gross proceeds from the IPO.

The company said it plans to use the net proceeds from this offering for working capital and general corporate purposes. Arbe said it aims to empower automakers, Tier 1 suppliers, autonomous ground vehicles (AGVs), commercial and industrial vehicles, and a wide array of safety applications with advanced sensing.

Founded in 2015, Arbe Robotics is based in Tel Aviv, Israel, and has offices in China, Germany, and the U.S.

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Arbe Robotics to move from ADAS to AVs

Arbe Robotics said it is starting with sensors for advanced driver-assist systems (ADAS), paving the way to full autonomous vehicles (AVs) later. The company claimed that its radar technology is 100 times more detailed than other radars on the market and that it is a critical sensor for SAE Level 2 and higher autonomy.

In September, Arbe said Tier 1 supplier Sensrad is providing 4D imaging radars using Arbe’s chipset to Tianyi Transportation Technology. It also announced that Tier 1 HiRain Technologies is using its chipset to develop an ADAS for another Chinese automaker.

More about the IPO

The ordinary shares were accompanied by Tranche A warrants to purchase up to 8.2 million ordinary shares and Tranche B warrants to purchase up to 8.2 million ordinary shares at a combined public offering price of $1.82 per share (or per pre-funded warrant in lieu thereof) and the accompanying Tranche A and Tranche B warrants.

The Tranche A warrants had an exercise price of $2.35 per share, were immediately exercisable upon issuance, and expired on Nov. 4. Meanwhile, the Tranche B warrants had an exercise price of $1.82 per share. These warrants were immediately exercisable upon issuance.

Arbe Robotics said the Tranche B Warrants will expire on Nov. 4, 2027, or 20 trading days after the company achieves all of the following, whichever comes first:

• The company publicly announces that it has entered into a definitive supply agreement with a named European automotive original equipment manufacturer (OEM) that agrees to purchase a minimum of 500,000 radar chipsets over the term of the “Definitive Agreement Announcement.”
• The VWAP (as defined in the Tranche B Warrant) for each trading day in any period of 10 consecutive trading days within one calendar year of the date of the Definitive Agreement Announcement is equal to or exceeds $2.25, subject to certain adjustments.
• The trading volume of the ordinary shares (as reported by Bloomberg L.P.) on each trading day of the measurement period is at least 250,000 ordinary shares, subject to certain adjustments.
• The ordinary shares underlying the Tranche B warrants and any ordinary shares issuable upon the exercise of any pre-funded warrants issued upon the exercise of a Tranche B warrant (collectively, the “saleable shares”) are then covered by an effective registration statement and a current prospectus, which can be used for the sale or other disposition of the saleable shares. The company said it has no reason to believe that such registration statement and prospectus will not continue to be available for the saleable shares for the next 30 trading days (collectively, the “triggering event”).

This deal was led by institutional investors including AWM Investment Co., the investment adviser of the Special Situations Funds, which also participated in Arbe’s previous $23 million financing round. Canaccord Genuity acted as the sole bookrunner for the offering. Roth Capital Partners acted as the co-manager for the offering.

The aggregate gross proceeds to the Arbe from this offering were approximately $15 million, before deducting the underwriters’ discounts and commissions and other offering expenses payable by the company. It said the potential additional gross proceeds from the Tranche A and Tranche B warrants, if fully exercised on a cash basis, would be about $34.4 million.

The securities described above were offered pursuant to a registration statement on Form F-3 (File No. 333-269235), originally filed on Jan. 13, 2023, with the Securities and Exchange Commission and declared effective by the SEC on Feb. 24, 2023. Arbe filed the offering through prospectus and a prospectus supplement as part of its registration statement.