Serve Robotics Inc. /DE/
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
SERV$3.22+38.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001832483-24-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001832483-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 95 current paragraphs.
39 unchanged; 22 reworded; 33 added; 42 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
Our Company
Current report
We are on a mission to deliver a sustainable future by transforming how goods move among people. Serve has developed an advanced, AI-powered robotics mobility platform, with last-mile delivery in cities as its first application. We are an operating company which has experienced losses since our inception. Our sources of cash to date have been capital investments by stockholders.
Current report
The following discussion contains forward-looking statements, as discussed elsewhere in this Quarterly Report on Form 10-Q. Please see the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
Current report
Our principal offices are located at 730 Broadway, Redwood City, CA 94063, our telephone number is (818) 860-1352 and our corporate website (which does not form part of this Quarterly Report on Form 10-Q) is located at www.serverobotics.com.
Current report
Our discussion and analysis are organized as follows:
Current report
•Executive Summary – Summary analysis of financial and other highlights to provide context for the discussion and analysis.
Current report
•Results of Operations – An analysis of our financial results.
Current report
•Liquidity, and Capital Resources – An analysis of changes in our balance sheets and cash flows and a discussion of our financial condition and potential sources of liquidity.
Current report
•Critical Accounting Estimates – Accounting estimates that management believes are the most important to understanding the assumptions and judgments incorporated in our financial results and forecasts and involve a significant level of estimation uncertainty.
Current report
Serve Robotics
Current report
Because we started this project within a food delivery company, our team comes with a depth of combined expertise in food delivery, automation, and robotics.
Current report
Our expertise positions us to service the growing on-demand delivery market, including food delivery, where approximately half of all deliveries are less than 2.5 miles and well-suited to delivery by sidewalk robots. We provide a robotic delivery experience that delights customers, improves reliability for merchants, and reduces traffic congestion and eliminates vehicle emissions. At scale, our delivery robots can complete deliveries at lower cost than human couriers, making on-demand delivery more affordable and accessible in areas we operate.
Current report
Securities Purchase Agreement
Current report
On January 7, 2025, the Company entered into a securities purchase agreement with a certain institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering an aggregate of 4,210,525 shares of the Company’s common stock at a price of $19.00 per share. The gross proceeds to the Company from the Registered Direct Offering were approximately $80 million, before deducting the placement agents’ fees and other offering expenses payable by the Company.
Current report
Public Offering and Uplisting to Nasdaq
Current report
License and Services Agreement
Current report
On February 20, 2024, Serve entered into a License and Services Agreement (the “LSA”) with Magna as a part of a strategic partnership with Magna. Pursuant to the LSA, Serve, as an independent contractor of Magna, agreed to (i) grant a non-exclusive royalty-free license to the Serve AMR Technology in the Licensed Fields of Use (each as defined in the LSA) to Magna and its affiliates and (ii) provide all reasonable engineering, technical and related support services that Magna may request from time to time in writing and in furtherance of commercialization of the Serve AMR Technology and products (including software) using, practicing, or incorporating the Serve AMR Technology, and manufactured using, practicing or incorporating the Serve AMR Technology (such services and support, the “Development Services”). Except as expressly set forth in the LSA, any Development Services shall be provided under the MSA (as defined below) and, if expired or terminated, under terms and conditions that are consistent with the terms therein. The term of the LSA will continue unless terminated by either party pursuant to and in accordance with the terms and conditions set forth in the LSA.
Current report
Master Services Agreement
Current report
On February 1, 2024, Serve entered into the MSA with Magna, retroactively effective as of January 15, 2024 (the “Effective Date”). Pursuant to the MSA, Serve agreed to provide certain services to Magna as described in one or more statements of work (“SOWs”). Such SOWs will contain a description of the scope, the time to be spent on performance, the fees to be paid to Serve, the functional requirements and technical specifications and, to the extent applicable, the timetable, schedule or milestones for the performance of the requested services. Serve and Magna entered into the first SOW on the Effective Date. The term of the MSA commenced on the Effective Date and will continue for a term of three months, unless terminated earlier or mutually extended in accordance with its terms.
Current report
The Magna Warrant Shares that may be issued pursuant to the exercise of the Magna Warrant were offered and sold in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act.
Current report
A significant portion of our revenue is concentrated with two customers, Magna and Uber. For the three months ended March 31, 2025 and 2024, sales to Magna and Uber accounted for 83% and 95% of our total revenue, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. The loss of one or either of these customers could have a negative impact on our planned operations.
Current report
Cost of Revenue and Operating Expenses
Current report
Operations. Operations consists of lease expense for facilities and certain field operations personnel to support fleet services. The Company considers these expenses to be indirect costs to deliver fleet services.
Current report
Interest Income. Interest income consists of interest earned on our cash and cash equivalents, restricted cash and cash equivalents and marketable securities.
Current report
Cost of revenues increased $1.56 million to $1.91 million for the three months ended March 31, 2025, compared with $0.35 million for the same period in 2024, due to costs related to scale-up of our fleet and launch related costs in new markets of $1.33 million.
Current report
General and administrative expenses increased $3.74 million to $4.75 million for the three months ended March 31, 2025, from $1.01 million for the same period in 2024, due to an increase in stock-based compensation expense of $1.82 million and $0.87 million from growth due to employee headcount.
Current report
Research and development expenses increased $0.24 million for the three months ended March 31, 2025 to $6.88 million, compared to $6.64 million for the same period in 2024, due to an increase of headcount of $1.61 million, consulting expenses of $0.21 million and depreciation of $0.23 million, offset by a decrease in stock-based compensation expense of $2.31 million.
Current report
Interest income increased $1.78 million to $1.79 million for the three months ended March 31, 2025, from income of $0.01 million for the same period in 2024 as a result interest earned from cash on hand.
Current report
Interest expense and amortization decreased $1.33 million to none for the three months ended March 31, 2025, from the expense of $1.34 million for the same period in 2024, as the prior period expense was related to amortization of debt discount.
Current report
As of March 31, 2025, we had current assets of $199.97 million and current liabilities of $5.26 million, which included $197.76 million in cash and cash equivalents. Cash and cash equivalents consisted of cash on deposit with banks as well as an institutional money market account.
Current report
We have generated significant operating losses from our operations as reflected in our accumulated deficit of $120.74 million as of March 31, 2025. We have historically funded our operations from issuance of equity and debt securities, including our initial public offering in April 2024. To execute on our strategic initiatives to continue to grow our business, we may incur operating losses and generate negative cash flows from operations in the future, and as a result, we may require additional capital resources. We believe our existing cash and cash equivalents will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months.
Current report
Our future capital expenditures will depend on many factors, including, but not limited to our growth, our ability to attract and retain customers, the continuing market acceptance of our offerings, the time and extent of spending to support our efforts to develop our platform, and the expansion of sales and marketing activities, the timing and extent of spending for policy initiatives. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
Current report
Net cash used in operating activities was $9.46 million and $4.08 million for the three months ended March 31, 2025 and 2024, respectively. The increase of $5.38 million primarily consisted of an increased net loss of $4.18 million, adjusted for certain non-cash items, which primarily includes an increase of $0.46 million of depreciation expense, offset by decreases of $0.38 million of non-cash stock-based compensation expense and $1.21 million of amortization of debt discount.
Removed paragraphs (42)
Previous report
Reverse Merger
Previous report
Public Offering
Previous report
Pursuant to the Underwriting Agreement, at the closing of the Offering on April 22, 2024, the Company issued to Aegis a warrant to purchase 500,000 shares of common stock (the “Representative’s Warrant”). The Representative’s Warrant is exercisable at a per share exercise price equal to $5.00 and became exercisable at any time and from time to time, in whole or in part, on October 14, 2024. The Representative’s Warrant expires on April 17, 2029.
Previous report
Convertible Notes
Previous report
At an initial closing on January 2, 2024 and at subsequent closings on January 12, 2024, January 22, 2024 and January 26, 2024, the Company issued to certain accredited investors convertible promissory notes of an aggregate amount of $5,014,500, for which the Company received $4,844,625 in net proceeds (the “January Notes”). As a result, the Company incurred fees of $169,875 which was recorded as a debt discount in the unaudited condensed consolidated financial statements. The convertible promissory notes bore interest at a rate of 6.00% per year, compounded annually, and were due and payable upon request by each investor on or after the 12-month anniversary of the original issuance date of each note. The terms of the January Notes required the January Notes to be converted into shares of common stock upon a qualified offering (as defined in the January Notes) at the lesser of the price paid per share multiplied by 75% or the quotient resulting from dividing $80,000,000 by the outstanding shares of common stock on a fully diluted basis immediately prior to the qualified offering.
Previous report
Upon closing of the Offering, the January Notes converted into 2,104,562 shares of common stock based upon a conversion price of $2.42 per share, and 3,542 shares of our common stock were issued upon exercise of warrants. Furthermore, the Company granted 63,479 warrants to purchase common stock to the placement agent of the January Notes at an exercise price of $2.42 per share.
Previous report
Note Payable - Related Party
Previous report
In December 2023, the Company issued a senior secured promissory note to its Chief Executive Officer for which Serve received $70,000 in proceeds. The note bore interest at 7.67% per annum. The note was fully repaid on January 3, 2024.
Previous report
Magna Warrant
Previous report
On February 1, 2024, Serve entered into a Master Services Agreement (the “MSA”) with Magna New Mobility USA, Inc. (“Magna”), retroactively effective as of January 15, 2024.
Previous report
The fair value of the Magna Warrant was $8,566,184 as determined using the Black-Scholes option pricing method.
Previous report
One customer accounted for 78% and 86% of the Company's revenue during the three months ended September 30, 2024, and 2023, respectively. During the nine months ended September 30, 2024, one customer accounted for 72% of the Company's revenue. In the same period in 2023, a different customer accounted for 68% of the Company’s revenue. As of September 30, 2024, one customer accounted for 88% of the accounts receivable. We currently have a limited number of customers. If either of our significant customers were to breach, cancel or amend our agreements with them, it may have an outsized effect on our revenue, cash on hand and profitability. Our business development team is actively pursuing new delivery and branding customers to diversify our customer base.
Previous report
Future Prospects.
Previous report
We anticipate that we will continue to experience operating losses in 2024 and 2025 as we seek to implement our long-term strategic plan, including research and development spending, scaling our robotic fleet, expanding our sales and business development efforts, and increasing our overall headcount in order to achieve efficiencies through scaled growth. Our goal over the next two years is to scale our operating fleet and expand our geographic coverage to new markets beyond our current operating area in Los Angeles. With such an increase, we anticipate proportional increases in capital costs, overhead and operating expenses. Our ability to initially achieve profitability is dependent upon numerous factors, including the development of revenues, general business and economic conditions, and other risks and uncertainties, including those listed under the caption “Risk Factors” elsewhere in this Quarterly Report.
Previous report
Operating Expenses
Previous report
Operations. Operations expenses primarily consist of costs for field operations personnel.
Previous report
Interest Expense
Previous report
Changes in Fair Value of Future Equity Obligations
Previous report
Changes in the fair value of the simple agreements for future equity (“SAFEs”) relate to updated assumptions and estimates are recognized within the statements of operations.
Previous report
Other Income, Net
Previous report
Other income, net of other expenses, consists primarily of income generated from our interest-bearing deposit account.
Previous report
Cost of revenues decreased $0.20 million to $0.38 million for the three months ended September 30, 2024, compared with $0.57 million for the same period in 2023 due primarily to a decrease in depreciation expense.
Previous report
General and administrative expenses increased $0.55 million to $1.98 million for the three months ended September 30, 2024, from $1.43 million for the same period in 2023, due primarily to an increase in headcount and public company fees.
Previous report
Operations expenses increased $0.36 million to $0.92 million for the three months ended September 30, 2024, from $0.56 million for the same period in 2023, due primarily to an increase in headcount and stock-based compensation expense.
Previous report
Research and development expenses increased $2.05 million for the three months ended September 30, 2024 to $5.01 million, compared to $2.96 million for the same period in 2023. This increase was due primarily to stock compensation attributable to the Magna Warrant for $1.12 million recognized during the three months ended September 30, 2024, as well as increased expenses for headcount and related stock-based compensation.
Previous report
Interest income (expense), net increased $1.93 million to income of $0.45 million for the three months ended September 30, 2024, from expense of $1.48 million for the same period in 2023, due primarily to interest earned on bank deposits and decreasing interest on outstanding debt balances.
Previous report
There was no change in the fair value of derivative for the three months ended September 30, 2024, compared to $0.15 million expense for the three months ended September 30, 2023. The decrease in expense was due to the April 2023 convertible notes which were converted into shares of common stock upon the Merger.
Previous report
There was no change in fair value of the simple agreements for future equity (“SAFEs”) for the three months ended September 30, 2024, compared with $0.44 million for the three months ended September 30, 2023. The decrease in expense is related to no longer having SAFE agreements.
Previous report
Revenues increased $1.47 million to $1.64 million for the nine months ended September 30, 2024 from $0.16 million for the same period in 2023. The increase is due primarily to the $1.15 million in revenues generated from software services. The Company also recognizes increases in delivery and branding revenues of $0.29 million to $0.45 million for the nine months ended September 30, 2024, compared to $0.16 million for the same period in 2023.
Previous report
Cost of revenues decreased $0.28 million to $1.06 million for the nine months ended September 30, 2024, compared with $1.33 million for the same period in 2023 due primarily from a decrease in depreciation expense.
Previous report
General and administrative expenses increased $1.45 million to $4.86 million for the nine months ended September 30, 2024, from $3.41 million for the same period in 2023, due primarily to an increase in headcount and public company fees.
Previous report
Research and development expenses increased $10.26 million for the nine months ended September 30, 2024 to $17.43 million, compared to $7.17 million for the same period in 2023. This increase was due primarily to stock compensation attributable to the Magna Warrant for $7.44 million, as well as increased expenses for headcount, software and stock-based compensation expense.
Previous report
Sales and marketing expenses increased $0.19 million to $0.67 million for the nine months ended September 30, 2024, from $0.48 million for the same period in 2023, due primarily to increase in headcount and stock-based compensation expense.
Previous report
Interest income (expense), net increased $2.48 million to income of $1.14 million for the nine months ended September 30, 2024, from expense of $2.02 million for the same period in 2023, due primarily to interest earned on bank deposits and decreasing interest on outstanding debt balances.
Previous report
The change in the fair value of derivative was $0.22 million for the nine months ended September 30, 2024, compared with $0.15 million for the same period in 2023. The increase in expense was due to the January 2024 Notes which were converted into shares of common stock upon the Offering.
Previous report
There was no change in fair value of the simple agreements for future equity (“SAFEs”) for the nine months ended September 30, 2024, compared with $1.67 million for the same period in 2023. The decrease in expense is related to no longer having SAFE agreements.
Previous report
Our cash and cash equivalents generated by financing activities are our primary source of liquidity. As of September 30, 2024, we had $50.91 million in cash and cash equivalents. Cash and cash equivalents consist of highly liquid investments with original maturities of 90 days or less at the time of purchase.
Previous report
On July 23, 2024, the Company entered into a Securities Purchase Agreement (the “July Purchase Agreement”) with a certain accredited and institutional investor for a private placement offering of pre-funded warrants (the “July Pre-Funded Warrants”) to purchase shares of the Company’s common stock and warrants exercisable for common stock (the “July Investor Warrants”). Pursuant to the July Purchase Agreement, the Company sold 2,500,000 July Pre-Funded Warrants with each July Pre-Funded Warrant exercisable for one share of common stock, together with the July Investor Warrants to purchase up to 2,500,000 shares of common stock. Each July Pre-Funded Warrant and accompanying July Investor Warrant were sold together at a combined offering price of $5.9999. The Company received net proceeds of $13.7 million pursuant to the July Purchase Agreement.
Previous report
On August 27, 2024, the Company entered into a Securities Purchase Agreement (the “August Purchase Agreement”) with a certain accredited and institutional investor for a private placement offering of pre-funded warrants (the "August Pre-Funded Warrants") to purchase shares of the Company’s common stock and warrants exercisable for shares of common stock (the “August Investor Warrants”). Pursuant to the August Purchase Agreement, the Company sold 555,555 August Pre-Funded Warrants, with each August Pre-Funded Warrant exercisable for one share of common stock, together with the August Investor Warrants to purchase up to 555,555 shares of common stock. Each August Pre-Funded Warrant and accompanying August Investor Warrant were sold together at a combined offering price of $8.9999. The July Investor Warrants were exercised in full for 2,500,000 shares of common stock. In consideration for the immediate exercise in full of the existing warrants, the exercise holder received new warrants (the "Exchange Warrants") to purchase 2,200,000 shares of common stock with and exercise price of $10.00 per share. The Exchange Warrants are exercisable immediately and will expire five and a half years from the date of issuance. The Company received net proceeds of $18.65 million pursuant to the August Purchase Agreement.
Previous report
We will need additional capital to fund our operations which include our research and development and general and administrative expenses, which we may obtain from additional financings, public offerings, research funding, additional collaborations, contract and grant revenue or other sources.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Reworded paragraphs (22)
Previous wording
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report for the period ended September 30, 2024. Some of the information contained in this discussion and analysis including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions. You should read the “Risk Factors” section of this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report.
Current wording
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. Some of the information contained in this discussion and analysis including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions. You should read Part II, Item 1A. Risk Factors of this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Please also see the note entitled “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
On July 31, 2023, Patricia Acquisition Corp., Serve Acquisition Corp., a corporation formed in the State of Delaware on July 10, 2023 (“Acquisition Sub”), and Serve entered into a merger agreement (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, Acquisition Sub merged with and into Serve, with Serve continuing as the surviving corporation and our wholly owned subsidiary. As a result of the Merger, we acquired the business of Serve and will continue the existing business operations of Serve as a public reporting company under the name Serve Robotics Inc. Concurrently therewith, Serve was renamed Serve Operating Co. The Merger was treated as a recapitalization and reverse acquisition for us for financial reporting purposes and Serve is considered the acquirer for accounting purposes. As a result of the Merger and the change in our business and operations, a discussion of the past financial results of Patricia Acquisition Corp. is not pertinent, and under applicable accounting principles, the historical financial results of Serve, the accounting acquirer, prior to the Merger are considered our historical financial results.
Current wording
On July 31, 2023, the Company, Acquisition Sub, and Serve entered into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, Acquisition Sub merged with and into Serve, with Serve continuing as the surviving corporation and our wholly-owned subsidiary. As a result of the Merger, we acquired the business of Serve and continued the existing business operations of Serve as a public reporting company under the name Serve Robotics Inc. Upon the closing of the Merger, Serve’s predecessor was renamed Serve Operating Co.
Previous wording
We are shaping the future of sustainable, self-driving delivery. We design, develop and operate low-emissions robots that serve people in public spaces, starting with food delivery. Starting in 2017, our core technology was developed by our co-founders and a majority of our product and engineering team in San Francisco, California as a special project within Postmates Inc. (“Postmates”), one of the pioneering food delivery startups in the United States. By the end of 2020, the team had developed a fleet of sidewalk robots that had successfully performed over 10,000 commercial deliveries for Postmates in California, augmenting Postmates’ fleet of human couriers. Postmates was acquired by Uber Technologies, Inc. (“Uber”) in 2020, and in February of 2021, Uber’s leadership team agreed to contribute the intellectual property developed by the team and assets relating to this project. In return for this contribution and an investment of cash into the Company, Uber acquired a minority equity interest in our business.
Current wording
Serve is shaping the future of sustainable, self-driving delivery. We design, develop, and operate low-emissions robots that serve people in public spaces, starting with food delivery. Starting in 2017, our core technology was developed by our co-founders and a majority of our product and engineering team in San Francisco, California as a special project within Postmates, one of the pioneering food delivery startups in the United States.
Previous wording
On April 17, 2024, the Company entered into an underwriting agreement (the "Underwriting Agreement") with Aegis Capital Corp. (“Aegis”) in connection with the public offering of 10,000,000 shares of the Company’s common stock at a public offering price of $4.00 per share (the “Offering”). The Company’s net proceeds from the Offering, after deducting the underwriting discount and other estimated offering expenses payable by the Company, were approximately $35.8 million. As a result of the Offering, the Company’s common stock commenced trading on The Nasdaq Capital Market under the ticker symbol “SERV”.
Current wording
On April 17, 2024, we entered into the Underwriting Agreement with Aegis in connection with the Offering. The Company’s net proceeds from the Offering, after deducting the underwriting discount and other estimated offering expenses payable by the Company, were approximately $35.8 million. As a result of the Offering, the Company’s common stock was approved for listing on The Nasdaq Capital Market and commenced trading under the ticker symbol “SERV” beginning on April 18, 2024.
Previous wording
In connection with the strategic partnership with Magna, on February 7, 2024, the Company issued to Magna a warrant (the “Magna Warrant”) to purchase up to 2,145,000 shares of its common stock (the “Magna Warrant Shares”), subject to at an exercise price of $0.01 per share. The Magna Warrant was issued pursuant to a production agreement executed in connection with the MSA between the parties in April 2024 whereby Magna will assist the Company in assembly of robotic delivery vehicles.
Current wording
In connection with the strategic partnership with Magna, on February 7, 2024, we issued the Magna Warrant to purchase up to 2,145,000 shares of our common stock, subject to adjustments as provided therein, at an exercise price of $0.01 per share. The Magna Warrant was issued pursuant to a production agreement executed in connection with the MSA between the parties in April 2024 whereby Magna will assist the Company in assembly of robotic delivery vehicles.
Previous wording
The Magna Warrant is exercisable in two equal tranches: (i) the first tranche became exercisable on May 15, 2024; and (ii) the second tranche will became exercisable upon Magna’s achievement of a certain manufacturing milestone as set forth in a production and purchase agreement to be entered into with respect to the contract manufacturing of our autonomous delivery robots by Magna or its affiliates. Notwithstanding the foregoing, the Magna Warrant Shares will vest and become exercisable upon any “change of control” (as defined in the Magna Warrant).
Current wording
The Magna Warrant is exercisable in two equal tranches: (i) the first tranche became exercisable in May 2024; and (ii) the second tranche became exercisable in December 2024.
Previous wording
Our potential for growth depends significantly on continued demand for last-mile delivery of food and other items on our partner platforms. This demand can fluctuate based on various market cycles, weather and local community health conditions, as well as evolving competitive dynamics. Our largest stream of projected revenue comes from maximizing utilization of our robots to perform deliveries on our partner platforms. Matching algorithms on these platforms as well as the extent of their merchant and end-customer participation in robotic delivery directly impacts the utilization rate of our robots, both of which can be challenging to predict. These uncertainties make demand difficult to forecast for us and our partners.
Current wording
Our potential for growth depends significantly on continued demand for last-mile delivery of food and other items on our partner platforms. This demand can fluctuate based on various market cycles and weather and local community health conditions, as well as evolving competitive dynamics. Our largest stream of projected revenue comes from maximizing utilization of our robots to perform deliveries on our partner platforms. Matching algorithms on these platforms as well as the extent of their merchant and end-customer participation in robotic delivery directly impacts the utilization rate of our robots, both of which can be challenging to predict. These uncertainties make demand difficult to forecast for us and our partners.
Previous wording
We consider most on-demand purchases as discretionary spending for consumers, and we are therefore susceptible to changes in discretionary spending patterns and economic slowdowns in the geographic areas in which merchants on our partners’ platforms operate, and in the economy at large. Discretionary consumer spending can be impacted by general economic conditions, unemployment, consumer debt, inflation, rising gasoline prices, interest rates, consumer confidence and other macroeconomic factors. Inflation can lead to increased cost of material and labor for restaurants and merchants who may in turn raise prices on the item they sell, potentially resulting in a reduction in demand for those items. To the extent inflation reduces economic activity and consumer demand for items we deliver, it could negatively impact our financial results. Continued uncertainty in or a worsening of the economy, generally or in a number of our markets, and consumers’ reactions to these trends, could adversely affect our business and cause us to, among other things, reduce the number and frequency of new market openings or cease operations in existing markets. It is important to note, however, that inflation can also serve as a tailwind that would accelerate the adoption of automated robotic last mile delivery as labor becomes more expensive and drives up the cost of delivery by humans.
Current wording
We consider most on-demand purchases as discretionary spending for consumers, and we are therefore susceptible to changes in discretionary spending patterns and economic slowdowns in the geographic areas in which merchants on our partners’ platforms operate and in the economy at large. Discretionary consumer spending can be impacted by general economic conditions, unemployment, consumer debt, inflation, gasoline prices, interest rates, consumer confidence, and other macroeconomic factors. Inflation can lead to increased cost of material and labor for restaurants and merchants who may in turn raise prices on the items they sell and result in a reduction in demand for those items. To the extent inflation reduces economic activity and consumer demand for items we deliver, it could negatively impact our financial results. Continued uncertainty in or a worsening of the economy, generally or in a number of our markets, and consumers’ reactions to these trends could adversely affect our business and cause us to, among other things, reduce the number and frequency of new market openings or cease operations in existing markets. It is important to note, however, that inflation can also serve as a tailwind that would accelerate the adoption of automated robotic last-mile delivery as labor becomes more expensive and drives up the cost of delivery by humans.
Previous wording
The global supply shortage of electrical components, including semiconductor chips and other hardware components essential to the manufacturing and maintenance of our robots, continued to impact our supply chain throughout 2024. As a result, we experienced increases in our lead times and costs for certain components to build our robots. We cannot be sure whether global supply chain shortages will impact our future robot build plans. In order to mitigate supply chain risks, we would need to incur higher costs to secure available inventory and place non-cancellable purchase commitments with our suppliers, which could introduce inventory risk if our forecasts and assumptions prove inaccurate. Higher costs of components would impact our cash runway and delays in the manufacturing of our robots would push out our revenue forecasts.
Current wording
We cannot be sure whether global supply chain shortages will impact our future robot build plans. In order to mitigate supply chain risks, we may need to incur higher costs to secure available inventory and place non-cancelable purchase commitments with our suppliers, which could introduce inventory risk if our forecasts and assumptions prove inaccurate. Higher costs of components would impact our cash runway and delays in the manufacturing of our robots would push out our revenue forecasts.
Previous wording
Our revenue currently consists of (1) delivery revenues, (2) branding revenues and (3) software services revenues.
Current wording
Our revenue currently consists of software services revenues and fleet services revenues.
Previous wording
Cost of revenue consists primarily of allocations of depreciation on robot assets used for revenue producing activities, personnel time related to revenue activities and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to communicate with its robots while in service.
Current wording
Cost of revenue. Cost of revenue consists primarily of allocations of depreciation on robot assets used for revenue producing activities, personnel time related to revenue activities and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to communicate with its robots while in service.
Previous wording
General and Administrative. General and administrative expenses primarily consist of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal and human resources, as well as general corporate expenses and general insurance. General and administrative expenses also include depreciation on property and equipment as well as amortization of right of use assets. These costs are expensed as incurred.
Current wording
General and Administrative. General and administrative expenses primarily consist of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal and human resources, as well as general corporate expenses and general insurance. General and administrative expenses also include depreciation on property and equipment as well as amortization of right of use assets.
Previous wording
Interest expense consists of stated rates of interest on financing instruments, fees incurred related to financing instruments or accretion of debt discounts.
Current wording
Interest Expense. Interest expense consists of stated rates of interest on financing instruments, fees incurred related to financing instruments or accretion of debt discounts.
Previous wording
For the three months ended September 30, 2024 and 2023, we generated revenues of $221,555 and $62,565, respectively, and reported a net loss of $7,996,219 and $7,645,972, respectively.
Current wording
For the three months ended March 31, 2025 and 2024, we generated revenues of $440,465 and $946,711, respectively, and reported a net loss of $13,216,292 and $9,037,971, respectively.
Previous wording
As of September 30, 2024, we had an accumulated deficit of $94,405,938.
Current wording
As noted in our condensed consolidated financial statements, as of March 31, 2025, we had an accumulated deficit of $120,741,725.
Previous wording
Revenues increased $0.16 million to $0.22 million for the three months ended September 30, 2024, compared to $0.06 million for the same period in 2023. The increase is primarily due to an increase in delivery and branding revenue. The Company recognized increases in delivery and branding revenues of $0.12 million to $0.18 million for the three months ended September 30, 2024, compared to $0.06 million for the same period in 2023.
Current wording
Revenues decreased $0.51 million to $0.44 million for the three months ended March 31, 2025, compared to $0.95 million for the same period in 2024. The decrease is due to a decrease in software services revenue, which may be inconsistent in the future. As a result of a larger fleet, the Company recognized increases in fleet services revenues of $0.12 million to $0.21 million for the three months ended March 31, 2025, compared to $0.10 million for the same period in 2024.
Previous wording
Operations expenses increased $0.66 million to $2.33 million for the nine months ended September 30, 2024, from $1.67 million for the same period in 2023, due primarily to an increase in headcount and additional facility costs.
Current wording
Operations expenses increased $1.13 million to $1.67 million for the three months ended March 31, 2025, from $0.54 million for the same period in 2024, due to an increase in infrastructure and facility costs of $0.32 million from expansion locations, expanded workforce of $0.09 million, the remaining fleet financing costs of $0.19 million and software costs of $0.17 million.
Previous wording
Sales and marketing expenses increased $0.27 million to $0.38 million for the three months ended September 30, 2024, from $0.12 million for the same period in 2023, due primarily to an increase in investor relations expense and stock-based compensation expense.
Current wording
Sales and marketing expenses increased $0.12 million to $0.24 million for the three months ended March 31, 2025, from $0.12 million for the same period in 2024, due to an increase in stock-based compensation expense of $0.04 million and headcount of $0.03 million.
Previous wording
As of September 30, 2024, our cash and cash equivalents were $50.91 million. The following table shows a summary of our cash flows for the periods presented in millions:
Current wording
As of March 31, 2025, our cash and cash equivalents were $197.76 million. The following table shows a summary of our cash flows for the periods:
Previous wording
Net cash used in investing activities was $5.39 million and $0.0 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $5.39 million was mainly due to robot build construction in-process.
Current wording
Net cash used in investing activities was $3.30 million and none for the three months ended March 31, 2025 and 2024, respectively. The increase of $3.30 million was mainly due to robot build construction in-process.
Previous wording
Net cash provided by financing activities was $71.58 million and $13.08 million for the nine months ended September 30, 2024, and 2023, respectively. The increase of $58.50 million was due to $35.8 million from proceeds of issuance of common stock pursuant to offering, net of issuance costs, $17.12 million from proceeds from issuance of prefunded warrants to purchase common stock in connection with private placement, net of issuance costs, $16.32 million from proceeds from the exercise of warrants, partially offset by repayments of lease liability for Silicon Valley Bank (as more fully described below).
Current wording
Net cash provided by financing activities was $87.26 million and $4.50 million for the three months ended March 31, 2025 and 2024, respectively. The increase of $82.75 million primarily consisted of proceeds from issuance of common stock pursuant to securities purchase, net of offering costs of $75.85 million, and proceeds from the exercise of warrants of $11.78 million, partially offset by a decrease in proceeds received from convertible notes of $4.84 million.
Previous wording
We are an “emerging growth company,” as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to either early adopt or delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Current wording
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to either early adopt or delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Merger was treated as a recapitalization and reverse acquisition for us for financial reporting purposes, and Serve is considered the acquirer for accounting purposes. As a result of the Merger and the change in our business and operations, a discussion of the past financial results of Patricia is not pertinent, and under applicable accounting principles, the historical financial results of Serve, the accounting acquirer prior to the Merger, are considered our historical financial results.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
The following table summarizes our operating results as reflected in our unaudited statements of operations during the nine months ended September 30, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.
Previous report — wording carried elsewhere
On April 17, 2024, the Company entered into an underwriting agreement with Aegis Capital Corp. (“Aegis”) in connection with the public offering of 10,000,000 shares of the Company’s common stock at a public offering price of $4.00 per share (the “Offering”). The Company’s net proceeds from the Offering, after deducting the underwriting discount and other estimated offering expenses payable by the Company, were approximately $35.8 million.