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Serve Robotics Inc.(SERV) - 2024 Q3 - Quarterly Report
SERVServe Robotics Inc.(SERV)2024-11-07 21:16
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Revenue Growth and Performance - Revenue for the three months ended September 30, 2024, was 221,555,comparedto221,555, compared to 62,565 for the same period in 2023, representing a significant increase[147] - Revenues increased by 254% to 221,555forthethreemonthsendedSeptember30,2024,comparedto221,555 for the three months ended September 30, 2024, compared to 62,565 for the same period in 2023, driven by growth in delivery and branding revenue[150] - Revenues increased by 893% to 1,636,641fortheninemonthsendedSeptember30,2024,comparedto1,636,641 for the nine months ended September 30, 2024, compared to 164,826 for the same period in 2023, primarily due to software services revenue[159] - One customer accounted for 78% of the company's revenue during the three months ended September 30, 2024, and 86% during the same period in 2023[134] - The company's revenue streams include delivery revenues, branding revenues, and software services revenues[142] Net Loss and Financial Performance - Net loss for the three months ended September 30, 2024, was 7,996,219,comparedto7,996,219, compared to 7,645,972 for the same period in 2023[147] - Net loss increased by 5% to 7,996,219forthethreemonthsendedSeptember30,2024,comparedto7,996,219 for the three months ended September 30, 2024, compared to 7,645,972 for the same period in 2023[150] - Net loss increased by 47% to 26,071,557fortheninemonthsendedSeptember30,2024,comparedto26,071,557 for the nine months ended September 30, 2024, compared to 17,750,350 for the same period in 2023[159] - The company's accumulated deficit as of September 30, 2024, was 94,405,938[147]ResearchandDevelopmentExpenses−Researchanddevelopmentexpensesincreasedby6994,405,938[147] Research and Development Expenses - Research and development expenses increased by 69% to 5,007,985 for the three months ended September 30, 2024, compared to 2,962,812forthesameperiodin2023,primarilyduetostock−basedcompensationandheadcountincreases[150][152]−Researchanddevelopmentexpensesincreasedby1432,962,812 for the same period in 2023, primarily due to stock-based compensation and headcount increases[150][152] - Research and development expenses increased by 143% to 17,434,332 for the nine months ended September 30, 2024, compared to 7,171,446forthesameperiodin2023,drivenbystockcompensationandheadcountexpenses[159][163]CapitalRaisingandFinancingActivities−Thecompanyissuedconvertiblepromissorynotestotaling7,171,446 for the same period in 2023, driven by stock compensation and headcount expenses[159][163] Capital Raising and Financing Activities - The company issued convertible promissory notes totaling 5,014,500 in January 2024, with net proceeds of 4,844,625[125]−ThecompanycompletedapublicofferingonApril17,2024,issuing10,000,000sharesat4,844,625[125] - The company completed a public offering on April 17, 2024, issuing 10,000,000 shares at 4.00 per share, resulting in net proceeds of approximately 35.8million[123]−Thecompanyraised35.8 million[123] - The company raised 35.8 million in net proceeds from a public offering of 10,000,000 shares of common stock at 4.00pershareonApril17,2024[171]−Thecompanysold555,555pre−fundedwarrantsand555,555investorwarrantsatacombinedofferingpriceof4.00 per share on April 17, 2024[171] - The company sold 555,555 pre-funded warrants and 555,555 investor warrants at a combined offering price of 8.9999, generating net proceeds of 18.65million[174]−Netcashprovidedbyfinancingactivitiesincreasedby18.65 million[174] - Net cash provided by financing activities increased by 58.50 million to 71.58millionfortheninemonthsendedSeptember30,2024,drivenbyproceedsfromissuanceofcommonstock,pre−fundedwarrants,andexerciseofwarrants[181]−Thecompanyrepaida71.58 million for the nine months ended September 30, 2024, driven by proceeds from issuance of common stock, pre-funded warrants, and exercise of warrants[181] - The company repaid a 2.50 million term loan with Silicon Valley Bank in full as of September 30, 2024[182] Cash and Liquidity - The company had 50.91millionincashandcashequivalentsasofSeptember30,2024,providingliquidityforoperations[170]−CashandcashequivalentsasofSeptember30,2024,were50.91 million in cash and cash equivalents as of September 30, 2024, providing liquidity for operations[170] - Cash and cash equivalents as of September 30, 2024, were 50.91 million[177] - Net cash used in operating activities increased by 2.98millionto2.98 million to 15.28 million for the nine months ended September 30, 2024, primarily due to a larger net loss of 8.00million[177]−Netcashusedininvestingactivitieswas8.00 million[177] - Net cash used in investing activities was 5.39 million for the nine months ended September 30, 2024, mainly due to robot build construction in-process[178] Operational Metrics and Expansion - Daily Active Robots increased to 59 for the three months ended September 30, 2024, compared to 30 for the same period in 2023, reflecting improved operational capacity[168] - Daily Supply Hours increased to 465 for the three months ended September 30, 2024, compared to 224 for the same period in 2023, indicating expanded robot utilization[168] - The company anticipates operating losses in 2024 and 2025 as it scales its robotic fleet and expands into new markets[140] - Supply chain constraints, particularly for semiconductor chips, have increased lead times and costs for robot components[138] - The company entered into an equipment financing lease agreement for robot construction, with total expected costs of 4.46million[183]InternalControlsandLegalMatters−Thecompanyidentifiedmaterialweaknessesininternalcontroloverfinancialreportingandplanstoremediatethembyincreasingfinancialpersonnelcapacityandimplementingformalpoliciesandprocedures[193][194]−Thecompanyisanemerginggrowthcompanyandsmallerreportingcompany,withreduceddisclosureobligations[186][187]−Nomateriallegalproceedingsarependingorthreatenedagainstthecompany[197]WarrantIssuance−ThecompanyissuedawarranttoMagnatopurchaseupto2,145,000sharesofcommonstockat4.46 million[183] Internal Controls and Legal Matters - The company identified material weaknesses in internal control over financial reporting and plans to remediate them by increasing financial personnel capacity and implementing formal policies and procedures[193][194] - The company is an emerging growth company and smaller reporting company, with reduced disclosure obligations[186][187] - No material legal proceedings are pending or threatened against the company[197] Warrant Issuance - The company issued a warrant to Magna to purchase up to 2,145,000 shares of common stock at 0.01 per share, with a fair value of $8,566,184[130][132]