Serve Robotics Inc.(SERV) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, significant transactions, and financial position Condensed Consolidated Balance Sheets This table presents the company's financial position, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $214,315 | $139,601 | | Cash and cash equivalents | $116,700 | $123,266 | | Short-term marketable securities | $66,631 | $- | | Total Liabilities | $7,109 | $7,920 | | Total Stockholders' Equity | $207,206 | $131,681 | Condensed Consolidated Statements of Operations This table outlines the company's revenues, costs, gross profit, operating expenses, and net loss for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $642 | $468 | $1,082 | $1,415 | | Cost of revenues | $3,501 | $326 | $5,410 | $678 | | Gross profit (loss) | $(2,859) | $142 | $(4,328) | $737 | | Total operating expenses | $19,785 | $8,698 | $33,323 | $17,003 | | Net loss | $(20,850) | $(9,038) | $(34,068) | $(18,075) | Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) This table details changes in stockholders' equity, including stock issuances, warrant exercises, stock-based compensation, and net loss for the six months ended June 30, 2025 Changes in Stockholders' Equity (in thousands) for Six Months Ended June 30, 2025 | Item | Amount | | :-------------------------------------------------------------------------------- | :----- | | Balances at December 31, 2024 | $131,681 | | Issuance of common stock, net of offering costs | $75,847 | | Issuance of common stock under 2025 Equity Distribution Agreement, net of offering costs | $13,521 | | Exercise of warrants | $(411) | | Stock-based compensation | $4,398 | | Net loss | $(20,850) | | Balances at June 30, 2025 | $207,206 | Condensed Consolidated Statements of Cash Flows This table summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) for Six Months Ended June 30 | Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash used in operating activities | $(25,426) | $(9,820) | | Net cash used in investing activities | $(81,934) | $(798) | | Net cash provided by financing activities | $100,795 | $39,392 | | Net change in cash and cash equivalents | $(6,565) | $28,774 | | Cash and cash equivalents at end of period | $116,700 | $28,781 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations of the accounting policies, significant transactions, and financial position supporting the unaudited condensed consolidated financial statements 1. Nature of Operations, History, Organization and Business Serve Robotics Inc. is developing next-generation robots for last-mile delivery services. The company completed a reverse merger in July 2023, becoming a public reporting company, and subsequently completed a public offering and uplisted to Nasdaq in April 2024 - Company's core business: Developing next-generation robots for last-mile delivery services[25] - Reverse Merger: Completed on July 31, 2023, with Serve becoming a wholly-owned subsidiary of Patricia Acquisition Corp., which then changed its name to Serve Robotics Inc[26] - Public Offering & Nasdaq Listing: Completed on April 17, 2024, raising approximately $35.8 million net proceeds, and commenced trading on Nasdaq under "SERV" beginning on April 18, 2024[27] 2. Summary of Significant Accounting Policies This section details the company's accounting policies, including its basis of presentation, single operating segment, liquidity and going concern considerations, and revenue recognition. It highlights significant customer concentration and outlines recently adopted and new accounting pronouncements - Basis of Presentation: Unaudited condensed consolidated financial statements prepared in accordance with SEC rules and GAAP, including normal recurring adjustments[29] - Liquidity and Going Concern: As of June 30, 2025, principal liquidity sources were $183.3 million in cash and marketable securities; the company expects to fund its operations for at least the next twelve months[32] Customer Revenue Concentration | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Magna | 39% | 63% | 46% | 81% | | Uber | 31% | 30% | 29% | 13% | - Revenue Recognition: Revenue is disaggregated into software services and fleet services, recognized when control of goods or services is transferred to customers[70][74] - Recently Adopted Accounting Pronouncements: Adopted ASU No. 2023-07, Segment Reporting, during the fourth quarter of December 31, 2024[84] 3. Acquisition On April 1, 2025, the Company acquired a foreign entity for approximately $5.75 million in cash, resulting in preliminary goodwill of $4.33 million. The acquisition included identifiable intangible assets such as developed technology, customer relationships, and trade names - Acquisition Date: April 1, 2025[87] - Purchase Consideration: Approximately $5.75 million of cash consideration[90] - Preliminary Goodwill: $4.33 million, attributed to expected synergies and other benefits[90] Preliminary Fair Values of Identified Intangible Assets Acquired (in thousands) | Intangible Assets | Useful life (in years) | Preliminary fair value at acquisition | | :---------------- | :--------------------- | :---------------------------------- | | Developed technology | 15 | $980 | | Customer relationships | 25 | $255 | | Trade names | 10 | $135 | | Total | | $1,370 | 4. Goodwill and Intangible Assets, Net Goodwill increased to $4.59 million as of June 30, 2025, primarily due to the recent acquisition and foreign currency translation effects. Intangible assets, net, totaled $1.43 million, consisting of developed technology, customer relationships, and trade names, amortized over 10-25 years Goodwill Carrying Amount (in thousands) | Metric | Amount | | :-------------------------- | :----- | | Balance as of December 31, 2024 | $— | | Acquisition | $4,327 | | Effects of foreign currency translation | $261 | | Balance as of June 30, 2025 | $4,588 | Intangible Assets, Net (in thousands) as of June 30, 2025 | Intangible Assets | Weighted-Average Remaining Useful Life (in years) | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | | :---------------- | :---------------------------------------------- | :------------------- | :----------------------- | :----------------- | | Developed technology | 14.8 | $1,039 | $17 | $1,022 | | Customer relationships | 24.8 | $270 | $3 | $267 | | Trade names | 9.8 | $144 | $4 | $140 | | Total | | $1,453 | $24 | $1,429 | Estimated Future Amortization Expense of Intangible Assets (in thousands) | Year Ending December 31, | Amortization Expense | | :----------------------- | :------------------- | | Remainder of 2025 | $47 | | 2026 | $94 | | 2027 | $94 | | 2028 | $94 | | 2029 | $94 | | Thereafter | $1,006 | | Total | $1,429 | 5. Fair Value Measurements As of June 30, 2025, the company held $172.6 million in cash equivalents and short-term marketable securities measured at fair value, primarily classified as Level 1 and Level 2. The derivative liability related to convertible notes was converted to additional paid-in capital in April 2024 Fair Value Measurements as of June 30, 2025 (in thousands) | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $97,318 | $— | $— | $97,318 | | Commercial Paper (cash equiv.) | $6,481 | $— | $— | $6,481 | | U.S. Treasury securities (cash equiv.) | $2,201 | $— | $— | $2,201 | | Commercial paper (short-term) | $— | $31,732 | $— | $31,732 | | Corporate bonds | $— | $27,492 | $— | $27,492 | | U.S. Treasury securities (short-term) | $— | $7,407 | $— | $7,407 | | Total | $106,000 | $66,631 | $— | $172,631 | - Derivative Liability: The related derivative liability was converted into additional paid-in capital in connection with the conversion of the underlying January Notes upon the Offering in April 2024[103] 6. Marketable Securities As of June 30, 2025, the company held $172.6 million in cash equivalents and marketable securities. Unrealized losses of $45k were recorded on short-term marketable securities, but no credit loss allowance was deemed necessary as the company intends to hold these securities until maturity or recovery of cost basis Marketable Securities Summary (in thousands) as of June 30, 2025 | Asset Type | Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | | :-------------------------- | :--------------------- | :--------------- | :---------------- | :------------------- | | Money market funds | $97,318 | $— | $— | $97,318 | | Commercial Paper (cash equiv.) | $6,481 | $— | $— | $6,481 | | U.S. Treasury securities (cash equiv.) | $2,201 | $— | $— | $2,201 | | Commercial paper (short-term) | $31,748 | $— | $(16) | $31,732 | | Corporate bonds | $27,515 | $— | $(23) | $27,492 | | U.S. Treasury securities (short-term) | $7,413 | $— | $(6) | $7,407 | | Total | $172,676 | $— | $(45) | $172,631 | - For marketable securities with unrealized losses, the Company does not intend to sell them and expects to hold them until maturity or recovery of cost basis; no allowance for credit losses was recorded[105] 7. Property and Equipment, Net Property and equipment, net, increased to $18.59 million as of June 30, 2025, from $11.96 million at December 31, 2024, primarily due to a significant increase in robot assets. Depreciation expense also increased substantially Property and Equipment, Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Office equipment | $373 | $332 | | Robot assets | $12,948 | $4,610 | | Construction-in-progress | $7,069 | $7,826 | | Tooling | $2,111 | $1,799 | | Total | $22,501 | $14,567 | | Less: accumulated depreciation | $(3,908) | $(2,604) | | Property and equipment, net | $18,593 | $11,963 | - Depreciation expense for the six months ended June 30, 2025, was $1,269 thousand, a significant increase from $28 thousand in the same period of 2024[106] 8. Note Payable A related party note payable was fully repaid in January 2024. January 2024 convertible notes totaling $5.0 million were converted into 2,104,562 shares of common stock in April 2024 upon the public offering, eliminating related interest expense and derivative liability - Related Party Note Payable: $70 thousand, fully repaid on January 3, 2024[107] - January 2024 Convertible Notes: $5.0 million aggregate, converted into 2,104,562 shares of common stock at a conversion price of $2.42 per share upon the closing of the Offering in April 2024[108][109] - Derivative Liability: A derivative liability with a fair value of $1.7 million was reclassified to additional paid-in capital upon the conversion of the January Notes in April 2024[110] 9. Stockholders' Equity (Deficit) The company's common stock outstanding increased significantly due to various equity transactions, including a $40.0 million public offering in April 2024, private placements totaling $32.3 million in July and August 2024, an $80 million registered direct offering in January 2025, and 'at-the-market' offerings raising $77.6 million in 2024 and $13.5 million in H1 2025 - Common Stock Outstanding: 59,333,332 shares as of June 30, 2025, compared to 51,288,566 shares as of December 31, 2024[16] - April 2024 Public Offering: Issued 10,000,000 shares for gross proceeds of $40.0 million[115] - July 2024 Private Placement: Sold pre-funded warrants and investor warrants for net proceeds of $13.7 million[117] - August 2024 Private Placement: Sold pre-funded warrants and investor warrants for net proceeds of $18.6 million[118] - January 2025 Registered Direct Offering: Issued 4,210,525 shares for approximately $80 million gross proceeds[119] - 2024 At-the-Market (ATM) Offering: Sold 5,698,992 shares, raising $77.6 million net proceeds during the twelve months ended December 31, 2024[131] - 2025 At-the-Market (ATM) Offering: Sold 1,125,706 shares, raising $13.5 million net proceeds during the six months ended June 30, 2025[132] - Magna Warrant: Issued on February 7, 2024, to purchase up to 2,145,000 shares at $0.01 per share, fully exercised by June 30, 2025[127][128] 10. Stock-Based Compensation The 2023 Equity Incentive Plan was amended in June 2025, increasing authorized shares by 2,280,000. Stock-based compensation expense for the six months ended June 30, 2025, was $8.28 million, an increase from $7.74 million in the prior year, primarily allocated to research and development, and general and administrative expenses - 2023 Equity Incentive Plan: Amended in June 2025, increasing the number of shares authorized by 2,280,000 additional shares[134] Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $2,061 | $428 | $3,885 | $434 | | Operations | $96 | $138 | $176 | $144 | | Research and development | $2,158 | $2,861 | $4,087 | $7,101 | | Sales and marketing | $83 | $53 | $129 | $56 | | Total | $4,398 | $3,480 | $8,277 | $7,735 | - Unrecognized compensation cost related to non-vested stock option awards amounted to approximately $166 thousand as of June 30, 2025, to be recognized over a weighted average period of 1.31 years[140] 11. Commitments and Contingencies The company has operating leases for office, warehouse space, and cargo vans, with total undiscounted future minimum payments of $2.75 million. A finance lease for robot assets was settled in April 2025 with the purchase of assets for $2.25 million. No material legal proceedings are pending Future Annual Minimum Payments Under Operating Leases (in thousands) as of June 30, 2025 | Year | Amount | | :----------------------- | :----- | | Remainder of 2025 | $605 | | 2026 | $1,123 | | 2027 | $869 | | 2028 | $155 | | 2029 | $— | | Total undiscounted future cash flows | $2,752 | | Less: imputed interest | $(177) | | Total operating lease liabilities | $2,575 | - Finance Lease: The Company exercised the option to purchase robot assets at the end of the lease for $2.25 million in April 2025, with no outstanding liability as of June 30, 2025[145] - Contingencies: There are no pending, threatened, or actual material legal proceedings in which the Company or any of its subsidiaries is a party[146][225] 12. Segment Information The company operates as a single operating and reportable segment, with the Chief Executive Officer reviewing financial information on a consolidated basis for decision-making - The Company has one operating and reportable segment[147] - The Chief Executive Officer serves as the Chief Operating Decision Maker (CODM) and reviews financial information on a consolidated basis[147] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of Serve Robotics Inc.'s business, recent developments, financial performance for the three and six months ended June 30, 2025, key operational metrics, and an analysis of its liquidity and capital resources, along with critical accounting estimates and company status Company Overview This section outlines the company's mission, core technology in AI-powered robotics for last-mile delivery, and the market opportunity it addresses - Mission: To deliver a sustainable future by transforming how goods move among people[151] - Core Technology: Advanced, AI-powered robotics mobility platform, with last-mile delivery in cities as its first application[151] - Market Opportunity: Servicing the growing on-demand delivery market, where approximately half of all deliveries are less than 2.5 miles and well-suited to delivery by sidewalk robots[159] Recent Developments This section highlights key corporate actions including a technology acquisition, a registered direct offering, Nasdaq uplisting, and a strategic partnership with Magna - Acquisition of Technology Company: On April 1, 2025, the Company acquired all of the issued and outstanding equity of a foreign entity[160] - Securities Purchase Agreement: On January 7, 2025, the Company issued and sold 4,210,525 shares of common stock in a registered direct offering for approximately $80 million gross proceeds[161] - Public Offering and Uplisting to Nasdaq: On April 17, 2024, the Company completed a public offering, raising approximately $35.8 million net proceeds, and commenced trading on The Nasdaq Capital Market on April 18, 2024[162] - Strategic Partnership with Magna: Entered into a License and Services Agreement (Feb 20, 2024) and a Master Services Agreement (Feb 1, 2024) for technology licensing, development services, and robot assembly assistance[163][164][166] Outlook And Challenges Facing Our Business This section discusses factors influencing the business, such as demand for last-mile delivery, customer concentration, inflation, supply chain constraints, and regulatory conditions - Overall Demand for Last-Mile Delivery: Growth depends significantly on continued demand on partner platforms, which can fluctuate based on market cycles, weather, health conditions, and competitive dynamics[168] - Customer Concentration: A significant portion of revenue is concentrated with Magna (39% of Q2 2025 revenue) and Uber (31% of Q2 2025 revenue), posing risks if these customers are lost[169][170][171] - Inflation and Market Considerations: Discretionary consumer spending is susceptible to economic conditions; inflation could reduce demand but also accelerate the adoption of automated robotic last-mile delivery as labor costs rise[172] - Supply Chain Constraints: Potential global supply chain shortages could impact future robot build plans, leading to higher costs or delays[174] - Governmental and Regulatory Conditions: Growth depends on continued permission and acceptance by local governments; changes in regulations could reduce or limit the ability to generate revenues[175] Components of Results of Operations This section defines the company's revenue streams, cost of revenue, and categories of operating expenses - Revenue: Consists of software services revenues and fleet services revenues[176] - Cost of Revenue: Primarily includes depreciation on robot assets, personnel time, and costs related to data and software for robot functionality[177] - Operating Expenses: Categorized into Operations (facility leases, field personnel), Research and Development (product design, hardware, software), Sales and Marketing (personnel, advertising), and General and Administrative (executive, finance, legal, HR, corporate expenses)[178][179][180] Financial Overview This section provides a high-level summary of the company's revenues, net loss, and accumulated deficit as of June 30, 2025 - Revenues for the three months ended June 30, 2025, were $642 thousand[182] - Net loss for the three months ended June 30, 2025, was $20.8 million[182] - Accumulated deficit as of June 30, 2025, was $141.6 million[182] Results of Operations - Three Months Ended June 30, 2025 and 2024 This section analyzes the company's financial performance, including revenues, costs, gross profit, operating expenses, and net loss, for the three months ended June 30, 2025 and 2024 Operating Results (in thousands) for Three Months Ended June 30 | Metric | 2025 | 2024 | Change | Change % | | :-------------------------- | :----- | :----- | :----- | :------- | | Revenues | $642 | $468 | $174 | 37% | | Cost of revenues | $3,501 | $326 | $3,175 | 974% | | Gross profit (loss) | $(2,859) | $142 | $(3,002) | (2109)% | | Total operating expenses | $19,785 | $8,698 | $11,087 | 127% | | Net loss | $(20,850) | $(9,038) | $(11,812) | 131% | - Revenues increased by $0.17 million (37%) primarily due to a larger fleet, leading to a $0.16 million increase in fleet services revenues[184] - Cost of revenues increased by $3.18 million (974%) due to costs related to the scale-up of the fleet and launch-related costs in new markets[185] Results of Operations - Six Months Ended June 30, 2025 and 2024 This section analyzes the company's financial performance, including revenues, costs, gross profit, operating expenses, and net loss, for the six months ended June 30, 2025 and 2024 Operating Results (in thousands) for Six Months Ended June 30 | Metric | 2025 | 2024 | Change | Change % | | :-------------------------- | :----- | :----- | :----- | :------- | | Revenues | $1,082 | $1,415 | $(333) | (24)% | | Cost of revenues | $5,410 | $678 | $4,732 | 697% | | Gross profit (loss) | $(4,328) | $737 | $(5,065) | (688)% | | Total operating expenses | $33,323 | $17,003 | $16,320 | 96% | | Net loss | $(34,068) | $(18,075) | $(15,993) | 88% | - Revenues decreased by $0.33 million (24%) primarily due to a decrease in software services revenue, despite an increase in fleet services revenues of $0.27 million[191] - Cost of revenues increased by $4.73 million (697%) due to costs related to the scale-up of the fleet and launch-related costs in new markets[192] Key Metrics This section presents key operational metrics such as Daily Active Robots and Daily Supply Hours, reflecting fleet utilization and operational capacity Key Business Metrics | Metric | Three Months Ended June 2025 | Three Months Ended June 2024 | Six Months Ended June 2025 | Six Months Ended June 2024 | | :------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Daily Active Robots | 160 | 48 | 116 | 44 | | Daily Supply Hours | 1,723 | 385 | 1,189 | 342 | - Daily Active Robots: The average number of robots performing daily deliveries, reflecting the operation team's capacity[198] - Daily Supply Hours: The average number of hours robots are ready to accept offers and perform daily deliveries, indicating fleet utilization potential[199] Liquidity and Capital Resources This section discusses the company's principal sources of liquidity, accumulated deficit, and a summary of cash flows from operating, investing, and financing activities - Principal Sources of Liquidity (June 30, 2025): $183.33 million, consisting of $116.70 million in cash and cash equivalents and $66.63 million in marketable securities[200] - Accumulated Deficit: $141.59 million as of June 30, 2025, reflecting significant operating losses[201] Summary of Cash Flows (in thousands) for Six Months Ended June 30 | Activity | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net cash (used in) provided by: | | | | | Operating activities | $(25,426) | $(9,820) | $(15,606) | | Investing activities | $(81,934) | $(798) | $(81,136) | | Financing activities | $100,795 | $39,392 | $61,403 | | Increase (decrease) in cash and cash equivalents | $(6,565) | $28,774 | $(35,339) | - Net cash used in investing activities increased by $81.14 million, primarily due to the purchase of short-term marketable securities ($66.3 million) and the acquisition of a new business ($5.6 million)[205] - Net cash provided by financing activities increased by $61.40 million, primarily from proceeds from common stock issuances[206] Off-Balance Sheet Transactions This section confirms the absence of off-balance sheet financing arrangements or relationships with unconsolidated entities during the reporting periods - The Company did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities during the periods presented[209] Critical Accounting Estimates This section states that there have been no material changes to the critical accounting policies previously disclosed in the annual report - There have been no material changes in critical accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[210] Emerging Growth Company and Smaller Reporting Company Status This section clarifies the company's status as an emerging growth company and smaller reporting company, including its election for an extended transition period for accounting standards - The Company is an "emerging growth company" and a "smaller reporting company"[211][212] - The Company has elected to use the extended transition period for complying with new or revised financial accounting standards[211] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Serve Robotics Inc. is not required to provide quantitative and qualitative disclosures about market risk for this reporting period - The Company is a smaller reporting company and is not required to provide the information for this item[213] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses in internal control over financial reporting, including an ineffective control environment, lack of segregation of duties, inadequate accounting policies, and ineffective IT general controls. A remediation plan is in place Disclosure Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025[217] - Ineffectiveness is due to material weaknesses in internal control over financial reporting[217] Material Weaknesses in Internal Control Over Financial Reporting Identified material weaknesses include an ineffective control environment, lack of segregation of duties, inadequate accounting policies, and ineffective IT general controls - Identified material weaknesses include an ineffective control environment due to insufficient resources, lack of effective segregation of duties, inadequate comprehensive and formalized accounting and financial reporting policies, and ineffective IT general controls[223] - These material weaknesses did not result in a misstatement to any of the Company's previously issued consolidated financial statements but could result in future material misstatements[219] Status of Remediation Plan Management has established a remediation plan for 2025 to address identified material weaknesses by implementing robust processes and effective financial reporting controls - Management has established a remediation plan for 2025 to address material weaknesses, focusing on establishing more robust processes, designing and implementing effective financial reporting controls, and ensuring accurate documentation and timely support[220] - Full remediation will require completion and effective operation of these steps over a sufficient period of time[221] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[222] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings There are no pending, threatened, or actual material legal proceedings involving Serve Robotics Inc. or its subsidiaries - There are no pending, threatened or actual material legal proceedings in which the Company or any of its subsidiaries is a party[225] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[226] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for this period - None[227] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for this period - None[228] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to Serve Robotics Inc.'s operations - Not applicable[229] Item 5. Other Information Evan Dunn (General Counsel) and Euan Abraham (Chief Hardware and Manufacturing Officer) each entered into Rule 10b5-1 trading plans in May and June 2025, respectively, for the potential sale of common stock, with sales not to commence before September 2025. No shares have been sold under these plans as of the report date - Evan Dunn, General Counsel, entered into a Rule 10b5-1 trading plan on May 20, 2025, for the potential sale of up to 15,000 shares of common stock, with sales not to commence prior to September 1, 2025[230] - Euan Abraham, Chief Hardware and Manufacturing Officer, entered into a Rule 10b5-1 trading plan on June 2, 2025, for the potential sale of up to 50,000 shares of common stock, with sales not to commence prior to September 2, 2025[231] - As of the date of this report, none of the shares were sold under these trading plans[230][231] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including amendments to the equity incentive plan, certifications of principal officers, and various XBRL documents - Exhibits include an amendment to the 2023 Equity Incentive Plan, certifications of the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents[233] Signatures The report is duly signed on August 7, 2025, by Ali Kashani, Chief Executive Officer, and Brian Read, Chief Financial Officer - The report was signed on August 7, 2025, by Ali Kashani, Chief Executive Officer, and Brian Read, Chief Financial Officer[239]