Company: SERV
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001832483-25-000038
Chunk: 31

Company: Serve Robotics Inc. /DE/
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 estimated fair value of the derivative liability was recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.The fair value of the derivative liability was valued using a probability-weighted scenario analysis utilizing the terms of the notes under the with-or-without method. The Company determined a 100% probability of conversion into equity as the notes were converted into shares of common stock upon the Offering in April 2024.Upon the Offering in April 2024, all the convertible notes, including principal and accrued interest, were converted into 2,104,562 shares of common stock. Accordingly, the related derivative liability was converted into additional paid-in capital.

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4. PROPERTY AND EQUIPMENT, NET

The following is a summary of property and equipment, net: March 31,2025December 31,2024Office equipment$332,310 $332,310 Robot assets10,460,645 4,609,886 Construction-in-progress4,766,289 7,826,476 Tooling1,799,033 1,799,033 Total17,358,277 14,567,705 Less: accumulated depreciation(3,078,875)(2,604,244)Property and equipment, net$14,279,402 $11,963,461 Depreciation expense was $474,632 and $17,923 for the three months ended March 31, 2025 and 2024, respectively.

5. NOTE PAYABLE

Note Payable – Related PartyIn 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.January 2024 Convertible Note PayableAt various dates in January 2024, the Company issued to certain accredited investors convertible promissory notes in 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. The January 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