Company: SERV
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001832483-25-000038
Chunk: 66

Company: Serve Robotics Inc. /DE/
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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 expense captions presented on the face of the statements of operations. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. Early adoption is permitted. The adoption will require certain additional disclosure in the notes to the Company’s consolidated financial statements. 

3. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows:There were no Level 1, 2 or 3 assets or liabilities as of March 31, 2025 or December 31, 2024. Derivative LiabilityIn connection with the Company’s convertible notes, the Company recorded a derivative liability (see Note 5). The 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 202