Serve Robotics (SERV) risk factors, 2025 10-K

Risks Related to Our Business and Industry

1. 01Because we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses for the foreseeable future, we cannot assure you that we can or will be able to operate profitably
2. 02We have a limited operating history, which may make it difficult to evaluate our business and prospects
3. 03If we fail to effectively manage our growth, we may not be able to design, develop, manufacture, market, and launch new generations of our robotic systems successfully
4. 04Our revenues and profits are subject to fluctuations
5. 05A significant portion of our revenue is concentrated with two customers
6. 06We are dependent on general economic conditions
7. 07Our directors may be engaged in a range of business activities that could result in conflicts of interest
8. 08Unfavorable changes in interest rates and foreign currency exchange rates may adversely affect our financial condition, liquidity, and results of operations
9. 09The inability of our supply chain to deliver certain key electrical components, such as semiconductors, could materially adversely affect our business, financial condition and results of operations
10. 10Our failure to attract and retain highly qualified personnel in the future could harm our business
11. 11Litigation or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management’s time and attention, and damage our reputation
12. 12Our future revenue plans rely on partnering with third-party delivery platforms, brand sponsors and/or direct sales to merchants
13. 13Failure of our service providers or disruptions to our outsourcing relationships may negatively impact our ability to conduct our business
14. 14Our robots operate in public spaces and any errors caused by human supervisors, network connectivity issues, third-party software, or automation may adversely affect our commercial relationships
15. 15The benefits to customers of our products could be supplanted by other technologies or solutions or competitors’ products that utilize similar technology to ours in a more effective way
16. 16We have limited experience commercializing our products at a large scale and may not be able to do so efficiently or effectively
17. 17business with us, then we would have significant difficulty in procuring and producing our robots and our business prospects would be significantly harmed
18. 18Tariffs imposed by the United States and other countries, as well as changing trade relations, regional and international conflicts, and political conditions could have a material adverse effect on our business and results of operations
19. 19The evolving regulations around personal delivery devices ("PDDs") could materially impact our business and growth prospects in new markets
20. 20communications could result in fines, loss of permits and licenses or other regulatory consequences, which could limit our ability to manufacture and deliver our robotic systems and negatively affect our business, prospects, financial condition, results of operations, and cash flows
21. 21Even if our products perform properly and are used as intended, if operators sustain any injuries while using our products, we could be exposed to liability and our results of operations, financial condition, and our reputation may be adversely affected
22. 22We operate in a competitive industry that is subject to rapid technological change, and competitors may have or attain more resources and/or greater market recognition than we do
23. 23provide superior results to customers or are less expensive than our products. Our technologies and products could have reduced competitiveness by such developments
24. 24If we cannot protect, maintain and, if necessary, enforce our intellectual property rights, our ability to develop and commercialize products may be adversely impacted
25. 25We may be subject to claims of infringement of third-party intellectual property rights
26. 26Security breaches and other disruptions could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer
27. 27network disruptions from numerous causes, including computer viruses and other cyber-attacks, facility access issues, new system implementations, and energy blackouts
28. 28We may be subject to theft, loss, or misuse of personal data by or about our employees, customers, or other third parties, which could increase our expenses, damage our reputation, or result in legal or regulatory proceedings
29. 29Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or contain terms unfavorable to us or our investors
30. 30We will need additional capital to develop future versions of the Serve robots and scale our commercial delivery operations. We will not be able to continue product development and our commercial deliveries if we cannot raise additional debt and/or equity financing
31. 31Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by domestic and international financial institutions or transactional counterparties, could adversely affect our business, financial condition, and results of operations
32. 32If use of the internet via websites, mobile devices and other platforms, particularly with respect to online food ordering, does not continue, our business and growth prospects will be harmed
33. 33Our products and services are disruptive to the delivery services industries, and important assumptions about the market demand, pricing, adoption rates and sales cycle, for our current and future products and services may be inaccurate
34. 34The benefits of our products to customers and projected return on investment have not been substantiated through long-term trials or use
35. 35Even if we successfully market our robotic systems, the purchase or subscription, adoption and use of these systems may be materially and negatively impacted if our customers resist their use and adoption
36. 36Our systems, products, technologies and services and related equipment may have shorter useful lives than we anticipate
37. 37Any acquisitions, partnerships, or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations
38. 38Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and could cause our stock price to decline
39. 39Our management team will have broad discretion in making strategic decisions to execute their growth plans, and there can be no assurance that our management’s decisions will result in successful achievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects
40. 40We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations
41. 41We, any manufacturing partners, and suppliers may rely on complex machinery for production, which involves a significant degree of risk and uncertainty in terms of operational performance and costs
42. 42We may be unable to adequately control the costs associated with our operations
43. 43Our ability to manufacture products of sufficient quality on schedule in the future is uncertain, and delays in the design, production and launch of our products could harm our business, prospects, financial condition and operating results
44. 44Laws, regulations, and other legislative efforts related to climate change, environmental concerns, and health and safety could result in increased operating costs, reduced demand for our products and services, or the loss of future business
45. 45regulations could lead to withdrawal or recall of our products from the market, delay our projected revenues, increase cost, or make our business unviable if we are unable to modify our products to comply
46. 46Severe weather conditions and climate change could have a material adverse impact on our business by reducing the operating hours of our robots
47. 47We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our products and data processed by us or third-party vendors
48. 48Being a public company can be administratively burdensome and will significantly increase our legal and financial compliance costs
49. 49Our management as a group has limited experience in operating a publicly traded company

Risks Related to Ownership of Our Common Stock

1. 50The market price and trading volume of our common stock may be volatile and could decline significantly
2. 51We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors
3. 52Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
4. 53We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards
5. 54We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
6. 55If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline
7. 56We are and may continue to be significantly impacted by the worldwide economic downturn due to pandemics, outbreaks of other contagious diseases, and other catastrophic events