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United States securities and exchange commission logo
October 11, 2023
Ali Kashani
Chief Executive Officer
Serve Robotics Inc.
730 Broadway
Redwood City, CA 94063
Re: Serve Robotics Inc.
Registration
Statement on Form S-1
Filed September 15,
2023
File No. 333-274547
Dear Ali Kashani:
We have reviewed your
registration statement and have the following comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Form S-1 Filed on September 15, 2023
General
1. We note that you refer
to your prior private placement as the Offering, for example on
the prospectus cover
and page 40. Please revise this definition to avoid confusion with the
current resale offering
and revise disclosure on page 57 that refers to subsequent closings
of the private
placement, or advise. In addition, revise references throughout your
registration statement
to "this merger" and to other information that appears unrelated to
the current offering,
such as projected financial information and forecasts. Update
information throughout
as of the most recent practicable date, such as your disclosure
regarding required
deposits at Silicon Valley Bank, recent developments on page 57, and
market and beneficial
ownership information.
2. Revise your
registration statement to furnish the information required by Item 506 of
Regulation S-K related
to dilution under a separate heading or tell us why you believe you
are not required to do
so.
Ali Kashani
FirstName LastNameAli Kashani
Serve Robotics Inc.
Comapany
October 11,NameServe
2023 Robotics Inc.
October
Page 2 11, 2023 Page 2
FirstName LastName
3. We note that there has been a change in your independent registered
public accounting
firm. As applicable, revise your registration statement to furnish the
information required
by Item 304 of Regulation S-K or tell us why you believe you are not
required to do so.
Prospectus Summary, page 1
4. Please conform or otherwise revise your disclosure to clarify whether
all, or which
portion, of the shares issued in the share conversion are being
offered for resale. In this
regard, we note the prospectus cover refers to 12,391,823 shares
(which excludes
restricted stock held by the employees), page 3 describes the issuance
of up to 20,948,917
shares and defines "Share Conversion" to include options and warrants,
and page 40 refers
to shares "issued as a result of the Share Conversion." Please also
revise the final two
bullet points on page 10 to clarify whether the referenced shares are
being registered and
offered pursuant to this registration statement. We further note a
reference to contractual
restrictions on transfer on page 3 and the description of lock-up
agreements on page
112. Please revise to clarify how these relate to the shares being
offered for resale. File the
registration rights agreement and lock-up agreements as exhibits to
your registration
statement.
5. We note disclosure on pages 1 and 2 that refers to your sidewalk
robots as zero-
emissions and indicates you anticipate opportunities for reducing
greenhouse gas
emissions. Please balance by more fully describing the emissions
related to your sidewalk
robots, for instance in connection with their charging and
transportation to or from
delivery locations. Additionally revise the environmental impacts
section on page 54 to
describe the assumptions upon which your emissions reductions claims
are based. Please
also balance disclosure on page 2 that your robots can improve road
safety and make
cities friendlier for pedestrians by describing relevant safety
concerns, including
information as to your security and safety track record.
Risk Factors, page 9
6. Please revise your risk factor disclosure throughout so that risks you
have actually
encountered are not presented as purely hypothetical. For example,
your risk factor "Our
future revenue plans rely on partnering with third party delivery
platforms, brand sponsors
and/or direct sales to merchants" indicates that you "may" be unable
to maximize robot
utilization or realize branding placement revenues, but does not
discuss and provide
specific details regarding your actual experience. Similar
shortcomings are noted in other
risk factors including, without limitation, "Failure of our service
providers or disruptions
to our outsourcing relationships might negatively impact our ability
to conduct our
business" and "Our 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."
7. Please discuss whether supply chain disruptions materially affect your
outlook or business
goals. Address, without limitation, the "industry-wide shortages"
referenced on page 49
Ali Kashani
FirstName LastNameAli Kashani
Serve Robotics Inc.
Comapany
October 11,NameServe
2023 Robotics Inc.
October
Page 3 11, 2023 Page 3
FirstName LastName
and "global supply shortage of electrical components, including
semiconductor chips and
other hardware components essential to the manufacturing and
maintenance of our robots"
referenced on page 59. Clearly describe whether supply shortages or
disruptions have
materially impacted your results of operations or capital resources
and quantify, to the
extent possible, how your sales, profits, and/or liquidity have been
impacted.
8. We note your disclosure on page 13 stating that "[u]nfavorable changes
in interest rates,
pricing of certain precious metals, utility rates, and foreign
currency exchange rates may
adversely affect [y]our financial condition, liquidity, and results of
operations." Please
expand your discussion of interest rates and changes in pricing of
certain precious metals
to specifically identify their impact on your operations and how your
business has been
affected. For example, describe whether changes in pricing of certain
metals used in
manufacturing and maintenance of your delivery robots has recently
increased or is
expected to increase and whether this affects your expansion goals.
9. We note your disclosure on page 16 stating that you "are substantially
reliant on [y]our
relationships with suppliers and service providers for the parts and
components in [y]our
robots, as well as for the manufacture of [y]our robots." Please
describe the material terms
of your arrangements with suppliers and service providers, and file
any material contract
as an exhibit to your registration statement pursuant to Item
601(b)(10) of Regulation S-K.
In this regard, we note your disclosure on page 49 regarding single or
limited source
components, and your key suppliers NVIDIA and Ouster, Inc.
10. We note your disclosure on page 22 stating that economic downturns,
including inflation,
could materially adversely affect your results of operation. Please
update this risk factor if
recent inflationary pressures have materially impacted your
operations. In this regard,
identify the types of inflationary pressures you are facing and how
your business has been
affected. In addition, please update your disclosure to identify
actions planned or taken, if
any, to mitigate inflationary pressures.
We face risks related to natural disasters, health epidemics and other
outbreaks, which could
significantly disrupt our operations, page 24
11. Please tailor your disclosure to describe the specific risks
applicable to your operations
and products. Clarify, for example, whether your robots are dependent
upon internet
and/or broadband connectivity to function, and how disruption thereof
would affect their
operations. Discuss the need to charge robot batteries and the effect
that power outages
would have. Describe and assess other risks that might adversely
affect your operations
and results, such as theft or disablement of robots.
We, any manufacturing partners, and suppliers may rely on complex machinery,
page 24
12. Please revise your disclosure which appears to refer to your
manufacturing facilities, for
consistency with disclosure elsewhere that indicates you use
third-party manufacturers, for
example on pages 16 and 25. Additionally ensure consistency with the
discussion of
assembly and manufacturing in your business section, for example on
page 49.
Ali Kashani
FirstName LastNameAli Kashani
Serve Robotics Inc.
Comapany
October 11,NameServe
2023 Robotics Inc.
October
Page 4 11, 2023 Page 4
FirstName LastName
Description of Our Business, page 42
13. Please revise your disclosure to include a specific, clear description
of your current
operations, status of product and service development, and markets and
deployment
methods. Distinguish clearly your aspirations from your
accomplishments. Address,
without limitation, each of the following items:
Identify the current stage of development of your delivery
robots and describe your
expected timeline for further development.
Clearly describe the current automation level of your robots
and plans to increase
automation.
Revise your disclosure that "we plan to expand our fleet by
building and deploying
hundreds of new robots in coming years after raising additional
rounds of financing,"
by identifying the number of new robots and target year(s) for
production and
deployment.
Clearly disclose your current and anticipated production
capacity, including your
expected timeline for ramping up, and distinguish between
in-house and third-party
production.
Clearly describe the steps involved in the research, design,
development,
manufacturing, commercialization, and deployment of your delivery
robots,
identifying material obstacles to overcome, such as safety
testing and regulatory
approvals.
Indicate which steps are expected to be completed with existing
funds, and which
will require additional funding, consistent with your liquidity
disclosure elsewhere,
including on page 20.
Describe the current status of the Uber pilot program and the
commercial-scale
agreement to deploy 2,000 robots across the United States
referenced on page 51.
Clarify your business plans with respect to overseas operations
or international
markets. In this regard, we note the risk factor references on
pages 26 and 29.
14. Please revise your disclosure to describe your customers and the
nature of your
contractual arrangements, clearly distinguishing between existing and
prospective
customers and arrangements. In this regard, we note references on
pages 23 and 25 to
purchases/sales or subscriptions, disclosure on page 22 that,
"Although we have engaged
in ongoing dialogue with potential customers, we have no binding
commitments to
purchase products and services," and the description of "Partnerships"
on page 51. Clarify
which party owns the delivery robots, is responsible for maintenance
and repairs, bears the
risk of loss or damage, and has branding or other applicable rights
pursuant to your
various contractual arrangements. Describe any warranties and/or
indemnifications you
provide in relation to your robots and their operations. Clarify which
of the unit costs
described on page 52 are incurred by you or by your customers.
Describe the outcome of
your pilot programs and whether these are expected to lead to
commercial contracts. Fully
describe the material terms of your agreements with Uber and Seven-11,
including what
platform-level integration entails and how revenue is generated.
Ali Kashani
FirstName LastNameAli Kashani
Serve Robotics Inc.
Comapany
October 11,NameServe
2023 Robotics Inc.
October
Page 5 11, 2023 Page 5
FirstName LastName
Impact of Robot Delivery, page 44
15. Please balance your disclosure in this section by describing
applicable limitations on robot
operations, such as utilization rates, round-trip delivery times,
potential safety risks, and
useful lifespan. More fully describe the extent of human involvement
with respect to your
existing fleet, including by clarifying the role of human operators
and/or supervisors with
respect to the operation of robots or specific use-scenarios. Describe
robot storage,
charging requirements, transportation to/from or between deployment
locations, and other
relevant logistics considerations.
Competition, page 52
16. We note your disclosure that, "Similar to Serve, Coco focuses on urban
delivery but does
not have a marketplace integration with a major third-party delivery
platform,
significantly constraining its ability to scale." Please revise to
more fully discuss this
difference between Serve and Coco, including whether and how
marketplace
integration affects the availability of and fees charged for your
respective delivery
services. If delivery fees are standardized (i.e., as between
merchants and delivery
platforms, or as between the fees charged for human or robot delivery
by a given delivery
platform), then revise disclosure on page 54 that indicates robots
reduce delivery costs
accordingly, or advise.
Government Regulations, page 54
17. Please revise your disclosure to discuss the government regulations to
which your
business operations are subject. Refer to Items 101(h)(4)(viii), (ix),
and (xi) of Regulation
S-K for guidance. In this regard, we note references on pages 16 and
17 to "requisite
permits" from municipalities, Federal Communications Commission
regulations,
and Department of Transportation requirements. Please also clarify
whether you are
subject to food safety and handling requirements.
Intellectual Property, page 54
18. We note your disclosure stating that you "have applied for 18 patents
in China, the United
States, Canada, and through the Patent Cooperation Treaty." Please
expand this disclosure
to state how many patents you have applied for in each country
including how many have
been granted in each country.
Certain Relationships and Related Party Transactions
Secured Subordinated Promissory Note with Ali Kashani, page 87
19. With regard to the amount involved in this transaction, during the
period for which
disclosure is provided, please revise this section to provide
disclosure of the largest
aggregate amount of principal outstanding, the amount of principal
paid, and the amount
of interest and fees paid. See Item 404(a)(5) of Regulation S-K.
Ali Kashani
FirstName LastNameAli Kashani
Serve Robotics Inc.
Comapany
October 11,NameServe
2023 Robotics Inc.
October
Page 6 11, 2023 Page 6
FirstName LastName
Determination of Offering Price, page 93
20. Please revise this section to include disclosure that describe the
various factors considered
in determining the initial offering price. See Item 505(a) of
Regulation S-K.
Plan of Distribution, page 104
21. Please revise this section to identify the fixed price at which shares
may be offered for
resale and to clearly state that the shares may not be offered
at-the-market until they are
quoted on the OTCQB, consistent with disclosure elsewhere.
Unaudited Pro Forma Combined Financial Information, page F-43
22. We note that you still include references to the legacy pro forma
guidance regarding
adjusting for events that are directly attributable to the
transaction, factually supportable,
and expected to have a continuing impact. Please revise your pro forma
financial
statements to fully comply with Article 11 of Regulation S-X as
amended and to remove
any references to the legacy pro forma guidance. In doing so, confirm
that your pro forma
financial statements include all necessary transaction accounting
adjustments, including
those that are not expected to have a continuing impact.
Unaudited Pro Forma Combined Balance Sheets , page F-44
23. Please revise your pro forma combined balance sheet to show the number
of preferred
stock and common stock authorized, issued and outstanding on both a
historical and pro
forma basis.
Unaudited Pro Forma Combined Statements of Operations, page F-45
24. Please revise your pro forma combined statements of operations for the
six-months ended
June 30, 2023 and the year ended December 31, 2022 to include the
historical weighted
average common shares outstanding basic and diluted, and net loss
per common share
basic and diluted for Serve Robotics. Refer to Rule 11-02(a)(9)(i) of
Regulation S-X.
Notes to Unaudited Pro Forma Financial Statements , page F-47
25. With regards to footnote (i), please provide a reconciliation between
the historical and pro
forma weighted average shares used in computing basic and diluted EPS.
Please also
disclose any shares not included for anti-dilution reasons.
26. We note that pro forma adjustment (a) records the proceeds of
$3,001,500, less the
commissions paid to the Bridge Brokers of $239,400, pursuant to the
April 2023 private
placement offering of 10% senior subordinated secured convertible
notes ("Bridge
Notes") to accredited investors. In light of the fact that this
offering took place during the
period of the historical balance sheet, appears to be disclosed in
Note 6 to the interim
financial statements, and is included on the balance sheet as of June
30, 2023, as
convertible note payable, it does not appear to be an appropriate pro
forma adjustment to
Ali Kashani
Serve Robotics Inc.
October 11, 2023
Page 7
increase cash for this amount. Also, in this regard, it appears that
there may need to be a
pro forma adjustment related to the conversion of the Bridge Notes
which are recorded as
liabilities as of June 30, 2023, to shares of common stock. Please
revise or advise
accordingly.
Part II
Item 15. Recent Sales of Securities, page II-I
27. We note the incorporation by reference of information regarding
certain securities. Please
revise to provide the information required by Item 701 of Regulation
S-K with respect to
all recent sales of securities.
Exhibit Index
Exhibit 23 - Consent of Independent Registered Public Accounting Firm, page
II-6
28. Please revise to include a currently dated consent of your prior
auditor, Raich Ende Malter
& Co, to the inclusion of their report dated March 29, 2022, relating
to the financial
statements of Patricia Acquisition Corp as of and for the year ended
December 31, 2021.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Ernest Greene at 202-551-3733 or Claire Erlanger at
202-551-3301 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Eranga Dias at 202-551-8107 or Jennifer Angelini at 202-551-3047 with
any other
questions.
FirstName LastNameAli Kashani Sincerely,
Comapany NameServe Robotics Inc.
Division of
Corporation Finance
October 11, 2023 Page 7 Office of
Manufacturing
FirstName LastName