Serve Robotics reports $59.23 million net loss

Cover page 3 changes

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For the Quarterly Period Ended June September 30, 2026

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Redwood City , California 94063

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As of August 4, November 3, 2026, the registrant had 86,707,507 87,884,752 shares of its common stock, par value $0.0001 per share, outstanding.

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Forward-looking statements 8 changes

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• unfavorable changes in interest rates, foreign currency exchange rates, and inflationary pressures that may increase our operating costs;

• our dependence on discretionary spending patterns in the areas in which we operate and in the economy at large;

• competition in an industry subject to rapid technological change, where competitors may have or attain more resources and greater market recognition than we do;

• important assumptions about the market demand, pricing, adoption rates, and sales cycle for our current and future products and services being inaccurate;

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• restrictions on foreign-produced advanced robotic devices and our ability to obtain required Federal Communications Commission ("FCC") equipment authorizations and related government approvals for our current and future robots;

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Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this

• other risks and uncertainties, including those listed described in our Annual Report on Form 10-K for the year ended December 31, 2025, including the risks, uncertainties, assumptions, and other factors described in the section entitled "Part I, Item 1A. Risk Factors," as supplemented by those risks and uncertainties listed described in our subsequent SEC filings, including the risks, uncertainties, assumptions, and other factors described in this Quarterly Report on Form 10-Q including the factors described in the section entitled " Part II, Item 1A. Risk Factors. "

Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, prospects, strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section entitled "Part I, Item 1A. Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by those risks and uncertainties described in our subsequent SEC filings, including the risks, uncertainties, assumptions, and other factors described in this Quarterly Report on Form 10-Q in the section entitled " Part II, Item 1A. Risk Factors. and elsewhere in this Quarterly Report on Form 10-Q. " Moreover, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

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Financial statements 144 changes

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Other receivables 2,605 696

Goodwill 27,998 15,530

Total assets $ 378,624 $ 367,751

Cash and cash equivalents $ 79,112 50,765 $ 106,239

Short-term marketable securities 156,295 147,234 127,170

Accounts receivable, net 2,883 2,170 851

Prepaid expenses 6,177 6,026 6,042

Other receivables 1,451 696

Other current assets 219 307 77

Total current assets 247,291 207,953 241,075

Long-term marketable securities 5,001 — 26,344

Property and equipment, net 50,507 48,711 47,013

Intangible assets, net 34,505 32,553 31,313

Goodwill 29,732 15,530

Operating lease right-of-use assets 10,050 9,591 5,369

Other non-current assets 3,272 2,961 1,107

Total assets $ 331,501 $ 367,751

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Accounts payable $ 5,505 $ 5,014

Accrued liabilities 9,430 6,482

Accounts payable $ 3,023 $ 5,014

Accrued liabilities 11,497 6,482

Deferred revenue 1,975 1,916 2

Operating lease liabilities, current 2,362 2,727 1,800

Total current liabilities 19,272 19,163 13,298

Operating lease liabilities, non-current 7,335 6,744 3,454

Deferred tax liabilities 225 353 255

Total liabilities 26,832 26,260 17,007

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Accumulated deficit ( 322,017 ) ( 208,886 )

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of both June September 30, 2026 and December 31, 2025

Common stock, $ 0.0001 par value; 300,000,000 shares authorized, 86,536,203 87,599,157 and 74,781,782 shares issued and 86,496,060 87,562,360 and 74,734,949 shares outstanding as of June September 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 673,832 686,509 559,485

Accumulated other comprehensive income (loss) ( 32 30 ) 138

Accumulated deficit ( 381,247 ) ( 208,886 )

Total stockholders' equity 351,792 305,241 350,744

Total liabilities and stockholders' equity $ 378,624 331,501 $ 367,751

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June 30, Six Months Ended

Revenues $ 3,238 $ 642 $ 6,222 $ 1,082

Cost of revenues 12,017 3,501 24,002 5,410

Gross loss ( 8,779 ) ( 2,859 ) ( 17,780 ) ( 4,328 )

Research and development 20,279 9,120 39,316 16,000

General and administrative 24,844 8,078 39,760 12,828

Operations 7,862 2,124 14,817 3,793

Sales and marketing 4,301 463 6,174 702

Total operating expenses 57,286 19,785 100,067 33,323

Loss from operations ( 66,065 ) ( 22,644 ) ( 117,847 ) ( 37,651 )

September 30, Nine Months Ended

Revenues $ 2,835 $ 687 $ 9,057 $ 1,769

Cost of revenues 10,390 5,066 34,392 10,476

Gross loss ( 7,555 ) ( 4,379 ) ( 25,335 ) ( 8,707 )

Research and development 22,636 13,414 61,952 29,414

General and administrative 20,227 13,153 59,987 25,981

Operations 7,260 2,987 22,071 6,780

Sales and marketing 3,510 883 9,690 1,585

Total operating expenses 53,633 30,437 153,700 63,760

Loss from operations ( 61,188 ) ( 34,816 ) ( 179,035 ) ( 72,467 )

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Interest income 1,927 1,794 4,033 3,586

Interest expense — — — ( 3 )

Other income 3 — 38 —

Other expenses ( 24 ) — ( 24 ) —

Net loss before income taxes ( 64,163 ) ( 20,850 ) ( 113,815 ) ( 34,068 )

Net loss $ ( 64,127 ) $ ( 20,850 ) $ ( 113,131 ) $ ( 34,068 )

Interest income 1,974 1,707 6,007 5,293

Interest expense ( 1 ) — ( 1 ) ( 3 )

Realized gain (loss) on foreign currency translation ( 4 ) — 9 ) 14 4 ( 23 ) 4

Realized gain (loss) on investments ( — ( 1 ) 85 ( 2 ) 85

Other income — — 38 —

Other expenses ( 84 ) — ( 108 ) —

Net loss before income taxes ( 59,309 ) ( 33,020 ) ( 173,124 ) ( 67,088 )

Benefit from income taxes ( 36 79 ) — ( 684 763 ) —

Net loss $ ( 59,230 ) $ ( 33,020 ) $ ( 172,361 ) $ ( 67,088 )

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Other comprehensive income (loss), before tax 29 298 ( 170 ) 298

Income tax expense related to items of other comprehensive income — — — —

Comprehensive loss $ ( 64,098 ) $ ( 20,552 ) $ ( 113,301 ) $ ( 33,770 )

Weighted average common shares outstanding - basic and diluted 80,310,583 57,514,808 77,820,615 56,953,711

Unrealized gain (loss) on foreign currency translation ( 2 10 ( 343 ) 6 4 — 343

Unrealized gain (loss) on investments 31 ( 45 ) ( 164 8 ) 110 ( 45 172 ) 65

Other comprehensive income (loss), net of tax 29 298 2 ( 170 233 ) 298 ( 168 ) 65

Comprehensive loss $ ( 59,228 ) $ ( 33,253 ) $ ( 172,529 ) $ ( 67,023 )

Weighted average common shares outstanding - basic and diluted 86,934,371 61,343,218 80,891,917 58,472,679

Net loss per common share - basic and diluted $ ( 0.80 0.68 ) $ ( 0.36 0.54 ) $ ( 1.45 2.13 ) $ ( 0.60 1.15 )

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and 64 more changes in the filing

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 42 changes

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As of June September 30, 2026, our principal sources of liquidity were cash and cash equivalents and short-term marketable securities of $ 235.4 198.0 million, which consisted of unrestricted cash and cash equivalents on hand of $ 79.1 50.8 million and $ 156.3 147.2 million in short-term marketable securities. The Company has incurred recurring losses each year since its inception and continues to forecast operating and investing cash outflows.

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We have and may continue to seek to obtain working capital during our fiscal year 2026 or thereafter through sales of our equity securities or convertible debt or through public or private debt facilities from various financial institutions where possible, though the availability of such funding, and applicable terms, will be dependent on prevailing market conditions.

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June 30, Six Months Ended

September 30, Nine Months Ended

Customer A sales as a percentage of total revenues 11 10 % 31 43 % 12 11 % 29 34 %

Customer B sales as a percentage of total revenues 22 % N/A 17 N/A 12 % N/A

Customer C sales as a percentage of total revenues N/A 39 % N/A 46 N/A 27 %

Customer D sales as a percentage of total revenues N/A 27 % N/A 10 %

A significant portion of our accounts receivable is concentrated with a limited number of customers. The following table represents the concentration of accounts receivable for all customers that account for more than 10% of our total accounts receivable as of June September 30, 2026 and December 31, 2025:

June September 30, 2026 December 31, 2025

Customer A receivables as a percentage of total accounts receivable 11 % N/A 11 %

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Customer D receivables as a percentage of total accounts receivable N/A 18 30 %

Customer E receivables as a percentage of total accounts receivable 14 % 30 N/A 18 %

Customer F receivables as a percentage of total accounts receivable 13 23 % N/A

Customer G receivables as a percentage of total accounts receivable 12 % N/A

Customer H receivables as a percentage of total accounts receivable 11 % N/A

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Acquisition-related costs are costs that the Company incurs to effect a business combination, such as advisory, legal, accounting, valuation, and consulting fees. These costs are expensed as incurred. The Company recognized $ 0.4 0.1 million and $ 2.2 1.0 million of acquisition costs during the three and six months ended June September 30, 2026 and 2025, respectively. There was an immaterial amount The Company recognized $ 2.3 million and $ 1.3 million of acquisition costs recognized during the three and six nine months ended June September 30, 2026 and 2025, respectively.

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Property and Equipment, Net

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The range of useful lives of leasehold improvements will depend on the specific circumstances for each improvement and the associated lease agreement. As of June September 30, 2026, leasehold improvements are being depreciated over 1 to 7 years. Estimated useful lives are routinely assessed by management for reasonableness. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the unaudited condensed consolidated balance sheets and any resulting gains or losses are included in the unaudited condensed consolidated statements of operations and comprehensive loss in the period of disposal.

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Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation ("ASC 718"). The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved.

The Company classifies stock-based compensation expense in its unaudited condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. We estimate the volatility of common stock on the date of grant based on the weighted-average historical stock price volatility of our own shares or comparable publicly traded companies in our industry group. The expected term of the Company's stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield reflects the Company's history of not paying cash dividends on common stock and its expectation that it will not pay cash dividends in the foreseeable future. Forfeitures are recognized as incurred. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

For awards with performance-based vesting conditions, compensation expense is recognized on a straight-line basis over the requisite service period. The fair value of each performance-based award granted is estimated on the date of grant. For performance-based awards with vesting conditions that impact the determination of fair value, the Company uses a Monte Carlo simulation option pricing model. This model requires the input of subjective assumptions, including expected stock price volatility, expected term, risk-free interest rate, dividend yield and the probability and timing of achieving the applicable performance conditions, as applicable. The Company estimates expected volatility based on the historical volatility of its common stock. The risk-free interest rate is based on U.S. Treasury yields with maturities consistent with the expected term of the awards. The Company assumes no expected dividend yield because it has not historically paid, and does not currently expect to pay, dividends on its common stock.

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Fees that have been invoiced or paid but for which performance obligations have not been met are recorded as deferred revenue. As of June September 30, 2026 and December 31, 2025, the Company had $ 2.0 1.9 million and an immaterial amount, respectively, in deferred revenue pertaining to fleet and software services.

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Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation ("ASC 718"). The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved.

The Company classifies stock-based compensation expense in its unaudited condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. We estimate the volatility of common stock on the date of grant based on the weighted-average historical stock price volatility of our own shares or comparable publicly traded companies in our industry group. The expected term of the Company's stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield reflects the Company's history of not paying cash dividends on common stock and its expectation that it will not pay cash dividends in the foreseeable future. Forfeitures are recognized as incurred. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

For awards with performance-based vesting conditions, compensation expense is recognized on a straight-line basis over the requisite service period. The fair value of each performance-based award granted is estimated on the date of grant. For performance-based awards with vesting conditions that impact the determination of fair value, the Company uses a Monte Carlo simulation option pricing model. This model requires the input of subjective assumptions, including expected stock price volatility, expected term, risk-free interest rate, dividend yield and the probability and timing of achieving the applicable performance conditions, as applicable. The Company estimates expected volatility based on the historical volatility of its common stock. The risk-free interest rate is based on U.S. Treasury yields with maturities consistent with the expected term of the awards. The Company assumes no expected dividend yield because it has not historically paid, and does not currently expect to pay, dividends on its common stock.

The U.S. dollar is the functional currency of the Company's foreign subsidiaries. The Company remeasures monetary assets or liabilities denominated in currencies other than the U.S. dollar using exchange rates prevailing on the balance sheet date, and non-monetary assets and liabilities at historical rates. Foreign currency remeasurement and transaction gains and losses are included in other income (expense) and have not been material for any periods presented.

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect reflects the weighted average number of shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities were anti-dilutive as of June September 30, 2026 and 2025, diluted net loss per share is the same as basic net loss per share for each period.

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Stock options 694,138 874,049

Total potentially dilutive shares 16,492,921 8,573,214

Common stock warrants 5,079,294 1,096,481 5,079,294

Contingently issuable shares 1,795,960 — 1,785,960 1,440,001

Stock options 639,128 866,268

Unvested restricted stock awards subject to recourse and nonrecourse loans 36,797 50,178

Total potentially dilutive shares 16,613,907 16,420,144

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In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," which requires the disaggregation of certain expenses in the notes of the financial statements to provide enhanced transparency into the 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. The Company is evaluating the impact of this standard, but it does not expect the standard to have an impact on its financial statements and related disclosures.

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In July 2025, the FASB issued ASU 2025-05, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which provides a practical expedient for entities to estimate expected credit losses on current accounts receivable and current contract assets arising from revenue transactions accounted for under ASC 606. ASU 2025-05 is effective for the Company for annual periods beginning after December 15,

2025, and interim periods within those annual periods. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

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Note 3: REVENUE 16 changes

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Three Months Ended June 30, Six Months Ended June 30,

Fleet services $ 2,305 $ 330 $ 4,263 $ 541

Software services 933 312 1,959 541

Total revenue $ 3,238 $ 642 $ 6,222 $ 1,082

Three Months Ended September 30, Nine Months Ended September 30,

Fleet services $ 2,582 $ 433 $ 6,845 $ 974

Software services 253 254 2,212 795

Total revenue $ 2,835 $ 687 $ 9,057 $ 1,769

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Six Months Ended June 30,

Nine Months Ended September 30,

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Revenue recognized ( 4,071 ) ( 20 )

Revenue recognized ( 6,538 ) ( 20 )

Balance at end of period $ 1,975 1,916 $ 10 3

As of June September 30, 2026, all of the deferred revenue is classified as current on the unaudited condensed consolidated balance sheet and expected to be recognized within the next twelve months.

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We have applied the practical expedients not to present unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which we recognize revenue at the amount which it has we have the right to invoice for services performed.

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The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 15 to 42 39 months.

Note 4: ACQUISITIONS 36 changes

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On February 17, 2026 (the "Vebu Closing Date"), the Company completed its acquisition of Vebu, Inc. ("Vebu"), which specializes in developing advanced automation solutions and robotic systems that streamline food preparation and kitchen workflows across the food supply chain. Pursuant to the Agreement and Plan of Merger, dated February 5, 2026, by and among Serve, the Company, Vebu and Serve Kitchen Robotics Inc., a Delaware corporation and direct wholly-owned subsidiary of the Company, and James Buckly Jordan, an individual, solely in his capacity as the representative of the indemnifying securityholders (the "Vebu Merger Agreement"), the Company acquired all of the issued and outstanding equity of Vebu (the "Vebu Acquisition").

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In addition, as set forth in the Vebu Merger Agreement, Vebu stockholders may be entitled to receive additional earnout consideration consisting of a number of shares of the Company's common stock equal to 33 % of the net proceeds generated during the earnout period, divided by the volume-weighted average price of the Company's common stock over the earnout period (the "Earnout Consideration"). The Earnout Consideration is classified as a liability in accordance with ASC 480 because the Company is obligated to issue a variable number of shares. As of June September 30, 2026, the fair value of the contingent consideration was deemed to be $ 5.0 thousand. The contingent consideration liability will be recognized at the point that the earnout is deemed probable. At the time it is recorded, it will be classified in the consolidated balance sheets based on the expected timing of settlement. Refer to Note 6. Fair Value Measurements for information regarding the subsequent measurement of the contingent consideration liability at fair value.

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At the closing of the Vebu Acquisition, each outstanding share of Vebu common stock and preferred stock was automatically cancelled and converted into the right to receive shares of the Company's common stock (including any escrow releases and earnout consideration), as set forth in the Vebu Merger Agreement. Each restricted stock unit held by a continuing employee immediately prior to the closing was assumed and converted by the Company into a Company RSU on a 1 :1 basis and on substantially identical terms and conditions. The Company assumed 500,000 restricted stock units held by continuing employees of Vebu.

The Company allocated the fair value of the purchase price consideration to the tangible assets acquired and liabilities assumed, based on estimated fair values. The excess purchase price over those fair values is recorded as goodwill. The Company's valuation assumptions of acquired assets and assumed liabilities require significant estimates with respect to intangible assets. The acquired company's intangible asset is comprised of developed technology. The estimated fair value of the developed technology was determined using the relief from royalty method under the income-based approach. This method estimates the fair value of the subject intangible asset based on the present value of royalty payments that would be paid if the subject intangible asset was were not owned but accessed through a license agreement.

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Certain data necessary to complete the purchase price allocation remains preliminary. The Company expects to complete the purchase price allocation within 12 months of the Vebu Closing Date, at which time the purchase price allocation set forth herein may be revised. Any such revisions or changes may be material. The Company utilized widely accepted income-based, market-based, and cost-based valuation approaches to perform the preliminary purchase price allocation.

The Company's preliminary allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the Vebu Closing Date, is as follows (in thousands):

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The following table sets forth the preliminary components of intangible assets acquired (in thousands) and their estimated useful life as of the date of acquisition (in years):

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The Company recorded $ 0.2 million immaterial acquisition-related costs in the three months ended September 30, 2026, and $ 0.6 million of acquisition related acquisition-related costs in the three and six nine months ended June September 30, 2026. respectively, representing These costs represent professional fees and other direct acquisition costs. These costs are recorded within general and administrative expense in our unaudited condensed consolidated statements of operations and comprehensive loss.

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Pursuant to the terms of the Diligent Merger Agreement, the aggregate consideration paid by the Company to the Diligent stockholders at the closing of the Diligent Acquisition had an aggregate fair value of $ 25.7 million of cash, common stock, and earnout contingent consideration. After giving effect to the adjustments as set forth in the Diligent Merger Agreement, the Company issued 197,472 shares of the Company's common stock to the Diligent stockholders with a fair value of $ 2.5 million, based on the Company's closing stock price as of on the Diligent Closing Date. of acquisition. In addition, up to 366,332 shares of the Company's common stock may be issued in the future upon achievement of certain milestones set forth in the Diligent Merger Agreement, of which 274,749 shares relate to the contingent consideration included in the consideration transferred. The remaining 91,583 shares of the Company's common stock to be issued upon achievement of certain future milestones as set forth in the Diligent Merger Agreement are attributed to certain employees and subject to a continuous service-condition. Refer to Note 10. Stockholders' Equity and Stock-Based Compensation for additional information regarding the earnout consideration arrangements.

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At the closing of the Diligent Acquisition, each outstanding share of Diligent common stock, all Diligent options, and all Diligent warrants were automatically cancelled for no consideration and each outstanding share of Diligent preferred stock was automatically cancelled and converted into the right to receive shares of the Company's common stock, including any escrow releases and earnout consideration, as set forth in the Diligent Merger Agreement. Each Diligent restricted stock unit held by a continuing employee immediately prior to the closing was assumed and converted into a restricted stock unit on a 1 :1 basis and on substantially identical terms and conditions. The Company assumed 1,319,151 restricted stock units held by continuing employees of Diligent.

The Company allocated the fair value of the purchase price consideration to the tangible and intangible assets acquired and liabilities assumed, based on estimated fair values. The excess purchase price over those fair values is recorded as goodwill. The Company's valuation assumptions of acquired assets and assumed liabilities require significant estimates with respect to intangible assets. The acquired company's intangible assets are comprised of developed technology and trade name. The estimated fair values of the developed technology and trade name were determined using the relief from royalty method under the income-based approach. This method estimates the fair value of the intangible asset based on the present value of royalty payments that would be paid if the subject intangible asset was were not owned but paid to a third-party for the use of the asset.

The preliminary goodwill of $ 10.4 11.9 million arising from the acquisition is attributed to the expected synergies, including innovation synergies, synergies related to the assembled workforce, and other benefits expected to be generated. Substantially all of the goodwill recognized is not expected to be deductible for tax purposes.

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Property and equipment 12,474 11,028

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Total identified assets acquired 22,349 20,903

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Fair value of identifiable assets, net of identifiable liabilities assumed $ 15,259 13,813

Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. During the three months ended September 30, 2026, the Company recorded a $ 1.4 million decrease to property and equipment and a corresponding increase to Goodwill, reflecting refined estimates and assumptions based on the results of a spare parts count performed as part of the integration process.

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The Company recorded $ 0.2 0.1 million and $ 1.4 1.5 million of acquisition related acquisition-related costs in the three and six nine months ended June September 30, 2026, respectively, representing professional fees and other direct acquisition costs. These costs are recorded within general and administrative expense in our unaudited condensed consolidated statements of operations and comprehensive loss.

The amounts of revenue and loss from Diligent included in the Company's unaudited condensed consolidated statements of operations and comprehensive loss from January 27, 2026 to the period ended June September 30, 2026 were $ 2.9 4.6 million and $ 14.0 22.0 million, respectively.

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The following pro forma information assumes the Diligent Acquisition occurred as of the beginning of the year immediately preceding the transaction. The pro forma information contains the actual operating results of the Company combined with the results of Diligent prior to acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of January 1, 2025. The pro forma adjustments primarily consist of $ 2.0 million to remove interest expense recorded on debt paid off at close and adjustments for a total $ 3.3 2.0 million in transaction costs incurred. This pro forma presentation does not include any impact of transaction synergies.

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Three Months Ended June 30, Six Months Ended June 30,

Revenues $ 3,238 $ 3,166 $ 6,722 $ 5,969

Net Loss $ ( 63,971 ) $ ( 27,482 ) $ ( 114,601 ) $ ( 45,860 )

Three Months Ended September 30, Nine Months Ended September 30,

Revenues $ 2,835 $ 2,926 $ 9,557 $ 8,895

Net Loss $ ( 59,115 ) $ ( 40,048 ) $ ( 173,716 ) $ ( 84,026 )

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The total purchase consideration was approximately $ 39.5 million of cash, common stock, warrant, and replacement equity awards. The goodwill of $ 11.2 11.5 million arising from the acquisition is attributed to the expected synergies, including innovation synergies, and other benefits expected to be generated. Substantially all of the goodwill recognized is not expected to be deductible for tax purposes. The estimated fair value of the warrants was determined using the Black-Scholes model. The estimated fair value of the replacement equity awards attributable to pre-combination service was determined using the binomial lattice model.

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Certain data necessary to complete the purchase price allocation remains preliminary. The Company expects to complete the purchase price allocation within 12 months of the Vayu Closing Date, at which time the purchase price allocation set forth herein may be revised. The Company does not expect these revisions to be material. The Company utilized widely accepted income-based, market-based, and cost-based valuation approaches to perform the preliminary purchase price allocation.

The Company's preliminary allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the Vayu Closing Date, is as follows (in thousands):

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Deferred tax liability ( 3,784 4,071 )

Total identifiable liabilities assumed ( 4,194 4,481 )

Fair value of identifiable assets, net of identifiable liabilities assumed $ 28,308 28,021

Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. As a result of refining estimates and assumptions since the acquisition date, during the three months ended September 30, 2026, the Company recorded a $ 0.3 million increase to deferred tax liability and a corresponding increase to Goodwill as a result of new information obtained about facts and circumstances that existed as of the acquisition date.

The following table sets forth the preliminary components of intangible assets acquired (in thousands) and their estimated useful life as of the date of acquisition (in years):

2 unchanged paragraphs

The Company recorded zero and $ 0.2 million of acquisition related acquisition-related costs in the three and six nine months ended June September 30, 2026, respectively, representing professional fees and other direct acquisition costs. These costs are recorded within general and administrative expense in our unaudited condensed consolidated statements of operations and comprehensive loss.

2 unchanged paragraphs

The Company allocated the fair value of the purchase price consideration to the tangible assets, liabilities, and intangible assets acquired, based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. The Company's valuation assumptions of acquired assets and assumed liabilities require significant estimates, particularly for intangible assets. The acquired company's intangible assets consist of customer relationships, trade name, and developed technology. The estimated fair value of customer relationships, trade name, and developed technology were was determined using the multi-period excess earnings method and the relief from royalty method. Both methods require forward-looking estimates that are discounted to determine the fair value of the intangible asset using a risk-adjusted discount rate that is reflective of the level of risk associated with future estimates associated with the asset group, which could be affected by future economic and market conditions. The estimated fair value of the developed technology is also dependent on the selection of the royalty rate used in the valuation method.

17 unchanged paragraphs

Acquisition related Acquisition-related costs represent costs incurred for professional fees and other direct acquisition costs. These costs are recorded within general and administrative expense in our unaudited condensed consolidated statements of operations and comprehensive loss. In connection with the acquisition of Voysys, the Company recorded zero acquisition-related costs in the three and six nine months ended June September 30, 2026.

Note 5: GOODWILL AND INTANGIBLE ASSETS, NET 13 changes

1 unchanged paragraph

The changes in the carrying amount of goodwill during the six nine months ended June September 30, 2026 were as follows (in thousands):

1 unchanged paragraph

Balance as of June 30, 2026 $ 27,998

Measurement period adjustments 1,733

Balance as of September 30, 2026 $ 29,732

Measurement period adjustments represent adjustments to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. Refer to Note 4. Acquisitions for details pertaining to the nature of the adjustments recorded.

The Company evaluates goodwill for impairment at least annually during the fourth quarter and more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of its reporting unit is below its carrying amount. No such triggering events or circumstances were identified during the three and nine months ended September 30, 2026.

1 unchanged paragraph

Intangible assets, net consisted of the following as of June September 30, 2026 (in thousands):

3 unchanged paragraphs

Balance as of June 30, 2026 $ 40,839 $ 6,334 $ 34,505

Balance as of September 30, 2026 $ 40,839 $ 8,286 $ 32,553

1 unchanged paragraph

The Company recorded amortization expense associated with intangible assets of $ 2.0 million and $ 3.8 0.9 million for the three and six months ended June September 30, 2026 and 2025, respectively. An insignificant amount of The Company recorded amortization expense associated with intangible assets was recognized during the three of $ 5.8 million and six $ 0.9 million for the nine months ended June September 30, 2026 and 2025, respectively.

The estimated future amortization expense of intangible assets as of June September 30, 2026 is as follows (in thousands):

2 unchanged paragraphs

Remainder of 2026 $ 3,903 1,952

1 unchanged paragraph

The Company evaluates definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. No such triggering events or circumstances were identified during the three and nine months ended September 30, 2026.

Note 6: FAIR VALUE MEASUREMENTS 18 changes

1 unchanged paragraph

The following tables set forth the Company's cash equivalents and marketable securities that were measured at fair value on a recurring basis by level within the fair value hierarchy as of June September 30, 2026 and December 31, 2025 (in thousands):

1 unchanged paragraph

as of June September 30, 2026:

1 unchanged paragraph

Commercial paper — 4,336 — 4,336

Corporate bonds — 800 — 800

Commercial paper — 5,478 — 5,478

Corporate bonds — 798 — 798

2 unchanged paragraphs

Corporate notes/bonds — 100,399 — 100,399

U.S. Treasury securities

Long-term marketable securities

Corporate notes/bonds — 4,001 — 4,001

U.S. Government agencies — 1,000 — 1,000

Total fair value of assets $ 45,263 $ 166,432 $ — $ 211,695

Corporate notes/bonds — 77,619 — 77,619

U.S. Government agencies — 2,002 3,001 — 2,002 3,001

Total fair value of assets $ 24,023 $ 153,510 $ — $ 177,533

4 unchanged paragraphs

Corporate bonds — — — —

12 unchanged paragraphs

The fair value of the liability classified liability-classified arrangements are is determined using a Monte Carlo simulation which uses Level 3 unobservable inputs. These liability-classified arrangements are carried at fair value which is estimated by applying a probability-based model utilizing inputs based on timing of achievement that were unobservable in the market. Actual results may differ from the projected results and could have a significant impact on the estimated fair value of the contingent consideration. Changes in fair value are recorded in other income in the unaudited condensed consolidated statements of operations and comprehensive loss.

The most significant unobservable inputs used to determine the fair value of the liability-classified contingent considerations consideration relate to the revenue growth rate ( 3.0 %), discount rate ( 28.0 %) and the market price of risk adjustment ( 4.0 %). As of June September 30, 2026, the fair value of the Company's Level 3 liabilities was immaterial.

Note 7: MARKETABLE SECURITIES 14 changes

The following tables summarize the cost or amortized cost, gross unrealized gain, gross unrealized loss, and fair value of the Company's cash equivalents and marketable securities as of June September 30, 2026 and December 31, 2025 (in thousands):

1 unchanged paragraph

Commercial paper 4,337 — ( 1 ) 4,336

Corporate bonds 801 — ( 1 ) 800

Commercial paper 5,480 — ( 2 ) 5,478

Corporate bonds 798 — — 798

2 unchanged paragraphs

Corporate notes/bonds 100,523 — ( 124 ) 100,399

U.S. Treasury securities

Long-term marketable securities

Corporate notes/bonds 3,999 2 — 4,001

U.S. Government agencies 1,000 — — 1,000

Corporate notes/bonds 77,690 — ( 71 ) 77,619

U.S. Government agencies 2,002 3,001 — — 2,002 3,001

2 unchanged paragraphs

Corporate bonds — — — —

8 unchanged paragraphs

For marketable securities with unrealized loss positions, the Company does not intend to sell these securities, and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis. No allowance for credit losses was recorded for these securities as of June September 30, 2026 or December 31, 2025.

Note 8: PROPERTY AND EQUIPMENT, NET 13 changes

1 unchanged paragraph

Robot assets $ 50,098 $ 47,221

Office equipment 611 375

Leasehold improvement 618 414

Robot assets $ 49,669 $ 47,221

Construction in progress 8,282 10,205 3,357

Furniture and fixtures 655 709 —

Leasehold improvement 627 414

Office equipment 531 375

Less: accumulated depreciation ( 12,107 15,493 ) ( 6,465 )

Property and equipment, net $ 50,507 48,711 $ 47,013

The Company recorded depreciation expense of $ 3.7 3.4 million and $ 0.8 1.1 million for the three months ended June September 30, 2026 and 2025, respectively. The Company recorded depreciation expense of $ 7.1 10.5 million and $ 1.3 2.4 million for the six nine months ended June September 30, 2026 and 2025, respectively.

As of June September 30, 2026, property and equipment robot assets included a $ 4.4 4.5 million reduction related to tariff refunds recognized during the period as a result of the U.S. Supreme Court ruling under the International Emergency Economic Powers Act ("IEEPA"). As of June 30, 2026, $ 3.6 million is reflected in robot assets and the remaining $ 0.8 million is reflected in construction in progress. Refer to Note 12. Commitments and Contingencies for further information.

The Company evaluates property and equipment for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. No such triggering events or circumstances were identified during the three and nine months ended September 30, 2026.

Note 9: LEASES 34 changes

1 unchanged paragraph

The Company leases its facilities, which include office and warehouse space, under non-cancelable lease agreements with terms expiring between August 2026 June 2027 and September 2031. The Company also has leases for cargo vans with terms expiring between November 2026 and March June 2028. Certain of these arrangements have free rent, escalating rent payment provisions, lease renewal options, and tenant allowances. Under such arrangements, the Company recognizes an ROU asset and lease liability on the unaudited condensed consolidated balance sheets. Lease costs are recognized on a straight-line basis over the non-cancelable lease term.

1 unchanged paragraph

Three Months Ended June 30, Six Months Ended June 30,

Operations $ 938 $ 495 $ 1,833 $ 686

General and administrative 304 5 472 28

Research and development 3 5 9 74

Total lease costs $ 1,246 $ 505 $ 2,315 $ 788

Three Months Ended September 30, Nine Months Ended September 30,

Operations $ 1,269 $ 770 $ 3,102 $ 1,456

General and administrative 22 26 494 54

Research and development — 2 9 76

Sales and marketing 1 — 1 2 —

Total lease costs $ 1,292 $ 798 $ 3,607 $ 1,586

1 unchanged paragraph

Three Months Ended June 30, Six Months Ended June 30,

Operating lease costs $ 765 $ 416 $ 1,563 $ 655

Variable lease costs 448 89 675 133

Total lease costs $ 1,246 $ 505 $ 2,315 $ 788

Three Months Ended September 30, Nine Months Ended September 30,

Operating lease costs $ 914 $ 550 $ 2,478 $ 1,205

Variable lease costs 350 220 1,024 353

Short-term lease costs 33 — 77 — 28 28 105 28

Total lease costs $ 1,292 $ 798 $ 3,607 $ 1,586

1 unchanged paragraph

Six Months Ended June 30,

Nine Months Ended September 30,

Operating cash flows paid for operating leases $ 1,288 2,017 $ 534 1,019

Right-of-use assets obtained in exchange for operating lease obligations $ 5,584 8,389 $ 1,172 3,045

1 unchanged paragraph

Weighted-average remaining lease term (in years) 4.12 4.92 3.42

Weighted-average discount rate 7.47 8.99 % 7.39 %

The maturities of lease liabilities as of June September 30, 2026, are as follows (in thousands):

Remainder of 2026 $ 1,472 835

Total undiscounted future cash flows 11,298 10,937

Less: imputed interest ( 1,601 1,466 )

Total operating lease liabilities $ 9,697 9,471

As of June September 30, 2026, the Company had no additional operating lease commitments for non-cancelable leases that had not yet commenced.

1 unchanged paragraph

In November 2022, the Company entered into a lease agreement with Farnam Capital for its robot assets. As per ASC 842-40-25-1, the transaction was considered a failed sales-leaseback and therefore the lease was accounted for as a financing agreement. In April 2025, the Company exercised the option to purchase the assets at the end of the lease for $ 2.2 million. There was no outstanding liability at June September 30, 2026.

Note 10: STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION 66 changes

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's stockholders. Common stockholders are not entitled to receive dividends, unless declared by the Company's board of directors (the "Board").

As of June September 30, 2026, the Company is authorized to issue 10,000,000 shares of preferred stock, par value $ 0.0001 per share, and 300,000,000 shares of common stock, par value $ 0.0001 per share.

2 unchanged paragraphs

On February 17, 2026, the Company entered into the Vebu Merger Agreement, pursuant to which the Company issued 147,445 shares of its common stock in initial upfront consideration. The Company also issued 500,000 shares of common stock to certain employees. As of June September 30, 2026, 637,945 of the total 647,445 shares of common stock contemplated in the Vebu Merger Agreement have been issued and are outstanding.

On January 27, 2026, the Company entered into the Diligent Merger Agreement, pursuant to which the Company issued 197,472 shares of its common stock in initial upfront consideration. Additionally, the Company granted a future earnout consisting of up to 366,332 shares of common stock, contingent on the achievement of certain performance milestones. The Company also issued 1,319,151 shares of common stock to certain employees. As of June September 30, 2026, 1,440,893 1,439,087 of the total 1,882,955 shares of common stock contemplated in the Diligent Merger Agreement have been issued and are outstanding.

1 unchanged paragraph

On August 15, 2025, the Company entered into the Vayu Merger Agreement. Pursuant to which the Vayu Merger Agreement, the Company issued 1,494,906 shares of its common stock in as initial upfront consideration Additionally, and granted an additional 45,000 shares of common stock to a Vayu shareholder, subject to the terms of the Vayu Merger Agreement. The Company also issued 493,970 shares of common stock to certain Vayu employees pursuant to the Vayu Merger Agreement. In addition, the Company granted a future contingent earnout consisting consideration of up to 560,000 shares of common stock to certain Vayu shareholders and up to 880,001 shares of common stock to certain Vayu employees, each subject to the achievement of certain performance milestones. The Company also issued granted warrants to purchase 4,000,000 shares of common stock with to a certain Vayu securityholder at an exercise price of $ 10.36 per share, which amount is equal to represented the 10 -day volume-weighted average price of the Company's common stock immediately prior to the closing of the transaction closing, and issued 84,437 stock options to a certain Vayu securityholder. As of June 30, 2026, 1,494,906 of the 7,558,314 shares of deal consideration have been issued and are outstanding.

Vayu shareholders. As of September 30, 2026, 1,770,099 of the 7,558,314 shares of deal consideration have been issued and are outstanding.

15 unchanged paragraphs

Subject to adjustments as set forth in the 2023 Plan, the maximum aggregate number of shares of common stock that may be issued under the 2023 Plan will not exceed 7,487,029 shares. In June 2025, the 2023 Plan was amended, and the number of shares authorized under the 2023 Plan was increased by 2,280,000 additional shares. In October 2025, the number of shares authorized under the 2023 Plan was increased by 3,289,146 additional shares, pursuant to the evergreen provisions under the 2023 Plan. As of June September 30, 2026, there were a total of 1,534,968 263,031 shares available to be issued under the 2023 Plan.

3 unchanged paragraphs

Subject to adjustments as set forth in the 2022 Vayu Plan, the maximum aggregate number of shares of the Company's common stock that may be issued under the 2022 Vayu Plan may not exceed 5,344,275 shares. Subject to adjustments as set forth in the 2022 Vayu Plan, the maximum aggregate number of shares that may be issued under the 2022 Vayu Plan pursuant to incentive stock options may not exceed the number set forth above plus, to the extent allowable under Section 422 of the Internal Revenue Code and the regulations promulgated thereunder, any shares that again become available for issuance pursuant to the 2022 Vayu Plan. As of June September 30, 2026, there were approximately 94,566 shares available to be issued under the 2022 Vayu Plan.

1 unchanged paragraph

The 2022 Vayu Plan is administered by the Company's Board of directors or a committee thereof (the "2022 Vayu Plan Administrator"). The 2022 Vayu Plan Administrator has the authority to determine the terms and conditions of stock awards granted under the 2022 Vayu Plan, including the recipients, type of award, number of shares subject to each award, exercise or purchase price, vesting schedule, and other terms and conditions. Stock awards may be granted to employees, directors, and independent contractors of the Company and its affiliates. The 2022 Vayu Plan also provides for adjustments in the event of certain corporate transactions, such as stock splits, mergers, or other changes in capitalization, and includes customary provisions regarding the administration, amendment, and termination of the plan.

1 unchanged paragraph

The following table summarizes activity related to the Company's restricted stock awards for the six nine months ended June September 30, 2026:

3 unchanged paragraphs

Nonvested as of June 30, 2026 43,620 $ 0.45

Canceled and forfeited ( 2,132 ) —

Nonvested as of September 30, 2026 38,188 $ 0.47

During 2023, the Company issued shares of restricted common stock for recourse notes. The shares were issued with a corresponding note receivable, a recourse loan that was collateralized by the underlying shares. In June 2024, the remaining loans were deemed non-recourse. As of June September 30, 2026 and December 31, 2025, there were 40,143 36,797 and 46,833 shares of common stock issued, respectively, that are subject to the non-recourse notes and deemed not outstanding.

1 unchanged paragraph

The following table summarizes activity related to the Company's RSUs for the six nine months ended June September 30, 2026:

3 unchanged paragraphs

Granted 3,608,010 11.59

Forfeited ( 387,078 ) 11.60

Nonvested as of June 30, 2026 8,883,386 $ 10.27

Granted 4,981,012 9.74

Canceled and forfeited ( 568,596 ) 11.52

Nonvested as of September 30, 2026 9,072,728 $ 9.69

During the six nine months ended June September 30, 2026, the Company granted 3,608,010 4,981,012 RSUs with vesting periods ranging from 1 month to 4 years.

3 unchanged paragraphs

During the six nine months ended June September 30, 2026, the Company repurchased no shares of common stock.

1 unchanged paragraph

The following table summarizes activity related to the Company's performance-based restricted stock units ("PRSU") for the six nine months ended June September 30, 2026:

3 unchanged paragraphs

Forfeited ( 33,664 ) 9.71

Canceled and forfeited ( 43,664 ) 9.71

Nonvested as of June September 30, 2026 869,628 859,628 $ 9.67

1 unchanged paragraph

On June 17, 2026, the Company granted 2,000 PRSUs to an employee of the Company ("June PRSUs") from the 2023 Plan. The June PRSUs shall vest upon satisfaction of a performance-based vesting condition, which shall be satisfied upon the achievement of certain milestones. At the point the conditions of the June PRSUs are deemed to have been achieved, 100 % of the PRSUs will vest immediately. The total grant date fair value of the June PRSUs was $ 13.4 thousand, which was determined based on the Company's stock price on date of grant. As of June September 30, 2026, the Company considers does not consider the achievement of the June PRSUs milestone to be probable. Accordingly, as such, of September 30, 2026, the Company reversed all previously recognized stock-based compensation expense and will not recognize the related additional stock-based compensation cost over expense until the requisite service period. June PRSUs milestone becomes probable, as defined by ASC 718. As of June September 30, 2026, all shares of the June PRSUs were unvested and outstanding.

1 unchanged paragraph

On March 23, 2026, the Company granted 100,000 PRSUs to an employee of the Company ("March PRSUs") from the 2023 Plan. The March PRSUs shall vest upon satisfaction of both (i) a service-based vesting condition and (ii) a performance-based vesting condition. The service-based vesting condition shall be satisfied based on the employee's continued employment. The performance-based vesting condition shall be satisfied upon the achievement of certain milestones. At the point the conditions of the March PRSUs are deemed to have been achieved, 25 % of the total March PRSUs will vest immediately, and 1/30th of the remaining shares will vest on the same day of each month thereafter for 30 months, subject to the employee's continued employment. The total grant date fair value of the March PRSUs was $ 0.9 million, which was determined based on the Company's stock price on date of grant. As of June September 30, 2026, the Company considers the achievement of the March PRSUs milestone to be probable. As such, the Company will recognize the related compensation cost over the requisite service period. As of June September 30, 2026, all shares of the March PRSUs were unvested and outstanding.

On August 15, 2025, the Company granted 1,440,001 shares contemplated by the Vayu Acquisition, of which the Company granted 880,001 PRSUs to employees ("Vayu PRSUs"). The remaining 560,000 shares were granted to nonemployees. The Vayu PRSUs will vest or commence vesting upon achievement of certain milestones as defined per the Vayu Merger Agreement. In addition, the Vayu PRSUs may also be subject to a continuous service condition. At the point the milestones have been deemed to be achieved (the "Milestone Date"), approximately 66 % of the Vayu PRSUs will vest immediately, and the remaining 34 % will vest over 2.5 years following the Milestone Date. The total grant date fair value of the Vayu PRSUs was $ 8.5 million, which was determined based on the Company's stock price on date of grant. As of June September 30, 2026, the Company considers the achievement of the Vayu PRSUs milestone to be probable. As such, the Company will recognize the related compensation cost over the requisite service period. As of June September 30, 2026, all shares of the Vayu PRSUs were unvested and outstanding.

The following table summarizes activity related to the Company's stock options for the six nine months ended June September 30, 2026:

2 unchanged paragraphs

Exercised ( 102,986 ) 3.87 678

Forfeited ( 29,415 ) 1.52 194

Outstanding as of June 30, 2026 694,138 $ 0.84 $ 4,545

Exercisable as of June 30, 2026 473,487 $ 0.79 $ 3,116

Exercisable and expected to vest at June 30, 2026 694,138 $ 0.84 $ 4,545

Exercised ( 167,144 ) 2.31

Canceled and forfeited ( 20,267 ) 5.14

Outstanding as of September 30, 2026 639,128 $ 0.87 $ 2,499

Exercisable as of September 30, 2026 597,853 $ 0.87 $ 2,338

Exercisable and expected to vest at September 30, 2026 639,128 $ 0.87 $ 2,499

2 unchanged paragraphs

On August 15, 2025, the Company granted 560,000 shares contemplated by the Vayu Acquisition to nonemployee shareholders. The vesting terms of these shares are consistent with the Vayu PRSUs. The total grant date fair value was

On January 27, 2026, the Company granted 366,332 awards contemplated by the Diligent Acquisition to nonemployee shareholders ("Diligent Nonemployee Awards"). Of this total, 274,749 awards will vest or commence vesting upon achievement of certain performance-based milestones as defined per the Diligent Merger Agreement ("Diligent Nonemployee Performance-based Awards"). At the point the milestones have been deemed to be achieved (the "Milestone Date"), approximately all of the Diligent Nonemployee Performance-based Awards will vest immediately. The total grant date fair value of the Diligent Nonemployee Performance-based Awards was $ 3.1 million, which was determined using the Monte Carlo simulation option pricing model. The Diligent Nonemployee Performance-based Awards were included in the consideration transferred as part of the Diligent Acquisition. As such, settlement of the equity-classified contingent consideration will be accounted for within equity. As of June September 30, 2026, the Company considers the achievement of the Diligent Nonemployee Performance-based Awards milestone to be probable. The remaining 91,583 awards granted to nonemployee shareholders of the Company will be earned upon satisfaction of a service-based condition achieved eighteen months following the closing of the Diligent Acquisition ("Diligent Nonemployee Service-based Awards"). The fair value of the Diligent Nonemployee Service-based Awards at date of grant was determined to be $ 1.2 million and will be recognized as stock-based compensation expense over the requisite service period. All Diligent Nonemployee Service-based Award shares will vest immediately upon satisfaction of the service-based condition. As of June September 30, 2026, all Diligent Nonemployee Awards were unvested and outstanding.

On August 15, 2025, the Company granted 560,000 shares contemplated by the Vayu Acquisition to nonemployee shareholders. The vesting terms of these shares are consistent with the Vayu PRSUs. The total grant date fair value was $ 5.4 million, which was determined based on the Company's stock price on date of grant. As of June September 30, 2026, the Company considers the achievement of the milestone to be probable. As such, the Company will recognize the related compensation cost over the requisite service period. As of June September 30, 2026, all shares were unvested and outstanding.

1 unchanged paragraph

Three Months Ended June 30, Six Months Ended June 30,

General and administrative $ 8,543 $ 2,061 $ 11,990 $ 3,885

Research and development 5,421 2,158 8,943 4,087

Operations 309 96 559 176

Sales and marketing 412 83 546 129

Total stock-based compensation expense $ 14,685 $ 4,398 $ 22,038 $ 8,277

The Company recorded stock-based compensation expense for both employees and nonemployees of $ 14.7 12.5 million and $ 4.4 6.6 million for the three months ended June September 30, 2026 and 2025, respectively. The Company recorded stock-based compensation expense for both employees and nonemployees of $ 22.0 34.6 million and $ 8.3 14.9 million for the six nine months ended June September 30, 2026 and 2025, respectively. Stock-based compensation expense for employees is classified based on the cost center to which the award holder belongs. Stock-based compensation expense for nonemployees is classified as general and administrative expense. The Company recorded stock-based compensation expense in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

General and administrative $ 5,973 $ 3,712 $ 17,963 $ 7,597

Research and development 5,959 2,680 14,902 6,767

Operations 348 147 907 323

Sales and marketing 256 103 802 232

Total stock-based compensation expense $ 12,536 $ 6,642 $ 34,574 $ 14,919

During the three months ended June September 30, 2026 and 2025, the Company recorded stock-based compensation expense related to vesting of RSUs and RSAs of $ 14.7 12.2 million and $ 4.0 6.6 million, respectively. During the six nine months ended June September 30, 2026 and 2025, the Company recorded stock-based compensation expense related to vesting of RSUs and RSAs of $ 22.0 34.2 million and $ 7.9 14.5 million, respectively.

As of June September 30, 2026, there was $ 92.3 85.0 million of unamortized compensation costs related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.8 1.1 years. As of June September 30, 2026, there was an immaterial amount of unamortized compensation costs related to unvested RSAs, which is expected to be recognized over a weighted-average period of approximately 0.1 2.6 years.

During the three and six nine months ended June September 30, 2026 and 2025, the Company recorded an immaterial amount of stock-based compensation expense for stock options. As of June September 30, 2026, there was an immaterial amount of total unamortized compensation cost related to unvested stock option awards, which is expected to be recognized over a weighted average period of 0.6 5.8 years.

The following is a summary of warrants as of June September 30, 2026:

2 unchanged paragraphs

Outstanding as of June September 30, 2026 5,079,294 $ 10.18

Exercisable as of June September 30, 2026 5,079,294 $ 10.18

The weighted-average remaining term of the warrants outstanding was 4.8 4.6 years as of June September 30, 2026.

4 unchanged paragraphs

As of June September 30, 2026, the Company has sold 8,540,900 shares of the Company's common stock under the 2026 Sales Agreement at a weighted-average price of $ 9.08 per share and raised $ 77.6 million of gross proceeds. After deducting approximately $ 2.3 million of commissions and offering costs incurred by the Company, the net proceeds from sales of the Company's common stock were $ 75.2 million as of June September 30, 2026. As of June September 30, 2026, the Company had approximately $ 72.4 million of remaining capacity to sell the Company's common stock under the 2026 Sales Agreement.

2 unchanged paragraphs

During the six nine months ended June September 30, 2026, the Company sold 1,217,000 shares of the Company's common stock under the 2025 Distribution Agreement at a weighted-average price of $ 8.21 per share and raised $ 10.0 million of gross proceeds. After deducting approximately $ 0.3 million of commissions and offering costs incurred by the Company during the six nine months ended June September 30, 2026, the net proceeds from sales of the Company's common stock under the 2025 Distribution Agreement were $ 9.7 million during the six nine months ended June September 30, 2026. Inception to date, as of June September 30, 2026, the Company has sold a total of 7,716,935 shares of the Company's common stock under the 2025 Distribution Agreement at a weighted-average price of $ 11.82 per share and raised $ 91.2 million of gross proceeds. After deducting approximately $ 2.7 million of commissions and offering costs incurred by the Company, the net proceeds from sales of the Company's common stock were $ 88.5 million as of June September 30, 2026. On May 6, 2026 the Company terminated the 2025 Distribution Agreement.

Note 11: INCOME TAXES 6 changes

1 unchanged paragraph

The Company periodically evaluates its valuation allowance requirements as facts and circumstances change and may adjust its deferred tax asset valuation allowances accordingly. It is reasonably possible that the Company will either add to or reverse a portion of its existing deferred tax asset valuation allowances in the future. Such changes in the deferred tax asset valuation allowances will be reflected in the current operations through the Company's effective income tax rate.

The Company recorded income tax benefit of $ 36.2 thousand 0.1 million for the three months ended June September 30, 2026 compared to zero no expense recorded for the three months ended June September 30, 2025. Income tax expense for the three months ended June September 30, 2026 was favorably impacted by $ 36.2 thousand 0.1 million of net discrete tax benefit, primarily related to the release of uncertain tax benefits offset by a return to provision expense benefit related to income tax returns filed in Canada. Income the U.S., offset by an increase in valuation allowance. There was no tax expense recorded for the three months ended June September 30, 2025 was entirely attributable due to an increase in the a full valuation allowance. of deferred tax assets with no tax expense arising from the estimated annual effective tax rate.

The Company recorded income tax benefit of $ 0.7 0.8 million for the six nine months ended June September 30, 2026 compared to zero no expense for the six nine months ended June September 30, 2025. Income tax expense for the six nine months ended June September 30, 2026 was favorably impacted by $ 0.7 0.8 million of net discrete tax benefit, primarily related to the release of prior year valuation allowance amounts. The release was driven by the acquisition of net deferred liabilities of Diligent. Income There was no tax expense recorded for the six nine months ended June September 30, 2025 was entirely attributable due to an increase in the a full valuation allowance. of deferred tax assets with no tax expense arising from the estimated annual effective tax rate.

The Company periodically evaluates its valuation allowance requirements as facts and circumstances change and may adjust its deferred tax asset valuation allowances accordingly. The Company evaluates and weighs all available evidence, both positive and negative, including its historical operating results, future reversals of existing deferred tax liabilities, as well as projected future taxable income. Changes in earnings performance and future earnings projections, among other factors, may cause the Company to adjust the valuation allowance on deferred tax assets, which could materially impact the income tax expense in the period the Company determines that these factors have changed.

As of June September 30, 2026, there have been no material changes in unrecognized tax benefits from those disclosed in the Company's most recent audited financial statements as of December 31, 2025. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in its unaudited condensed consolidated statements of operations and comprehensive loss.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of June September 30, 2026, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and income tax liabilities and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments related to income tax examinations.

Legal proceedings 4 changes

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In December 2024, a class action complaint was filed in the Superior Court of California, County of Los Angeles, alleging that the Company violated the California Labor Code, among other claims. In December 2025, the Company agreed with the plaintiff to settle for the amount of $ 375.0 thousand. As a result, the Company recorded a total of $ 408.8 thousand in legal settlement expense, of which $ 375.0 thousand was recorded for the settlement with the plaintiff and the remaining $ 33.8 thousand was recorded for the related payroll tax expense as a result of the settlement payment. The legal settlement expense is presented in accrued liabilities on the unaudited condensed consolidated balance sheet as of June September 30, 2026.

On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under IEEPA. As a result of this ruling, the Company is eligible for a refund of tariffs previously paid on imported goods. The Company has recognized amounts that were realized or realizable as of June September 30, 2026 within the financial results. During the six nine months ended June September 30, 2026, the Company recognized $ 4.6 million of refunds related to the IEEPA tariffs. Because the related tariffs were originally capitalized as part of the cost of raw materials, the refund was recorded as a reduction of $ 3.6 million to robot assets and a reduction of $ 0.8 million to construction in progress within property and equipment on the unaudited condensed consolidated balance sheets. Any interest received in connection with tariff refunds was recognized as interest income in the unaudited condensed consolidated statements of operations and comprehensive loss. During the six nine months ended June September 30, 2026, the Company recognized $ 0.2 0.1 million of interest income related to the tariff refunds.

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Based on the applicable criteria under the accounting standard, including quantitative thresholds, the Company has identified one operating and reportable segment (the "Segment") for the period ended June September 30, 2026. The Segment is focused on enhancing the Company's advanced, AI-powered robotics mobility platform that integrates proprietary hardware, AI, computer vision, and cloud-based fleet management software to enable autonomous operation in complex, real-world settings.

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The Segment derives revenue from customers by providing (i) services via the Company's robot fleet, including indoor and outdoor delivery services, branding and experiential services, and (ii) access to software developed for the robot fleet, including certain autonomous capabilities. The majority of the Segment's revenue is derived from robot delivery services. and the Segment's long-term partnerships with food delivery platforms. The Segment's operations are primarily based in the United States and Canada, and it manages its business activities on a consolidated basis. The Segment derives all revenue from its United States operations. The Segment's assets are primarily based in the United States. Assets based in foreign countries are not material to the operations of the Segment. The services provided by the robot fleet are offered and deployed in a similar manner across all jurisdictions in which the Company operates.

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MD&A 123 changes

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Serve operates autonomy systems across multiple domains spanning both outdoor and indoor environments. Our sidewalk outdoor delivery operations provide autonomous last-mile delivery services for restaurant and retail partners, while our healthcare operations, enabled through the acquisition of Diligent Robotics in 2026, deploy robots in hospital settings to support clinical staff through logistics and workflow automation.

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For the three months ended June September 30, 2026 and 2025, we generated revenues of $3.2 $2.8 million and $0.6 $0.7 million, respectively, and reported net losses of $64.1 $59.2 million and $20.9 $33.0 million, respectively. For the six nine months ended June September 30, 2026 and 2025, we generated revenues of $6.2 $9.1 million and $1.1 $1.8 million, respectively, and reported net losses of $113.1 $172.4 million and $34.1 $67.1 million, respectively.

As noted in our unaudited condensed consolidated financial statements, as of June September 30, 2026, we had an accumulated deficit of $322.0 $381.2 million.

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Our potential for growth depends significantly on continued demand for last-mile delivery of food and other items on our partner platforms and for automation solutions from our hospital customers. The demand for last-mile delivery can fluctuate based on various factors, including market cycles, weather and local community health conditions, as well as evolving competitive dynamics. The demand for hospital-based automation solutions can fluctuate based on factors such as budget cycles, staffing levels, operational priorities, and broader healthcare industry conditions.

Our largest stream of projected revenue comes from maximizing utilization of our outdoor delivery robot fleet to perform deliveries on our partner platforms. Matching algorithms on these platforms as well as the extent of their merchant and end-customer participation in robotic delivery directly impacts the utilization rate of our robots, both of which can be challenging to predict. As previously disclosed, the Company has experienced lower than expected delivery volume through the Company's Uber Eats partnership, which contributed to downward pressure on our revenue during the three and nine months ended September 30, 2026, and we expect reduced demand to continue through the remainder of 2026. Our ability to gain additional partners and to generate revenue with such additional partners is dependent on numerous factors, including, among others, the partner's consumer base and desire to use robotic delivery, along with normal-course onboarding for new partners. These uncertainties make demand difficult to forecast for us and our partners.

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June 30, Six Months Ended

September 30, Nine Months Ended

Customer A sales as a percentage of total revenues 11 10 % 31 43 % 12 11 % 29 34 %

Customer B sales as a percentage of total revenues 22 % N/A 17 N/A 12 % N/A

Customer C sales as a percentage of total revenues N/A 39 % N/A 46 N/A 27 %

Customer D sales as a percentage of total revenues N/A 27 % N/A 10 %

A significant portion of our accounts receivable is concentrated with a limited number of customers. The following table represents the concentration of accounts receivable for all customers that account for more than 10% of our total accounts receivable as of June September 30, 2026 and December 31, 2025:

June September 30, 2026 December 31, 2025

Customer A receivables as a percentage of total accounts receivable 11 % N/A 11 %

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Customer D receivables as a percentage of total accounts receivable N/A 18 30 %

Customer E receivables as a percentage of total accounts receivable 14 % 30 N/A 18 %

Customer F receivables as a percentage of total accounts receivable 13 23 % N/A

Customer G receivables as a percentage of total accounts receivable 12 % N/A

Customer H receivables as a percentage of total accounts receivable 11 % N/A

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Comparison of Results of Operations for the three months ended June September 30, 2026 and 2025

The following table summarizes our operating results as reflected in our unaudited condensed consolidated statements of operations and comprehensive loss during the three months ended June September 30, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods (in thousands).

Three Months Ended June September 30,

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Revenues $ 3,238 $ 642 $ 2,596 404 %

Cost of revenues 12,017 3,501 8,516 243 %

Gross loss (8,779) (2,859) (5,920) 207 %

Research and development 20,279 9,120 11,159 122 %

General and administrative 24,844 8,078 16,766 208 %

Operations 7,862 2,124 5,738 270 %

Sales and marketing 4,301 463 3,838 829 %

Total operating expenses 57,286 19,785 37,501 190 %

Loss from operations (66,065) (22,644) (43,421) 192 %

Revenues $ 2,835 $ 687 $ 2,148 313 %

Cost of revenues 10,390 5,066 5,324 105 %

Gross loss (7,555) (4,379) (3,176) 73 %

Research and development 22,636 13,414 9,222 69 %

General and administrative 20,227 13,153 7,074 54 %

Operations 7,260 2,987 4,273 143 %

Sales and marketing 3,510 883 2,627 298 %

Total operating expenses 53,633 30,437 23,196 76 %

Loss from operations (61,188) (34,816) (26,372) 76 %

1 unchanged paragraph

Interest income 1,927 1,794 133 7 %

Realized loss on foreign currency translation (4) — (4) 100 %

Other income 3 — 3 100 %

Other expenses (24) — (24) 100 %

Net loss before income taxes (64,163) (20,850) (43,313) 208 %

Net loss $ (64,127) $ (20,850) $ (43,277) 208 %

Six Months Ended June 30,

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and 76 more changes in the filing

Controls and procedures 3 changes

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and 3 more changes in the filing

Risk factors 343 changes

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and 343 more changes in the filing

Other information 2 changes

and 2 more changes in the filing

Exhibits 8 changes

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and 8 more changes in the filing