UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 WASHINGTON, D.C. 20549

 Form

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from _________ to
__________

 COMMISSION FILE NUMBER 000-56237

 SERVE ROBOTICS INC.

 (Exact name of registrant as specified in its charter)

 Delaware

 85-3844872

 (State or other jurisdiction of

incorporation or organization)

 (I.R.S. Employer

Identification No.)

 730 Broadway

 Redwood City, CA 94063

 (818) 860-1352

 (Address of principal executive offices) (Zip Code)

 (Registrant's telephone number, including area code)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 None.

 N/A

 N/A

 Securities registered pursuant to Section 12(g)
of the Act:

 Common Stock, $0.0001 par value per share

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes
No

 The registrant was not publicly traded as of the last business day
of its most recently completed second fiscal quarter (June 30, 2023), and thus information related to the aggregate market value of the
registrant's voting and non-voting common stock held by non-affiliates of the registrant cannot be provided.

 As of February 23, 2024, the registrant had a total of 24,832,814 shares
of its common stock, par value $0.0001 per share, issued and outstanding.

 Page

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operation

 Item 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Exhibit Index

 Signatures

 i

 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

 This Annual Report on Form 10-K contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933,
as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and
financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future
performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will
be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's
good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance
or results to differ materially from those expressed in or suggested by the forward-looking statements.

 Forward-looking statements include all statements
that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "may," "will,"
"should," "could," "would," "expect," "intend," "seek," "plan,"
"anticipate," "believe," "estimate," "project," "predict," "potential,"
"might," "forecast," "continue," or the negative of those terms, and similar expressions and comparable
terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:

 our ability to protect and enforce our intellectual property protection and the scope and duration of
such protection;

 our reliance on third parties, including suppliers, delivery platforms, brand sponsors, software providers
and service providers;

 our ability to operate in public spaces and any errors caused by human supervisors, network connectivity
or automation;

 our robots' reliance on sophisticated software technology that incorporates third-party components
and networks to operate, and our ability to maintain licenses for this software technology;

 our ability to commercialize our products at a large scale;

 the competitive industry in which we operate which is subject to rapid technological change;

 our ability to raise additional capital to develop our technology and scale our operations;

 developments and projections relating to our competitors and our industry;

 our ability to adequately control the costs associated with our operations;

 the impact of current and future laws and regulations, especially those related to personal delivery devices;

 potential cybersecurity risks to our operational systems, infrastructure, and integrated software by us
or third-party vendors;

 the development of a market for our common stock; and

 other risks and uncertainties, including those listed under Item 1A. Risk Factors.

 Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed,
estimated, expected, intended or planned.

 Factors or events that could cause our actual
results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results,
levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Annual Report on Form 10-K should
not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans
will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

 ii

 Item 1. Business

 All references to "Serve" refer to
Serve Operating Co. (formerly known as Serve Robotics Inc.), a privately held Delaware corporation and our direct, wholly-owned subsidiary.
Unless otherwise stated or the context otherwise indicates, references to the "Company," "we," "our,"
"us" or similar terms refer to Serve Robotics Inc. (formerly named Patricia Acquisition Corp.) together with its wholly-owned
subsidiary, Serve. Serve holds all material assets and conducts all business activities and operations of Serve Robotics Inc.

 Formation History

 Serve was incorporated in the State of Delaware on January 15,
2021. Serve is a spin-off of Uber Technologies, Inc. ("Uber"), a global ride-hailing and last-mile delivery platform. The
Serve initiative was initially formed in 2017 as the X division of Postmates Inc. ("Postmates"), a pioneering food delivery
startup in the United States. Uber acquired Postmates in 2020, including the Postmates X division.

 At the beginning of 2021, Uber's leadership
agreed to contribute the intellectual property developed by the Postmates X division team, the related assets, as well as a capital
investment to Serve in return for a minority equity interest in the business.

 Glossary of Terms and Abbreviations

 The following is a glossary of technical terms
used in this annual report:

 AI — Artificial Intelligence

 AV — Autonomous Vehicle

 GHG — Greenhouse Gases

 GPS — Global Positioning
System

 GPU — Graphical Processing
Unit

 IMU — Inertial Measurement
Unit

 LIDAR — A digital sensor
for measuring distance to objects which uses the principle of radar, but uses light from a laser

 ODD — Operating Design
Domain describes the specific operating conditions in which the automated driving system is designed to properly operate, including but
not limited to roadway types, speed range, and environmental conditions

 Reverse Logistics — A type
of supply chain management that moves goods from customers back to the sellers or manufacturers

 Company Overview

 We are on a mission to deliver a sustainable future
by transforming how goods move among people.

 Serve has developed an advanced, AI-powered robotics mobility platform,
with last-mile delivery in cities as its first application. According to the Bureau of Transportation Statistics in 2017, 45% of car trips
are taken for shopping and errands, while FedEx has stated that, as of 2019, over 60% of merchants' customers live within three
miles of a store location. By eliminating unnecessary car traffic, and by reducing the cost of last-mile transportation, Serve aims to
reshape cities into sustainable, safe, and people-friendly environments, with thriving local economies.

 Serve's first product is a low-emissions
robot that serves people in public spaces, starting with food delivery. In 2017, our core technology development began by our co-founders
and a growing product and engineering team. In 2020, the team launched a fleet of sidewalk delivery robots (hereafter simply referred
to as "delivery robots") in Los Angeles performing contactless restaurant deliveries during the COVID-19 pandemic shutdowns.
By the end of that year, Serve robots had successfully completed over 10,000 commercial deliveries for Postmates in California, augmenting
Postmates' fleet of human couriers.

 After the contribution of assets in 2021, Serve established a commercial
partnership with Uber, with deliveries starting in January 2022 at a small scale. In May 2022, Uber announced a pilot program
with Serve, and by June, it executed a commercial-scale agreement with Serve to deploy up to 2,000 of its robots across the United States.
The above mentioned 10,000 commercial deliveries for Postmates were related to research and development of technology.

 Serve's current fleet consists of over 100
robots, and we plan to expand our fleet by building and deploying hundreds of new robots in coming years after raising additional rounds
of financing. Our goal is to deploy all 2,000 Uber robots by the end of 2025, though the exact timing and robot quantity will be determined
by future capital availability. We currently do not expect to be able to build and deploy robots in 2024 based on our existing capital.
We have platform-level integrations with Uber Eats and 7-Eleven, Inc. in Los Angeles, California, which means Serve robots can provide
real-time presence and status updates on those platforms and receive requests to perform deliveries with respect to customer orders placed
on those platforms as needed. We have also successfully conducted pilots for Walmart, a major pizza quick service restaurant, and a major
coffee shop chain. To date, Uber Eats is the only partner for whom we have completed a material number of deliveries. Our strategic investors
include NVIDIA, Uber, 7-Ventures and Delivery Hero's corporate venture units, alongside other world-class investors.

 Because Serve started within a food delivery company,
our team comes with a depth of expertise in food delivery. Additionally, the engineering team has extensive experience in AI, automation
and robotics. Our leadership team includes veterans from Uber, Postmates, Waymo, Apple Inc., Blue Origin, LLC, GoPro, Inc., GoDaddy Inc.,
and Anki, Inc. We believe our expertise positions us to service the ever-growing on-demand delivery market, including food delivery.

 Based on our proprietary historical delivery data,
approximately half of all delivery distances in the United States are less than 2.5 miles and well-suited to delivery by sidewalk
robots. We provide a robotic delivery experience that delights customers, improves reliability for merchants and reduces traffic congestion
and vehicle emissions. Moreover, at scale we expect our robots will complete deliveries at lower cost than human couriers, making on-demand
delivery more affordable and accessible in the areas in which we operate.

 Last-mile Delivery Costs

 Despite new technological innovations of the past
few decades as well as growing adoption of online commerce and home delivery, last-mile delivery has remained costly and inefficient.
By our own estimate, issues such as refunds and crediting caused by driver error (e.g., failed deliveries or missing items) and fraud
increase average delivery cost by over $1.00 per delivery. In 2022, DoorDash, the largest food delivery platform in the United States,
reported 35% revenue growth while net losses increased over 190%.

 Besides on-demand delivery, next-day parcel delivery
has also struggled with last-mile cost. For example, in May 2023, Amazon announced a program to reduce its delivery costs by offering
customers $10 to pick up items from nearby stores.

 Tailwinds for Automation

 While an ever-growing share of consumers is shopping
online and demanding faster deliveries, a number of factors have contributed to keeping last-mile costs high:

 Labor shortages caused by the aging population and the COVID-19 pandemic have led to wage inflation.

 On-demand delivery companies in many jurisdictions are battling regulatory pressures to classify gig workers
as employees, which would in turn increase labor costs.

 More recently, cities across the United States have introduced maximum limits on how much delivery
platforms can charge restaurants and merchants, highlighting the need to lower underlying delivery costs.

 Labor cost inflation and regulatory pressures
serve as tailwinds that are expected to accelerate the adoption of automated robotic last-mile delivery. While labor costs typically increase
over time, hardware and technology costs typically decrease. We expect the cost of cameras, GPU processors, electric motors, batteries,
and advanced sensors such as LIDAR to continue to decrease, while mobile networks will become faster and more reliable with higher bandwidth
and geographic coverage, which will lead to a downward trend in the cost of building and operating robots.

 Delivery Robots, Aerial Drones and Autonomous
Vehicle

 Deliveries vary by distance, cargo size, cargo
sensitivity and timing requirements, among other factors. Today, most next-day parcels are delivered using trucks, while on-demand food
delivery largely takes place in personal vehicles. Overall, a small percentage of short-distance deliveries are performed on bicycles.

 As automation is introduced, different automated
technologies will be best suited for different deliveries. AVs will be best for longer distance and larger deliveries, though experts
currently believe AVs are still many years away from scaled, profitable operation. Delivery robots and aerial drones, however, have been
commercially operating in a variety of environments for several years and are expected to scale rapidly over the coming years. Robots
are best suited for short-distance deliveries in populated environments and drones are best suited for longer distances and less populated
areas. When different automated vehicles emerge at scale, we expect to see a considerable share of deliveries completed using multiple
technologies collaboratively.

 For example, while aerial drones may provide faster
delivery experience across longer distances and less populated areas, they face many challenges when it comes to picking up orders from
many restaurants located in densely populated areas: safety concerns to sidewalk pedestrians, noise pollution, and lack of availability
of dedicated real estate at every store front, among others. Instead, we expect delivery robots will be able to pick up items on busy
streets and urban environments, and deliver them to a drone at a nearby hand-off location. While in motion, a battery-powered delivery
robot often generates less noise and carries considerably less kinetic energy than a flying drone. By blending with existing infrastructure
without introducing significant noise or safety concerns, delivery robots may enable drones to access items in the most populated spaces
that may otherwise be challenging for drones to access in the future.

 Similarly, when AVs become commercially viable,
they will face challenges accessing merchants on congested streets where parking is limited. Restaurant waiting staff are often too busy
to walk to the nearest available parking space to load an AV. We expect delivery robots will facilitate this process and help accelerate
the adoption of AVs by allowing them to commercialize within existing urban infrastructures.

 In summary, delivery robots, aerial drones and
AVs are each efficacious for deliveries with different attributes, and all three will work collaboratively to create the most efficient
automated last-mile delivery network.

 Delivery Robot Operations

 Our sidewalk delivery robots start each day at
a central hub located near their operating area. Employees at the hub prepare robots for dispatch every morning by ensuring robots are
cleaned, regular maintenance items are performed, and robots pass daily diagnostic tests. While most robots deploy to and return from
their operating area automatically and without further vehicular assistance, some robots may be transported to and from operating areas
that are further away in a human-driven vehicle.

 While in the field, we estimate that Serve robots
are able to navigate over 80% of their environment autonomously. They are supervised through mobile connectivity and video streaming by
remote human operators who can assist robots when necessary, such as at intersection crossings or when robots are unable to navigate certain
conditions (e.g., blocked paths, construction zones, etc.). In less frequent occasions, if a robot requires physical assistance, such
as when a robot is too low on battery to return home or if it has been damaged, a nearby employee is dispatched to repair or return the
robot. As of January 2024, fewer than 1 out of every 500 of our robotic deliveries require physical assistance.

 Throughout the day, each robot receives a series
of delivery orders from partnered merchants and delivery platforms. Upon acceptance of any such order, the robot navigates to the pick-up
location, waits outside, and notifies merchant staff, often through their existing delivery tablets or point-of-sale devices. Once the
merchant staff load the package into the robot, it navigates to its drop-off destination. A similar sequence of events results in customers
meeting the robot at the curb, unlocking its cargo using their delivery app or on-screen instructions, and retrieving their package.

 At night, robots return to their central hub to
be recharged, maintained, upgraded when necessary, and prepared for next morning's deployment. Also, various robot components are
occasionally replaced due to wear and tear (e.g., tires, motors and batteries). Other components such as computers and key sensors like
LIDAR have multi-year lifespans and are rarely replaced. Overall, the useful life of a robot is measured in years, as calculated based
on the average lifespan of individual components weighted by their cost.

 Sidewalk delivery robots have inherent limitations
on how much cargo they can carry and how quickly they can move given the constraints of the sidewalk environment. Current Serve robots
carry up to 50 lbs and can move at a maximum speed of 7 mph. This imposes limits on addressable deliveries, travel time, and rate
of utilization of robots. For example, due to their speed, delivery robots are best suited for short-distance deliveries, though the majority
of restaurant deliveries in the United States are under 2.5 miles and thus within the delivery range of sidewalk robots. Additionally,
given the expected customer delivery wait time of 30 minutes, food delivery robots operating 12 hours per day could perform
a maximum of 20 to 30 deliveries per day, depending on the rate of batched deliveries.

 Furthermore, our robots are equipped with a number
of security features to prevent their cargo and their associated data and IP from unauthorized access. The robots' secure cargo
compartment can only be unlocked through the delivery app's interface or using a security code entered on the touch screen. Moreover,
using encrypted communication protocols and data storage as well as secure authentication methods, the data and software onboard each
robot is protected from unauthorized access. Finally, robots are equipped with redundant real-time location tracking systems as well as
alarm and communication features to deter attempts at vandalism and enable quick recovery of assets in the unlikely event of theft.

 Impact of Robotic Delivery

 As automation decreases the cost of last-mile
delivery and leads to increased adoption, we anticipate opportunities for impact over the long term:

 Reduced GHG Emissions: We believe robots and drones can reduce emissions caused by large vehicles used
today for moving small packages.

 Lower Delivery Costs: While all automated delivery vehicles still require a certain amount of human involvement
(e.g., loading & unloading, maintenance, remote supervision), we believe labor is leveraged more efficiently resulting in more deliveries
per unit of human effort. Just as automation has done in the past, it is expected that this will reduce delivery costs.

 Increased On-Demand Adoption: On-demand services are largely luxuries afforded by affluent consumers today.
We believe reducing delivery costs could make home delivery services affordable to more people.

 Easier Reverse Logistics: We believe reducing the cost for last-mile transportation is likely to increase
adoption of reverse logistics applications as well (e.g., more convenient package returns).

 More Local Commerce: We believe that the increased adoption of home delivery will result in more commerce
for local businesses.

 Moreover, faster and cheaper local deliveries
as well as easier and more cost-effective reverse logistics will likely result in new consumer behaviors and increased use of online commerce.
For example, a customer ordering a pair of shoes from Amazon may wait several days only to receive an ill-fitting pair that must be returned
while they wait more days for the next pair. In contrast, a customer ordering shoes from a local store could have three pairs of varying
sizes delivered to their front door by a robot within an hour. They may try them on, pick the best fitting pair, and leave the other pairs
in the robot to return.

 More Local Jobs: We believe increased delivery and local commerce activities resulting from reduction
in cost of delivery could lead to more local jobs, ranging from increased staffing of local businesses, logistics operators who enable
automated delivery networks to function, and human couriers who perform deliveries that automated services cannot perform.

 Higher Delivery Quality: Like most automated systems, robots are less prone to error. For example,
customers of food delivery platforms often experience missing items, mistaken orders, and lost or missed deliveries altogether. Robots
promise to reduce such errors, creating a better experience for customers and merchants alike.

 Safer Roads: According to a study by the National Highway Traffic Safety Administration (the "NHTSA")
from December 2023, there were 7,388 pedestrians and 966 cyclists killed in motor vehicle crashes in 2021 in the United States.
This represents a 13% increase in pedestrian deaths and a 3% increase in bicyclist deaths from 2020. The deaths accounted for
19% of all traffic fatalities in the United States in 2021. In addition to the fatalities, the NHTSA estimated there were also 60,577 pedestrians
and 41,615 cyclists injured in motor vehicle crashes in the United States in 2021. These injuries can be serious and life-changing,
and they can also have a significant financial impact on the victims and their families. There are many factors that contribute to pedestrian
and bicyclist fatalities and injuries, including: speeding, distracted driving, drunk driving, and aggressive driving.

 Delivery robots weigh significantly
less and move at lower speeds than cars; as a result, on average, a single car carries over a thousand times more kinetic energy than
a single robot. We anticipate that replacing cars with delivery robots could result in safer cities for pedestrians and cyclists.

 Friendlier
 Cities: Based on a University of Michigan report in 2010, it is estimated that as much
 as one half of city land area in the United States is dedicated to streets, parking
 lots, driveways, and other car-related uses. With mass adoption of automated last-mile delivery
 vehicles, such as robots and drones, more spaces in cities can be reclaimed from vehicles
 and used to create social and green spaces.

 Serve Technology

 Our robotic technology has been developed based
on the following key principles:

 1.
 Humans and Machines: We believe that the most effective way to quickly unleash the benefits of
AI and autonomy in our lives is by designing solutions that leverage both human and machine intelligence in ways that collaborate and
complement each other. Creating fully autonomous machines that are safe and reliable without any human intervention requires substantially
more time and capital investment than creating machines that are mostly automated but can rely on occasional human support, especially
when it comes to high consequence safety-critical decisions.

 2.
 Labor-Optimized: We believe the cost of advanced sensors and hardware will continue to decrease
over the coming years, and optimizing against such costs can be premature and an investment with diminishing long-term returns. Instead,
we have continued to innovate by designing highly capable hardware and software solutions for robotic last-mile delivery that optimize
against the largest cost of delivery: labor.

 3.
 Robots Among People: We believe that building world-class
hardware, software, AI and autonomy for robots to share spaces with people is how we are positioned to build market value and create
a lasting legacy.

 4.
 Robotic Platform: Our mission is to build a superior
robotic platform that can accelerate the adoption of robotic solutions beyond last-mile delivery.

 The following are key highlights of our approach
to technology development:

 Artificial Intelligence —
AI empowers Serve robots to navigate city sidewalks and interact with their environment safely and efficiently. We use the latest AI methodologies
to design, train and deploy a host of models on Serve robots. Currently, our AI models are used to perform a variety of tasks, including
identification of sidewalk surfaces, intersections, traffic signals, obstacles, pedestrians and vehicles, and projecting the trajectory
of other dynamic agents.

 For the last six years of development, we have
continued to create AI models with new capabilities, while improving the performance of existing models. We expect to continue developing
increasingly more capable AI models to improve robots' performance and differentiate Serve from alternative products and solutions.
As the broader field of Artificial Intelligence advances, we expect to benefit from such advances by increasing efficiency and effectiveness
of our robots.

 Level 4 Autonomy — In
January 2022, we announced the deployment of a new generation of delivery robots capable of operating at Level 4 autonomy.

 Level 4 autonomous robots can drive without
humans in the loop for periods of time while they are operating in their intended operating environments (also known as "ODDs").
Specifically, Serve robots are capable of driving autonomously on certain sidewalks without a remote human supervisor having to oversee
their movement. This capability makes it possible to operate our robots at lower cost than remotely operated robots used by our competitors,
because it enables a single remote operator to simultaneously perform multiple deliveries.

 Currently, we estimate that Serve robots can autonomously
navigate over 80% of their operating environment with the help of a number of different AI models that detect people, objects and terrains,
and predict future state of dynamic actors. Serve robots' autonomous capabilities enable one remote supervisor to safely monitor
up to four moving robots.

 Through frequent software updates, Serve's
AI models are continuously improved. We believe that over the coming years, we can steadily increase our robots' autonomous capabilities
using new and improved AI models and more training data including new edge cases encountered every day by our operating fleet.

 Safety — Achieving Level 4
autonomy required Serve robots to maintain safety even when operating without supervision. As such, we have designed robust onboard safety
systems that rely heavily on Serve's advanced sensors and AI capabilities. This significantly reduces the possibility of collisions
even when the robots are being supervised.

 In fact, we believe robots that rely heavily on
humans for safety are not sufficiently safe, because without automated onboard safety features, humans are prone to error. Also, data
networks used for remote supervision frequently fail, slow down or get interrupted. Therefore, over-reliance on error-prone humans and
failure-prone data networks makes human-in-the-loop safety inadequate.

 In contrast, current Serve robots are equipped
with an extensive array of onboard technologies that ensure safe and reliable operation without over-reliance on humans. Serve robots
utilize multiple layers of redundant systems for critical navigation functions, including multiple sensor modalities—active sensors
such as LIDAR and ultrasonics, as well as passive sensors such as cameras—to navigate safely on busy city sidewalks. Our robots
have a wide range of capabilities, such as:

 Automatic emergency braking: If a remote supervisor mistakenly puts a robot at risk of collision,
the robot will automatically override the remote supervisor and come to a stop.

 Vehicle collision avoidance: While Serve robots and their remote supervisors are trained to ensure
legal and safe crossing of intersections and driveways, drivers of vehicles can still cause vehicle-to-robot collisions. Similar driver
errors cause thousands of fatalities and injuries to pedestrians and cyclists every year. As such, Serve robots are equipped with AI features
that assess the risk of collision with nearby vehicles and minimize such risks by taking necessary actions such as stopping prior to a
collision.

 Fail-safe mechanical braking: We believe another unique and innovative capability of Serve robots
is their fail-safe emergency braking. No matter how reliable and well tested, batteries, electronics and computer systems occasionally
fail. During any such failures, Serve robots automatically come to a full stop through a mechanically designed fail safe braking system.
Some robots used by competitors solely rely on electronic braking, which can become ineffective during power or computer failures.

 Robot Design — As a division
of Postmates during Serve's inception, we had access to millions of historical delivery records. This enabled us to design robots
from the ground up based on proprietary insights about last-mile delivery.

 Current Serve robots consist of a number of key
systems:

 Drivetrain: Serve's innovative four-wheel drive
system is custom-made for navigating city sidewalks. It includes Ackerman steering similar to road vehicles, emergency fail-safe braking,
and a bogie suspension mechanism. Our unique design is a result of years of iteration and field testing.

 Rather than a fixed wheelbase, our
robots use a bogie that connects the pair of wheels on each side of the robot together via a differential. Relative to the main chassis,
each pair of wheels can rotate in opposite directions to maintain full traction on all four wheels regardless of road surface irregularities.
As a result, Serve robots can reliably navigate challenging city sidewalks that include tree wells, fallen branches, tree roots and other
unexpected obstacles.

 Our bogie design was inspired by the
suspension arrangement first developed by NASA in 1988 for the Mars rover Sojourner. Since then, NASA has used similar designs in Mars
rovers Spirit, Opportunity, Curiosity, and, most recently Perseverance.

 Power System: Serve's custom designed power distribution
system and redundant batteries enable it to operate reliably from morning to night without requiring charging or battery swaps. Robots
charge within a few hours upon returning to their home station at night.

 Connectivity: Serve robots include redundant LTE modems
and antennas that ensure they can consistently connect to cloud services used to dispatch and route their movements, as well as be monitored
by remote supervisors.

 Sensing & Compute: Serve robots are equipped with
an array of cameras, ultrasonic sensors, a pair of stereo cameras, an infrared-based depth sensor, GPS sensors, IMUs, and a 360-degrees
LIDAR sensor. Additionally, the robots use multiple CPU and GPU chips to process sensor information, run AI models, perform actions,
interact with pedestrians, and connect to the internet.

 Secured Cargo: Serve's cargo bin is designed
for maximum capacity, ease of use, customizability, and operational efficiency. The bin fits two large shopping bags or four large pizzas.
During operation the bin remains locked and is only accessible to designated restaurant staff and delivery customers, who can use their
delivery app or the PIN pad on the robot's touchscreen to unlock the cargo. Once the user completes loading or unloading, the cargo
lid shuts down and locks automatically, without requiring additional human assistance. Lastly, the cargo space is designed to remain
sufficiently clean and operational even if there is liquid spillage. Upon returning to the base, the interior of the bin can be removed
for cleaning and sanitization.

 Display and Lights: In order to create a user-friendly
experience for merchants and customers that requires no training or onboarding, as well as to create a friendly and positive experience
for pedestrians and other sidewalk users, Serve's design includes a touchscreen display for indicating robot status and providing
instructions. The design also includes a number of functional lights, including a light ring around the bin, brake lights, front headlights,
and a pair of circular eyes for expressing intentions and anthropomorphizing the robots.

 Stage of Development — Though
still early in their development maturity cycle, Serve robots are the result of over six years of engineering and development. Every day,
we continue to work on improving our robots' capabilities, including making them faster, safer, smarter and more affordable.

 The following table provides a list of Serve robots'
current specifications:

 Speed

 7 mph (max)

 Range

 23 miles, 10 hours

 Weather

 Light Rain, 32-104 F

 Autonomy

 >80% Autonomy Capability

 Cargo

 13 GAL (2 Lg Shopping Bags, 4 Lg Pizzas)

 Serve robots are designed to operate in common
environmental conditions in each operating market. Currently we limit Serve's operation to warm and dry climates, and do not operate
robots under rare or extreme conditions such as strong storms or unusually high or low temperatures.

 With additional financing required for further
development, we expect each new generation of robots to continually expand their operating envelope (e.g., introducing the ability to
manage ice and snow), which in turn expands our market reach. Our roadmap includes a new generation of robots launched in 2024 (assuming
availability of sufficient capital) that includes faster drivetrain, increased battery life, increased range of temperature and rain tolerance,
and more. The efforts towards the new robot generation began earlier this year and will require continued financing to complete.

 Development Process — Our
development efforts began in 2017 with extensive market research. Using proprietary historical Postmates delivery data, we ran thousands
of simulation scenarios to define desirable robot specifications, best deployment and operation models, as well as go-to market strategies
to achieve the most efficient, low-cost and scalable last-mile robotic delivery. The resulting specifications led to the development of
prototype robots that were quickly deployed in San Francisco and Los Angeles to learn from real-life operations while serving customers
and merchants.

 Today, every subsequent robot generation and incremental
software improvement starts with prototyping, followed by iterative rounds of testing and developments. Prior to deployment, we perform
extensive quality assurance testing using an expanding array of predefined validation tests, online simulations, and in-house testing
facilities. The validation tests include safety verifications to ensure any new software or hardware is capable of matching or exceeding
pre-defined safety standards. When safety verifications fail, additional cycles of development and testing are required.

 Once robots pass pre-deployment testing, a small-scale
deployment test is initiated with a representative set of robots. Upon collecting sufficient amounts of performance metrics, the final
go/no-go decision is made on whether any new software or hardware will be deployed across the entire fleet.

 The design and development process is also informed
by regulatory requirements in certain geographies, such as a number of states and municipalities, that have implemented permitting frameworks
for robotic delivery. The requirements include limits to robot weight, speed, operating conditions, availability of lights and identifying
labels, etc. Lastly, there are also hardware design requirements around electromagnetic radiations and battery safety that are considered
during the design and development process.

 For each new generation of hardware that introduces
changes to relevant components, we build an initial set of evaluation units and use them to obtain necessary certifications. Currently,
the only applicable certification requirement for the operation of sidewalk robots in the United States is UN 38.3. We have identified
additional certifications that may become necessary for the operation of sidewalk robots in the United States in the future and have
accounted for these certifications in the design and test of our devices.

 Manufacturing — Our robots
are designed by Serve's high caliber team of mechanical, electrical, and system engineers to not only meet product requirements
but also supply availability of components and manufacturing and assembly for scalability.

 Most components are widely available in supply
and/or fabricated from raw materials using common manufacturing processes including machining, molding, stamping, and additive manufacturing
from multiple sources. However, certain highly complex components are obtained from single or limited sources that we may have to compete
for with other participants in the robotics, consumer electronics, and automotive markets. Therefore, these components can be at times
subject to industry-wide shortages, resulting in long lead times and significant pricing fluctuations. Under these circumstances and to
maintain production schedules, it may be necessary to temporarily source alternate higher-priced compatible components. Key suppliers
of single and limited source components include NVIDIA and Ouster, Inc., in addition to vendors providing cameras, ultrasonic sensors,
electronic motors, and modems. To mitigate such supply risks, we routinely search for more available alternatives and/or enter into strategic
partnerships and agreements to secure pricing and supply of components.

 Finally, manufacturing and assembly of robots
take place by a third-party contract manufacturer after component supply has been secured. We have proven, first-hand experience designing
and assembling multiple generations of Serve robots and we believe our designs are highly manufacturable for contract manufacturers to
outsource. Therefore, we are not dependent on any particular outsourcing partner and we are, instead, able to vet top tier contract manufacturers
for their DFM (Design for Manufacturing) capabilities and leverage their existing scale to assemble robots in the most cost-effective
and timely manner. This typically starts with SMT (Surface Mount Technology) pick and place machines to assemble PCBAs (Printed Circuit
Board Assemblies) in batches followed by FATP (Final Assembly Test & Pack) on all the remaining components by subassemblies into fully
completed robots before being shipped out and deployed into our markets.

 The most recent batch of Serve robots was assembled
by a tier 1 contract manufacturer in California within a few months and came in at our highest yield and throughput, all at a manufacturing
cost that makes up a small fraction of our total robot cost. This speaks to our ability to design and execute with all our component suppliers
and contract manufacturers and we expect to improve even further as we scale with higher volumes.

 We plan to use contract manufacturing partners
to build future robots. Our goal is to secure adequate funding and resources to begin scaling our fleet starting with a fleet of 2,000
robots deployed for Uber before the end of 2025. We currently do not expect to be able to build and deploy robots in 2024 based on our
existing capital.

 We are party to a Lease Agreement with Farnam
Street Financial, Inc. ("Farnam") dated as of June 6, 2022 (the "Farnam Lease"), pursuant to which we lease
the hardware of our robots. The Farnam Lease had an initial term of 24 months, which was modified in December 2023 to provide for
a term of 15 months beginning on January 1, 2024. Pursuant to the Farnam Lease we have a purchase option allowing us to purchase the equipment
subject to the Farnam Lease on the last day of the extended lease term, (i) in whole for 45% of the original equipment cost, plus applicable
taxes, subject to certain conditions or (ii) in part for 20% of the original equipment cost, plus applicable taxes, subject to a renewal
of the Farnam Lease for an additional 12 months. The Farnam Lease also includes a right of first refusal requiring us to notify Farnam
of any bona fide offer from a third party to lease robots to us (a "Third-Party Offer") which we intend to accept. Prior to
accepting such an offer, we must make an offer to Farnam on the same terms and conditions as the Third-Party Offer. This right of first
refusal expires concurrently with the Farnam Lease.

 Robots That Win Hearts and Minds

 New technologies often face initial resistance
and skepticism before becoming widely accepted. We believe delivery robots are no exception. As such, we have invested significant time
and effort in creating robots that would be welcomed by society. Our years of commercial operations to date suggest we are on track to
accomplish our mission.

 In order to make robots acceptable by the public,
we set out our design efforts with a number of key objectives:

 Be familiar: Our robot design is inspired by familiar sidewalk
objects such as baby strollers and shopping carts. Unfamiliar form factors can elicit strong resistance, whereas familiar-looking robots
with blinking eyes and personalized names seem to already belong.

 Be fresh: First impressions are lasting impressions. Thanks
to decades of negative and dystopian portrayal of robots in science fiction, introducing robots to the public requires a strong first
impression that would encourage a readjustment in existing preconceptions. One way to achieve this is by creating a robot design that
is pleasantly surprising and unexpected, so that it would bring into question whatever fearful or dystopian views one might hold prior
to meeting a Serve robot in person.

 Be deferential: We believe robots are here to serve people,
and therefore during everyday interactions on city sidewalks, robots must make every effort to stay respectful and compliant of people
they share space with. For example, when their motion trajectory conflicts with a person, robots should always yield and prioritize people.

 Be considerate: Sidewalks are a shared space where people
from every walk of life, language, and physical ability come together. Robots must be designed with all users of public spaces in mind.
For example, while waiting to cross an intersection, our robots are trained to avoid blocking curb ramps needed by wheelchairs.

 Serve's talented design team has applied the above principles
as they studied human-robot interactions on sidewalks, and they have created a robot design that stands in a class of its own.

 Business Strategy

 After six years of research and development investment
in AI, autonomy, safety, and efficiency of our robots, we are in a leading position to partner with the world's largest food delivery
platforms, restaurants, retailers, and convenience brands to augment their last-mile human delivery capabilities. Our business strategy
relies on providing partners with a complete end-to-end delivery solution and charging a fee per delivery—or per hour depending
on the type of partnership.

 Additionally, robots can perform other value-add
tasks while in operation and capture additional revenues. For example, in 2023 while roughly 71% of our revenue was generated by delivery
fees on the Uber Eats platform, the other 29% was generated through branding and other revenue. Brands have used out-of-home ("OOH")
branding on transit vehicles since the age of streetcars in the 1800s. Similar to billboards and buses today, brands are placing ads on
Serve robots' exteriors.

 We anticipate additional revenue opportunities
from delivery robots in the future. For example, the ability to license our technology to partners who wish to create their own robots
for other applications, including our anticipated agreement with Magna. Additionally, robots can provide a new, more granular and timely
data source to mapping providers. They can also enable cities to identify infrastructure problems. As robots become more common, we expect
to identify new ways for robots to create value while operating.

 New revenues from robot branding and other services
supplement delivery revenues, and as a result position delivery robots with better economics compared with existing delivery solutions.

 Partnerships

 We operate a fleet of robots that perform deliveries
for delivery platforms or partnered merchants as either a part of a shared fleet or dedicated, exclusive fleet. For our robots to perform
deliveries, they would need to have some level of integration with our partners' platforms in order to receive an order, determine
its suitability for robotic delivery, accept or reject that order, and provide status updates and notifications to the merchants and recipients
throughout the course of the delivery.

 All of our currently active commercial robotic
delivery engagements are based on the shared fleet model, whereby a partner sends us their request for robotic delivery and only pays
us for those requests we choose to accept and complete. In the current shared fleet model, we have legal custody of the robots and maintain
and operate them at all times, receiving payment for performing deliveries and placement of advertising on our robots while incurring
all costs and risks relating to the robots and their operation. We may explore other partnership paradigms in the future, such as providing
an exclusive fleet to a partner who would maintain and house the robots and pay us a monthly fee for operations and rental of the robots.

 In 2021, we signed a commercial agreement with
Uber. Pilot deliveries began in early 2022, which successfully led to the execution of an additional agreement in June 2022 to enable
the commercial expansion of our service with up to 2,000 robots across multiple markets. Currently, this is our only large-scale
commercial contract.

 Uber launched its first-of-a-kind autonomy application
programming interface in August 2022, with Serve as one of its first integrated partners. Since last year, we have completed thousands
of deliveries for Uber Eats customers in Los Angeles and continue to expand our operations. Uber is also a strategic investor in Serve
and has participated in multiple financing rounds, and as a result it owns a minority stake in our company.

 In addition to Uber and 7-Eleven, Serve has performed
pilots for Walmart at its headquarters in Bentonville, Arkansas, for a major pizza quick service restaurant in Vancouver, Canada, and
for a major coffee shop chain in Los Angeles, California. All three pilots were successful in achieving their respective targeted
performance criteria and the next phase of our engagement with those parties are subject to further negotiations.

 Serve is also in discussions with Delivery Hero,
also a strategic investor, to identify suitable markets outside North America to launch their first deployment.

 Lastly, Serve is at various stages of discussions
with a number of other restaurant brands, restaurant integrator platforms, delivery platforms, and logistics companies.

 Traction

 With a fleet of over 100 robots as of December
31, 2023, we provide robotic delivery to more than 300 restaurants on the Uber Eats platform in a number of neighborhoods in Los
Angeles. To date, we have completed tens of thousands of deliveries to Uber Eats customers and our delivery volume has grown over 25%
month-over-month since early 2022.

 Serve robots' delivery reliability is most
notable. Our proprietary historical delivery data suggest that on average, human couriers fail to complete five or more orders per every
1,000 deliveries (i.e., 99.5% reliability). In contrast, in the most recent month, Serve robots have achieved a delivery reliability
as high as 99.94%. Improved delivery quality enhances both customers' and restaurants' experiences, and reduces the added
cost of refunds caused by courier error.

 By rapidly growing our delivery volume and proving
that our robots are more reliable than human couriers, we have successfully concluded the pilot phase of our partnership with Uber and
signed an agreement to deploy up to 2,000 robots across the United States. Our goal is to deploy those robots in 2025, conditioned
on securing required capital. We currently do not expect to be able to build and deploy robots in 2024 based on our existing capital.

 Growth Strategy

 We plan to continue growing our delivery operations
and establish Serve as the de facto global leader in automated last-mile delivery. Our growth will be facilitated by continued investment
in our hardware, software and AI developments that increase the performance and efficiency of our fleet.

 Over the next 24 months, we plan to grow
our operation fleet by 10 times and operate in at least two markets. To do this, we must first secure additional capital. Our existing
partnerships enable us to access sufficient demand for our projected growth over that period and beyond.

 Additionally, we plan to continue partnership
discussions with a number of food and grocery brands, as well as other delivery and restaurant ordering platforms.

 Currently, we do not have plans to expand operations
beyond the United States and Canada, but we do engage in partnership discussions from time to time to evaluate the potential to expand
into different geographies.

 Strategic Investments and Relationships

 In addition to revenue partnerships, we have developed
strategic relations and collaborate with market leaders in robotics and delivery. Such collaborations have allowed us to improve our product,
accelerate our growth, explore new market opportunities, and access additional capital.

 NVIDIA — A leading provider
of high-performance GPU computing chips, NVIDIA is an early technology collaborator of Serve. We have worked with NVIDIA's robotics
and engineering teams for over five years. Since 2022, NVIDIA has invested over $12 million in Serve.

 Delivery Hero SE — A German
multinational online food ordering platform with significant presence in Europe and Asia, Delivery Hero is also an early investor of Serve.

 Uber Technologies, Inc. — As
discussed earlier, Uber holds a minority stake in Serve by contributing Serve's initial IP and assets developed at Postmates X,
as well as by participating in multiple financing rounds. Uber is a key commercial partner and has enabled us to reach hundreds of restaurants
and thousands of customers within weeks of launching on their platform.

 7-Eleven Inc. and 7-Ventures, LLC —
Global convenience retailer with over 13,000 locations in the US and Canada, 7-Eleven is another early strategic investor in Serve.
Our partnership discussions began in 2020 when Serve was a part of Postmates. 7-Eleven is our first foray into the convenience market,
as well as our first direct integration with a retail chain. 7-Ventures, LLC, is an investment firm which operates as the venture capital
arm of 7-Eleven. The firm invests primarily in companies with emerging retail technology, consumer-focused services, and
disruptive CPG products that complement 7-Eleven's legacy of innovation.

 In addition to the existing partnerships, we are
in discussions with other potential strategic partners that would enable us to grow faster and reach more customers.

 Economics of Robotic Delivery

 The unit cost of robotic delivery can be divided
into two major components: labor costs related to fleet management personnel (remote supervision, field operations, and hardware operations)
and costs related to the robots (licensed software, mobile data fees, and robot lease payments). In our shared fleet model, both labor
and robot costs are incurred by us.

 The two most important drivers of delivery cost
efficiency are autonomy and robot utilization. Increased autonomy reduces the cost of labor by increasing the number of deliveries per
remote supervisor and field operator. Similarly, increasing robot utilization (i.e., number of deliveries per robot per day) leads to
lower per delivery cost as fixed costs would be divided over more deliveries, and labor would be more efficiently leveraged.

 Additional cost drivers include hardware amortization
period, upfront capital costs, and hourly wages for field and remote operations.

 It is worth noting the importance of the amortization
period in hardware design choices. Designing a more durable robot, as well as using reusable components, will help reduce the cost of
delivery. For example, LIDAR sensors and GPU computers have a higher initial cost of capital, and as such some have decided against using
them; however, they are long-lasting components that can be amortized over a number of years, and most importantly, they increase autonomy
performance and reduce the more significant labor costs.

 Besides increasing autonomy performance and robot
utilization, achieving operational profitability requires scaling the fleet. Scaled operations allow labor to be more efficiently utilized,
while building robots at a higher volume also reduces the unit cost of hardware.

 Competition

 There are existing direct competitors in the sidewalk
robotic space including Kiwibot, Starship Technologies, Coco, and Cartken. Kiwibot and Starship primarily focus on college campuses. College
campus environments are smaller markets compared to our target market of urban environments. According to the Education Data Initiative,
nearly 18 million students were enrolled in American colleges in 2022, compared to over 274 million people who live in urban
environments according to University of Michigan's Center for Sustainable Systems.

 Similar to Serve, Coco focuses on urban delivery
but does not have a direct marketplace integration with a major third-party delivery platform, significantly constraining its ability
to scale. Integrating with an existing delivery marketplace such as Uber Eats allows Serve to reach customers and merchants in new markets
quickly and cost-efficiently without the need to sign every merchant and acquire every customer. Direct marketplace integration also increases
robot utilization, and as a result, reduces cost per delivery by increasing the pool of deliveries available to robots and ensuring they
are more likely to receive delivery assignments well suited for robots. Direct marketplace integration also benefits marketplaces by reducing
their cost per delivery.

 Finally, Coco lacks advanced autonomy and requires
a human remote operator to drive each robot at all times, diminishing cost-effectiveness, scalability, and safety. Cartken is a newer
entrant to the space with limited operations.

 Positioned for Success

 We believe that our world-class team, superior
technology, and market-leading partnerships position us well to be a leader in the robotic delivery race.

 Our approach to product development and go-to-market
strategy has been informed by the proprietary historical delivery data we had the privilege to access inside Postmates. We developed sophisticated
simulation tools to anticipate the dynamics of robotic delivery, and design our hardware, software and operations accordingly.

 As a result of our access to proprietary data,
we have created the following:

 Unique Robot: We have designed a one-of-a-kind robot, purpose-built
for last-mile urban delivery, with a uniquely suitable drivetrain, battery life, cargo design, and more.

 Best-in-Class Autonomy: Having understood the importance of
autonomy for profitable unit economics from early simulations, we invested considerably in suitable sensors, computing stack, and AI
models to achieve Level 4 autonomous capability.

 Fastest, Most Scalable Go-to-Market: We have led competition
in our go-to-market approach in urban environments, with the largest number of restaurant partners and highest density of partners per
geographic region.

 Highest Robot Utilization: We have achieved higher robot utilization
than other robotic delivery providers, as a result of our robot design, partnership strategy and integrations.

 Efficient Unit Economics: Leading in autonomy and robot utilization
results in cheaper delivery economics.

 Safest: Our robots are equipped with the most sophisticated
sensors, more redundancy in sensing than competition, and more robust safety features such as mechanical fail-safe braking.

 In addition to having the best-in-class technology,
strongest strategic partnerships, and significant deployment contracts, we have also assembled a high integrity, talented team, with a
wealth of experience and a history of execution in creating innovative products and businesses.

 Our Values

 Serve is a mission-driven company based on a set
of values that drive who we are and what we do:

 Empower People — We serve
our neighborhoods and support local businesses. We go beyond self-interest, taking our community into account. We empower each other with
trust and autonomy to solve big problems to build a sustainable future.

 Passionate, Authentic and Kind — We
are mission driven. We value each other. We celebrate milestones and moments, both at Serve and in our personal lives.

 Trustworthy — We operate with
integrity. We do what we say we will do. We are honest, transparent, and respectful.

 Safety Is Not Negotiable — We
set the standard for safety. Our goal is to eliminate risks to safety. Our commitment goes beyond the sidewalk—we protect our customers'
data, our employees, and the public.

 Take Ownership, Give Credit — It's
not mine, it's not yours, it's ours. We solve big audacious problems working together as a distributed, cross-functional team.
We take pride in the quality of our work and no task is beneath us.

 Put the Marshmallow on Top — We
are humbled by unknowns, not defeated. We see opportunity in ambiguity. We don't need turn-by-turn directions, but plan our own
routes and even scout for others. We embrace experimentation in the face of uncertainty.

 Find Truth on the Sidewalk — We
experiment rapidly and discover eagerly in the real world. We move fast, gather data, and learn by delivering.

 Deliver Delight — Both to
our customers or to each other! We exceed customer expectations. We bring joy to our work and to our neighborhoods.

 Environmental Impact

 Based on our internal data, we estimate that over
95% of deliveries completed by Serve robots over the last year would otherwise be performed by personal vehicles. At scale, we estimate
that delivery robots can reduce global GHG emissions by nearly 762 megatons annually by replacing deliveries by personal vehicles,
which represents approximately 2% reduction in the 37.15 billion metric tons of global emissions (Global Carbon Project).

 According to the International Energy Agency,
3.53 billion metric tons of CO2 were emitted by passenger vehicles in 2022. Assuming the 2017 estimate by the Bureau of Transportation
Statistics that 45% of car trips were taken for shopping and errands, and our proprietary delivery data indicating half of all shopping
trips can be completed by delivery robots, this suggests that the scaled use of robotic delivery could reduce global passenger car emissions
of such trips from approximately 794 megatons to less than 32 megatons per year, which is a reduction of over 96% as estimated by
a study published in Transportation Research Part D: Transport and Environment (Volume 85, August 2020, 102443).

 Government Regulations

 In the United States, by default delivery
robots are allowed to operate on sidewalks. Over twenty states and a number of cities have put in place legal frameworks to explicitly
permit the use of delivery robots. The instances of cities welcoming delivery robots far exceed the few examples in which their operations
were banned. This positive regulatory momentum for delivery robots may be due to a number of factors:

 Robots Inherently Safer: Cars carry over 1,000 times
more kinetic energy than robots. As a result of having much lower kinetic energy, robots do not pose the same risk for injury or fatality
that cars do. Meanwhile, cars injure and kill thousands of pedestrians and cyclists each year. Removing unnecessary car trips can make
cities safer for pedestrians and cyclists.

 Robots Reduce Emissions: Many cities have established
targets for reducing carbon emissions, and robots can help advance their environmental initiatives.

 Robots Reduce Congestion: Deliveries often originate
in high traffic regions where restaurants and shops tend to be located. As a result, removing delivery car traffic can reduce congestion
and parking issues in cities.

 Robots Reduce Delivery Cost for Local Merchants: Recently,
a number of cities have implemented restrictions on how much delivery platforms can charge restaurants for their services. Robots can
offer a cheaper alternative to help local restaurants and merchants reduce their delivery costs.

 We are currently operational in West Hollywood,
CA and Los Angeles, CA and hold requisite permits with both cities. Other states and municipalities across the United States
may have legal requirements for personal delivery device ("PDD") deployment, but they are not applicable to our operations
at this time.

 West Hollywood's PDD permitting program
is administered via a Call for Application and subsequent procurement process. Serve Robotics submitted an application and received an
operating permit as of September 2022. The permit limits operation to twenty (20) or fewer robots and requires monthly submission
of a report outlining incidents, geographic data, and areas for infrastructure improvement within the city.

 Under Municipal Code Section 71.30, the Los
Angeles Department of Transportation is empowered to enact a PDD pilot program. These rules include size and weight requirements, speed
limits, 3-1-1 integration, braille identifying markers on the devices, integration with the Mobility Data Specification for location reporting,
and regular communication of incidents that may take place.

 California
currently has no statewide requirements governing the operation of PDDs. Under California Health and Safety Code Sections 113982
and 113930.5, restaurants that deliver meals by means of third-party delivery services are required to use tamper evident packaging.
Additionally, the Los Angeles County Department of Public Health provides guidance on food delivery and pickup by third-party delivery
service drivers. However, there are currently no requirements specifically addressing automated and robotic delivery vehicles such as
PDDs.

 As
we expand our operations, we will continue to engage with local municipalities and regulators, to collaboratively introduce our innovative
technology to new communities.

 Currently, hardware certification requirements for sidewalk robots
in the United States include the UN 38.3, which Serve robots are in compliance with. We have identified additional certifications
that may become necessary for the operation of sidewalk robots in the United States in the future and have accounted for these certifications
in the design and test of our devices.

 Intellectual
Property

 Our
success and ability to compete are significantly dependent on our core technology and intellectual property. We have applied for 18 patents
in various jurisdictions: China (1 patent), the United States (11 patents), Canada (6 patents), and through the Patent
Cooperation Treaty.

 We
have thus far been granted nine of the 18 patents for which we have applied—4 in the United States, 4 in Canada and 1
in China. Our granted patents will expire between May 2029 and June 2039, assuming that all maintenance fees are paid, no portion
of the patent has been terminally disclaimed and the patent has not been invalidated. In certain jurisdictions, and in certain circumstances,
patent terms can be extended or shortened.

 We
seek to protect our intellectual property and proprietary rights, including our proprietary technology and software, by relying on a
combination of federal, state, and common law rights in the United States and other countries, as well as on contractual measures. However,
these laws, agreements, and procedures provide only limited protection. Legal protections afford only limited protection for our technology.
Although we currently primarily operate within the United States, the laws of some foreign countries do not protect our proprietary rights
to as great an extent as domestic laws, and many foreign countries do not enforce these laws as diligently as government agencies and
private parties in the United States.

 We
encourage our employees to continue to invent and develop new technologies so as to maintain our competitiveness in the marketplace.
We generally enter into confidentiality and non-disclosure agreements with our employees, consultants, vendors and customers, and generally
limit access to and distribution of our proprietary information. We also enter into invention assignment agreements with our employees
and consultants, which give us the rights to their inventions during the term of the agreements.

 Despite
our best efforts, our means of protecting our proprietary rights may be inadequate. It is possible that our current patents, or patents
we later acquire, may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued
patents for our pending patent applications or other inventions we seek to protect. In that regard, we sometimes permit certain intellectual
property to lapse or go abandoned under appropriate circumstances and due to uncertainties inherent in prosecuting patent applications,
sometimes patent applications are rejected and we subsequently abandon them. It is also possible that any patent issued to us may not
provide us with any competitive advantages, or that the patents of others will harm or altogether preclude our ability to do business.
Moreover, unauthorized parties and our competitors may either attempt to copy aspects of our products or obtain and use information that
we regard as proprietary, or independently develop technology that is similar to ours thereby rendering our protected products less valuable,
if the design is favorably received in the marketplace.

 Employees
and Human Capital Resources

 Our
employees are our greatest assets. We value and support hiring exceptional talent to develop our core technology and drive our business
growth. We strive to meet these objectives by offering competitive pay and benefits in a diverse, inclusive, and safe workplace. In addition,
we provide opportunities for our employees to grow and develop their careers.

 As of February 23, 2024, we have 57 employees in the United States
and 10 employees in Canada through our wholly-owned Canadian subsidiary. By primary job function, about 70% of our employees have engineering
or product roles, 25% are in operations and 5% have business development or other administrative roles. None of our employees are represented
by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

 Competitive
Pay and Benefits

 We
provide compensation and benefits packages that we believe are competitive within our industry. We use a combination of cash and equity
compensation and other benefits to attract, motivate and retain our employees, including stock option awards, retirement programs, flexible
or paid time off based on department, and health and wellness benefits. In addition, we benchmark our compensation and benefits packages
periodically to remain competitive with our peers and attract and retain talent throughout our organization.

 Employee
Recruitment, Retention, and Development

 We
believe our corporate culture, competitive compensation and benefits programs, and career growth and development opportunities promote
longer employee tenure and reduce turnover. We have enjoyed high employee retention since becoming an independent company in 2021 and
monitor employee turnover rates as our success depends upon retaining and investing in our highly skilled technical staff.

 Diversity,
Equity, and Inclusion

 We
value the uniqueness that an inclusive and diverse team brings to our company. Therefore, we are focused on creating an environment that
leverages the perspectives and contributions of each employee.

 Safety,
Health, and Wellness

 We
prioritize safe working conditions. We are committed to an injury-free workplace and provide comprehensive workplace training and support
to reduce or eliminate health and safety risks.

 Available
Information

 We
are a public company, and our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and any amendments to such reports are filed with the SEC. We are subject to the informational requirements of the Exchange Act and file
or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the Securities
and Exchange Commission (the "SEC") will be available free of charge on our website at www.serverobotics.com when such reports
are available on the SEC's website. The SEC maintains a website that contains reports, proxy and information statements, and other
information that issuers file electronically with the SEC at www.sec.gov. Our website is www.serverobotics.com, and we can be contacted
at investor.relations@serverobotics.com.

 The
contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites
are intended to be inactive textual references only.

 Item
1A. Risk Factors

 Investment
in our stock involves a high degree of risk. You should consider carefully the risks described below, together with other information
in this Annual Report on Form 10-K and our other filings with the SEC, before making investment decisions regarding our stock. If any
of the following risks and uncertainties, or if any other risks and uncertainties, actually occurs, our business, financial condition,
or operating results could differ materially from the plans, projections, and other forward-looking statements included in Part II, Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Annual Report on
Form 10-K and in our other public filings. In addition, if any of the following risks and uncertainties, or if any other risks and uncertainties,
actually occurs, our business, financial condition, or operating results could be harmed substantially, which could cause the market
price of our stock to decline, perhaps significantly. Moreover, the risks described below are not the only ones that we face. Additional
risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial
condition.

 Risks
Related to Our Business and Industry

 Because
we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses for
the foreseeable future, we cannot assure you that we can or will be able to operate profitably.

 We
are an early-stage company. We were formed and commenced operations in January 2021. We face all the risks faced by newer companies,
including significant competition from existing and emerging competitors, some of which are established and have better access to capital.
In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown
factors. We will need to transition from an early-stage company to a company capable of supporting larger scale commercial activities.
If we are not successful in such a transition, our business, results, and financial condition will be harmed.

 We
have not been profitable to date, and we expect operating losses for the near future. During the years ended December 31, 2023 and 2022,
we generated revenue of $0.21 million and $0.11 million, respectively, and incurred a net loss of $24.81 million and $21.86
million, respectively. There can be no assurance that we will not continue to incur net losses in the future. We may not succeed in expanding
our customer base and product offerings and even if we do, may never generate revenue that is significant enough to achieve profitability.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Furthermore,
we may not be able to control overhead expenses even where our operations successfully expand. Our failure to become and remain profitable
would depress our value and could impair our ability to raise capital, expand our business, diversify our product offerings, or even
continue our operations.

 We
have a limited operating history, which may make it difficult to evaluate our business and prospects.

 We
face the risks associated with businesses in their early stages, with limited operating histories and whose prospects are hard to evaluate.
Any evaluation of our business and our prospects must be considered in light of the uncertainties, delays, difficulties and expenses
commonly experienced by companies at this stage, which generally include unanticipated problems and additional costs relating to the
development and testing of products, product approval or clearance, regulatory compliance, production, product introduction and marketing,
and competition. For example, we have incurred losses for each of the past few years, driven mainly by our investments in research and
development costs. Many of these factors are beyond the control of our management. In addition, our performance will be subject to other
factors beyond our control, including general economic conditions and conditions in the robotics industry. Accordingly, our business
and success face risks from uncertainties faced by developing companies in a competitive environment. There can be no assurance that
our efforts will be successful or that we will ultimately be able to attain profitability.

 Our
auditor has issued a "going concern" opinion.

 Our auditor has issued a "going concern"
opinion on our financial statements, which means they are not sure that we will be able to succeed as a business without additional financing.
For the year ended December 31, 2023, we generated $0.21 million in revenue, and we sustained a net loss of $24.81 million.
We had an accumulated deficit of $68.33 million as of December 31, 2023. Our ability to continue as a going concern until we reach
profitability is dependent upon our ability to generate cash from operating activities and to raise additional capital to fund our operations.
While we were successful in raising a cumulative total of approximately $5.0 million in convertible debt financing through February 23,
2024, our ongoing operational expenses are now approximately $1.7 million per month without yet generating any material corresponding
revenue. Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability
to execute our business plan.

 If
we fail to effectively manage our growth, we may not be able to design, develop, manufacture, market, and launch new generations of our
robotic systems successfully.

 We
intend to invest significantly in order to expand our business. Any failure to manage our growth effectively could materially and adversely
affect our business, prospects, financial condition, and operating results. We intend to expand our operations significantly. We expect
our expansion to include:

 expanding
 the management, engineering, and product teams;

 identifying
 and recruiting individuals with the appropriate relevant experience;

 hiring
 and training new personnel;

 launching
 commercialization of new products and services;

 forecasting
 production and revenue;

 entering
 into relationships with one or more third-party design for manufacturing partners and third-party
 contract manufacturers and/or expanding our internal manufacturing capabilities;

 controlling
 expenses and investments in anticipation of expanded operations;

 carrying
 out acquisitions and entering into collaborations, in-licensing arrangements, joint ventures,
 strategic alliances or partnerships;

 expanding
 and enhancing internal information technology, safety, and security systems;

 conducting
 demonstrations;

 entering
 into agreements with suppliers and service providers; and

 implementing
 and enhancing administrative infrastructure, systems, and processes.

 Should
achieved market penetration warrant, we intend to continue to hire a significant number of additional personnel, including engineers,
design, production, and operations personnel and service technicians for our robotic systems and services. Because of the innovative
nature of our technology, individuals with the necessary experience may not be available to hire, and as a result, we will need to expend
significant time and expense to recruit and retain experienced employees and appropriately train any newly hired employees. Competition
for individuals with experience designing, producing, and servicing robots and their software is intense, and we may not be able to attract,
integrate, train, motivate or retain additional highly qualified personnel. The failure to attract, integrate, train, motivate and retain
these additional employees could seriously harm our business, prospects, financial condition and operating results.

 Our
revenues and profits are subject to fluctuations.

 It
is difficult to accurately forecast our revenues and operating results, and these could fluctuate in the future due to a number of factors.
These factors may include adverse changes in companies' interests in our robotic delivery and branding services, companies'
available dollars to invest on our services, general economic conditions, our ability to market our company to companies, headcount and
other operating costs, and general industry and regulatory conditions and requirements. The Company's operating results may fluctuate
from year to year due to the factors listed above and others not listed. At times, these fluctuations may be significant and could impact
our ability to operate our business.

 A
significant portion of our revenue is concentrated with one customer.

 A
significant portion of our revenue is concentrated with one customer, Uber. For the years ended December 31, 2023 and 2022, sales to
Uber accounted for 71% and 50% of our total revenue, respectively. For the year ended December 31, 2021, we had not yet commenced
any revenue-generating activity. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited
number of customers. If Uber were to breach, cancel or amend our agreement, it may have an outsized effect on our revenue, cash on hand,
and profitability. In addition, we may have an increased interest in accepting less favorable terms of any amendment as a result.

 We
are dependent on general economic conditions.

 Our business model is dependent on companies purchasing our robotic
delivery and branding services. Our business model is thus dependent on national and international economic conditions. Uncertain economic
conditions have created volatility in the U.S. Such adverse national and international economic conditions may reduce the future availability
of dollars companies have to spend on our services, which would negatively impact our revenues and possibly our ability to continue operations.
For example, rising labor costs in recent years have led to increased interest in last-mile automation, while higher interest rates have
resulted in a decrease in investment activity and overall capital allocation to hardware startups. The worsening of global economic conditions
has in the past adversely affected, and could in the future, adversely affect our business, financial condition or results of operations,
and the worsening of economic conditions in certain specific regions of the country could impact the expansion and success of our businesses
in such areas.

 Our
directors may be engaged in a range of business activities that could result in conflicts of interest.

 We
may be subject to various potential conflicts of interest because some of our officers and directors may be engaged in a range of business
activities. In addition, our executive officers and directors may devote time to their outside business interests, so long as such activities
do not materially or adversely interfere with their duties owed to us. In some cases, our executive officers and directors may have fiduciary
obligations associated with these business interests that interfere with their ability to devote time to our business and affairs and
that could adversely affect our operations. These business interests could require significant time and attention of our executive officers
and directors. In addition, we may also become involved in other transactions which conflict with the interests of our directors and
the officers who may from time-to-time deal with persons, firms, institutions or companies with which we may be dealing, or which may
be seeking investments similar to those desired by us. The interests of these persons could conflict with our interests. For example,
one of our directors, James Buckley Jordan, currently serves as a director, officer, or advisor to multiple companies, including Miso
Robotics and Vebu Labs, that compete in our industry, robotics and automation.

 Unfavorable
changes in interest rates and foreign currency exchange rates may adversely affect our financial condition, liquidity, and results of
operations.

 Fluctuations
in interest rates and foreign exchange rates may negatively impact our business. These rates are highly sensitive to many factors beyond
our control, including general economic conditions, both domestic and foreign, and the monetary and fiscal policies of various governmental
and regulatory authorities. Any of such widespread economic conditions could negatively impact our supply chain partners and the industry
as a whole, which could materially decrease our profits and cash flow. We have experienced increased costs in acquiring parts for our
robots as a result of the global semiconductor industry facing shortages in supply as well as inflation and increased interest rates.
We, or our supply chain partners, could continue to increase prices as a result of other adverse macroeconomic conditions.

 The
inability of our supply chain to deliver certain key electrical components, such as semiconductors, could materially adversely affect
our business, financial condition and results of operations.

 Certain
highly complex components used to manufacture our robots are obtained from single or limited sources that we may have to compete for
with other participants in the robotics, consumer electronics, and automotive markets. If our supply chain fails to deliver products
to us in sufficient quality and quantity on a timely basis, we will be challenged to meet our target production and development timelines
and could incur significant additional expenses for expedited freight and other related costs. Our supply chain may also be adversely
impacted by events outside of our control, including macroeconomic events, trade restrictions and economic recessions. For example, throughout
2022, we experienced delays in supply chain deliveries, extended lead times and shortages of key components. Supply chain disruptions
may delay the timing of production and maintenance of our robots, which in turn could negatively impact our business, results of operations
and financial condition.

 Our
robots are reliant on semiconductors. In recent years, there has been an ongoing shortage of semiconductors. The semiconductor supply
chain is complex, with capacity constraints occurring throughout. We have and will continue to work closely with our suppliers to minimize
any potential adverse impacts of the global semiconductor chip shortage and monitor the availability of semiconductor chips and other
key components and any other supply chain inefficiencies that may arise. In an effort to mitigate these risks, in some cases, we may
have to incur higher costs due to investment in supply chain resiliency and to secure available inventory or make non-cancellable purchase
commitments with semiconductor suppliers, which introduce inventory risk if our forecasts and assumptions prove inaccurate. Furthermore,
if we are not able to mitigate the impact of the semiconductor chip shortage, any direct or indirect supply chain disruptions may have
a material adverse impact on our business, financial condition and results of operations.

 Our
failure to attract and retain highly qualified personnel in the future could harm our business.

 We
are an innovative technology company. We may not be able to locate or attract qualified individuals for important positions, such as
software engineers, robotics engineers, machine vision and machine learning experts and others, which could affect our ability to grow
and expand our business. We may also face intense competition for qualified individuals from numerous other companies, including other
similarly situated technology companies, many of whom have greater financial and other resources than we do.

 In
addition, new hires often require significant training and, in many cases, take significant time before they achieve full productivity.
We may incur significant costs to attract and retain qualified personnel, including significant expenditures related to salaries and
benefits and compensation expenses related to equity awards, and we may lose new employees to our competitors or other companies before
we realize the benefit of our investment in recruiting and training them. Moreover, new employees may not be or become as productive
as we expect, as we may face challenges in adequately or appropriately integrating them into our workforce and culture. If we are unable
to attract, integrate and retain suitably qualified individuals who can meet our technical, operational and managerial requirements,
on a timely basis or at all, our business, results of operation and financial condition could be adversely affected.

 Litigation
or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management's time and attention,
and damage our reputation.

 We
may, from time to time, be a party to various litigation claims and legal proceedings. We will evaluate these claims and proceedings
to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses. Claims made or threatened
by our suppliers, distributors, customers, competitors, or current or former employees could adversely affect our relationships, damage
our reputation or otherwise adversely affect our business, financial condition, or results of operations. The costs associated with defending
legal claims and paying damages could be substantial. Our reputation could also be adversely affected by such claims, whether or not
successful.

 Our
future revenue plans rely on partnering with third-party delivery platforms, brand sponsors and/or direct sales to merchants.

 Our
largest stream of projected revenue comes from maximizing utilization of our robots to perform deliveries. We may be unable to maximize
utilization due to a variety of reasons, including insufficient merchant participation, platform partner matching algorithms, failure
to deliver a commercial grade product, and a lack of product acceptance by merchants and/or delivery recipients. To date, we have been
able to continually increase our robot utilization in our partnership with Uber driven by the continued improvement in our integration,
high merchant participation, and widespread product acceptance by users of the Uber platform. We have not yet achieved such levels of
utilization with our other partners because those integrations are less complete. To achieve profitability, we would need to continue
to improve our utilization targets with Uber above current levels and maintain those levels with other partners as well. As this requires
cooperation by third parties, there is no guarantee that it will be achieved within a specific timeframe.

 Our
financial projections also anticipate generating revenues from brand sponsors who would pay to place their branding on our robots as
a form OOH branding. OOH branding on robots is a new phenomenon and as such, an unproven model. To date, for our limited number of robots,
we have been able to run periodic OOH advertising campaigns with several brands in varying sectors including real estate, fashion and
entertainment, with 22% and 50% of our revenues for the years ended December 31, 2023 and 2022, respectively, coming from OOH advertising.
In the future, if we are unable to realize these sales, our business model and go-to-market strategy will be jeopardized.

 Failure
of our service providers or disruptions to our outsourcing relationships may negatively impact our ability to conduct our business.

 Certain
of our remote piloting services are currently provided by third-party vendors, and sometimes from service centers outside of the United States.
Services provided pursuant to arrangements with these third-party vendors could be disrupted due to events outside of their control such
as power failures, cybersecurity incidents, internet traffic congestion or increased latency, or deterioration in their economic condition.
Similarly, the expiration of agreements associated with such arrangements or the transition of services between providers could lead
to loss of institutional knowledge or service disruptions. While we have not experienced material impact of such disruptions to date,
our reliance on others as service providers could have a material adverse effect on our business, financial condition, results of operations
and cash flows in the future.

 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.

 Our
ability to attract and retain customers (including merchants, platform partners, and brand sponsors) is heavily dependent on our ability
to provide a safe and reliable service. Our safety and security track record have been instrumental in helping us attract and retain
our existing customers. Because we operate on public sidewalks, the performance of our robots is highly visible and we have to maintain
the highest standards for public safety. Our operating procedures and automated systems are designed to ensure that our robots yield
the right of way to vehicles, pedestrians, and other sidewalk and road users. Examples include only crossing controlled intersections
during a pedestrian "walk" signal and slowing down or stopping if a pedestrian approaches the robot from any direction. Our
partners, such as Uber, require timely reporting of any material safety incidents, and if they are not able to ascertain our ability
to maintain safe operations, our commercial relationships may be jeopardized. To date, we have not experienced material safety incidents
nor have our partners raised any concerns about our safety standards and track record. However, any actual or perceived public safety
incidents that may be caused by our human supervisors, network connectivity issues, third-party software, or automation may put our commercial
relationships and financial viability at risk.

 Our
robots rely on sophisticated software technology that incorporate third-party components and networks to operate, and the inability to
maintain licenses for software technology, errors in the software we license or the terms of open-source licenses could result in increased
costs or reduced service levels, which would adversely affect our business.

 Our
robots require certain third-party software and networks to function safely and effectively, and our business relies on certain third-party
software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software in the
future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this
may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party software may require
significant work and require substantial investment of our time and resources. Our use of additional or alternative third-party software
would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or
at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect
our business. Furthermore, performance degradation or lack of access to such software and networks can result in poor delivery performance
or even grounding of our entire fleet until it is resolved, which can adversely impact our ability to continue our operations.

 Additionally,
the software powering our technology systems incorporates software covered by open-source licenses. The terms of many open-source licenses
have not been interpreted by U.S. courts, and there is a risk that the licenses could be construed in a manner that imposes unanticipated
conditions or restrictions on our ability to operate our systems. In the event that portions of our proprietary software are determined
to be subject to an open-source license, we could be required to publicly release the affected portions of our source code or re-engineer
all or a portion of our technology systems, each of which could reduce or eliminate the value of our technology systems. Such risk could
be difficult or impossible to eliminate and could adversely affect our business, financial condition, and results of operations.

 The
benefits to customers of our products could be supplanted by other technologies or solutions or competitors' products that utilize
similar technology to ours in a more effective way.

 The
benefits to customers of our products could be supplanted by other technologies or solutions or competitors' products that utilize
similar technology to ours in a more effective way. We cannot be sure that alternative technologies or improvements to artificial intelligence,
industrial automation or other technologies, processes or industries will not match or exceed the benefits of our products or be more
cost effective than our products. The development of any alternative technology that can compete with or supplant our products may materially
and adversely affect our business, prospects, financial condition and operating results, including in ways we do not currently anticipate.
Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially
delay our development and introduction of new and enhanced products, which could result in the loss of competitiveness of our robotic
systems and solutions, decreased revenue and a loss of market share to competitors. Our research and development efforts may not be sufficient
to adapt to new or changing technologies. While we plan to upgrade and adapt our robotic systems and solutions as we or others develop
new technology, our robotic systems and solutions may not compete effectively with alternative products if we are not able to source
and integrate the latest technology into our systems and solutions.

 We
have limited experience commercializing our products at a large scale and may not be able to do so efficiently or effectively.

 We
have limited experience commercializing robotic systems at a large scale and may not be able to do so efficiently or effectively. A key
element of our long-term business strategy is the continued growth in sales, marketing, training, customer service and maintenance and
servicing operations, including hiring personnel with the necessary experience. Managing and maintaining these operations is expensive
and time consuming, and an inability to leverage such an organization effectively or at all could inhibit potential sales or subscriptions
and the penetration and adoption of our products into new markets. In addition, certain decisions we make regarding staffing in these
areas in our efforts to maintain an adequate spending level could have unintended negative effects on our revenues, such as by weakening
the sales, marketing and maintenance and servicing infrastructures or lowering the quality of customer service.

 We
are substantially reliant on our relationships with suppliers and service providers for the parts and components in our robots, as well
as for the manufacture of our robots. If any of these suppliers or service partners choose to not do business with us, then we would
have significant difficulty in procuring and producing our robots and our business prospects would be significantly harmed.

 Our
robots contain hundreds of components which are assembled by third-party manufacturing partners. Collaboration with third parties for
the manufacturing of robots is subject to risks with respect to operations that are outside our control. Global supply chain problems
directly impact our ability to obtain these components cost-effectively. We could experience delays to the extent our current or future
partners do not continue doing business with us, meet agreed upon timelines, experience capacity constraints or otherwise are unable
to deliver components or manufacture robots as expected. For example, we have had to delay increasing the number of robots in our fleet
due to previous third-party supply restraints. Serve has an agreement with a leading LIDAR vendor to purchase LIDARs at highly competitive
prices within a limited timeframe. Failure to leverage this agreement, or secure similar supplier agreements for components that may
face availability constraints due to supply chain disruptions can result in higher prices for those components, which in turn increases
the cost of manufacturing robots and result in an adverse financial impact to our delivery economics.

 There
is risk of potential disputes with partners, and we could be affected by adverse publicity related to our partners whether or not such
publicity is related to their collaboration with us. Our ability to successfully build a premium brand could also be adversely affected
by perceptions about the quality of our partner manufacturers' robots or other robots manufactured by the same partner. In addition,
although we intend to be involved in material decisions in the supply chain and manufacturing process, given that we also rely on our
partners to meet our quality standards, there can be no assurance that we will be able to maintain high quality standards.

 We
may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties
to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary
information, non-performance by the third party, and increased expenses in establishing new strategic alliances, any of which may materially
and adversely affect our business.

 The
evolving regulations around PDDs could materially impact our business and growth prospects in new markets.

 Sidewalk
robots, as opposed to autonomous vehicles operating on public streets, are not by default prohibited from operations in most jurisdictions.
But there is no guarantee that the current permissive environment will not change in the future, especially as more sidewalk robots get
deployed. While we currently have the requisite permits and support from local municipalities in areas we operate, any change in regulations
or permit requirements could adversely impact our business. Therefore, we proactively engage with lawmakers, academics, standards-setting
organizations, urban planning nonprofits, disability rights advocates, senior citizen organizations, and regional bicycle coalitions
to anticipate and mitigate potential regulatory challenges.

 Over a dozen states across the United States have enacted legislation
regulating PDDs, using a definition that includes sidewalk robots such as ours. While these regulations have been largely industry-friendly
and intended to streamline the rollout of PDDs in those jurisdictions, they are not yet uniform and may present some challenges as we
seek to deploy in new markets. For example, Washington State and the District of Columbia have a 100 lbs unladen weight restriction and
the City of Santa Monica prohibits the operation of autonomous devices on sidewalks, that would require amending in order for us
to expand into those jurisdictions.

 Furthermore,
the cellular network and radio systems contained in our robots are regulated by the Federal Communications Commission (the "FCC"),
which allocates cellular and wireless bandwidth to ensure minimal conflict between operators. And the battery packs within our robots
use custom lithium-ion cells. The transportation and effective storage of lithium-ion batteries is tightly regulated by the U.S. Department
of Transportation and other regulatory bodies. Any failure to comply with the Department of Transportation's storage and transport
requirements or the FCC's regulations on wireless communications could result in fines, loss of permits and licenses or other regulatory
consequences, which could limit our ability to manufacture and deliver our robotic systems and negatively affect our business, prospects,
financial condition, results of operations, and cash flows.

 Defects,
glitches, or malfunctions in our products or the software that operates them, failure of our products to perform as expected, connectivity
issues or operator errors may result in product recalls, lower than expected return on investment for customers and cause significant
safety concerns, each of which could adversely affect our results of operations, financial condition and our reputation.

 The
design, manufacture, and marketing of our products involve certain inherent risks. Manufacturing or design defects, glitches, malfunctions,
connectivity issues between the central processing unit and peripheral vehicle subsystems, operator errors, unanticipated use of our
robotic systems, inadequate disclosure of risks relating to the use of sidewalk robots, among others, can lead to injury, property damage
or other adverse events. We conduct extensive testing of our units, in some instances in collaboration with our customers, to ensure
that any such issues can be identified and addressed in advance of commercial launch of the products. However, there can be no assurance
that we will be able to identify all such issues or that, if identified, efforts to address them will be effective in all cases.

 In
addition, if the manufacturing of our products is outsourced, we may not be aware of manufacturing defects that could occur. Such adverse
events could lead to unexpected failures in our products and could result, in certain cases, in the removal of our products from the
market. A product recall could result in significant costs. To the extent any manufacturing defect occurs, our agreement with the third-party
manufacturer may contain a limitation on the third-party manufacturer's liability, and therefore we could be required to incur
the majority of related costs. Product defects or recalls could also result in negative publicity, damage to our reputation or, in the
event of regulatory developments, delays in new product acceptance.

 Our
products incorporate sophisticated computer software. Complex software frequently contains errors, especially when first introduced.
Our software may experience errors or performance problems in the future. If any part of our products' hardware or software were
to fail, the service mission could be compromised. Additionally, users may not use our products in accordance with safety protocols and
training, which could amplify the risk of failure. Any such occurrence could cause delay in market acceptance of our products, damage
to our reputation, product recalls, increased service and warranty costs, product liability claims and loss of revenue relating to such
hardware or software defects.

 We
anticipate that as part of our ordinary course of business we may be subject to product liability claims alleging defects in the design
or manufacture of our products. A product liability claim, regardless of our merit or eventual outcome, could result in significant legal
defense costs and high punitive damage payments. Although we maintain product liability insurance, the coverage is subject to deductibles
and limitations, and may not be adequate to cover future claims. Additionally, we may be unable to maintain our existing product liability
insurance in the future at satisfactory rates or adequate amounts.

 Even
if our products perform properly and are used as intended, if operators sustain any injuries while using our products, we could be exposed
to liability and our results of operations, financial condition, and our reputation may be adversely affected.

 Our
products contain complex technology and must be used as designed and intended in order to operate safely and effectively. While we expect
to develop a training, customer service and maintenance and servicing infrastructure to ensure users are equipped to operate our products
in a safe manner, we cannot be sure that the products will ultimately be used as designed and intended. In addition, we cannot be sure
that we will be able to predict all the ways in which use or misuse of the products can lead to injury or damage to property, and our
training resources may not be successful at preventing all incidents. If operators were to cause any injuries or damage to property while
using our products, in a manner consistent with our training and instructions or otherwise, we could be exposed to liability and our
results of operations, financial condition and our reputation may be adversely affected.

 We
operate in a competitive industry that is subject to rapid technological change, and competitors may have or attain more resources and/or
greater market recognition than we do.

 Our
competitor base may change or expand as we continue to develop and commercialize our robotic systems in the future. Some of these companies
are direct competitors, while others provide adjacent services such as delivery with autonomous vehicles on streets that could impact
our market. A number of these companies may have, or may attain, more resources and/or greater market recognition than we do. These or
other competitors may develop new technologies or products that provide superior results to customers or are less expensive than our
products. Our technologies and products could have reduced competitiveness by such developments.

 Our
competitors may respond more quickly to new or emerging technologies, undertake more extensive marketing campaigns, have greater financial,
marketing, manufacturing and other resources than we do, or may be more successful in attracting potential customers, employees and strategic
partners. In addition, potential customers could have long-standing or contractual relationships with competitors. Potential customers
may be reluctant to adopt our products, particularly if they compete with or have the potential to compete with or diminish the need/utilization
of products or technologies supported through these existing relationships. If we are not able to compete effectively, our business,
prospects, financial condition, and operating results will be negatively impacted.

 In addition, because we operate in a new market,
the actions of our competitors could adversely affect our business. Adverse events such as product defects or legal claims with respect
to competing or similar products could cause reputational harm to the robotics market on the whole and, accordingly, our business.

 If we cannot protect, maintain and, if necessary,
enforce our intellectual property rights, our ability to develop and commercialize products may be adversely impacted.

 Our success, in large part, depends on our ability
to protect and maintain the proprietary nature of our technology. We must prosecute and maintain our existing patents and obtain new patents.
Some of our proprietary information may not be patentable, and there can be no assurance that others will not utilize similar or superior
solutions to compete with us. We cannot guarantee that we will develop proprietary products that are patentable, and that, if issued,
any patent will give us a competitive advantage or that such patent will not be challenged by third parties. The process of obtaining
patents can be time consuming with no certainty of success, as a patent may not issue or may not have sufficient scope or strength to
protect the intellectual property it was intended to protect. We cannot assure you that our means of protecting our proprietary rights
will suffice or that others will not independently develop competitive technology or design around patents or other intellectual property
rights issued to us. If any of our products or the technology underlying our products is covered by third-party patents or other intellectual
property rights, we could be subject to various legal actions. Even if a patent is issued, it does not guarantee that it is valid or enforceable.
Any patents that we or our licensors have obtained or obtain in the future may be challenged, invalidated, or unenforceable. If necessary,
we intend to initiate actions to protect our intellectual property, which will be costly and time consuming, and could have an adverse
impact on our business, results of operation and financial condition.

 We may be subject to claims of infringement
of third-party intellectual property rights.

 Our operating results may be adversely affected if third parties claim
that our products infringed their patent, copyright, or other intellectual property rights. We cannot assure that our products do not,
or will not in the future, infringe patents held by others. Although there have been no allegations made to this effect, we cannot assure
that we will not receive such correspondence from third parties or competitors in the future. Such assertions could lead to expensive
and unpredictable litigation, diverting the attention of management and technical personnel. Litigation may be necessary to enforce our
intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or
to defend against claims of infringement or invalidity, misappropriation, or other claims. Any such litigation could result in substantial
costs and diversion of our resources. Moreover, any settlement of or adverse judgment resulting from such litigation could require us
to obtain a license to continue to use the technology that is the subject of the claim, or otherwise restrict or prohibit our use of the
technology. Any required licenses may not be available to us on acceptable terms, if at all. An unsuccessful result in such litigation
could adversely affect our business, including injunctions, exclusion orders, and royalty payments to third parties.

 Security breaches and other disruptions
could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer.

 We rely on trade secrets, technical know-how,
and other unpatented proprietary information relating to our product development and manufacturing activities to provide us with competitive
advantages. We protect this information by entering into confidentiality agreements with our employees, consultants, strategic partners,
and other third parties. We also design our computer systems and networks and implement various procedures to restrict unauthorized access
to the dissemination of our proprietary information.

 We face internal and external data security threats.
For example, current, departing, or former employees or third parties could attempt to improperly use or access our computer systems and
networks to copy, obtain, or misappropriate our proprietary information or otherwise interrupt our business. Like others, we are also
subject to significant system or network disruptions from numerous causes, including computer viruses and other cyber-attacks, facility
access issues, new system implementations, and energy blackouts.

 Security breaches, computer malware, phishing,
spoofing, and other cyber-attacks have become more prevalent and sophisticated in recent years. We do not believe that such attacks have
caused us any material damage to date, but because the techniques used by computer hackers and others to access or sabotage networks constantly
evolve and generally are not recognized until launched against a target, we may be unable to anticipate, counter or ameliorate all these
techniques. As a result, our and our customers' proprietary information may be misappropriated, and we cannot predict the impact
of any future incident. Any loss of such information could harm our competitive position, result in a loss of customer confidence in the
adequacy of our threat mitigation and detection processes and procedures, cause us to incur significant costs to remedy the damages caused
by the incident, and divert management and other resources. We routinely implement improvements to our network security safeguards, and
we are devoting increasing resources to the security of our information technology systems. However, we cannot assure that such system
improvements will be sufficient to prevent or limit the damage from any future cyber-attack or network disruptions.

 The costs related to cyber-attacks or other security
threats or computer systems disruptions typically would not be fully insured or indemnified by others. As a result, the occurrence of
any of the events described above could result in the loss of competitive advantages derived from our intellectual property. Moreover,
these events may result in the diversion of the attention of management and critical information technology and other resources, or otherwise
adversely affect our internal operations and reputation or degrade our financial results and stock price.

 We may be subject to theft, loss, or misuse
of personal data by or about our employees, customers, or other third parties, which could increase our expenses, damage our reputation,
or result in legal or regulatory proceedings.

 In the ordinary course of our business, we have
access to sensitive, confidential, or personal data or information regarding our employees and others that is subject to privacy and security
laws and regulations. Therefore, the theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our
business, or by our third-party service providers, including business process software applications providers and other vendors that have
access to sensitive data, could result in damage to our reputation, disruption of our business activities, significantly increased business
and security costs or costs related to defending legal claims. For example, in July 2023, third-party actors attempted to steal one
of our robots. We are not aware that any data was obtained during any incident of vandalism or attempted theft. We are also aware of certain
media reports relating to the use of our robots as elements in law enforcement surveillance efforts. As a general policy, we do not share
data with law enforcement, except in certain narrow circumstances where (1) we are required to share data when served with a warrant
or subpoena, or (2) there are insurance claims, active incident investigations, or acts of armed violence or theft attempts involving
the Company's personnel or property.

 Global privacy legislation, enforcement, and policy
activity in this area are rapidly expanding and creating a complex regulatory compliance environment. For example, the European Union
has adopted the General Data Protection Regulation ("GDPR"), which requires companies to comply with rules regarding the handling
of personal data, including its use, protection, and the ability of persons whose data is stored to correct or delete such data about
themselves. Failure to meet GDPR requirements could result in penalties of up to 4% of worldwide revenue. In addition, the interpretation
and application of consumer and data protection laws in the U.S., Europe, and elsewhere are often uncertain and fluid and may be interpreted
and applied in a manner that is inconsistent with our data practices. As a result, complying with these changing laws has caused, and
could continue to cause, us to incur substantial costs, which could harm our business and results of operations. Further, failure to comply
with existing or new rules may result in significant penalties or orders to stop the alleged non-compliant activity. Finally, even our
inadvertent failure to comply with federal, state, or international privacy-related or data protection laws and regulations could result
in audits, regulatory inquiries, or proceedings against us by governmental entities or others.

 Our business plans require a significant
amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders
or contain terms unfavorable to us or our investors.

 We will require significant capital to operate
our business and fund our capital expenditures for the next several years. The level and timing of future expenditure will depend on a
number of factors, many of which are outside our control. While we expect that we will have sufficient capital to fund our currently planned
operations, it is possible that we will need to raise additional capital to fund our business, including to finance ongoing research and
development costs, manufacturing, any significant unplanned or accelerated expenses, and new strategic alliances or acquisitions. The
fact that we have limited experience commercializing our delivery robotic systems on a large scale, coupled with the fact that our products
represent a new product category in the commercial and delivery robotic market, means we have limited historical data on the demand for
our robotic systems. In addition, we expect our capital expenditures to continue to be significant in the foreseeable future as we continue
generational improvements for our commercial products, and that our level of capital expenditures will be significantly affected by customer
demand for our robotic systems. As a result, our future capital requirements may be uncertain and actual capital requirements may be different
from those we currently anticipate. We may need to seek equity or debt financing to finance a portion of our capital expenditures. Such
financing might not be available to us in a timely manner or on terms that are acceptable, or at all, or that such funds, if raised, would
be sufficient.

 Our ability to obtain the necessary financing
to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business
model. These factors may make the timing, amount, terms, and conditions of such financing unattractive or unavailable to us. If we are
unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially
change our corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct business
as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

 In addition, our future capital needs and other
business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity
or equity-linked securities could dilute our stockholders. The incurrence of indebtedness would result in increased debt service obligations
and could result in operating and financing covenants that would restrict our operations.

 If we cannot raise additional funds when we need
or want them, we may be forced to curtail or abandon our growth plans, which could adversely impact the Company, its business, development,
financial condition, operating results or prospects.

 We will be required to raise additional
capital in order to develop our technology and scale our commercial delivery operations. However, we may be unable to raise additional
capital needed to fund and grow our business.

 We will need additional capital to develop the
next version of the Serve robots and scale our commercial delivery operations. We will not be able to continue product development and
our commercial deliveries if we cannot raise additional debt and/or equity financing.

 We may not be able to increase our capital resources
by engaging in additional debt or equity financings. Even if we complete such financings, they may result in dilution to our existing
investors and include additional rights or terms that may be unfavorable to our existing investor base. These circumstances could materially
and adversely affect our financial results and impair our ability to achieve our business objectives. Additionally, we may be required
to accept terms that restrict our ability to incur additional indebtedness or take other actions (including terms that require us to maintain
specified liquidity or other ratios) that would otherwise be in the best interests of our stockholders.

 Adverse developments affecting the financial
services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by domestic and international financial
institutions or transactional counterparties, could adversely affect our business, financial condition, and results of operations.

 Actual events involving reduced or limited liquidity,
defaults, non-performance or other adverse developments that affect domestic and international financial institutions or other companies
in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds,
have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank
was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation
as receiver. We maintain a banking relationship with Silicon Valley Bank and are required to keep deposits with Silicon Valley Bank pursuant
to our Loan and Security Agreement with them. Although we had debt with Silicon Valley Bank at the time of its closure, following the
closure, the debt was subsequently assumed by First Citizens Bank & Trust and we have experienced no impacts from the closure. However,
investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including
higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity
sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding
or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial
obligations or fulfill our other obligations, or result in breaches of our financial and/or contractual obligations. Any of these impacts,
or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material
adverse impacts on our liquidity and our current and/or projected business operations, financial condition and results of operations.

 If use of the internet via websites, mobile
devices and other platforms, particularly with respect to online food ordering, does not continue, our business and growth prospects will
be harmed.

 Our business and growth prospects are substantially
dependent upon the continued use of the internet as an effective medium of transactions by diners. Internet use may not continue to develop
at historical rates, and diners may not continue to use the internet and other online services to order their food at current or increased
growth rates or at all, which could adversely impact our business, results of operation and financial condition. In addition, the internet
and mobile applications may not continue to be accepted as a viable platform or resource for a number of reasons, including:

 actual or perceived lack of security of information or privacy protection;

 possible disruptions, computer viruses or other damage to internet servers, users' computers or
mobile applications;

 excessive governmental regulation; and

 unacceptable delays due to actual or perceived limitations of wireless networks.

 Our business depends on discretionary spending
patterns in the areas in which the restaurants on our partners' platforms operate and in the economy at large. Economic downturns
or other events (like coronavirus variants or similar widespread health/pandemic outbreaks) impacting the United States and global
economy could materially adversely affect our results of operations.

 Purchases at restaurants and food and beverage
hospitality services locations are discretionary for consumers and we are therefore susceptible to changes in discretionary spending patterns
or economic slowdowns in the geographic areas in which restaurants on our partners' platforms operate and in the economy at large.
Discretionary consumer spending can be impacted by general economic conditions, unemployment, consumer debt, inflation, rising gasoline
prices, interest rates, consumer confidence, and other macroeconomic factors. We believe that consumers generally are more willing to
make discretionary purchases, including delivery, dine-in or carryout of restaurant meals, during favorable economic conditions. Disruptions
in the overall economy (including disruptions due to coronavirus or similar health/pandemic events), including high unemployment, inflation,
rising gasoline prices, financial market volatility and unpredictability, and the related reduction in consumer confidence, could negatively
affect food and beverage sales throughout the restaurant industry, including orders through our partners' platforms. Additionally,
merchants on our partners' platforms may be negatively impacted by general economic conditions, supply chain issues, labor shortages,
inflation, or other macroeconomic factors, which could negatively impact their ability to fulfill orders. There is also a risk that if
uncertain economic conditions persist for an extended period of time or worsen, consumers might make long-lasting changes to their discretionary
spending behavior, including ordering food for delivery, dine-in or carryout less frequently. The ability of the U.S. economy to handle
this uncertainty is likely to be affected by many national and international factors that are beyond our control. These factors, including
national, regional and local politics and economic conditions, continued impact of the COVID-19 pandemic, disposable consumer income and
consumer confidence, also affect discretionary consumer spending. If any of these factors cause restaurants to cease operations or cease
using our partners' platforms, it could also significantly harm our financial results, for the reasons set forth elsewhere in these
risk factors. Continued uncertainty in or a worsening of the economy, generally or in a number of our markets, and diners' reactions
to these trends could adversely affect our business and cause us to, among other things, reduce the number and frequency of new market
openings or cease operations in existing markets.

 Moreover, inflation also increases the cost of
labor and materials needed to build and operate robots. For example, we have observed an increase in cost of labor for managing and maintaining
robots in the field in the past year. However, over a longer time horizon, technological improvements continue to reduce the cost of our
key components such as sensors, batteries and computers. While the unit cost of labor for operating robots will increase over time with
inflation, robotic delivery leverages labor more efficiently than manual courier delivery. As such, we believe labor inflation increases
the cost of manual courier delivery and similar alternatives to robotic delivery more than it increases robotic delivery cost. However,
we believe improvements in robot autonomy will continue to reduce the rate of labor usage.

 Our products and services are disruptive
to the delivery services industries, and important assumptions about the market demand, pricing, adoption rates and sales cycle, for our
current and future products and services may be inaccurate.

 The market demand for and adoption of our delivery
robots is unproven, and important assumptions about the characteristics of targeted markets, pricing, and sales cycles may be inaccurate.
Although we have engaged in ongoing dialogue with potential customers, we have no binding commitments to purchase products and services.
Existing or new regulatory or safety standards, or resistance by customer employees and labor unions, all of which are outside of our
control, could cause delays or otherwise impair adoption of these new technologies, which will adversely affect our growth, financial
position, and prospects. Given the evolving nature of the markets in which we operate, it is difficult to predict customer demand or adoption
rates for our products or the future growth of the markets we expect to target. If one or more of the targeted markets experience a shift
in customer or prospective customer demand, our products may not compete as effectively, if at all, and they may not be fully developed
into commercial products. As a result, the financial projections in this report necessarily reflect various estimates and assumptions
that may not prove accurate and these projections could differ materially from actual results because of the risks included in this " Risk
Factors " section, among others. If demand does not develop as expected or if we cannot accurately forecast pricing, adoption
rates and sales cycle for our products, our business, results of operations and financial condition will be adversely affected.

 The benefits of our products to customers
and projected return on investment have not been substantiated through long-term trials or use.

 Our core products' benefits to customers
and projected return on investment have not been substantiated through long-term trials or use. We currently have a limited frame of reference
by which to evaluate the performance of our delivery robotic systems upon which our business prospects depend. There can be no assurance
that such robotic systems will provide their expected benefit to customers. Our robotic systems may not perform consistently with customers'
expectations or effectively compete with other robotics products which may become available. Any failure of our robotic systems and software
to perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product
liability claims and significant warranty and other expenses and could have a material adverse impact on our business, prospects, financial
condition and operating results. Additionally, problems and defects experienced by competitors or others in the delivery robotics market
could, by association, have a negative impact on perception and customer demand for our delivery robotic systems.

 Even if we successfully market our robotic
systems, the purchase or subscription, adoption and use of these systems may be materially and negatively impacted if our customers resist
their use and adoption.

 We have designed and developed our robotic systems
with the goal of reducing operating costs and greenhouse gases. Even if we successfully market our products and services to customers,
the purchase, adoption and the use of the products may be materially and negatively impacted if our customers resist or delay the use
and adoption of these new technology products and services. Customers may resist or delay the adoption of our products and services for
several reasons, including lack of confidence in autonomous and semi-autonomous delivery vehicles. If our customers resist or delay adoption
of our robotic delivery services, our business, prospects, financial condition and operating results will be materially and adversely
affected.

 Our systems, products, technologies and
services and related equipment may have shorter useful lives than we anticipate.

 Our growth strategy depends in part on developing
systems, products, technologies, and services. These reusable systems, products, technologies and services and systems will have a limited
useful life. While we intend to design our products and technologies for a certain lifespan, which corresponds to a number of cycles,
there can be no assurance as to the actual operational life of a product or that the operational life of individual components will be
consistent with its design life. A number of factors will impact the useful lives of our products and systems, including, among other
things, the quality of their design and construction, the durability of their component parts and availability of any replacement components,
and the occurrence of any anomaly or series of anomalies or other risks affecting the technology during launch and in orbit. In addition,
any improvements in technology may make our existing products, designs, or any component of our products prior to the end of its life
obsolete. If our systems, products, technologies and services and related equipment have shorter useful lives than we currently anticipate,
this may lead to delays in increasing the rate of our follow on work and new business, which would have a material adverse effect on our
business, financial condition, and results of operations. In addition, we are continually learning, and as our engineering and manufacturing
expertise and efficiency increases, we aim to leverage this learning to be able to manufacture our products and equipment using less of
our currently installed equipment, which could render our existing inventory obsolete.

 Any acquisitions, partnerships, or joint
ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results
of operations.

 From time to time, we may evaluate potential strategic
acquisitions of businesses, including partnerships or joint ventures with third parties. We may not be successful in identifying acquisition,
partnership, and joint venture candidates. In addition, we may not be able to continue the operational success of such businesses or successfully
finance or integrate any businesses that we acquire or with which we form a partnership or joint venture. We may have potential write-offs
of acquired assets and/or an impairment of any goodwill recorded as a result of acquisitions. Furthermore, the integration of any acquisition
may divert management's time and resources from our core business and disrupt our operations or may result in conflicts with our
business. Any acquisition, partnership or joint venture may not be successful, may reduce our cash reserves, may negatively affect our
earnings and financial performance and, to the extent financed with the proceeds of debt, may increase our indebtedness. Further, depending
on market conditions, investor perceptions of us and other factors, we might not be able to obtain financing on acceptable terms, or at
all, to implement any such transaction. We cannot ensure that any acquisition, partnership, or joint venture we make will not have a material
adverse effect on our business, financial condition, and results of operations.

 As part of growing our business, we may
make acquisitions. If we fail to successfully select, execute, or integrate our acquisitions, then our business, results of operations
and financial condition could be materially adversely affected, and our stock price could decline.

 Failure to successfully identify, complete, manage
and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and could
cause our stock price to decline.

 From time to time, we may undertake acquisitions
to add new products and technologies, acquire talent, gain new sales channels, or enter into new markets or sales territories. In addition
to possible stockholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to
comply with any applicable laws and regulations, and a failure to obtain such approvals and licenses could result in delays and increased
costs and may disrupt our business strategy. Furthermore, acquisitions and the subsequent integration of new assets, businesses, key personnel,
customers, vendors, and suppliers require significant attention from our management and could result in a diversion of resources from
our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the
financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity
securities and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating
acquisitions may be significant.

 Our management team will have broad discretion
in making strategic decisions to execute their growth plans, and there can be no assurance that our management's decisions will
result in successful achievement of our business objectives or will not have unintended consequences that negatively impact our growth
prospects.

 Our management will have broad discretion in making
strategic decisions to execute their growth plans and may devote time and company resources to new or expanded solution offerings, potential
acquisitions, prospective customers or other initiatives that do not necessarily improve our operating results or contribute to our growth.
Management's failure to make strategic decisions that are ultimately accretive to our growth may result in unfavorable returns and
uncertainty about our prospects, each of which could cause the price of the common stock to decline.

 We face risks related to natural disasters,
health epidemics and other outbreaks, which could significantly disrupt our operations.

 Our facilities or operations or those of any third-party
manufacturers or suppliers could be adversely affected by events outside of our or their control, such as natural disasters, wars, health
epidemics, and other calamities. Our robots are charged overnight and rely on broadband internet connectivity to operate; therefore, power
outages and broadband connectivity disruptions would adversely impact our operations. Furthermore, as hardware, our robots can be damaged
or irreparably destroyed by the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war,
riots, terrorist or malicious attacks or similar events.

 We, any manufacturing partners, and suppliers
may rely on complex machinery for production, which involves a significant degree of risk and uncertainty in terms of operational performance
and costs.

 We, any third-party manufacturing partners, and
suppliers may rely on complex machinery for the production, assembly, repair, and maintenance of our robotic systems, which will involve
a significant degree of uncertainty and risk in terms of operational performance and costs. Our operational facilities, and those of any
third-party manufacturing partners and suppliers consist or are expected to consist of large-scale machinery combining many components.
These components may suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations,
which may not be available when needed. Unexpected malfunctions of these components may significantly affect the intended operational
efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our or any third-party
manufacturing partners' and suppliers' control, such as, but not limited to, scarcity of natural resources, environmental
hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining
governmental permits, damages or defects in electronic systems, industrial accidents, fire, seismic activity and natural disasters. Should
operational risks materialize, they may result in the personal injury to or death of workers, the loss of production equipment, damage
to production facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines,
increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, prospects,
financial condition and operating results.

 We may be unable to adequately control the
costs associated with our operations.

 We will require significant capital to develop
and grow our business, including developing and producing our commercial robotic systems and other products, establishing or expanding
design, research and development, production, operations and maintenance and service facilities and building our brand and partnerships.
We have incurred and expects to continue incurring significant expenses which will impact our profitability, including research and development
expenses, procurement costs, business development, operation and integration expenses as we build and deploy our robotic fleet, and general
and administrative expenses as we scale our operations, identify and commit resources to investigate new areas of demand and incur costs
as a public company. In addition, we may incur significant costs servicing, maintaining and refurbishing our robots, and we expect that
the cost to repair and service our robots will increase over time as they age. Our ability to become profitable in the future will not
only depend on our ability to complete the design and development of our robots to meet projected performance metrics, identify and investigate
new areas of demand and successfully market our robotic services, but also to sell, whether outright or through subscriptions, our systems
at prices needed to achieve our expected margins and control our costs, including the risks and costs associated with operating, maintaining
and financing our robots. If we are unable to efficiently design, develop, manufacture, market, deploy, distribute and service our robots
in a cost-effective manner, our margins, profitability and prospects would be materially and adversely affected.

 Our ability to manufacture products of sufficient
quality on schedule in the future is uncertain, and delays in the design, production and launch of our products could harm our business,
prospects, financial condition and operating results.

 Our future business depends in large part on our
ability to execute our plans to design, develop, manufacture, market, deploy and service our products. We intend to outsource the manufacturing
of our robotic systems to a third-party manufacturing partner. While this arrangement may lower operating costs, it may have an adverse
effect on our flexibility to respond to changing conditions.

 We also plan to retain third-party vendors and
service providers to engineer, design and test some of the critical systems and components of our units. While this allows us to draw
from such third parties' industry knowledge and expertise, there can be no assurance such systems and components will be successfully
developed to our specifications or delivered in a timely manner to meet our program timing requirements.

 Laws, regulations, and other legislative
efforts related to climate change, environmental concerns, and health and safety could result in increased operating costs, reduced demand
for our products and services, or the loss of future business.

 Concerns over environmental pollution and climate
change have produced significant legislative and regulatory efforts on a global basis, and we believe this will continue both in scope
and in the number of countries participating. These changes could directly increase the cost of energy, which may have an effect on the
way we manufacture products or utilize energy to produce our products. In addition, any new regulations or laws in the environmental area
might increase the cost of raw materials or key components we use in our products. Environmental regulations may require us to reduce
product energy usage and to participate in compulsory recovery and recycling of our products or components. We are unable to predict how
any future changes will impact us and if such impacts will be material to our business.

 Further, climate change laws, environmental regulations,
and other similar measures may have an effect on the operating activities of our customers, which may, in turn, reduce the demand for
our products and services. To the extent increasing concentrations of greenhouse gases in the Earth's atmosphere may produce climate
changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic
events, such events could have a material adverse effect on the Company and potentially subject the Company to further regulation.

 We may become subject to new or changing
governmental regulations relating to the design, manufacturing, marketing, distribution, servicing, or use of our products, including
as a result of climate change, and a failure to comply with such regulations could lead to withdrawal or recall of our products from the
market, delay our projected revenues, increase cost, or make our business unviable if we are unable to modify our products to comply.

 We may become subject to new or changing international,
federal, state and local regulations, including laws relating to the design, manufacturing, marketing, distribution, servicing or use
of our products. Such laws and regulations may require us to pause sales and modify our products, which could result in a material adverse
effect on our revenues and financial condition. Such laws and regulations can also give rise to liability such as fines and penalties,
property damage, bodily injury and cleanup costs. Capital and operating expenses needed to comply with laws and regulations can be significant,
and violations may result in substantial fines and penalties, third-party damages, suspension of production or a cessation of our operations.
Any failure to comply with such laws or regulations could lead to withdrawal or recall of our products from the market.

 Climate change laws and environmental regulations
could result in increased operating costs and reduced demand for our services.

 Concerns over environmental pollution and climate
change have produced significant legislative and regulatory efforts on a global basis, and we believe this will continue both in scope
and in the number of countries participating. These changes could directly increase the cost of energy, which may have an effect on the
way we manufacture robots or utilize energy to deliver our services. In addition, any new regulations or laws in the environmental area
might increase the cost of raw materials or key components we use in our robots. Environmental regulations may require us to reduce product
energy usage and to participate in compulsory recovery and recycling of our robots or components. We are unable to predict how any future
changes will impact us and if such impacts will be material to our business.

 Further, climate change laws, environmental regulations,
and other similar measures may have an effect on the operating activities of our customers, which may, in turn, reduce the demand for
our products and services. To the extent increasing concentrations of greenhouse gasses in the Earth's atmosphere may produce climate
changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic
events, such events could have a material adverse effect on the Company and potentially subject the Company to further regulation.

 Severe weather conditions and climate change
could have a material adverse impact on our business by reducing the operating hours of our robots.

 Our robots are designed to operate in common environmental
conditions. Currently we operate our robots in warm and dry climates, and we do not operate robots under rare or extreme conditions such
as strong storms or unusually high or low temperatures. While with each new generation of robots we plan to continually expand their operating
ability (e.g., introducing the ability to manage ice and snow), which in turn would expand our geographic reach, there is no guarantee
that our efforts will successfully overcome all severe weather conditions.

 We are subject to cybersecurity risks to
our operational systems, security systems, infrastructure, integrated software in our products and data processed by us or third-party
vendors.

 Our business and operations involve the collection,
storage, processing, and transmission of personal data and certain other sensitive and proprietary data of collaborators, customers, and
others. Additionally, we maintain sensitive and proprietary information relating to our business, such as our own proprietary information
and personal data relating to our employees. An increasing number of organizations have disclosed breaches of their information security
systems and other information security incidents, some of which have involved sophisticated and highly targeted attacks. We may be a target
for attacks by state-sponsored actors and others designed to disrupt our operations or to attempt to gain access to our systems or data
that is processed or maintained in our business. The ongoing effects of the COVID-19 pandemic have increased security risks due to personnel
working remotely.

 We are at risk for interruptions, outages and
breaches of our: (a) operational systems, including business, financial, accounting, product development, data processing or production
processes, owned by us or our third-party vendors or suppliers; (b) facility security systems, owned by us or our third-party vendors
or suppliers; (c) transmission control modules or other in-product technology, owned by us or our third-party vendors or suppliers;
(d) the integrated software in our units; or (e) customer data that we processes or that our third-party vendors or suppliers
process on our behalf. Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and
may not be known until launched against a target, we may be unable to anticipate or prevent these attacks, react in a timely manner, or
implement adequate preventive measures, and may face delays in our detection or remediation of, or other responses to, security breaches
and other privacy-and security-related incidents. Such incidents could: materially disrupt our operational systems; result in loss of
intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of customers,
employees, suppliers, or others; jeopardize the security of our facilities; or affect the performance of in-product technology and the
integrated software in our units. Certain efforts may be state-sponsored or supported by significant financial and technological resources,
making them even more difficult to detect, remediate, and otherwise respond to.

 We plan to include product services and functionality
that utilize data connectivity to monitor performance and timely capture opportunities to enhance performance and for safety and cost-saving
preventative maintenance. The availability and effectiveness of our services depend on the continued operation of information technology
and communications systems. Our systems will be vulnerable to damage or interruption from, among others, physical theft, fire, terrorist
attacks, natural disasters, power loss, war, telecommunications failures, viruses, denial or degradation of service attacks, ransomware,
social engineering schemes, insider theft or misuse or other attempts to harm our systems. We intend to use our product services and functionality
to log information about each unit's use in order to aid us in diagnostics and servicing. Our customers may object to the use of
this data, which may require us to implement new or modified data handling policies and mechanisms, increase our unit maintenance costs
and costs associated with data processing and handling, and harm our business prospects.

 Although we are in the process of implementing
certain systems and processes that are designed to protect our data and systems within our control, prevent data loss, and prevent other
security breaches and security incidents, these security measures cannot guarantee security. The IT and infrastructure used in our business
may be vulnerable to cyberattacks or security breaches, and third parties may be able to access data, including personal data and other
sensitive and proprietary data of us and our customers, collaborators and partners, our employees' personal data, or other sensitive
and proprietary data, accessible through those systems. Employee error, malfeasance, or other errors in the storage, use, or transmission
of any of these types of data could result in an actual or perceived privacy or security breach or other security incident.

 Moreover, there are inherent risks associated
with developing, improving, expanding and updating our current systems, such as the disruption of our data management, procurement, production
execution, finance, supply chain and sales and service processes. These risks may affect our ability to manage our data and inventory,
procure parts or supplies or manufacture, deploy, deliver and service our units, adequately protect our intellectual property or achieve
and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We cannot be sure that
these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained
or expanded as planned. If we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted,
our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control
over financial reporting, which may impact our ability to certify our financial results. Moreover, our proprietary information or intellectual
property could be compromised or misappropriated, and our reputation may be adversely affected. If these systems do not operate as we
expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these
functions.

 Any actual or perceived security breach or security
incident, or any systems outages or other disruption to systems used in our business, could interrupt our operations, result in loss or
improper access to, or acquisition or disclosure of, data or a loss of intellectual property protection, harm our reputation and competitive
position, reduce demand for our products, damage our relationships with customers, partners, collaborators, or others, or result in claims,
regulatory investigations, and proceedings and significant legal, regulatory, and financial exposure, and any such incidents or any perception
that our security measures are inadequate could lead to loss of confidence in us and harm to our reputation, any of which could adversely
affect our business, financial condition, and results of operations. Any actual or perceived breach of privacy or security, or other security
incident, impacting any entities with which we share or disclose data (including, for example, our third-party technology providers) could
have similar effects. We expect to incur significant costs in an effort to detect and prevent privacy and security breaches and other
privacy- and security-related incidents and may face increased costs and requirements to expend substantial resources in the event of
an actual or perceived privacy or security breach or other incident.

 We are subject to evolving laws, regulations,
standards, policies, and contractual obligations related to data privacy and security laws and regulations, and our actual or perceived
failure to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely
affect our business, prospects, financial condition and operating results.

 We are subject to or affected by a number of federal,
state and local laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions
with respect to data privacy and security, and govern our collection, storage, retention, protection, use, processing, transmission, sharing
and disclosure of personal information, including that of our employees, customers and others. Most jurisdictions have enacted laws requiring
companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data. Such laws may
be inconsistent or may change or additional laws may be adopted. In addition, our agreements with certain customers may require us to
notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, result in penalties
or fines, result in litigation, may cause our customers to lose confidence in the effectiveness of our security measures and require us
to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.

 The global data protection landscape is rapidly
evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. We may not
be able to monitor and react to all developments in a timely manner. For example, California adopted the California Consumer Privacy Act
("CCPA"), which became effective in January 2020. The CCPA establishes a privacy framework for covered businesses, including
an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with potentially
severe statutory damages and private rights of action. The CCPA requires covered businesses to provide new disclosures to California residents,
provide them new ways to opt-out of certain disclosures of personal information, and allow for a new cause of action for data breaches.
Additionally, a new privacy law, the California Privacy Rights Act ("CPRA"), was approved by California voters in the November 3,
2020 election. The CPRA creates obligations relating to consumer data beginning on January 1, 2022, with implementing regulations
expected on or before July 1, 2022, and enforcement beginning July 1, 2023. The CPRA significantly modifies the CCPA, potentially
resulting in further uncertainty. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy
legislation in the United States. Other states have begun to propose and enact similar laws. For example, Virginia has enacted the
Virginia Consumer Data Protection Act, which provides for obligations similar to the CCPA, and which will go into effect January 1,
2023. As we expand our operations, the CCPA, CPRA, and other laws and regulations relating to privacy and data security may increase our
compliance costs and potential liability. Compliance with any applicable privacy and data security laws and regulations is a rigorous
and time-intensive process, and we may be required to put in place additional mechanisms to comply with such laws and regulations.

 Additionally, as our international presence expands,
we may become subject to or face increasing obligations under laws and regulations in countries outside the United States, many of
which, such as the European Union's General Data Protection Regulation ("GDPR") and national laws supplementing
the GDPR, as well as legislation substantially implementing the GDPR in the United Kingdom, are significantly more stringent than those
currently enforced in the United States. The GDPR requires companies to meet stringent requirements regarding the handling of personal
data of individuals located in the European Economic Area ("EEA"). The GDPR also includes significant penalties for noncompliance,
which may result in monetary penalties of up to the higher of 20 million or 4% of a group's worldwide turnover for the
preceding financial year for the most serious violations. The United Kingdom's version of the GDPR, the UK GDPR, which it maintains
along with its Data Protection Act (collectively, the "UK GDPR"), also provides for substantial penalties that, for the most
serious violations, can go up to the greater of 17.5 million or 4% of a group's worldwide turnover for the preceding
financial year. Many other jurisdictions globally are considering or have enacted legislation providing for local storage of data or otherwise
imposing privacy, data protection and data security obligations in connection with the collection, use and other processing of personal
data.

 We publish privacy policies and other documentation
regarding our collection, processing, use and disclosure of personal information and/or other confidential information. Although we endeavor
to comply with our published policies and other documentation, we may at times fail to do so or may be perceived to have failed to do
so. Moreover, despite our efforts, we may not be successful in achieving compliance, including if our employees, contractors, service
providers or vendors fail to comply with our published policies and documentation. Such failures can subject us to potential action by
governmental or regulatory authorities if they are found to be deceptive, unfair, or misrepresentative of our actual practices. We are
also aware of certain media reports relating to the use of our robots as elements in law enforcement surveillance efforts. As a general
policy, we do not share data with law enforcement, except in certain narrow circumstances where (1) we are required to share data
when served with a warrant or subpoena, or (2) there are insurance claims, active incident investigations, or acts of armed violence
or theft attempts involving our personnel or property. Public perception of our involvement in such surveillance activities could harm
our reputation, and consequently, our business prospects and financial condition. Any actual or perceived inability of us to adequately
address privacy and security concerns or comply with applicable laws, rules and regulations relating to privacy, data protection or data
security, or applicable privacy notices, could lead to investigations, claims, and proceedings by governmental entities and private parties,
damages for contract breach, and other significant costs, penalties, and other liabilities. Any such claims or other proceedings could
be expensive and time-consuming to defend and could result in adverse publicity. Any of the foregoing may have an adverse effect on our
business, prospects, results of operations, and financial condition.

 We are subject to U.S. and foreign anti-corruption
and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can
harm our business, prospects, financial condition and operating results.

 We are subject to the U.S. Foreign Corrupt Practices
Act of 1977, as amended (the "FCPA"), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S.
Travel Act, and other anti-corruption, anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption
laws are interpreted broadly and prohibit companies and their employees, business partners, third-party intermediaries, representatives,
and agents from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to
government officials, political candidates, political parties, or commercial partners for the purpose of obtaining or retaining business
or securing an improper business advantage.

 We have direct and indirect interactions with
foreign officials, including in furtherance of sales to governmental entities in non-U.S. countries. We sometimes leverage third parties
to conduct our business abroad, and our third-party business partners, representatives, and agents may have direct or indirect interactions
with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other
illegal activities of our employees or these third parties, even if we do not explicitly authorize or have actual knowledge of such activities.
The FCPA and other applicable laws and regulations also require that we keep accurate books and records and maintain internal controls
and compliance procedures designed to prevent any such actions. While we have policies and procedures to address compliance with such
laws, there can be no assurance that all of our employees, business partners, third-party intermediaries, representatives, and agents
will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Our exposure for
violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.

 Any violations of the laws and regulations described
above may result in whistleblower complaints, adverse media coverage, investigations, substantial civil and criminal fines and penalties,
damages, settlements, prosecution, enforcement actions, imprisonment, the loss of export or import privileges, suspension or debarment
from government contracts, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences, any of
which could adversely affect our business, prospects, financial condition and operating results. In addition, responding to any investigation
or action will likely result in a significant diversion of management's attention and resources and significant defense costs and
other professional fees.

 Being a public company can be administratively
burdensome and will significantly increase our legal and financial compliance costs.

 As a public reporting company, we are subject
to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations
related thereto, including compliance with the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and the Dodd-Frank Wall
Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). In addition, the listing requirements of any national securities
exchange or other exchange and other applicable securities rules and regulations impose various requirements on public companies. Our
management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules
and regulations will significantly increase our legal and financial compliance costs and will make some activities more time-consuming
and costly. Among other things, we are required to:

 maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight
Board;

 maintain policies relating to disclosure controls and procedures;

 prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

 institute a more comprehensive compliance function, including with respect to corporate governance; and

 involve, to a greater degree, our outside legal counsel and accountants in the above activities.

 The costs of preparing and filing annual and quarterly
reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders is expensive and much greater
than that of a privately-held company, and compliance with these rules and regulations will require us to hire additional financial reporting,
internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the
attention of our board of directors (the "Board") and management. In addition, being a public company makes it more expensive
for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially
higher costs to obtain this coverage. These factors could also make it more difficult for us to attract and retain qualified executives
and members of our Board.

 Although the Jumpstart Our Business Startups Act
of 2012 (the "JOBS Act") may for a limited period of time somewhat lessen the cost of complying with these additional regulatory
and other requirements, we nonetheless expect a substantial increase in legal, accounting, insurance and certain other expenses in the
future, which will negatively impact our business, results of operations and financial condition.

 Our management as a group has limited experience
in operating a publicly traded company.

 Our management team may not successfully or effectively
manage operating as a public company subject to significant regulatory oversight and reporting obligations under U.S. securities laws.
Our executive officers as a group have limited experience in the management of a publicly traded company. Their limited experience in
dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that
an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and
growth of our company. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting
policies, practices or internal control over financial reporting required of public companies. Any failure by us to effectively and efficiently
meet our obligations as a publicly traded company could have a material adverse effect on our business, prospects, financial condition
and operating results and/or result in legal liability or other negative consequences.

 Risks Related to Ownership of Our Common Stock

 There is currently no market for our common
stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of our common stock
at times and prices that you believe are appropriate.

 Our common stock is not listed on a national securities
exchange or any other exchange, or quoted on an over-the-counter market. Therefore, there is no trading market, active or otherwise,
for our common stock and our common stock may never be included for trading on any stock exchange, automated quotation system or any over-the-counter
market. Accordingly, our common stock is highly illiquid, and you will likely experience difficulty in re-selling such shares at times
and prices that you may desire.]

 The market price
and trading volume of our common stock may be volatile and could decline significantly following the Merger.

 The quotation systems,
including the OTC Markets QB tier, or stock exchanges, including the Nasdaq Stock Market, on which our common stock may be quoted or on
which our common stock may be listed in the future have from time to time experienced significant price and volume fluctuations. Even
if an active, liquid and orderly trading market develops and is sustained for our common stock, the market price of our common
stock may be volatile and could decline significantly. In addition, the trading volume in our common stock may fluctuate and cause
significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell
your shares at or above the market price of our common stock as of the date of the consummation of the Merger (as defined herein).
We cannot assure you that the market price of common stock will not fluctuate widely or decline significantly in the future in response
to a number of factors, including, among others, the following:

 the realization of any of the
risk factors presented in this annual report;

 actual or anticipated differences
in our estimates, or in the estimates of analysts, for our revenues, results of operations, level of indebtedness, liquidity or financial
condition;

 additions and departures of
key personnel;

 failure to comply with the requirements
of the OTCQB market, or following our potential up listing on Nasdaq;

 failure to comply with the Sarbanes-Oxley
Act or other laws or regulations;

 future issuances, sales, resales
or repurchases or anticipated issuances, sales, resales or repurchases, of our common stock;

 publication of research reports
about us, or our industry;

 the performance and market valuations
of other similar companies;

 broad disruptions in the financial
markets, including sudden disruptions in the credit markets;

 speculation in the press or
investment community;

 actual, potential or perceived
control, accounting or reporting problems; and

 changes in accounting principles,
policies and guidelines.

 In the past, securities
class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares.
This type of litigation could result in substantial costs and divert our management's attention and resources, which could have
a material adverse effect on us.

 Future sales, or the expectation of future
sales, of a substantial number of our common shares could depress the trading price of our common stock.

 Currently, there is not a public market for our
common stock. Future sales of our common stock, including shares issued upon the exercise of options or warrants that we may issue, in
the public market, or the perception that those sales may occur, could cause the prevailing price for our common stock to fall or impair
our ability to raise equity capital in the future. A limited number of shares of our common stock will be available for sale in the public
market for a period of several months after consummation of the Merger (as defined below) due to contractual and legal restrictions on
resale pursuant to the lock-up agreements. Future sales of our common stock in the public market either before (to the extent permitted)
or after restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing price of our common stock
at such time and our ability to raise equity capital at a time and price we deem appropriate. As of February 23, 2024, we had 24,832,814
shares of common stock outstanding. Of those outstanding shares, 7,724,869 shares of common stock are freely tradable, without restriction,
as of February 23, 2024. No shares issued in connection with the Merger or the Private Placement (as defined below) can be publicly sold
under Rule 144 under the Securities Act until at least 12 months have elapsed from the date on which we provided Form 10 information in
our Form 8-K, as amended by the Form 8-K/A filed with the SEC on August 16, 2023.

 The designation of our common stock as "penny
stock" would limit the liquidity of our common stock.

 Our common stock may be deemed a "penny
stock" (as that term is defined under Rule 3a51-1 of the Exchange Act) in any market that may develop in the future. Generally,
a "penny stock" is a common stock that is not listed on a securities exchange and trades for less than $5.00 a share. Prices
often are not available to buyers and sellers and the market may be very limited. Penny stock in start-up companies is among the riskiest
equity investments. Broker-dealers who sell penny stock must provide purchasers with a standardized risk-disclosure document prepared
by the SEC. The document provides information about penny stock and the nature and level of risks involved in investing in the penny stock
market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson compensation
and make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser's written
agreement to the purchase. Many brokers choose not to participate in penny stock transactions. If our common stock is deemed "penny
stock", because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the
future and stockholders are likely to have difficulty selling their shares.

 FINRA sales practice requirements may limit
a stockholder's ability to buy and sell our common stock.

 The Financial Industry Regulatory Authority, or
FINRA, has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status,
investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high
probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are
applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers
buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect
on the market for and price of our common stock.

 We are obligated to develop and maintain
proper and effective internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls
and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable
laws and regulations could be impaired. In addition, the presence of a material weakness increases the risk of material misstatement of
the consolidated financial statements.

 We are a public company and are required, pursuant
to Section 404(a) of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of its internal
control over financial reporting on our annual report on Form 10-K. Effective internal control over financial reporting is necessary
for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to
prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could
cause us to fail to meet its reporting obligations. Ineffective internal controls could also cause investors to lose confidence in reported
financial information, which could have a negative effect on the trading price of our common stock.

 The report by management is required to include
disclosure of any material weaknesses identified in internal control over financial reporting. However, for as long as we are an "emerging
growth company" under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness
of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. Management's assessment
of internal controls, when implemented, could detect problems with internal controls, and an independent assessment of the effectiveness
of internal controls by our auditors could detect further problems that management's assessment might not, and could result in the
identification of material weaknesses that were not otherwise identified. Undetected material weaknesses in internal controls could lead
to financial statement restatements and require us to incur the expense of remediation. We are required to disclose changes made in internal
control and procedures on a quarterly basis. To comply with the public company requirements, we may need to undertake various actions,
such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

 We are in the early stages of developing the system
and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to complete
its evaluation, testing, and any required remediation in a timely fashion. During the evaluation and testing process, if we identify material
weaknesses in internal control over financial reporting, we will be unable to assert that internal control over financial reporting is
effective.

 As discussed elsewhere in this Annual Report on
Form 10-K, we completed the Merger on July 31, 2023. Prior to the Merger, Serve was a private company and, therefore, its controls were
not required to be designed or maintained in accordance with Rules 13a-15 and 15d-15 under the Exchange Act. The design and implementation
of internal control over financial reporting post-Merger has required and will continue to require significant time and resources from
management and other personnel. Because of this, the design and ongoing development of our framework for implementation and evaluation
of internal control over financial reporting is in its preliminary stages. As a result, management was unable, without incurring unreasonable
effort or expense to conduct a comprehensive assessment of our internal control over financial reporting as of December 31, 2023. Accordingly,
we are excluding management's report on internal control over financial reporting pursuant to Section 215.02 of the SEC Division of Corporation
Finance's Regulation S-K Compliance & Disclosure Interpretations. However, management concluded that as of December 31, 2023, we had
material weaknesses in our internal controls over financial reporting.

 A "material weakness" is a deficiency,
or combination of deficiencies, in internal control over financial reporting, such that there is more than a reasonable possibility that
a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management
concluded that we did not have a comprehensive and formalized accounting and financial reporting policies and procedures manual which
details the information needed for our financial reporting process and that we did not have a robust review process by which management
could monitor for potential errors or technical accounting requirements.

 If we are unable to assert that our internal control
over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the
effectiveness of its internal control, including as a result of the material weaknesses described above, we could lose investor confidence
in the accuracy and completeness of financial reports, which would cause the price of our common stock to decline, and we may be subject
to investigation or sanctions by the SEC. In addition, if we are unable to continue to meet these requirements, we may not be able to
remain quoted on any over-the-counter trading system, or following any potential listing, listed on any securities exchange.

 We are an emerging growth company and a
smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable
to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors.

 We are an "emerging growth company,"
as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions
from various reporting requirements applicable to other public companies but not to emerging growth companies, including:

 not being required to have our independent registered public accounting firm audit our internal control
over financial reporting under Section 404 of the Sarbanes-Oxley Act;

 reduced disclosure obligations regarding executive compensation in our periodic reports and annual report
on Form 10-K; and

 exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder
approval of any golden parachute payments not previously approved.

 We could be an emerging growth company for up
to five years following the completion of our initial public offering. Our status as an emerging growth company will end as soon as any
of the following takes place:

 the last day of the fiscal year in which we have more than $1.235 billion in annual revenues;

 the date we qualify as a "large accelerated filer," with at least $700 million of equity
securities held by non-affiliates;

 the date on which we have issued, in any three-year period, more than $1.00 billion in non-convertible
debt securities; or

 the last day of the fiscal year ending after the fifth anniversary of the completion of the Merger.

 We cannot predict if investors will find our common
stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our common
stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the
market price of our common stock may be more volatile.

 Under the JOBS Act, emerging growth companies
can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected
to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the
same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be
comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

 We are also a "smaller reporting company"
as defined in the Exchange Act. We may continue to be a "smaller reporting company" even after we are no longer an emerging
growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to
take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million
measured on the last business day of our second fiscal quarter, or our annual revenues is less than $100.0 million during the most
recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured
on the last business day of our second fiscal quarter.

 Anti-takeover provisions in our charter
documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may
prevent attempts by our stockholders to replace or remove our current management.

 Our amended and restated certificate of incorporation
and our amended and restated bylaws that became effective upon completion of the Merger contain provisions that could delay or prevent
a change in control of our company. These provisions could also make it difficult for stockholders to elect directors who are not nominated
by current members of our Board or take other corporate actions, including effecting changes in our management. These provisions:

 establish a classified Board so that not all members of our board are elected at one time;

 permit only the Board to establish the number of directors and fill vacancies on the board;

 provide that directors may only be removed "for cause" and only with the approval of two-thirds
of our stockholders;

 require super-majority voting to amend some provisions in our amended and restated certificate of incorporation
and amended and restated bylaws;

 authorize the issuance of "blank check" preferred stock that our board could use to implement
a stockholder rights plan;

 eliminate the ability of our stockholders to call special meetings of stockholders;

 prohibit stockholder action by written consent, which requires all stockholder actions to be taken at
a meeting of our stockholders;

 prohibit cumulative voting; and

 establish advance notice requirements for nominations for election to our board or for proposing matters
that can be acted upon by stockholders at annual stockholder meetings.

 In addition, our amended and restated certificate
of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for: any derivative action or
proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant
to the Delaware General Corporation Law (the "DGCL"), our amended and restated certificate of incorporation, or our amended
and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.

 Section 22 of the Securities Act creates
concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities
Act or the rules and regulations thereunder. Our amended and restated certificate of incorporation provides that the federal district
courts of the United States of America will, unless we consent in writing to an alternative forum, be the exclusive forum for resolving
any complaint asserting a cause of action arising under the Securities Act ("Federal Forum Provision"). Our decision to adopt
a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially
valid under Delaware law. While there can be no assurance that federal courts or state courts will follow the holding of the Delaware
Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum
Provision means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought
in federal court and cannot be brought in state court. While neither the exclusive forum provision nor the Federal Forum Provision applies
to suits brought to enforce any duty or liability created by the Exchange Act creates exclusive federal jurisdiction over all claims brought
to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, actions by our stockholders
to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder also must be brought in federal court.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.

 Any person or entity purchasing or otherwise acquiring
or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including
the Federal Forum Provision. These provisions may limit a stockholder's ability to bring a claim in a judicial forum of their choosing
for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers,
and other employees.

 In addition, Section 203 of the DGCL may
discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations
and other transactions between us and holders of 15% or more of our common stock.

 General Risk Factors

 We may face risks related to securities
litigation that could result in significant legal expenses and settlement or damage awards.

 We may in the future become subject to claims
and litigation alleging violations of the securities laws or other related claims, which could harm our business and require us to incur
significant costs. Significant litigation costs could impact our ability to comply with certain financial covenants under our credit agreement.
We are generally obliged, to the extent permitted by law, to indemnify our current and former directors and officers who are named as
defendants in these types of lawsuits. Regardless of the outcome, litigation may require significant attention from management and could
result in significant legal expenses, settlement costs or damage awards that could have a material impact on our business, results of
operation and financial condition.

 We do not intend to pay dividends for the
foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our
common stock.

 We have never declared or paid any cash dividends
on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in
the future will be at the discretion of our Board. Accordingly, investors must rely on sales of their common stock after price appreciation,
which may never occur, as the only way to realize any future gains on their investments.

 If securities or industry analysts do not
publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.

 The trading market for our common stock will depend
in part on the research and reports that securities or industry analysts publish about us or our business, as well as the way analysts
and investors interpret our financial information and other disclosures. Securities and industry analysts do not currently, and may never,
publish research on our business. If few, or no, securities or industry analysts commence coverage of us, our stock price could be negatively
affected. If securities or industry analysts downgrade our common stock, or publish negative reports about our business, our stock price
would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our
common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our common stock.

 We are and may continue to be significantly
impacted by the worldwide economic downturn due to pandemics, outbreaks of other contagious diseases, and other catastrophic events.

 The extent to which any catastrophic event affects
our business and financial results will depend on future developments, including the duration of such event and the global response to
it, its impact on capital and financial markets, its impact on global supply chains, and whether the impacts may result in temporary or
permanent changes in consumer behavior among others, which are highly uncertain and cannot be predicted.

 In addition, we cannot predict the impact any
future pandemic or outbreak of a disease, or a catastrophic event will have on our business partners and third-party merchants and suppliers,
and we may be adversely impacted as a result of the adverse impact our business partners and third-party merchants and suppliers suffer.
For example, if we are unable to produce our robots due to manufacturing strains, we may not be able to build and deploy our robots as
planned and scale our business. This impact would mean we'd need to raise additional capital in order to cover our operating expenses
and meet our revenue targets. To the extent a pandemic or other catastrophic event adversely affects our business and financial results,
it may also have the effect of heightening many of the other risks described in this "Risk Factors" section. Any of the foregoing
factors, or other cascading effects of the pandemic that are not currently foreseeable, could adversely impact our business, financial
performance and condition, and results of operations.

 Item 1B. Unresolved staff comments

 None.

 Item 1C. Cybersecurity

 Cybersecurity Risk Management and Strategy

 We recognize the importance of assessing, identifying, and managing
material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among
other things, operational risks; intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy or
security laws and other litigation and legal risk; and reputational risks. We have implemented several cybersecurity processes, technologies,
and controls to aid in our efforts to assess, identify, and manage such material risks.

 Our process for identifying and assessing material risks from cybersecurity
threats operates alongside our broader overall risk assessment process, covering all company risks. As part of this process, appropriate
disclosure personnel will collaborate with subject matter specialists, as necessary, to gather insights for identifying and assessing
material cybersecurity threat risks, their severity, and potential mitigations.

 We also have a cybersecurity specific risk assessment process, which
helps identify our cybersecurity threat risks. As part of this process, and our processes to provide for the availability of critical
data and systems, maintain regulatory compliance, identify and manage our risks from cybersecurity threats, and to protect against, detect,
and respond to cybersecurity incidents, as such term is defined in Item 106(a) of Regulation S-K, we undertake the below listed activities,
among others:

 closely monitor emerging data protection laws and implement changes to our processes designed to comply;

 undertake regular reviews of our consumer facing policies and statements related to cybersecurity;

 proactively inform our customers of substantive changes related to customer data handling;

 through policy, practice and contract (as applicable) require employees, as well as third parties who provide services on our behalf,
to treat customer information and data with care;

 carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident;

 maintain and follow an internal information security and incident response program;

 follow common industry security standards, such as having two-factor authentication for all accounts, using corporate VPN for service
access; and

 minimize the period of time customers' personal information is stored in our database.

 Our information security program coordinates the activities we take
to prepare for, detect and respond to cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain,
investigate, and remediate the incident.

 Our processes also address cybersecurity threat risks associated with
our use of third-party service providers, including those in our supply chain or who have access to our customer and employee data or
our systems. Third-party risks are included within our broader overall risk assessment process, as well as our cybersecurity-specific
risk identification program, both of which are discussed above. In addition, cybersecurity considerations affect the selection and oversight
of our third-party service providers. We perform diligence on third parties that have access to our systems, data or facilities that house
such systems or data, and continually monitor cybersecurity threat risks identified through such diligence. Where necessary, we require
those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks
in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. Please see the risk factor entitled
" We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our
products and data processed by us or third-party vendors. " in Part I, Item 1A. Risk Factors in this report for more information.

 In the last three fiscal years, we have not experienced any material
cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. We have not been faced with any
penalties or settlements related to cybersecurity.

 Cybersecurity Governance

 Cybersecurity is an important part of our risk management processes
and an area of increasing focus for our Board and management.

 The audit committee of the Board is responsible for the oversight of
risks from cybersecurity threats. Beginning fiscal year 2024, at least annually, the audit committee receives an overview from management
of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results from third-party
assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat
risks or incidents and developments, as well as the steps management has taken to respond to such risks. In such sessions, the audit committee
will generally receive materials including a cybersecurity scorecard and other materials indicating current and emerging material cybersecurity
threat risks, and describing the Company's ability to mitigate those risks, and will discuss such matters with our VP of Software
Platform. Members of the audit committee are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related
news events and discuss any updates to our cybersecurity risk management and strategy programs. Material cybersecurity threat risks will
also be considered during separate Board meeting discussions of important matters like risk management, operational budgeting, business
continuity planning, mergers and acquisitions, brand management, and other relevant matters.

 Our cybersecurity risk management and strategy processes, which are
discussed in greater detail above, are led by our VP of Software Platform. This individual has over 20 years of prior work experience
in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity
programs in the healthcare and robotics industries.

 The VP of Software Platform is informed about and monitor the prevention,
mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity
risk management and strategy processes described above, including the operation of our incident response plan.

 The VP of Software Platform reports to the audit committee about cybersecurity
threat risks, among other cybersecurity related matters.

 Item
2. Properties

 Our current headquarters are located in Redwood
City, California, where we lease 4,200 square feet of office and industrial space pursuant to a lease that expires in 2025. We have
an option to extend that lease by a four-year term. Our headquarters contain research and development, operations and selling, general
and administrative functions as well as test tracks for our robots. We also lease two other offices in Los Angeles, our current delivery
area.

 We believe our facilities are adequate and suitable
for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.

 Item 3. Legal Proceedings

 From time to time, we may become involved in various
lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm business.

 We are currently not aware of any pending legal
proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are
contemplated by any governmental authority.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities

 Market Information

 No public market currently exists for our common
stock.

 Holders of Common Stock

 As of December 31, 2023, we have 24,832,814 shares
of common stock outstanding held by approximately 244 stockholders of record.

 Dividends

 We have never paid any cash dividends on our capital stock and do not
anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain future earnings to fund ongoing
operations and future capital requirements. Any future determination to pay cash dividends will be at the discretion of our Board and
will be dependent upon financial condition, results of operations, capital requirements and such other factors as the Board deems relevant.

 Recent Sales of Unregistered Securities

 Magna Warrant

 In connection with the strategic partnership with
Magna New Mobility USA, Inc. ("Magna"), on February 7, 2024, the Company issued to Magna a warrant (the "Magna Warrant")
to purchase up to 2,145,000 shares of the Company's common stock, par value $0.0001 per share (the "Magna Warrant Shares"),
subject to adjustments as provided therein, at an exercise price per share of $0.01.

 The Magna Warrant will be exercisable in two equal
tranches: (i) the first tranche will become exercisable no later than May 15, 2024, subject to certain conditions; and (ii) the second
tranche will become exercisable upon the achievement by Magna of a certain manufacturing milestone as set forth in a production and purchase
agreement to be entered into with respect to the contract manufacturing of the Company's autonomous delivery robots by Magna or
one of its affiliates. Notwithstanding the foregoing, all of Magna Warrant Shares will vest and become exercisable upon any Change of
Control (as defined in the Magna Warrant).

 The Magna Warrant Shares that may be issued pursuant
to the exercise of the Magna Warrant were offered and sold in a transaction exempt from registration under the Securities Act in reliance
on Section 4(a)(2) of the Securities Act.

 Convertible Promissory Notes Offering

 At an initial closing on January 2, 2024
and subsequent closings on January 12, 2024, January 22, 2024 and January 26, 2024, we issued an aggregate of $5.0 million in convertible
promissory notes to accredited investors. These transactions were exempt from registration under Section 4(a)(2) of the Securities
Act as not involving any public offering or Regulation D promulgated thereunder.

 Secured Subordinated Promissory Note

 On December 27, 2023, Serve issued the December
2023 Kashani Note to Ali Kashani, a holder of greater than 5% of the Company's capital stock who serves as Chief Executive Officer
and is a member of the Board, in exchange for a loan with the aggregate principal amount of $70,000. Pursuant to the December 2023 Kashani
Note, the loan accrued interest on the unpaid principal amount at a rate of 7.67% per annum, computed as simple interest. Serve repaid
the December 2023 Kashani Note on January 3, 2024.

 The issuance of the December 2023 Kashani Note
was exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC thereunder.

 The Bridge Financing

 On April 21, 2023, in connection with the
Bridge Financing, Serve offered and sold to accredited investors $3,001,500 principal amount of the Bridge Notes in a private placement.
The Bridge Notes bore interest at 10% per annum and were payable on October 21, 2023, subject to earlier conversion as described
below.

 On July 31, 2023, upon the closing of the
Merger and the initial closing of the Private Placement, the outstanding principal amount of the Bridge Notes was automatically converted
into 937,961 shares of our common stock at a conversion price of $3.20 per share, and investors in the Bridge Notes received Bridge
Warrants to purchase a number of shares of common stock equal to 50% of the number of shares of common stock into which the Bridge Notes
were converted, at an exercise price of $3.20 per share for a term of three years. If at any time after the Registration Effectiveness
Date there is no effective registration statement registering for resale, or the prospectus contained therein is not available for the
resale of the shares of common stock issuable upon exercise of the Bridge Warrants by the holder, the Bridge Warrants may also be exercised,
in whole or in part, at such time by means of a "cashless" net exercise.

 In connection with the sale of the Bridge Notes,
Serve agreed to cause the Company to issue to the Bridge Brokers, upon closing of the Merger and the Private Placement, Bridge Broker
Warrants to purchase a number of shares of Serve's common stock equal to 8% of the number of shares of common stock into which the
Bridge Notes, other than those purchased by Insider Investors, would convert at the closing of the Merger and Private Placement, with
an exercise price per share of $3.20 and a term of three years. The Bridge Brokers were entitled to be issued Bridge Broker Warrants to
purchase an aggregate of 74,662 shares of our common stock.

 The private placement of the Bridge Notes, and
the grant of the Bridge Warrants and Bridge Broker Warrants were exempt from registration under Section 4(a)(2) of the Securities
Act and Rule 506(b) of Regulation D promulgated by the SEC thereunder. The Bridge Notes were sold to "accredited investors,"
as defined in Regulation D, and the offering was conducted on a "reasonable best efforts" basis.

 Private Placement

 On July 31, 2023, in connection with the
Private Placement, we issued an aggregate of 2,782,378 shares of common stock at a price of $4.00 per share for aggregate gross
consideration of approximately $11.13 million to 71 accredited investors. These transactions were exempt from registration under
Section 4(a)(2) of the Securities Act as not involving any public offering or Regulation D promulgated thereunder.

 On August 30, 2023, in connection with the
Private Placement, we issued an aggregate of 257,762 shares of common stock at a price of $4.00 per share for aggregate gross
consideration of approximately $1.03 million to 5 accredited investors. These transactions were exempt from registration under
Section 4(a)(2) of the Securities Act as not involving any public offering or Regulation D promulgated thereunder.

 On October 26, 2023, in connection with the
Private Placement, we issued an aggregate of 143,531 shares of common stock at a price of $4.00 per share for aggregate gross
consideration of approximately $0.57 million to 8 accredited investors. These transactions were exempt from registration under
Section 4(a)(2) of the Securities Act as not involving any public offering or Regulation D promulgated thereunder.

 Placement Agent Warrants

 In connection with the Private Placement and subject
to the closing of the Private Placement, we agreed to pay each of the Placement Agents, Aegis Capital Corp. and Network 1 Financial
Services, Inc., each a U.S. registered broker-dealer, a cash placement fee of 8% of the gross proceeds raised from investors in the
Private Placement (or 4% of gross proceeds raised from Insider Investors) and to issue to them Placement Agent Warrants consisting of
(a) Placement Agent A Warrants to purchase a number of shares of our common stock equal to 8% of the number of shares of common
stock sold in the Private Placement (other than to Insider Investors), with a term expiring three years after the common stock begins
to trade on Nasdaq or NYSE and an exercise price of $4.00 per share and (b) Placement Agent B Warrants to purchase 125,000 shares
of common stock with the same term as the Placement Agent A Warrants and an exercise price of $0.001 per share.

 The grant of the Placement Agent Warrants was
exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the
SEC thereunder.

 Securities Issued in Connection with the Merger

 On July 31, 2023, pursuant to the terms of
the Merger Agreement, 3,091,672 shares of Serve's Series Seed preferred stock, 2,440,411 shares of Serve's Series
Seed-1 preferred stock, 2,088,696 shares of Serve's Series Seed-2 preferred stock, and 357,836 shares of Serve's
Series Seed-3 stock were converted into an aggregate of 7,978,616 shares of our common stock. These transactions were exempt from
registration under Section 4(a)(2) of the Securities Act as not involving any public offering or Regulation D promulgated thereunder.
None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved.

 Sales of Unregistered Securities of Serve

 The following list sets forth information as to
all securities Serve sold from January 15, 2021, through immediately prior to the consummation of the Merger, which were not registered
under the Securities Act. The following description is historical and has not been adjusted to give effect to the Merger. The proceeds
from these sales were used by the Company for working capital.

 1.
 Between April 27, 2021 and June 25, 2021, Serve issued a total of 3,535,400 shares of Serve's
common stock at a price per share of $0.0012 to stockholders of Serve for gross proceeds of $4,400. Serve relied upon the exemption from
registration provided by Regulation 4(2) under the Securities Act.

 2.
 Between April 12, 2021 and September 19, 2021, Serve issued a total of 3,663,819 shares
of common stock at a price per share of $0.0013 to service providers of Serve pursuant to the Serve Plan, of which 2,775,306 are outstanding
for gross proceeds of $4,725.27. Serve relied upon the exemption from registration provided by Rule 701 of the Securities Act.

 3.
 Between August 23, 2022 and September 7, 2022, Serve issued a total of 338,122 shares of
common stock at a price per share of $0.49 to service providers of Serve pursuant to the Serve Plan. Serve relied upon the exemption from
registration provided by Rule 701 of the Securities Act.

 4.
 Between December 23, 2021 and October 8, 2022, Serve issued options to purchase a total of 1,229,755 shares
of common stock at an exercise price of $0.49 per share to service providers of Serve pursuant to the Serve Plan, of which 829,749 are
outstanding. Serve relied upon the exemption from registration provided by Rule 701 of the Securities Act.

 5.
 On February 24, 2021, Serve issued a simple agreement for future
equity for an aggregate purchase amount of $1.00 million (the "February 2021 SAFE") to an investor of Serve. The
February 2021 SAFE converted into 2,440,411 shares of Serve's Series Seed-1 Preferred Stock at a price per share of $1.5161
on October 4, 2021. Serve relied upon the exemption from registration provided by Regulation 4(2) under the Securities Act.

 6.
 Between January 29, 2021 and March 16, 2021, Serve issued SAFEs for an aggregate purchase amount
of $5.68 million (the "2021 SAFEs") to investors of Serve. The 2021 SAFEs converted into 2,088,696 shares
of Serve's Series Seed-2 Preferred Stock at a price per share of $2.7170 on October 4, 2021. Serve relied upon the exemption
from registration provided by Regulation 4(2) under the Securities Act.

 7.
 On July 13, 2021, Serve issued a simple agreement for future equity for an aggregate purchase amount
of $1.25 million (the "Bridge SAFE") to investors of Serve. The Bridge SAFE converted into 357,836 shares of Serve's
Series Seed-3 Preferred Stock at a price per share of $3.4932 on October 4, 2021. Serve relied upon the exemption from registration
provided by Regulation 4(2) under the Securities Act.

 8.
 On October 4, 2021, Serve entered into a Series Seed Preferred Stock Purchase Agreement, pursuant
to which the Company issued 3,091,672 shares of Serve's Series Seed Preferred Stock at a price per share of $3.8814, 2,440,411 shares
of Serve's Series Seed-1 Preferred Stock, 2,088,696 shares of Serve's Series Seed-2 Preferred Stock, and 357,836 shares
of Serve's Series Seed-3 Preferred Stock to stockholders of Serve. Serve raised a total of $12.00 million from the sale of
Serve's Series Seed Preferred Stock. Serve relied upon the exemption from registration provided by Regulation 4(2) under the
Securities Act.

 9.
 On October 4, 2021, Serve issued a warrant to purchase 128,819 shares of Serve's Series
Seed Preferred Stock at an exercise price of $3.88 per share. Serve relied upon the exemption from registration provided by Regulation 4(2)
under the Securities Act.

 10.
 On November 11, 2021, Serve issued a warrant to purchase 13,911 shares of Serve's common
stock at an exercise price of $3.88 per share. Serve relied upon the exemption from registration provided by Regulation 4(2) under
the Securities Act.

 11.
 Between February 4, 2022 and March 9, 2022, Serve issued SAFEs for an aggregate purchase amount
of $10.59 million to investors of Serve. Serve relied upon the exemption from registration provided by Regulation 4(2) under
the Securities Act.

 12.
 On March 1, 2022, Serve issued a warrant to purchase 40,292 shares of Serve's common stock
at an exercise price of $0.49 per share. Serve relied upon the exemption from registration provided by Regulation 4(2) under the
Securities Act.

 13.
 Between December 1, 2022 and January 18, 2023, Serve issued simple agreement for future equity
for an aggregate purchase amount of $4.97 million to investors of Serve. Serve relied upon the exemption from registration provided
by Regulation 4(2) under the Securities Act.

 14.
 On March 15, 2023, Serve issued options to purchase a total of 255,240 shares of common stock
at an exercise price of $0.50 per share to service providers of Serve pursuant to the Serve Plan. Serve relied upon the exemption from
registration provided by Rule 701 of the Securities Act.

 15.
 On June 7, 2023, Serve issued options to purchase a total of 510,237 shares of common stock
at an exercise price of $0.86 per share to service providers of Serve pursuant to the Serve Plan. Serve relied upon the exemption from
registration provided by Rule 701 of the Securities Act.

 16.
 On June 28, 2023, Serve issued the June 2023 Kashani Note to Ali Kashani, in exchange for a
loan with the aggregate principal amount of $449,000. Pursuant to the June 2023 Kashani Note, the loan accrued interest on the unpaid
principal amount at a rate of 7.67% per annum, computed as simple interest. Dr. Kashani was entitled to an exit fee equal to 16% of the
stated principal amount of the June 2023 Kashani Note, less the total amount of interest that accrued on the June 2023 Kashani
Note prior to the Closing of the Merger. Serve paid the Kashani Exit Fee and repaid the June 2023 Kashani Note upon the Closing of the
Merger. On August 4, 2023, payment of $520,840 was made to Dr. Kashani as repayment of the promissory note, which includes $449,000
in principal and $71,840 in interest. No additional fees were paid. The issuance of the June 2023 Kashani Note was exempt from registration
under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC thereunder.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation

 The following discussion of the financial condition
and results of operations of the Company should be read in conjunction with the financial statements and the notes to those statements
included in this Annual Report on Form 10-K for the period ended December 31, 2023. Some of the information contained in this discussion
and analysis including information with respect to our plans and strategy for our business, includes forward-looking statements that involve
risk, uncertainties and assumptions. You should read Part I, Item 1A. Risk Factors of this report for a discussion of important factors
that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained
in the following discussion and analysis.

 Note about Forward-Looking Statements

 This Annual Report on Form 10-K includes statements
that constitute "forward-looking statements." These forward-looking statements are often characterized by the terms "may,"
"believes," "projects," "intends," "plans," "expects," or "anticipates,"
and do not reflect historical facts.

 Specific forward-looking statements contained
in this portion of the report include, but are not limited to: (i) statements that are based on current projections and expectations about
the markets in which we operate, (ii) statements about current projections and expectations of general economic conditions, (iii) statements
about specific industry projections and expectations of economic activity, (iv) statements relating to our future operations, prospects,
results, and performance, and (v) statements that the cash on hand and additional cash generated from operations together with potential
sources of cash through issuance of debt or equity will provide the Company with sufficient liquidity for the next 12 months.

 Forward-looking statements involve risks, uncertainties,
and other factors, which may cause our actual results, performance, or achievements to be materially different from those expressed or
implied by such forward-looking statements. Factors and risks that could affect our results, future performance and capital requirements
and cause them to materially differ from those contained in the forward-looking statements include those identified in the "Cautionary
Note Regarding Forward-Looking Statements" and the Part 1, Item 1A. Risk Factors in this report, as well as other factors
that we are currently unable to identify or quantify, but that may exist in the future.

 In addition, the foregoing factors may generally
affect our business, results of operations and financial position. Forward-looking statements speak only as of the date the statements
were made. We do not undertake and specifically decline any obligation to update any forward-looking statements. Any information contained
on our website www.serverobotics.com or any other websites referenced in this report are not part of this report.

 Our Company

 We are an operating company which has experienced
losses since our inception. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders.

 The following discussion contains forward-looking
statements, as discussed above. Please see the sections entitled " Cautionary Note Regarding Forward-Looking Statements "
and Part I, Item 1A. Risk Factors in this report for a discussion of the uncertainties, risks and assumptions associated with these
forward-looking statements.

 Our principal offices are located at 730 Broadway,
Redwood City, CA 94063, our telephone number is (818) 860-1352 and our corporate website (which does not form part of this report) is
located at www.serverobotics.com.

 Overview

 On July 31, 2023, Patricia Acquisition Corp.,
Acquisition Sub, and Serve entered into a Merger Agreement. Pursuant to the terms of the Merger Agreement, on the Closing Date, Acquisition
Sub merged with and into Serve, with Serve continuing as the surviving corporation and our wholly owned subsidiary. As a result of the
Merger, we acquired the business of Serve and will continue the existing business operations of Serve as a public reporting company under
the name Serve Robotics Inc. On the Closing Date, Serve's predecessor was renamed Serve Operating Co.

 The Merger was treated as a recapitalization and
reverse acquisition for us for financial reporting purposes, and Serve is considered the acquirer for accounting purposes. As a result
of the Merger and the change in our business and operations, a discussion of the past financial results of Patricia Acquisition Corp.
is not pertinent, and under applicable accounting principles, the historical financial results of Serve, the accounting acquirer, prior
to the Merger are considered our historical financial results.

 Our discussion and analysis are organized as follows:

 Executive Summary – Summary analysis of financial and other highlights to provide context for
the discussion and analysis.

 Results of Operations – An analysis of our financial results.

 Liquidity, and Capital Resources – An analysis of changes in our balance sheets and cash flows
and a discussion of our financial condition and potential sources of liquidity.

 Critical Accounting Estimates – Accounting estimates that management believes are the most important
to understanding the assumptions and judgments incorporated in our financial results and forecasts and involve a significant level of
estimation uncertainty.

 Serve Robotics

 Serve is shaping the future of sustainable, self-driving
delivery. We design, develop, and operate low-emissions robots that serve people in public spaces, starting with food delivery. Starting
in 2017, our core technology was developed by our co-founders and a majority of our product and engineering team in San Francisco, California
as a special project within Postmates, one of the pioneering food delivery startups in the United States. By the end of 2020, the
team had developed a fleet of sidewalk robots that had successfully performed over 10,000 commercial deliveries for Postmates in
California, augmenting Postmates' fleet of human couriers. Postmates was acquired by Uber in 2020, and in February of 2021, Uber's
leadership team agreed to contribute the intellectual property developed by the team and assets relating to this project to Serve. In
return for this contribution and an investment of cash into the Company, Uber acquired a minority equity interest in the business. By
the end of the first quarter of 2021, the majority of the team that had worked on this project at Postmates joined Serve as full time
employees.

 Because we started this project within a food
delivery company, our team comes with a depth of combined expertise in food delivery, automation, and robotics. Our expertise positions
us to service the growing on-demand delivery market, including food delivery, where approximately half of all deliveries are less than
2.5 miles and well-suited to delivery by sidewalk robots. We provide a robotic delivery experience that delights customers, improves
reliability for merchants, and reduces traffic congestion and eliminates vehicle emissions. At scale, our delivery robots can complete
deliveries at lower cost than human couriers, making on-demand delivery more affordable and accessible in areas we operate.

 Recent Developments

 License and Services Agreement

 On February 20, 2024, Serve entered into a License
and Services Agreement (the "LSA") with Magna as a part of a strategic partnership with Magna. Pursuant to the LSA, Serve,
as an independent contractor of Magna, agreed to (i) grant a non-exclusive license to the Serve AMR Technology in the Licensed Fields
of Use (each as defined in the LSA) to Magna and its affiliates and (ii) provide all reasonable engineering, technical and related support
services that Magna may request from time to time in writing and in furtherance of commercialization of the Serve AMR Technology and products
(including software) using, practicing, or incorporating the Serve AMR Technology, and manufactured using, practicing or incorporating
the Serve AMR Technology (such services and support, the "Development Services"). Except as expressly set forth in the LSA,
any Development Services shall be provided under the MSA (as defined below) and, if expired or terminated, under terms and conditions
that are consistent with the terms therein. The term of the LSA will continue unless terminated by either party pursuant to and in accordance
with the terms and conditions set forth in the LSA.

 Master Services Agreement

 On February 1, 2024, Serve entered into a Master
Services Agreement (the "MSA") with Magna, retroactively effective as of January 15, 2024 (the "Effective Date").
Pursuant to the MSA, Serve agreed to provide certain services to Magna as described in one or more statements of work ("SOWs").
Such SOWs will contain a description of the scope, the time to be spent on performance, the fees to be paid to Serve, the functional requirements
and technical specifications and, to the extent applicable, the timetable, schedule or milestones for the performance of the requested
services. Serve and Magna entered into the first SOW on the Effective Date. The term of the MSA commenced on the Effective Date and will
continue for a term of three months, unless terminated earlier or mutually extended in accordance with its terms.

 In connection with the strategic partnership with
Magna, on February 7, 2024, we issued the Magna Warrant to purchase up to 2,145,000 shares of our common stock, subject to adjustments
as provided therein, at an exercise price of $0.01 per share.

 The Magna Warrant will be exercisable in two equal
tranches: (i) the first tranche will become exercisable no later than May 15, 2024, subject to certain conditions; and (ii) the second
tranche will become exercisable upon Magna's achievement of a certain manufacturing milestone as set forth in a production and purchase
agreement to be entered into with respect to the contract manufacturing of our autonomous delivery robots by Magna or its affiliates.
Notwithstanding the foregoing, the Magna Warrant Shares will vest and become exercisable upon any "change of control" (as
defined in the Magna Warrant).

 The Magna Warrant Shares that may be issued pursuant to the exercise
of the Magna Warrant were offered and sold in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2)
of the Securities Act.

 Convertible Promissory Notes Offering

 At an initial closing on January 2, 2024 and subsequent closings
on January 12, 2024, January 22, 2024 and January 26, 2024, we issued to certain accredited investors convertible promissory notes, for
which the Company received an aggregate of $5.0 million in proceeds. The convertible promissory notes bear interest at a rate of 6.00%
per year, compounded annually, due and payable upon request by each investor on or after the 12-month anniversary of the original issuance
date of each note. The Company may not prepay or repay the notes in cash without the consent of the investors.

 Note Payable – Related Party

 On December 27, 2023, Serve issued a senior
secured promissory note to its Chief Executive Officer for which Serve received $70,000 in proceeds. The note bore interest at 7.67% per
annum. The agreement contained a clause that the terms would be updated if subsequent notes were issued at a more favorable term. Serve
repaid the note on January 3, 2024.

 Merger Agreement

 On July 31, 2023, the Company, our wholly-owned
subsidiary, Serve Acquisition Co., a corporation formed in the State of Delaware on July 10, 2023 ("Acquisition Sub"), and
Serve entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). Pursuant to the terms of the
Merger Agreement, on July 31, 2023 (the "Closing Date"), Acquisition Sub merged with and into Serve, with Serve continuing
as the surviving corporation and our wholly-owned subsidiary (the "Merger").

 As a result of the Merger, we acquired the business
of Serve, a leading autonomous sidewalk delivery company based in Redwood City, California. See Part I, Item 1. Business of this
report. At the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the "Effective
Time"), each of Serve's shares of capital stock issued and outstanding immediately prior to the closing of the Merger was
converted into the right to receive 0.8035 of a share of our common stock (in the case of shares held by accredited investors), with the
maximum number of shares of our common stock issuable to the former holders of Serve's capital stock equal to 20,948,917 shares
after adjustments due to rounding for fractional shares. Immediately prior to the Effective Time, an aggregate of 3,500,000 shares
of our common stock owned by our stockholders prior to the Merger were forfeited and canceled (the "Stock Forfeiture").

 In addition, pursuant to the Merger Agreement,
(i) options to purchase 1,984,951 shares of Serve's common stock issued and outstanding immediately prior to the closing
of the Merger under the Serve Plan were assumed and converted into options to purchase 1,594,800 shares of our common stock, (ii) warrants
to purchase 160,323 shares of Serve's Series Seed preferred stock issued and outstanding immediately prior to the closing of
the Merger were assumed and converted into warrants to purchase 128,819 shares of our common stock, and (iii) warrants to purchase
17,314 shares of Serve's common stock issued and outstanding immediately prior to the closing of the Merger were assumed and
converted into warrants to purchase 13,911 shares of our common stock and (iv) SAFEs totaling $15,551,953 were converted into
4,372,613 shares of our common stock.

 Private Placement

 Following the Effective Time of the Merger, we
sold 3,183,671 shares of our common stock pursuant to a private placement offering in multiple closings (the "Private Placement").
We also issued 937,961 shares of our common stock to convert the outstanding principal and interest of outstanding Bridge Notes in
connection with the consummation of the Merger.

 Each investor in the Private Placement was required
to represent that, at the time of the applicable closing, it (i) has a substantive, pre-existing relationship with us, or has direct
contact with us or the Placement Agents or other enumerated parties outside of the Private Placement and (ii) did not independently
contact us as a result of general solicitation by means of this report, any press release or any other public disclosure disclosing the
material terms of the Private Placement.

 Note Payable – Related Party

 In June and July 2023, the Company issued
a senior secured promissory note with its Chief Executive Officer for which the Company received $449,000 in proceeds. The note bore interest
at 7.67% per annum and matured upon the Merger. The agreement contained a clause that the terms would be updated if subsequent notes were
issued at a more favorable term. Accordingly, based on loans in July 2023, notes were issued that contained a 16% exit fee. Serve
repaid the notes upon the closing of the Merger.

 Secured Subordinated Promissory Notes

 On July 6, 2023, Serve issued Secured Subordinated
Promissory Notes (the "Promissory Notes") to accredited investors in an aggregate principal loan amount of $750,000. Pursuant
to the Promissory Notes, the loans accrued interest on the unpaid principal amount at a rate of 18.00% per annum, computed as simple interest.
Each holder of the Promissory Notes was entitled to an exit fee equal to 16% of the stated principal amount of such holder's Promissory
Note, less the total amount of interest that accrued on such Promissory Note prior to the closing of the Merger (the "Exit Fee").
Serve repaid the Promissory Notes and the Exit Fee upon the closing of the Merger.

 Outlook And Challenges Facing Our Business

 There are a number of industry factors that affect
our business which include, among others:

 Overall Demand for Last-mile Delivery on Partner
Platforms.

 Our potential for growth depends significantly
on continued demand for last-mile delivery of food and other items on our partner platforms. This demand can fluctuate based on various
market cycles and weather and local community health conditions, as well as evolving competitive dynamics. Our largest stream of projected
revenue comes from maximizing utilization of our robots 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. These uncertainties make demand difficult to forecast for us and our partners.

 Customer Concentration.

 We currently have a limited number of customers.
Sales to Uber represented 71% of our revenues for the year ended December 31, 2023, and if Uber were to breach, cancel, or amend
our agreement, it may have an outsized effect on our revenue, cash on hand, and profitability. Our business development team is actively
pursuing new delivery and branding customers to diversify our customer base.

 Inflation and Market Considerations; Availability
of Materials, Labor & Services.

 We consider most on-demand purchases as discretionary
spending for consumers, and we are therefore susceptible to changes in discretionary spending patterns and economic slowdowns in the geographic
areas in which merchants on our partners' platforms operate and in the economy at large. Discretionary consumer spending can be
impacted by general economic conditions, unemployment, consumer debt, inflation, rising gasoline prices, interest rates, consumer confidence,
and other macroeconomic factors. Inflation can lead to increased cost of material and labor for restaurants and merchants who may in turn
raise prices on the item they sell and result in a reduction in demand for those items. To the extent inflation reduces economic activity
and consumer demand for items we deliver, it could negatively impact our financial results. Continued uncertainty in or a worsening of
the economy, generally or in a number of our markets, and consumers' reactions to these trends could adversely affect our business
and cause us to, among other things, reduce the number and frequency of new market openings or cease operations in existing markets. It
is important to note, however, that inflation can also serve as a tailwind that would accelerate the adoption of automated robotic last-mile
delivery as labor becomes more expensive and drives up the cost of delivery by humans.

 Intellectual Property.

 We rely on patented and non-patented proprietary
information relating to product development, manufacturing capabilities, and other core competencies of our business. Protection of intellectual
property is critical. Therefore, steps such as additional patent applications, confidentiality, and non-disclosure agreements, as well
as other security measures are important. While we believe we have a strong patent portfolio and there is no actual or, to our knowledge,
threatened litigation against us for patent-related matters, litigation or threatened litigation is a common method to effectively enforce
or protect intellectual property rights. Such action may be initiated by or against us and would require significant management time and
expenses.

 Supply Chain Constraints.

 The global supply shortage of electrical components,
including semiconductor chips and other hardware components essential to the manufacturing and maintenance of our robots, continued to
impact our supply chain throughout 2023. As a result, we experienced increases in our lead times and costs for certain components to build
our robots. Although our supply chain normalized during 2023, we cannot be sure whether global supply chain shortages will impact our
future robot build plans. In order to mitigate supply chain risks, we would need to incur higher costs to secure available inventory and
place non-cancellable purchase commitments with our suppliers, which could introduce inventory risk if our forecasts and assumptions prove
inaccurate. Higher costs of components would impact our cash runway and delays in the manufacturing of our robots would push out our revenue
forecasts.

 Governmental and Regulatory Conditions.

 Our potential for growth depends on continued
permission and acceptance by local governments and municipalities where our robots perform deliveries. Changes in regulations such as
the imposition of a cap on the number of robots or technical requirements such as robot size and weight restrictions or limitations on
autonomy within a certain geographic area could reduce or limit our ability to generate revenues and/or impact our unit economics in those
markets.

 Future Prospects.

 We anticipate that we will continue to experience
operating losses in 2023 and 2024 as we seek to implement our long-term strategic plan, using the net proceeds from the Private Placement
to accelerate our development through increased research and development spending, scale our robotic fleet, expand our sales and business
development efforts, and increase our overall headcount in order to achieve efficiencies through scaled growth. Our goal over the next
two years is to scale our operating fleet by a factor of 10 and expand our geographic coverage to new markets beyond our current operating
area in Los Angeles. With such an increase, we anticipate proportional increases in capital costs, overhead, and operating expenses.
We aim to initially achieve profitability in 2025, with increased profitability thereafter; however, doing so is dependent upon numerous
factors, including the development of revenues, general business and economic conditions, and other risks and uncertainties, including
those listed under Part 1, Item 1A. Risk Factors.

 Components of Results of Operations

 Revenue

 Our revenue currently consists primarily of (1) delivery
revenues and (2) revenues from branding.

 Operating Expenses

 Cost of revenue. Cost of revenue consists
primarily of allocations of depreciation on robot assets used for revenue-producing activities, personnel time related to revenue-producing
activities, and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to
communicate with the robots while in service.

 Operations. Operations expenses primarily
consist of costs for field operations personnel.

 Research and Development. Costs incurred
in the research and development of the Company's products are expensed as incurred. Research and development costs include product
design, hardware and software costs.

 Sales and Marketing. Sales and marketing
expenses include personnel costs and public relations expenses. Advertising costs are expensed as incurred and included in sales and marketing
expenses.

 General and Administrative. General and
administrative expenses primarily consist of personnel-related expenses for executive management and administrative functions, including
finance and accounting, legal, and human resources, as well as general corporate expenses and general insurance. General and administrative
expenses also include depreciation on property and equipment as well as amortization of right of use assets. These costs are expensed
as incurred.

 Interest Expense

 Interest expense consists of stated rates of interest
on financing instruments, fees incurred related to financing instruments or accretion of debt discounts.

 Changes in Fair Value of future equity obligations

 Changes in the fair value of the simple agreements
for future equity ("SAFEs") relate to updated assumptions and estimates are recognized within the statements of operations.

 Other Income, Net

 Other income, net of other expenses, consists
primarily of income generated from our interest-bearing deposit account.

 Financial Overview

 For the year ended December 31, 2023 and 2022,
we generated revenues of $0.21 million and $0.11 million, respectively, and reported net loss of $24.81 million and $21.86 million,
respectively.

 As noted in our consolidated financial statements,
as of December 31, 2023, we had an accumulated deficit of $68.33 million.

 Results of Operations

 Comparison of Results of Operations for the
Year ended December 31, 2023 and 2022

 The following table summarizes our operating results
as reflected in our unaudited statements of operations during the year ended December 31, 2023 and 2022, respectively, and provides information
regarding the dollar and percentage increase (or decrease) during such periods.

 Year Ended

 2023

 2022

 Change

 Revenues

 $
 207,545

 $
 107,819

 $
 99,726

 Cost of revenues

 1,730,262

 1,148,426

 581,836

 Gross loss

 (1,522,717
)

 (1,040,607
)

 (482,110
)

 Operating expenses:

 General and administrative

 4,618,499

 3,786,124

 832,375

 2,564,930

 2,035,063

 529,867

 Research and development

 9,947,258

 13,565,765

 (3,618,507
)

 Sales and marketing

 605,205

 525,494

 79,711

 Impairment of long-lived assets

 1,468,995

 -

 1,468,995

 Total operating expenses

 19,204,887

 19,912,446

 (707,559
)

 Loss from operations

 (20,727,604
)

 (20,953,053
)

 225,449

 Other income (expense), net:

 Interest expense, net

 (2,264,426
)

 (636,330
)

 (1,628,096
)

 Change in fair value of derivative liability

 (149,000
)

 -

 (149,000
)

 Change in fair value of simple agreements for future equity

 (1,672,706
)

 (265,744
)

 (1,406,962
)

 Total other income (expense), net

 (4,086,132
)

 (902,074
)

 (3,184,058
)

 Provision for income taxes

 -

 -

 -

 Net loss

 $
 (24,813,736
)

 $
 (21,855,127
)

 $
 (2,958,609
)

 Weighted average common shares outstanding - basic and diluted

 14,204,078

 6,896,769

 Net loss per common share - basic and diluted

 $
 (1.75
)

 $
 (3.17
)

 Revenues were $0.21 million for the year ended
December 31, 2023, compared with $0.11 million for the year ended December 31, 2022. The increase was because 2023 had a full year of
operations, whereas 2022 had partial year, which resulted in more delivery fees.

 Cost of revenues was $1.73 million for the year
ended December 31, 2023, compared with $1.15 million for the year ended December 31, 2022. The increase was because 2023 had a full year
of operations, whereas 2022 had partial year, which resulted in more costs.

 General and administrative expense increased $0.83
million to $4.62 million for the year ended December 31, 2023 from $3.79 million for the year ended December 31, 2022, due primarily to
an increase in costs related to administrative functions, including finance and accounting, legal, and human resources, as well as general
corporate expenses.

 Operations expense increased $0.53 million to
$2.56 million for the year ended December 31, 2023, compared with $2.04 million for the year ended December 31, 2022, due primarily to
servicing the larger scale of the robot fleet.

 Research and development expense, which represented
51.8% and 68.1% of total operating expenses for the years ended December 31, 2023 and 2022, respectively, decreased $3.62 million to $9.95
million for the year ended December 31, 2023 from $13.57 million for the year ended December 31, 2022, due primarily to a reduction in
workforce effective December 2022.

 Sales and marketing expenses increased $0.08 million
to $0.61 million for the year ended December 31, 2023 from $0.53 million for the year ended December 31, 2022, due primarily to an increase
in personnel costs and public relations expenses.

 For the year ended December 31, 2023 an impairment
of long-lived asset expense of $1.47 million was recognized. Based on evaluating the forecasted cash flows through the assets' remaining
useful life, and technology becoming obsolete once a new generation of robots is expected to launch, in 2024, management concluded to
record a full impairment of the assets. Due to the discounted cash flows being negative through the remaining useful life (November 2024)
and the technology becoming obsolete once a new generation of robots is launched, it was determined that there was an impairment and the
expense recognized.

 Operating expense decreased $0.71 million to $19.20
million for the year ended December 31, 2023 from $19.91 million for the year ended December 31, 2022, due primarily to a reduction in
workforce effective December 2022.

 Interest expense increased $1.63 million to $2.26
million for the year ended December 31, 2023 compared to $0.64 million for the year ended December 31, 2022. This increase is related
to the accretion of debt discounts which is a result of debts entered into that contained redemption features requiring derivative accounting
and warrants issued with debt that discounted the debts. The majority of the increase is due to accretion and to a lesser extent, the
interest on the Farnam Lease.

 The change in fair value of future equity obligations
increased by $1.41 million to $1.67 million for the year ended December 31, 2023 compared to $0.27 million for the year ended December
31, 2022 primarily due to the revaluation of SAFEs immediately prior to conversion into common stock.

 The change in fair value of derivative liability
increased by $0.15 million to $0.15 million for the year ended December 31, 2023 compared to $0.00 million for the year ended December
31, 2022 primarily due to the revaluation of derivative immediately prior to conversion into common stock, and there was no such derivative
in the prior year.

 Other expenses were $4.09 million and $0.9 million
for each of the years ended December 31, 2023 and 2022, respectively primarily due to the increases in interest expense described above.

 Net loss increased $2.96 million to $24.81 million
for the year ended December 31, 2023 from $21.86 million for the same period in 2022. The increase in net loss was primarily attributed
to other expenses such as conversion of SAFEs and derivative liability into common stock as well as the impairment on the robot asset
in 2023.

 Key metrics

 We regularly review the following key business
metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make
strategic decisions:

 Year Ended December 31,

 2023

 2022

 (Unaudited)

 (Unaudited)

 Key Metrics

 Daily Active Robots

 Daily Supply Hours

 Daily Active Robots: We define daily active
robots as the average number of robots performing daily deliveries during the period. Daily active robots reflect our operation team's
capacity to have active robots in the field performing deliveries and/or generating branding revenues. We closely monitor and strive to
increase our daily active robots efficiently as we improve our autonomy and resultant human-to-robot ratios and increase the number of
merchants and brand advertisers on our platform.

 Daily Supply Hours: We define daily supply
hours as the average number of hours our robots are ready to accept offers and perform daily deliveries during the period. Supply hours
represent the aggregate number of robot hours per day during which we can utilize our robots for delivery. Supply hours increase as we
add active robots and increase the operating window of those robots in a day. We closely monitor and strive to efficiently increase our
fleet's daily supply hours.

 Liquidity and Capital Resources

 Net cash generated by financing activities is
our primary source of liquidity. As of December 31, 2023, we had current assets of $1.46 million and current liabilities of $6.39 million,
which included $0.01 million in cash and cash equivalents.

 We plan to raise additional working capital to
fund operations through the issuance of stock to investors and/or issuance of notes payable. We believe, but there is no assurance, that
the net proceeds of approximately $10 million from the initial closing of the Private Placement and our existing cash and cash equivalents
will be sufficient to fund our current operating plans.

 Our ability to continue as a going concern is
dependent on our ability to raise adequate capital to fund operating losses until we can generate liquidity from our business operations.
To the extent sufficient financing is not available, we may not be able to, or may be delayed in, developing our offerings and meeting
our obligations. We will continue to evaluate our projected expenditures relative to our available cash and evaluate financing alternatives
in order to satisfy our working capital and other cash requirements.

 Cash Flows

 As of December 31, 2023, our cash and cash equivalents
were $0.01 million. The following table shows a summary of our cash flows for the periods presented in millions:

 Year Ended

 2023

 2022

 Change

 Net cash (used in) provided by:

 Operating activities

 $
 (15,970,878
)

 $
 (21,402,786
)

 $
 5,431,908

 Investing activities

 (4,914
)

 (4,060,962
)

 4,056,048

 Financing activities

 13,266,829

 20,213,606

 (6,946,777
)

 (Decrease) increase in cash and cash equivalents

 $
 (2,708,963
)

 $
 (5,250,142
)

 $
 2,541,179

 Operating Activities

 Net cash used in operating activities was $15.97
and $21.40 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $5.43 million was attributable primarily
to a decrease in operating expenses including headcount and personnel costs, research and development, and support to revenue-producing
activities.

 Investing Activities

 Net cash used in investing activities was $0.00
and $4.06 million for the years ended December 31, 2023 and 2022, respectively. The usage of cash in 2022 related to the build of our
second-generation robots, whereas in 2023, there were no new builds of robots.

 Financing Activities

 Net cash provided by financing activities was
$13.27 and $20.21 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $6.95 million was attributable
primarily to reduced proceeds from SAFEs in 2023 compared to 2022, and lower proceeds from Silicon Valley Bank loan in 2022.

 Indebtedness

 In March 2022, we entered into a term loan
with Silicon Valley Bank for gross proceeds of $2.50 million with a maturity date of March 1, 2025. The loan accrues interest
at the greater of 3.25% or prime rate. Principal payments commenced on October 1, 2022, and the loan is repayable in 30 installments
of principal and accrued interest.

 We also entered into an equipment financing lease
agreement with Farnam in June 2022, commencing November 2022, for the cost of building robots, calling for 24 monthly payments
of approximately $0.19 million based on an expected total cost of $4.46 million of robot parts and manufacturing costs. In December
2023, the agreement was modified for three monthly payments of approximately $0.03 million and 12 monthly payments of approximately $0.19
million, subject to certain terms and effective in 2024.

 Contractual Obligations and Commitments

 The following is a summary of our significant
contractual obligations as of December 31, 2023.

 Remaining
 Period of 2024

 More than
 One Year
 and Less
 than
 Three Years

 More than
 Three Years and Less
 than
 Five Years

 More than
 Five Years

 Total

 Operating lease obligations

 $
 527,983

 214,775

 -

 -

 742,758

 Loan Financing Facility

 1,070,000

 250,000

 -

 -

 1,320,000

 Equipment Financing Facility

 2,363,807

 -

 -

 -

 2,363,807

 Total

 $
 3,961,790

 464,775

 -

 -

 4,426,565

 On December 31, 2021, we entered into a strategic
supply agreement with a manufacturer of component parts used for our robot assets. The agreement calls for a minimum of $2.30 million
in purchases over a two-year period ending December 2023. At the end of the two-year period, the vendor may invoice us for any shortfall
in orders. As of December 31, 2023, the minimum purchase commitment was extended one year.

 We have minimum spend agreements related to simulation
software and storage services. The purchase commitments extend for a period of two to three years.

 Off-Balance Sheet Transactions

 We did not have during the periods presented,
and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial
partnerships, such as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance
sheet arrangements or other contractually narrow or limited purposes.

 Critical Accounting Policies and Estimates

 Our consolidated financial statements and the
related notes thereto included in this report are prepared in accordance with United States generally accepted accounting principles.
The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenue, costs and expenses, and related disclosures. Our most critical accounting estimates relate to impairment
of long-lived assets, valuation of SAFEs, stock-based compensation and right of use assets and liabilities. These estimates are critical
as they require management judgment for inputs that are not observable. These estimates are developed based on historical experience and
various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the
estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial
statement presentation, financial condition, results of operation, and cash flows will be affected. We believe that the accounting policies
described below involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are most critical
to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

 Revenue Recognition

 We account for revenue in accordance with ASC 606
– Revenue from Contracts with Customers ("ASC 606"). We determine revenue recognition through the following steps:

 Identification of a contract with a customer;

 Identification of the performance obligations in the contract;

 Determination of the transaction price;

 Allocation of the transaction price to the performance obligations in the contract; and

 Recognition of revenue when or as the performance obligations are satisfied.

 Revenue is recognized when control of the promised
goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for
those goods or services. As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component
if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

 To date, we have generated initial revenues from
our delivery services as well as branding fees. For delivery services, we satisfy our performance obligation when the delivery is complete,
which is the point in time control of the delivered product transfers to the customer. We recognize branding fees over time as performance
obligations are completed over the term of the agreement.

 Lease Recognition

 We account for leases under ASC 842 – Leases.
We do not apply the recognition requirements for leases with a term of twelve months or less. We determine if an arrangement is a lease,
or includes an embedded lease, at inception for each contract or agreement. A contract is or contains an embedded lease if the contract
meets all of the below criteria:

 (i)

 there is an identified asset;

 (ii)

 we obtain substantially all of the economic benefits of the asset; and

 (iii)

 we have the right to direct the use of the asset.

 Our operating lease agreements include office
and warehouse space. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and operating
lease liabilities represent the obligation to make payments arising from the lease or embedded lease. Operating lease ROU assets and operating
lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term.
As most leases do not provide an implicit rate, we use an incremental borrowing rate that is based on the estimated rate of interest for
a collateralized borrowing of a similar asset, using a similar term as the lease payments at the commencement date. Indirect capital costs
are capitalized and included in the ROU assets at commencement.

 The operating lease ROU assets and operating lease
liabilities include any lease payments made, including any variable amounts that are based on an index or rate, and exclude lease incentives.
Variability that is not due to an index or rate, such as payments made based on hourly rates, are excluded from the lease liability. Lease
terms may include options to extend or terminate the lease.

 Renewal option periods are included within the
lease term and the associated payments are recognized in the measurement of the operating ROU asset and operating lease liability when
they are at our discretion and considered reasonably certain of being exercised. Over the lease term, we use the effective interest rate
method to account for the lease liability as lease payments are made and the ROU asset is amortized in a manner that results in straight-line
expense recognition.

 We have elected the practical expedient not to
recognize leases with an initial term of 12 months or less on our balance sheets and lease expense is recognized on a straight-line
basis over the term of the short-term lease.

 Stock-Based Compensation

 We account for stock-based compensation in accordance
with ASC 718, Compensation - Stock Compensation. We measure 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, net of estimated forfeitures,
over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting
conditions, we record the expense for using the straight-line method. For awards with performance-based vesting conditions, we record
the expense if and when we conclude that it is probable that the performance condition will be achieved.

 We classify stock-based compensation expenses
in our statement of operations 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 historically have been a private company and lacks company-specific
historical and implied volatility information for our stock. Therefore, we estimate our expected stock price volatility based on the historical
volatility of publicly traded peer companies and expect to continue to do so until such time as we have adequate historical data regarding
the volatility of our own traded stock price. The expected term of our 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 is based on the fact that we have never paid cash dividends on common stock and do not expect to pay any cash
dividends in the foreseeable future. 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 expenses could be materially different for future awards.

 Emerging Growth Company and Smaller Reporting
Company Status

 We are an "emerging growth company,"
as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period
for complying with new or revised accounting standards. This provision allows an emerging growth company to either early adopt or delay
the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the
extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively
and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable
to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 We are also a "smaller reporting company"
meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100
million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value
of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently
completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting
company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements
that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies,
smaller reporting companies have reduced disclosure obligations regarding executive compensation.

 Item 7A. Quantitative and Qualitative Disclosures about Market
Risk

 We are a smaller reporting company, as defined
in Rule 12b-2 under the Exchange Act, for this reporting period and are not required to provide the information required under this item.

 Item 8. Financial Statements and Supplementary Data

TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID: # 3501)

 Consolidated Balance Sheets at December 31, 2023 and 2022

 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated Statements of Stockholders' Deficit for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and

Stockholders of Serve Robotics Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of Serve Robotics Inc. (the "Company") as of December 31, 2023 and 2022, the related consolidated statements
of operations, stockholders' equity (deficit), and cash flows for the years ended December 31, 2023 and 2022, and the related notes
(collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash
flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Going Concern

 The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's has sustained
net losses, used cash flows from operations, and requires additional capital to operate. These factors raise substantial doubt about its
ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ dbb mckennon

 Newport Beach, California

 We have served as the Company's
auditor since 2022

 F- 2

 Consolidated Balance Sheets

 As of December 31, 2023
and 2022

 Year Ended December 31,

 2023

 2022

 ASSETS

 Current assets:

 Cash

 $
 6,756

 $
 2,715,719

 Accounts receivable

 2,955

 23,697

 Inventory

 774,349

 618,262

 Prepaid expenses

 676,969

 81,339

 Total current assets

 1,461,029

 3,439,017

 Property and equipment, net

 48,422

 3,376,427

 Right of use asset

 782,439

 1,215,968

 Deposits

 512,659

 512,659

 Total assets

 $
 2,804,549

 8,544,071

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 Current liabilities:

 Accounts payable

 $
 2,050,605

 $
 162,034

 Accrued liabilities

 255,849

 37,434

 Note payable, current

 1,000,000

 1,000,000

 Note payable - related party

 70,000

 -

 Right of use liability, current portion

 496,963

 483,186

 Lease liability, current portion

 2,363,807

 2,214,348

 Total current liabilities

 6,237,224

 3,897,002

 Note payable, net of current portion

 230,933

 1,214,600

 Simple agreements for future equity

 -

 Restricted stock award liability

 158,617

 162,747

 Right of use liability

 211,181

 708,143

 Lease liability

 -

 1,862,980

 Total liabilities

 6,837,955

 20,996,217

 Commitments and contingencies (Note 12)

 Stockholders' equity (deficit):

 Series Seed preferred stock, $ 0.0001 par value; 4,008,079 shares authorized, 0 and 3,091,672 shares issued and outstanding as of December 31, 2023 and 2022, respectively

 -

 Series Seed-1 preferred stock, $ 0.0001 par value; 3,037,227 shares authorized, 0 and 2,440,411 shares issued and outstanding as of December 31, 2023 and 2022, respectively

 -

 Series Seed-2 preferred stock, $ 0.0001 par value; 2,599,497 shares authorized, 0 and 2,088,696 shares issued and outstanding as of December 31, 2023 and 2022, respectively

 -

 Series Seed-3 preferred stock, $ 0.0001 par value; 445,347 shares authorized, 0 and 357,836 shares issued and outstanding as of December 31, 2023 and 2022, respectively

 -

 Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of December 31, 2023

 -

 -

 Common stock, $ 0.0001 par value; 300,000,000 shares authorized, 24,832,814 and 7,161,654 shares issued and 24,508,795 and 6,826,352 shares outstanding as of December 31, 2023 and 2022, respectively

 2,450

 Additional paid-in capital

 64,468,141

 31,232,737

 Subscription receivable

 ( 169,616
)

 ( 165,719
)

 Accumulated deficit

 ( 68,334,381
)

 ( 43,520,645
)

 Total stockholders' equity (deficit)

 ( 4,033,406
)

 ( 12,452,146
)

 Total liabilities and stockholders' equity (deficit)

 2,804,549

 8,544,071

 The authorized shares of preferred stock in the consolidated balance
sheets above reflect the historical authorized shares of Serve. Upon the Merger, shares issued and outstanding have been retroactively
restated to reflect the exchange ratio of 0.8035 as described in Note 4.

 See accompanying notes to these consolidated financial
statements.

 F- 3

 Consolidated Statements of Operations

For the
Years Ended December 31, 2023 and 2022

 Year Ended

 2023

 2022

 Revenues

 $
 207,545

 $
 107,819

 Cost of revenues

 1,730,262

 1,148,426

 Gross loss

 ( 1,522,717
)

 ( 1,040,607
)

 Operating expenses:

 General and administrative

 4,618,499

 3,786,124

 2,564,930

 2,035,063

 Research and development

 9,947,258

 13,565,765

 Sales and marketing

 605,205

 525,494

 Impairment of long-lived assets

 1,468,995

 -

 Total operating expenses

 19,204,887

 19,912,446

 Loss from operations

 ( 20,727,604
)

 ( 20,953,053
)

 Other income (expense), net:

 Interest expense, net

 ( 2,264,426
)

 ( 636,330
)

 Change in fair value of derivative liability

 ( 149,000
)

 -

 Change in fair value of simple agreements for future equity

 ( 1,672,706
)

 ( 265,744
)

 Total other income (expense), net

 ( 4,086,132
)

 ( 902,074
)

 Provision for income taxes

 -

 -

 Net loss

 ( 24,813,736
)

 ( 21,855,127
)

 -

 Weighted average common shares outstanding - basic and diluted

 14,204,078

 6,896,769

 Net loss per common share - basic and diluted

 ( 1.75
)

 ( 3.17
)

 See accompanying notes to these consolidated financial
statements.

 F- 4

 Consolidated Statements of Stockholders'
Equity (Deficit)

 For the Years Ended December
31, 2023 and 2022

 Series
 Seed

 Series
 Seed-1

 Series
 Seed-2

 Series
 Seed-3

 Common
 Stock

 Additional

 Paid-in

 Subscription

 Accumulated

 Total

 Stockholders'

 Capital

 Receivable

 Deficit

 Equity (Deficit)

 Balances
 at December 31, 2021

 2,834,033

 $

 2,440,411

 $

 2,088,696

 $

 357,836

 $

 7,111,123

 $

 $
 29,984,430

 $
 -

 $
 ( 21,665,518
)

 $
 8,320,395

 Issuance
 of Series Seed preferred stock

 257,639

 -

 -

 -

 -

 -

 -

 -

 -

 999,973

 -

 -

 999,999

 Restricted
 stock awards repurchased

 -

 -

 -

 -

 -

 -

 -

 -

 ( 287,591
)

 ( 28
)

 -

 -

 -

 Vested
 restricted stock purchased with recourse notes

 -

 -

 -

 -

 -

 -

 -

 -

 2,820

 -

 4,250

 ( 165,719
)

 -

 ( 161,469
)

 Warrants
 issued in connection with note payable

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 49,000

 -

 -

 49,000

 Stock-based
 compensation

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 195,056

 -

 -

 195,056

 Net
 loss

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 21,855,127
)

 ( 21,855,127
)

 Balances
 at December 31, 2022

 3,091,672

 2,440,411

 2,088,696

 357,836

 6,826,352

 31,232,737

 ( 165,719
)

 ( 43,520,645
)

 ( 12,452,146
)

 Issuance
 of common stock pursuant to private placement

 -

 -

 -

 -

 -

 -

 -

 -

 3,040,140

 12,160,256

 -

 -

 12,160,560

 Conversion
 of convertible note and derivative into common stock in connection with Merger

 -

 -

 -

 -

 -

 -

 -

 -

 937,961

 3,751,781

 -

 -

 3,751,875

 Conversion
 of SAFEs into common stock in connection with Merger

 -

 -

 -

 -

 -

 -

 -

 -

 4,372,601

 17,489,967

 -

 -

 17,490,404

 Conversion
 of preferred stock into common stock in connection with Merger

 ( 3,091,672
)

 ( 309
)

 ( 2,440,411
)

 ( 244
)

 ( 2,088,696
)

 ( 209
)

 ( 357,836
)

 ( 36
)

 7,978,616

 -

 -

 -

 -

 Patricia
 shares converted into common stock upon the Merger

 -

 -

 -

 -

 -

 -

 -

 -

 1,500,000

 ( 150
)

 -

 -

 -

 Issuance
 of common stock pursuant to private placement offering, net of offering costs

 -

 -

 -

 -

 -

 -

 -

 -

 143,531

 574,110

 -

 -

 574,124

 Vested
 restricted stock purchased with recourse notes

 -

 -

 -

 -

 -

 -

 -

 -

 11,194

 -

 13,735

 ( 3,897
)

 -

 9,838

 Restricted
 stock awards repurchased

 -

 -

 -

 -

 -

 -

 -

 -

 ( 319,118
)

 ( 32
)

 -

 -

 ( 3
)

 Warrants
 issued with convertible note

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 991,000

 -

 -

 991,000

 Exercise
 of warrants upon the Merger

 -

 -

 -

 -

 -

 -

 -

 -

 17,518

 ( 2
)

 -

 -

 -

 Stock-based
 compensation

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 544,375

 -

 -

 544,375

 Offering
 costs consists in connection with issuance of common stock pursuant to Merger

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 2,289,697
)

 -

 -

 ( 2,289,697
)

 Net
 loss

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 24,813,736
)

 ( 24,813,736
)

 Balances
 at December 31, 2023

 -

 $
 -

 -

 $
 -

 -

 $
 -

 -

 $
 -

 24,508,795

 $
 2,450

 $
 64,468,141

 $
 ( 169,616
)

 $
 ( 68,334,381
)

 $
 ( 4,033,406
)

 See accompanying notes to these consolidated financial
statements.

 F- 5

 Consolidated Statements of Cash Flows

 For the Years Ended December
31, 2023 and 2022

 Year Ended
 December 31

 2023

 2022

 Cash flows from operating activities:

 Net loss

 $
 ( 24,813,736
)

 $
 ( 21,855,127
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Depreciation

 1,863,924

 388,139

 Stock-based compensation

 544,375

 195,056

 Change in fair value of simple agreements for future equity

 1,672,706

 265,744

 Amortization of debt discount

 1,811,798

 13,600

 Change in fair value of derivative liability

 149,000

 -

 Impairment of long-lived assets

 1,468,995

 -

 Interest on recourse loan

 ( 3,897
)

 -

 Changes in operating assets and liabilities:

 Accounts receivable

 20,742

 ( 23,697
)

 Inventory

 ( 156,087
)

 ( 154,840
)

 Prepaid expenses

 ( 595,630
)

 ( 81,339
)

 Other current assets

 -

 11,163

 Accounts payable

 1,888,568

 ( 174,278
)

 Accrued liabilities

 228,020

 37,434

 Right of use liabilities, net

 ( 49,656
)

 ( 24,641
)

 Net cash used in operating activities

 ( 15,970,878
)

 ( 21,402,786
)

 Cash flows from investing activities:

 Purchase of property and equipment

 ( 4,914
)

 ( 3,644,950
)

 Deposits

 -

 ( 416,012
)

 Net cash used in investing activities

 ( 4,914
)

 ( 4,060,962
)

 Cash flows from financing activities:

 Proceeds from simple agreement for future equity

 2,666,953

 12,885,001

 Proceeds from notes payable

 750,000

 2,500,000

 Repayments of notes payable

 ( 1,750,000
)

 ( 250,000
)

 Proceeds from convertible notes payable

 2,798,410

 -

 Proceeds from notes payable, related party

 519,000

 -

 Repayments of notes payable, related party

 ( 449,000
)

 -

 Proceeds from lease liability financing

 -

 4,455,852

 Repayment of lease liability financing

 ( 1,713,518
)

 ( 378,524
)

 Issuance of restricted common stock, net of repurchases

 ( 3
)

 1,278

 Issuance of common stock pursuant to Merger and private placement, net of offering costs

 10,444,987

 -

 Issuance of Series Seed preferred stock

 -

 999,999

 Net cash provided by financing activities

 13,266,829

 20,213,606

 Net change in cash and cash equivalents

 ( 2,708,963
)

 ( 5,250,142
)

 Cash and cash equivalents at beginning of year

 2,715,719

 7,965,861

 Cash and cash equivalents at end of year

 6,756

 2,715,719

 Supplemental disclosure of cash flow information:

 Cash paid for income taxes

 $
 -

 $
 -

 Cash paid for interest

 $
 507,193

 $
 622,730

 Supplemental disclosure of non-cash investing and financing activities:

 Restricted stock award liability

 $
 -

 $
 162,747

 Derivative liability in connection with convertible note

 $
 601,000

 $
 -

 Debt discount issued as accrued liability

 $
 63,840

 $
 -

 Conversion of simple agreement for future equity into common stock

 $
 17,490,404

 $
 -

 Conversion of convertible note and derivative into common stock in connection with Merger

 $
 3,751,875

 $
 -

 Warrants issued in connection with note payable

 $
 991,000

 $
 49,000

 Subscription receivable

 $
 -

 $
 165,719

 See accompanying notes to these consolidated financial
statements.

 F- 6

 1.

 NATURE OF OPERATIONS, HISTORY, ORGANIZATION AND BUSINESS

 Serve Operating Co. (formerly known
as Serve Robotics Inc.) (the "Company" or "Serve") is a corporation formed on January 15, 2021 under the
laws of the State of Delaware. The Company is developing next generation robots for last-mile delivery services. The Company is headquartered
in Redwood City, California.

 In February 2021, the Company entered
into a contribution and license agreement with Postmates, LLC, a Delaware limited liability company ("Postmates"). Pursuant
to the agreement, Postmates transferred over certain contracts and agreements, intellectual property and patents and hardware and equipment
to the Company. As the contribution was without consideration, the agreement did not have any effect on the Company's consolidated
financial statements.

 On July 31, 2023, Patricia's
wholly-owned subsidiary, Serve Acquisition Corp., a corporation formed in the State of Delaware on July 10, 2023 ("Acquisition
Sub"), merged with and into the Company. Pursuant to this transaction (the "Merger"), the Company was the surviving
corporation and became Patricia's wholly owned subsidiary, and all of the outstanding stock of Serve was converted into shares of
Patricia's common stock. All of Serve's outstanding warrants and options were assumed by Patricia. In addition, on July 31,
2023, the board of directors of Patricia Acquisition Corp., a Delaware corporation incorporated on November 9, 2020 ("Patricia")
and all of its pre-Merger stockholders approved a restated certificate of incorporation, which was effective upon its filing with the
Secretary of State of the State of Delaware on July 31, 2023, and through which Patricia changed its name to "Serve Robotics
Inc." Following the consummation of the Merger, Serve changed its name to "Serve Operating Co."

 As a result of the Merger, Patricia
acquired the business of Serve and will continue the existing business operations of Serve as a public reporting company under the name
Serve Robotics Inc. In accordance with "reverse merger" or "reverse acquisition" accounting treatment, the Company
was determined the accounting acquirer. Patricia's historical financial statements before the Merger has been replaced with the
historical financial statements of Serve before the Merger in filings with the SEC since the Merger unless otherwise noted.

 2.
 GOING CONERN

 The Company has evaluated whether there
are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue
as a going concern within one year after the date that the consolidated financial statements are issued.

 The accompanying consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company sustained net losses of $ 24,813,736 and $ 21,855,127 during the years ended December 31,
2023 and 2022, respectively, and had cash used in operations of $ 15,970,878 during the year ended December 31, 2023. The Company requires
additional capital to operate and expects losses to continue for the foreseeable future. These factors raise substantial doubts about
the Company's ability to continue as a going concern.

 The Company's ability to continue
as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise
additional capital to fund operations. Management plans to raise additional capital to fund operations through debt and/or equity financings.
Through the issuance date of the consolidated financial statements, the Company has raised $ 5.0 million in convertible promissory notes
(see Note 13). Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability
to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty. The Company may not be able to obtain financing
on acceptable terms, or at all.

 F- 7

 3.
 REVERSE MERGER ACCOUNTING

 On July 31, 2023, Acquisition
Sub, merged with and into the Company. Pursuant to the Merger, the Company was the surviving corporation and became Patricia's wholly
owned subsidiary, and all of the outstanding stock of Serve was converted into shares of Patricia's common stock. All of Serve's
outstanding warrants and options were assumed by Patricia. Following the consummation of the Merger, Serve changed its name to "Serve
Operating Co."

 The merger was accounted for as a reverse-merger,
and recapitalization in accordance with generally accepted accounting principles in the United States ("GAAP"). Serve Robotics
Inc. was the acquirer for financial reporting purposes and Patricia was the acquired company. Consequently, the assets and liabilities
and the operations that are reflected in the historical financial statements prior to the merger are those of Serve Robotics Inc. and
have been recorded at the historical cost basis of Serve Robotics Inc., and the financial statements after completion of the merger include
the assets and liabilities of Patricia and Serve Robotics Inc., historical operations of Serve Robotics Inc. and operations of Patricia
from the closing date of the merger. Common stock and the corresponding capital amounts of Patricia pre-merger were retroactively restated
as capital stock shares reflecting the exchange ratio in the merger. In conjunction with the merger, the Company received no cash and
assumed no liabilities from Patricia Acquisition Corp.

 As a result of the Merger, each of
Serve's shares of capital stock issued and outstanding immediately prior to the closing of the Merger was converted into the right
to receive 0.8035 shares of Patricia's common stock (the "Common Share Conversion Ratio"). Accordingly, all share and
per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted
retroactively, where applicable, to reflect the Common Share Conversion Ratio. There was no effect on the number of shares of common stock
or preferred stock authorized for issuance under the Company's certificate of incorporation or the par value of such securities.

 4.
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation

 The accounting and reporting policies
of the Company conform to GAAP. The Company's fiscal year is December 31.

 Principles of Consolidation

 These consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Serve Operating Co. and Serve Robotics Canada Inc. All inter-company
transactions and balances have been eliminated on consolidation.

 F- 8

 Use of Estimates

 The preparation of the Company's
consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial
statements include, but are not limited to, impairment of long-lived assets, right-of-use assets and liabilities, stock-based compensation
and allocation of costs of revenue. The Company bases its estimates on historical experience, known trends and other market-specific or
other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates
when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known.
Actual results could differ from those estimates.

 Concentrations of Credit Risk

 Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company generally maintains
balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that
may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not
believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of
December 31, 2023 and 2022, the Company's cash and cash equivalents were held at one accredited financial institution.

 Concentrations

 During the years ended December 31,
2023 and 2022, one customer accounted for 71 % and 50 % of revenue, respectively. The loss of this customer may have a material effect on
the Company.

 Cash and Cash Equivalents

 The Company considers all highly liquid
investments with maturities of three months or less at the date of purchase to be cash equivalents.

 Fair Value Measurements

 Certain assets and liabilities of the
Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid
to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable
inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed
in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered
unobservable:

 Level 1—Quoted prices in active markets for identical assets or liabilities.

 Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets
for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other
inputs that are observable or can be corroborated by observable market data.

 Level 3—Unobservable inputs that are supported by little or no market activity that are significant
to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 F- 9

 The carrying values of the Company's
accounts receivable, prepaid expenses and accounts payable and accrued expenses approximate their fair values due to the short-term nature
of these assets and liabilities.

 See Notes 5 and 8 for fair value disclosures
of future equity obligations.

 Accounts Receivable

 Accounts receivable are derived from
services delivered to customers and are stated at their net realizable value. The Company accounts for allowance for doubtful accounts
under Accounting Standards Codification ("ASC") 310-10-35. Each month, the Company reviews its receivables on a customer-by-customer
basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues. Any balances
that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the
potential for recovery is considered remote. As of December 31, 2023 and 2022, the Company determined there was no allowance for doubtful
accounts necessary.

 Inventory

 Inventory is stated at the lower of
cost or market value and accounted for using the specific identification cost method. As of December 31, 2023 and 2022, inventory primarily
consists of robotic component parts from the Company's suppliers. Management reviews its inventory for obsolescence and impairment
annually and did not record a reserve for obsolete inventory for the years ended December 31, 2023 and 2022.

 Property and Equipment

 Property and equipment are stated at
cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of
the asset, which is three (3) to five (5) years for office equipment and two (2) years for the Company's robot assets. Estimated
useful lives are periodically assessed to determine if changes are appropriate. Maintenance and repairs are charged to expense 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 balance sheets and any resulting gains or losses are included in the statement of operations in the period of disposal.

 Impairment of Long-Lived Assets

 The Company accounts for long-lived
assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived
Assets. The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived
assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived
assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If
the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on
the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying
amount or the fair value less costs to sell.

 At December 31, 2023, management determined
that certain events and circumstances occurred that indicated that the carrying value of the Company's robot assets may not be recoverable.
Based on the undiscounted cash flows over the remaining depreciable life, management determined an impairment of the remaining carrying
value totaling $ 1,468,995 was necessary.

 F- 10

 Deferred Offering Costs

 The Company complies with the requirements
of ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred
offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or
to expense if the offering is not completed. As of December 31, 2023 and 2022, there were no deferred offering costs.

 Convertible Instruments

 GAAP requires companies to bifurcate
conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain
criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument
are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies
both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted
accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms
as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument
is deemed to be conventional as that term is described under applicable GAAP.

 Subscription Receivable

 The Company records stock issuances
at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on a
balance sheet, except when subscription receivable is not received prior to the issuance of financial statements at a reporting date in
satisfaction of the requirements under ASC 505-10-45-2, in which case, the subscription is reclassified as a contra account to stockholders'
equity (deficit) on the consolidated balance sheet.

 Accounting for Preferred Stock

 ASC 480, Distinguishing Liabilities
from Equity, includes standards for how an issuer of equity (including equity shares issued by consolidated entities) classifies and measures
on its consolidated balance sheet certain financial instruments with characteristics of both liabilities and equity.

 Management is required to determine
the presentation for the preferred stock as a result of the redemption and conversion provisions, among other provisions in the agreement.
Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely
related to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should
be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely related
(both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required. Management determined
that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company.
The Company has presented preferred stock within stockholders' equity.

 Costs incurred directly for the issuance
of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred
stock. The discount is not amortized.

 F- 11

 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 for 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 statement of operations 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. The Company historically has been a private company
and lacks company-specific historical and implied volatility information for its stock. Therefore, it estimates its expected stock price
volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it
has adequate historical data regarding the volatility of its own traded stock price. 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 is based on the fact that the Company has never
paid cash dividends on common stock and does not expect to pay any 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.

 Revenue Recognition

 The Company accounts for revenue under
ASC 606, Revenue from Contracts with Customers. The Company determines revenue recognition through the following steps:

 Identification of a contract with a customer;

 Identification of the performance obligations in the contract;

 Determination of the transaction price;

 Allocation of the transaction price to the performance obligations
in the contract; and

 Recognition of revenue when or as the performance obligations
are satisfied.

 Revenue is recognized when control
of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be
entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the
effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods
or services is expected to be one year or less.

 To date, the Company has generated
initial revenues from its delivery services as well as branding fees. For delivery services, the Company satisfies its performance obligation
when the delivery is complete, which is the point in time control of the delivered product transfers to the customer. The Company recognizes
branding fees over time as performance obligations are completed over the term of the agreement.

 F- 12

 During the year ended December 31,
2023, delivery revenue was $ 146,462, branding fees were $ 45,250 and other revenue was $ 15,833, respectively. During the year ended December
31, 2022, delivery revenue was $ 54,423 and branding fees were $ 53,575, respectively.

 Cost of Revenue

 Cost of revenue consists primarily
of allocations of depreciation on robot assets used for revenue-producing activities, personnel time related to revenue-producing activities,
and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to communicate
with the robots while in service.

 Sales and Marketing

 Sales and marketing expenses include
personnel costs and public relations expenses. Advertising costs are expensed as incurred and included in sales and marketing expenses.
Advertising expense were approximately $ 184,000 and $ 128,000 for the years ended December 31, 2023 and 2022, respectively.

 Operations expenses primarily consist of costs for field
operations personnel.

 General and Administrative Expenses

 General and administrative expenses
primarily consist of personnel-related expenses for executive management and administrative functions, including finance and accounting,
legal, and human resources, as well as general corporate expenses and general insurance. General and administrative expenses also include
depreciation on property and equipment as well as amortization of right of use assets. These costs are expensed as incurred.

 Research and Development Costs

 Costs incurred in the research and
development of the Company's products are expensed as incurred. Research and development costs include product design, hardware
and software costs.

 Leases

 The Company accounts for leases
under ASC 842 – Leases. The company does not apply the recognition requirements for leases with a term of twelve months or
less.

 The Company determines if an arrangement
is a lease, or includes an embedded lease, at inception for each contract or agreement. A contract is or contains an embedded lease if
the contract meets all of the below criteria:

 (i)
 there is an identified asset

 (ii)
 the Company obtains substantially all of the economic benefits
of the asset

 (iii)
 the Company has the right to direct the use of the asset

 F- 13

 The Company's operating lease
agreements include office and warehouse space. ROU assets represent the right to use an underlying asset for the lease term and operating
lease liabilities represent the obligation to make payments arising from the lease or embedded lease. Operating lease ROU assets and operating
lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term.
As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate that is based on the estimated rate of
interest for a collateralized borrowing of a similar asset, using a similar term as the lease payments at the commencement date. Indirect
capital costs are capitalized and included in the ROU assets at commencement.

 The operating lease ROU assets and
operating lease liabilities include any lease payments made, including any variable amounts that are based on an index or rate, and exclude
lease incentives. Variability that is not due to an index or rate, such as payments made based on hourly rates, are excluded from the
lease liability. Lease terms may include options to extend or terminate the lease.

 Renewal option periods are included
within the lease term and the associated payments are recognized in the measurement of the operating ROU asset and operating lease liability
when they are at our discretion and considered reasonably certain of being exercised. Over the lease term, the Company uses the effective
interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized in a manner that results
in straight-line expense recognition. (See Note 12).

 Income Taxes

 The Company uses the liability method
of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based
on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in
effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred
tax assets will not be realized. We assess our income tax positions and record tax benefits for all years subject to examination based
upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those
tax positions where there is a greater than 50 % likelihood that a tax benefit will be sustained, the Company's policy will be to
record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority
that has full knowledge of all relevant information. For those income tax positions where there is less than 50 % likelihood that a tax
benefit will be sustained, no tax benefit will be recognized in the financial statements.

 Net Loss per Share

 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 the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities
outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would
be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2023 and 2022, diluted net loss per share
is the same as basic net loss per share for each year. Potentially dilutive items outstanding as of December 31, 2023 and 2022 is as follows:

 2023

 2022

 Series Seed preferred stock (convertible to common stock)

 -

 3,091,672

 Series Seed-1 preferred stock (convertible to common stock)

 -

 2,440,412

 Series Seed-2 preferred stock (convertible to common stock)

 -

 2,088,696

 Series Seed-3 preferred stock (convertible to common stock)

 -

 357,836

 Common stock warrants

 1,090,272

 54,203

 Preferred stock warrants

 -

 128,819

 Stock options

 861,309

 Unvested restricted common stock

 324,019

 -

 Total potentially dilutive shares

 2,929,677

 9,022,947

 F- 14

 Excluded in the table of December 31,
2022 are the number of shares that would be issuable upon the conversion of Simple Agreements for Future Equity, for which the number
of shares are indeterminable as of December 31, 2022. Upon consummation of the Merger, all outstanding SAFEs were converted into 4,372,601 shares
of common stock (see Notes 5, 8 and 9).

 Upon the Merger, all outstanding shares
of preferred stock were converted into an aggregate of 7,978,616 shares of common stock. Furthermore, all outstanding warrants to purchase
shares of Series Seed preferred stock were converted into 128,819 warrants to purchase shares of common stock.

 Recently Adopted Accounting Pronouncements

 Management does not believe that any
other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.
As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 5.
 FAIR VALUE MEASUREMENTS

 The Company's financial assets
and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows:

 Fair Value Measurements as of
 December 31, 2023 Using:

 Level 1

 Level 2

 Level 3

 Total

 Liabilities:

 Simple agreement for future equity

 $
 -

 $
 -

 $
 -

 $
 -

 Derivative liability

 -

 -

 -

 -

 $
 -

 $
 -

 $
 -

 $
 -

 Fair Value Measurements as of

 December 31, 2022 Using:

 Level 1

 Level 2

 Level 3

 Total

 Liabilities:

 Simple agreement for future equity

 $
 -

 $
 -

 $

 $

 $
 -

 $
 -

 $

 $

 Simple Agreements for Future
Equity

 The Company measures the simple agreements
for future equity ("SAFE" or "SAFEs") at fair value based on significant inputs not observable in the market,
which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the future equity obligations
uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses
these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained.
Changes in the fair value of the simple agreements for future equity related to updated assumptions and estimates are recognized within
the statements of operations.

 The simple agreements for future equity
may change significantly as additional data is obtained, impacting the Company's assumptions regarding probabilities of outcomes
used to estimate the fair value of the liability. In evaluating this information, considerable judgment is required to interpret the data
used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized
in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material
effect on the estimated fair value amounts, and such changes could materially impact the Company's results of operations in future
periods.

 The Company utilized a probability-weighted
average approach based on the estimated market value of the underlying securities and the potential settlement outcomes of the simple
agreements for future equity, including a liquidity event or future equity financing as well as other settlement alternatives. Both the
market value of the underlying securities and the probability of settlement outcomes include unobservable Level 3 inputs.

 F- 15

 As of December 31, 2022, the Company
assumed a 85 % probability of a liquidity and/or equity financing events as the primary ultimate settlement outcomes of the future equity
obligations. Immediately prior to the Merger, the Company revalued the remaining outstanding SAFEs using a 100 % probability of an equity
financing and $ 4.00 as the fair value of the underlying common stock (see Note 9). Upon the Merger, the SAFEs converted into 4,372,601
shares of common stock at a fair value of $ 17,490,404.

 Derivative Liability

 In connection with the Company's
convertible notes, the Company recorded a derivative liability (see Note 7). The estimated fair value of the derivative liability is recorded
using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.

 The fair value of the derivative liability
is valued using a probability-weighted scenario analysis utilizing the terms of the notes and assumptions regarding cash settlement or
conversion to equity. Immediately prior to the Merger, the Company determined a 100 % probability of conversion into equity.

 The following table sets forth a summary
of changes in the fair value of our Level 3 financial instrument liabilities for the years ended December 31, 2023 and 2022:

 Simple

Agreement For

 Embedded

Derivative

 Future Equity

 Liability

 Total

 Outstanding as of December 31, 2021

 $
 -

 $
 -

 $
 -

 Issuance of simple agreements for future equity

 12,885,001

 -

 12,885,001

 Change in fair value

 265,744

 -

 265,744

 Outstanding as of December 31, 2021

 -

 Issuance of simple agreements for future equity

 2,666,953

 -

 2,666,953

 Issuance of embedded derivative liability

 -

 601,000

 601,000

 Change in fair value

 1,672,706

 149,000

 1,821,706

 Conversion to common stock upon Merger

 ( 17,490,404
)

 ( 750,000
)

 ( 18,240,404
)

 Outstanding as of December 31, 2023

 $
 -

 $
 -

 $
 -

 6.
 PROPERTY AND EQUIPMENT, NET

 The following is a summary of property
and equipment:

 2023

 2022

 Office equipment

 $
 250,661

 $
 245,747

 Robot assets

 2,092,293

 3,561,288

 Total

 2,342,954

 3,807,035

 Less: accumulated depreciation

 ( 2,294,532
)

 ( 430,608
)

 Property and equipment, net

 $
 48,422

 $
 3,376,427

 Depreciation expense was $ 1,863,924
and $ 388,139 for the years ended December 31, 2023 and 2022, respectively.

 As of December 31, 2023, the Company
fully impaired the carrying amount of the robot assets pursuant to its annual impairment assessment. The Company recorded an impairment
expense of $ 1,468,995.

 F- 16

 7.
 NOTE PAYABLE

 Silicon Valley Bank

 In March 2022, the Company entered
into a promissory note with Silicon Valley Bank ("SVB") for a principal amount of $ 2,500,000. The note matures on March 1,
2025 and bears interest at the greater of 3.25 % or prime rate. The loan had interest-only payments through September 2022, and then requires
monthly principal payments of $ 83,333, plus interest, beginning October 2022. During the years ended December 31, 2023 and 2022, the Company
made repayments of $ 1,000,000 and $ 250,000, and $ 1,250,000 and $ 2,250,000 remained outstanding, all respectively. Interest expense was
$ 72,639 and $ 58,463 for the years ended December 31, 2023 and 2022, respectively, all of which were paid. The note is subject to subordination
related to financed assets of the Company.

 In connection with the note, the Company issued SVB 40,292 warrants
to purchase common stock. The warrants have an exercise price of $ 0.49 per share, are immediately exercisable and have a term of 12 years.
The fair value of the warrant was $ 49,000, which was recognized as a debt discount and will be amortized to interest expense over the
life of the note. During the years ended December 31, 2023 and 2022, amortization of debt discount was $ 16,333 and $ 13,600, respectively.
During 2023, SVB exercised 40,292 warrants through a cashless exercise, which resulted in the issuance of 17,518 shares of the Company's
common stock.

 As of December 31, 2023 and 2022, note
payable, net of unamortized discount of $ 19,067 and $ 35,400, was $ 1,230,933 and 2,214,600, all respectively.

 Short-Term Notes

 Prior to the Merger, the Company received
$ 750,000 in proceeds from short-term notes. The loans accrued interest on the unpaid principal amount at a rate of 18 % per annum. Each
holder of the notes (with the exception of one) was entitled to an exit fee equal to 16 % of the stated principal amount of such holder's
note, less the total amount of interest that accrued on such note prior to the closing of the Merger (the "Exit Fee"). Upon
the Merger, the Company fully repaid the notes and exit fee for a total of $ 870,015.

 Convertible Note Payable

 In April 2023, the Company entered into bridge financing totaling $ 3,001,500
in principal for which the Company received $ 2,798,410 in net proceeds (the "April Notes"), after deducting offering costs
of $ 203,090. The April Notes bore interest at 10 % per annum and were payable six months from the date of the bridge financing, subject
to conversion. The April Notes were convertible into shares of common stock at a conversion price equal to 80 % of the price per the PIPE
offering (the "Private Placement"), which initially closed simultaneously with the Merger on July 31, 2023 (see Note 9). Upon
the closing of the Merger and the initial closing of the Private Placement, the outstanding principal amount of the Bridge Notes was automatically
converted into 937,961 shares of common stock at a conversion price of $ 3.20 per share. Furthermore, accrued interest on the April Notes
were forgiven; therefore, no interest was recognized as of the closing of the Merger.

 F- 17

 The Company evaluated the terms of the conversion features of the April
Notes as noted above in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging – Contracts in Entity's Own
Stock, and determined they are not indexed to the Company's common stock and that the conversion feature, which is akin to a redemption
feature, meet the definition of a liability. The notes contain an indeterminate number of shares to settle with conversion options outside
of the Company's control. Therefore, the Company bifurcated the conversion feature and accounted for it as a separate derivative
liability. Upon issuance of the April Notes, the Company recognized a derivative liability at a fair value of $ 601,000 (see Note 5), which
was recorded as a debt discount and was amortized over the life of the notes. Upon the Merger and the Private Placement, the derivative
liability had a fair value of $ 750,000, which was recorded to additional paid-in capital in connection with the conversion of the underlying
notes.

 For the year ended December 31, 2023,
the Company amortized $ 804,465 of the debt discount to interest expense. Upon the Merger, the outstanding balances were converted to 937,961
shares of common stock, and there were no remaining balances due.

 In connection with the April Notes, the Company recorded a charge of
$ 991,000 based on contingent warrants issued upon conversion. See Note 10.

 Note Payable – Related
Party

 In June and July 2023, the Company
issued senior secured promissory notes with its Chief Executive Officer for which the Company received $ 449,000 in proceeds. The notes
bore interest at 7.67 % per annum.

 In connection with these notes, the
Company agreed to pay an exit fee upon repayment of the note equal to 16 % of the principal, less the total interest that accrued until
repayment. Upon the Merger, the Company fully repaid the notes and exit fee for a total of $520,840.

 In December 2023, the Company issued
a senior secured promissory note to its Chief Executive Officer for which Serve received $ 70,000 in proceeds. The note bore interest at
 7.67 % per annum. The note was outstanding as of December 31, 2023 and fully repaid on January 3, 2024.

 8.
 FUTURE EQUITY OBLIGATIONS

 During 2022, the Company issued SAFEs
for an aggregate purchase amount of $ 12,885,001 to investors of Serve (the "2022 SAFEs"). The 2022 agreements, which provide
the right of the investors to future equity in the Company, were subject to a valuation cap of $ 65.0 million with an 80 % discount rate
for $ 2,300,000 of the purchase amount with the remaining agreements being uncapped with a 90 % discount rate. The agreements had a
discount rate of 80 %.

 In 2023, the Company entered into SAFEs
for aggregate purchase amounts of $ 2,666,953. The 2023 agreements, which provide the right of the investors to future equity in the Company,
were subject to a valuation cap of $ 65 million. The agreements had a discount rate of 80 %.

 F- 18

 In 2023, the terms of certain 2022
SAFE agreements were modified where previously uncapped agreements were amended to a valuation cap of $ 80 million. Furthermore, the discount
rates were amended from 90 % to 80 %. The amendments were accounted for as a modification. The SAFEs were marked-to-market, and the effects
of modification was included in the change in fair value of SAFEs for the year ended December 31, 2023.

 Upon the Merger in July 2023, all remaining
outstanding SAFEs were converted into 4,372,601 shares of common stock.

 As of December 31, 2023 and 2022, the
fair value of SAFEs was $ 0 and $ 13,150,745, respectively. See Note 6 for fair value disclosures.

 9.
 STOCKHOLDERS' EQUITY

 Before the consummation of the Merger,
the Company had issued Series Seed, Series Seed-1, Series Seed-2 and Series Seed-3 convertible preferred stock (collectively referred
to as "Pre-Merger Preferred Stock"). The Company's certificate of incorporation, as amended and restated, had authorized
the Company to issue a total of 10,090,150 shares of Pre-Merger Preferred Stock, of which 4,008,079 shares were designated as Series Seed
Preferred Stock, 3,037,227 shares were designated as Series Seed-1 Preferred Stock, 2,599,497 shares were designated as Series Seed-2
Preferred Stock and 445,347 shares were designated as Series Seed-3 Preferred Stock. The Preferred Stock have a par value of $ 0.0001
per share.

 The liquidation preferences were as
follows:

 2023

 2022

 Series Seed preferred stock

 $
 -

 $
 11,999,997

 Series Seed-1 preferred stock

 -

 3,699,950

 Series Seed-2 preferred stock

 -

 5,674,962

 Series Seed-3 preferred stock

 -

 1,250,000

 $
 -

 $
 22,624,909

 Upon the Merger, there were 10,000,000
shares of preferred stock, par value $ 0.0001 per share, authorized for issuance.

 Transactions

 In February 2022, the Company issued
 257,639 shares of Series Seed Preferred Stock for gross proceeds of $ 999,999, or $ 3.88 per share.

 Upon consummation of the Merger in
July 2023, all shares of Serve Preferred Stock were converted into 7,978,616 shares of common stock of the newly merged entity.

 Common Stock

 Upon the Merger, the Company has authorized
 300,000,000 shares of common stock, par value $ 0.0001 per share.

 F- 19

 Dividend Rights

 Subject to applicable law and the rights
and preferences, if any, of any holders of any outstanding series of preferred stock, the holders of our common stock are entitled to
receive dividends if our Board, in its discretion, determines to issue dividends and then only at the times and in the amounts that our
Board may determine, payable either in cash, in property or in shares of capital stock.

 Voting Rights

 Holders of our common stock are entitled
to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Except as otherwise required by law,
holders of common stock are not entitled to vote on any amendment to the amended and restated certificate of incorporation (including
any certificate of designation relating to any series of preferred stock) that relates solely to the terms of one or more outstanding
series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders
of one or more other such series, to vote on such amendment pursuant to the amended and restated certificate (including any certificate
of designation relating to any series of preferred stock). We have not provided for cumulative voting for the election of directors in
our amended and restated certificate of incorporation. Accordingly, holders of a majority of the shares of our common stock will be able
to elect all of our directors. Our amended and restated certificate of incorporation establishes a classified board of directors, divided
into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders,
with the other classes continuing for the remainder of their respective three-year terms.

 Transactions

 Immediately following the Merger, the
Company issued 2,782,378 shares of common stock pursuant to a private placement offering for gross proceeds of $ 11,129,512, or at a purchase
price of $ 4.00 per share. On August 31, 2023, the Company issued an additional 257,762 shares of common stock pursuant to the private
placement offering for gross proceeds of $ 1,031,048, or $ 4.00 per share. The private placement offerings are referred to herein as the
"Private Placement."

 Upon consummation of the Merger, Patricia's
predecessor shares converted into 1,500,000 shares of common stock of the newly merged entity.

 Upon consummation of the Merger, all
outstanding SAFEs were converted into 4,372,601 shares of common stock (see Notes 5 and 8).

 Upon consummation of the Merger, the outstanding convertible note was
converted into 937,961 shares of common stock (see Note 7).

 Upon consummation of the Merger, all
shares of Serve Preferred Stock were converted into 7,978,616 shares of common stock.

 On October 26, 2023, the Company completed
a subsequent closing of the Private Placement and issued 143,531 shares of common stock for gross proceeds of $ 547,123, or $ 4.00 per share.
The Company received $ 529,127 in net proceeds.

 F- 20

 Restricted Common Stock

 During 2022, the Company issued 338,121
shares of restricted common stock for recourse notes totaling $ 164,116. The shares were issued with a corresponding note receivable, a
recourse loan that was collateralized by the underlying shares. The Company plans to enforce the recourse terms for the holders. As such,
in accordance with ASC 505-10-45-2, the Company recognized a subscription receivable of $ 165,719, inclusive of interest on the note, which
is included as a contra-equity on the consolidated balance sheets. The Company recorded a corresponding restricted stock award liability
of $ 162,747 for the potential settlement if the call right for the shares of restricted common stock is exercised and unvested shares
repurchased. The Company reduced the liability and increased additional paid-in capital for the value of the note associated with vested
shares no longer subject to the call right. During the years ended December 31, 2023 and 2022, 11,194 and 2,820 shares of restricted common
stock vested for a value of $ 13,735 and $ 4,250, all respectively. As of December 31, 2023 and 2022, the subscription receivable balance
was $ 169,616 and 165,719 and the corresponding restricted stock award liability were $ 158,617 and 162,747, all respectively.

 Prior to December 31, 2023, the Company
has issued 6,842,490 shares of common stock subject to vesting requirements, whereby the Company can repurchase unvested shares at its
option upon an employees termination. As of December 31, 2023, 2,877,761 shares remained unvested and will vest over approximately 1.6
years.

 During the years ended December 31,
2023 and 2022, the Company recorded stock-based compensation pertaining to vesting of restricted common stock of $ 263,893 and $ 141,446,
respectively. Total unrecognized compensation cost related to non-vested restricted common stock amounted to approximately $ 638,000 as
of December 31, 2023.

 During the years ended December 31,
2023 and 2022, the Company repurchased restricted stock awards of 319,118 and 287,591 shares of common stock, respectively, for nominal
value.

 Warrants

 Upon the consummation of the Merger,
(i) warrants to purchase 17,314 shares of Serve's common stock issued and outstanding immediately prior to the closing of the Merger
were assumed and converted into warrants to purchase 13,911 shares of Patricia's common stock, and (ii) warrants to purchase 160,323
shares of Serve's Series Seed preferred stock issued and outstanding immediately prior to the closing of the Merger were assumed
and converted into warrants to purchase 128,819 shares of Patricia's common stock.

 In connection with the April Notes
(see Note 7), the Company granted each holder warrants to purchase common stock equal to 50 % of the number of shares of common stock into
which the loan is convertible at an exercise price of $ 3.20 per share. Furthermore, the Company granted warrants to the Bridge Brokers
equal to 8 % of the number of shares of common stock into which April Notes, other than those purchased by insider investors, would convert
at the closing of the Merger, with an exercise price of $ 3.20 per share. As the issuance of the warrants noted above were contingent on
the closing of the Merger, they were not considered granted until July 31, 2023. Upon the closing of the Merger, the Company issued 468,971
warrants to the holders of the April Notes and 74,662 warrants to the Bridge Brokers. The Company calculated the fair value of the warrants
using a Black-Scholes pricing model. The Company valued the warrants using a common stock fair value of $ 4.00, exercise price of $ 3.20
per share, a term of five years, a volatility of 75 % and a risk-free interest rate of 4.18 %. The Company recognized a note discount for
$ 991,000 in relation to the warrants, which was immediately recognized in interest expense as of the note conversion date on July 31,
2023. As of December 31, 2023, all of the warrants were outstanding and were immediately exercisable.

 In connection with the Private Placement
as of December 31, 2023, the Company granted an additional 403,909 warrants to purchase common stock to the placement agents. Of these,
 153,909 warrants had an exercise price of $ 4.00 per share and 250,000 warrants had an exercise price of $ 0.001 per share. The warrants
are immediately exercisable. The warrants are both an increase to additional paid-in capital and net against the proceeds of the offering
for a net zero effect to additional paid-in capital.

 As of December 31, 2023, there were
an aggregate of 1,090,272 warrants to purchase common stock outstanding with a weighted-average exercise price of $ 2.67 per share and
a weighted-average remaining term of 3.2 years.

 F- 21

 10.
 STOCK-BASED COMPENSATION

 2023 Equity Incentive Plan

 The 2023 Equity
Incentive Plan (the "2023 Plan") permits the grant of incentive stock options, nonstatutory stock options, stock appreciation
rights ("SARs"), restricted stock, restricted stock units ("RSUs") and stock bonus awards (all such types of awards,
collectively, "stock awards").

 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 1,594,800 shares. The shares may be authorized, but unissued, or reacquired common stock. Furthermore, subject to adjustments
as set forth in the 2023 Plan, in no event shall the maximum aggregate number of shares that may be issued under the 2023 Plan pursuant
to Incentive Stock Options exceed the number set forth above plus, to the extent allowable under Section 422 of the Code and the regulations
promulgated thereunder, any shares that again become available for issuance pursuant to the 2023 Plan.

 The number
of shares available for issuance under the 2023 Plan may, at the discretion of the Plan Administrator (as defined below), be increased
on October 1st of each fiscal year beginning with the 2023 fiscal year until the 2023 Plan terminates, in each case, in an amount equal
to the lesser of (i) at the discretion of our Board, 4 % of the shares of common stock issued and outstanding on the last day of the immediately
preceding month on a fully-diluted and as-converted basis and (ii) such other number of shares determined by our Board.

 To the extent,
stock awards or awards or shares issued under the 2021 Plan that are assumed by the Company pursuant to the Merger Agreement ("Existing
Plan Awards") expire or are forfeited or becomes unexerciseable for any reason without having been exercised in full, or are surrendered
pursuant to an exchange program (as defined in the 2023 Plan), the unissued shares that were subject thereto shall continue to be available
under the 2023 Plan for issuance pursuant to future stock awards. In addition, any shares which are retained by us upon exercise of a
stock award or Existing Plan Award in order to satisfy the exercise or purchase price for such stock award or Existing Plan Award or any
withholding taxes due with respect to such stock award or Existing Plan Award shall be treated as not issued and shall continue to be
available under the 2023 Plan for issuance pursuant to future stock awards. Shares issued under the 2023 Plan or an Existing Plan Award
and later forfeited to us due to the failure to vest or repurchased by us at the original purchase price paid to us for the shares (including
without limitation upon forfeiture to or repurchase by us in connection with a participant ceasing to be a service provider) shall again
be available for future grant under the 2023 Plan. To the extent a stock award under the 2023 Plan or Existing Plan Award is paid out
in cash rather than shares, such cash payment will not result in reducing the number of shares available for issuance under the 2023 Plan.

 Serve Robotics 2021 Equity Incentive
Plan

 The Company has adopted the Serve Robotics
2021 Equity Incentive Plan ("2021 Plan"), as amended and restated, which provides for the grant of shares of stock options
and stock appreciation rights ("SARs") and restricted common shares to employees, non-employee directors, and non-employee
consultants. The number of shares authorized by the 2021 Plan was 4,870,663 shares as of December 31, 2023. The option exercise price
generally may not be less than the underlying stock's fair market value at the date of the grant and generally have a term of ten
years. The amounts granted each calendar year to an employee or non-employee is limited depending on the type of award. As of December
31, 2023, there were 38,582 shares available for grant under the 2021 Plan. Stock options granted under the 2021 Plan typically vest over
a four-year period, with a one-year cliff as well as via specified milestones.

 F- 22

 A summary of information related to
stock options for the years ended December 31, 2023 and 2022 is as follows:

 Options

 Weighted Average Exercise Price

 Intrinsic Value

 Outstanding as of December 31, 2021

 590,073

 $
 0.49

 $
 -

 Granted

 639,682

 $
 0.49

 Exercised

 -

 -

 Forfeited

 ( 368,446
)

 Outstanding as of December 31, 2022

 861,309

 $
 0.49

 $
 -

 Granted

 765,477

 $
 0.75

 Exercised

 -

 -

 Forfeited

 ( 111,400
)

 $
 0.60

 Outstanding as of December 31, 2023

 $
 0.61

 $
 5,111,928

 Exercisable as of December 31, 2023

 722,264

 $
 0.66

 $
 2,413,853

 Exercisable and expected to vest at December 31, 2023

 $
 0.61

 $
 5,111,928

 As of December 31, 2023, the weighted
average duration to expiration of outstanding options was 8.50 years.

 Stock-based compensation expense for
stock options of $ 280,482 and $ 57,860 was recognized for the years ended December 31, 2023 and 2022, respectively. Total unrecognized
compensation cost related to non-vested stock option awards amounted to approximately $ 356,000 as of December 31, 2023, which will be
recognized over a weighted average period of 2.50 years.

 The stock options were valued using
the Black-Scholes pricing model using the range of inputs as indicated below:

 Years Ended

 2023

 2022

 Risk-free interest rate

 3.58 % - 3.91
 %

 2.98
 %

 Expected term (in years)

 5.52 - 6.27

 6.0 - 6.3

 Expected volatility

 75.0
 %

 79.1
 %

 Expected dividend yield

 %

 %

 The weighted average grant date fair value of
options granted during 2023 and 2023 were $ 0.41 and $ 0.27, respectively.

 Classification

 Stock-based compensation
expense for stock options and restricted common stock (Note 9) was classified in the statements of operations as follows:

 Years Ended

 2023

 2022

 General and administrative

 $
 59,002

 $
 23,650

 49,139

 14,625

 Research and development

 416,838

 152,739

 Sales and marketing

 19,396

 4,042

 $
 544,375

 $
 195,056

 F- 23

 11.
 INCOME TAXES

 Deferred taxes are recognized for temporary
differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily
to net operating loss carryforwards and temporary differences from capitalized research and development costs under tax purposes. As of
December 31, 2023 and 2022, the Company had net deferred tax assets before valuation allowance of $ 14,412,164 and $ 9,026,439, respectively.
 The following table presents the deferred tax assets and liabilities by source:

 2023

 2022

 Deferred tax assets:

 Net operating loss carryforwards

 $
 11,896,550

 $
 8,940,441

 Capitalized research and development costs

 2,516,557

 -

 Other temporary differences

 ( 943
)

 85,998

 Valuation allowance

 ( 14,412,164
)

 ( 9,026,439
)

 Net deferred tax assets

 $
 -

 $
 -

 The Company recognizes deferred tax
assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company
considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected
future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance
against its net deferred tax assets and determined a full valuation allowance is required due to taxable losses for the periods ended
2023 and 2022, cumulative losses through December 31, 2022, and no history of generating taxable income. Therefore, valuation allowances
of $ 14,412,164 and $ 9,026,439 were recorded as of December 31, 2023 and 2022, respectively. Valuation allowance increased by $ 5,385,725
and $ 6,043,682 during the periods ended December 31, 2023 and 2022, respectively. Deferred tax assets were calculated using the Company's
combined effective tax rate, which it estimated to be 28.0 %. The effective rate is reduced to 0 % due to the full valuation allowance on
its net deferred tax assets.

 The Company's ability to utilize
net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At December 31, 2023 and 2022,
the Company had net operating loss carryforwards available to offset future taxable income in the amount of $ 42,321,416 and $ 31,805,199,
respectively, and net operating loss carryforwards do not expire under current tax regulations.

 The Company has evaluated its income
tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties
related to any uncertain tax positions through its income tax expense.

 The Company may in the future become
subject to federal, state and local income taxation though it has not been since its inception, other than minimum state tax. The Company
is not presently subject to any income tax audit in any taxing jurisdiction, though its 2021-2023 tax years remain open to examination.

 12.
 COMMITMENTS AND CONTINGENCIES

 Leases – Right
of Use Asset and Liability

 The Company has three leases for office and warehouse space with monthly
ranging from $ 9,862 to $ 18,358, and terms expiring prior to August 31, 2025.

 F- 24

 The components of lease costs are as follows:

 Years Ended

 Financial Statement

 Type

 Line Item

 2023

 2022

 Operating lease

 General and administrative

 $
 49,810

 $
 621,388

 Operating lease

 665,961

 -

 Operating lease

 Research and development

 217,890

 -

 Total lease costs

 $
 933,661

 $
 621,388

 Supplemental cash flow information related to
leases are as follows:

 Years Ended

 2023

 2022

 Operating cash flows paid for operating leases

 $
 550,470

 $
 381,457

 Right-of-use assets obtained in exchange for operating lease obligations

 $
 -

 $
 1,535,230

 Supplemental information related to leases are
as follows:

 2023

 2022

 Weighted-average remaining lease term (in years)

 1.30

 2.30

 Weighted-average discount rate

 7.25
 %

 7.25
 %

 Future minimum payments under operating leases as of December 31, 2023, are as follows:

 2024

 $
 527,983

 2025

 214,775

 Total undiscounted future cash flows

 742,758

 Less: imputed interest

 ( 34,614
)

 Total

 $
 708,144

 Finance Lease –
Failed Sales-Leaseback

 In November 2022, the Company entered
into a lease agreement with Farnam Capital for its second-generation of 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 total, the Company received proceeds of
$ 4,455,852 related to robot assets constructed with the same value that are held as collateral. The agreement calls for monthly payments
through October 31, 2024 of $ 189,262 and required a security deposit of $ 378,524. During the years ended December 31, 2023 and 2022, the
Company made repayments totaling $ 1,713,521 and $ 378,524, respectively. The outstanding liability at December 31, 2023 and 2022 was $ 2,363,807
and $ 4,077,328, respectively. The Company has the option to purchase the assets at the end of the lease for 45 % of the original equipment
cost, and there was a partial purchase of 20 %. In December 2023, the Company entered into a modification that would modify and extend
the lease payments subject to certain conditions being met; however, based on the terms of the modification as of December 31, 2023, all
remaining lease payments were to be in 2024.

 Minimum Purchase Commitments

 On December 31, 2021, the Company
entered into a strategic supply agreement with a manufacturer of component parts used for the Company's robot assets. The agreement
calls for a minimum of $ 2.30 million in purchases over a two-year period ending December 2023. At the end of the two-year period,
the vendor may invoice the Company for any shortfall in orders. As of December 31, 2023, the minimum purchase commitment was extended
one year.

 Contingencies

 The Company may be subject to pending
legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with
certainty, but the Company does not anticipate that the final outcome arising out of any such matters will have a material adverse effect
on its business, financial condition or results of operations.

 F- 25

 13.
 SUBSEQUENT EVENTS

 Management has evaluated subsequent
events through February 29, 2024, the date the condensed financial statements were available to be issued. Based on this evaluation, no
material events were identified which require adjustment or disclosure in these condensed financial statements, other than as reported
below.

 Convertible Debt

 At an initial closing on January 2,
2024 and subsequent closings on January 12, 2024, January 22, 2024 and January 26, 2024, the Company issued to certain accredited investors
convertible promissory notes, for which the Company received an aggregate of $ 5.0 million in proceeds. The convertible promissory notes
bear interest at a rate of 6.00 % per year, compounded annually, and are due and payable upon request by each investor on or after the
12-month anniversary of the original issuance date of each note. The Company may not prepay or repay the notes in cash without the consent
of the investors. The notes convert upon a qualified offering into common stock at the lesser of the price paid per share multiplied by
 75 % or the quotient resulting from dividing $ 80,000,000 by the outstanding shares of common stock on a fully diluted basis prior to the
financing. If the Company consummates a financing that does not constitute a qualified financing, the holders can elect to treat such
as a qualified financing and convert at the same terms as if such was a qualified financing. The holders may also elect to convert, at
any time, at a quotient by dividing $ 80,000,000 by the outstanding shares of common stock on a fully diluted basis.

 License and Services Agreement

 On February 20, 2024, Serve entered
into a License and Services Agreement (the "LSA") with Magna New Mobility USA, Inc. ("Magna") as a part of a strategic
partnership with Magna. Pursuant to the LSA, Serve, as an independent contractor of Magna, agreed to (i) grant a non-exclusive license
to the Serve AMR Technology in the Licensed Fields of Use (each as defined in the LSA) to Magna and its affiliates and (ii) provide all
reasonable engineering, technical and related support services that Magna may request from time to time in writing and in furtherance
of commercialization of the Serve AMR Technology and products (including software) using, practicing, or incorporating the Serve AMR Technology,
and manufactured using, practicing or incorporating the Serve AMR Technology (such services and support, the "Development Services").
Except as expressly set forth in the LSA, any Development Services shall be provided under the MSA (as defined below) and, if expired
or terminated, under terms and conditions that are consistent with the terms therein. The term of the LSA will continue unless terminated
by either party pursuant to and in accordance with the terms and conditions set forth in the LSA.

 Master Services Agreement

 On February 1, 2024, Serve entered
into a Master Services Agreement (the "MSA") with Magna, retroactively effective as of January 15, 2024 (the "Effective
Date"). Pursuant to the MSA, Serve agreed to provide certain services to Magna as described in one or more statements of work ("SOWs").
Such SOWs will contain a description of the scope, the time to be spent on performance, the fees to be paid to Serve, the functional requirements
and technical specifications and, to the extent applicable, the timetable, schedule or milestones for the performance of the requested
services. Serve and Magna entered into the first SOW on the Effective Date. The term of the MSA commenced on the Effective Date and will
continue for a term of three months, unless terminated earlier or mutually extended in accordance with its terms.

 In connection with the strategic partnership
with Magna, on February 7, 2024, we issued to Magna a warrant (the "Magna Warrant") to purchase up to 2,145,000 shares of
our common stock (the "Magna Warrant Shares"), subject to adjustments as provided therein, at an exercise price of $ 0.01 per
share.

 The Magna Warrant will be exercisable
in two equal tranches: (i) the first tranche will become exercisable no later than May 15, 2024, subject to certain conditions; and (ii)
the second tranche will become exercisable upon Magna's achievement of a certain manufacturing milestone as set forth in a production
and purchase agreement to be entered into with respect to the contract manufacturing of our autonomous delivery robots by Magna or its
affiliates. Notwithstanding the foregoing, the Magna Warrant Shares will vest and become exercisable upon any "change of control"
(as defined in the Magna Warrant).

 F- 26

 Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

 Not applicable.

 Item 9A. Controls and Procedures

 Disclosure Controls and Procedures

 Under the supervision of and with the participation
of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness
of our disclosure controls and procedures as of December 31, 2023, the end of the period covered by this report on Form 10-K. The term
"disclosure controls and procedures," as set forth in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls
and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company
in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial
officers, as appropriate to allow timely decisions regarding required disclosure.

 In designing and evaluating our disclosure controls
and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing
disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship
of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies
or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur
and not be detected.

 As of December 31, 2023, we carried out an evaluation,
under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e))
pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are not effective.

 Management's
Report on Internal Control Over Financial Reporting

 This report does not include a report of management's
assessment regarding our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act)
as allowed by the SEC for reverse acquisitions between an issuer and a private operating company when it is not possible to conduct an
assessment of the private operating company's internal control over financial reporting in the period between the consummation date
of the reverse acquisition and the date of management's assessment of internal control over financial reporting (pursuant to Section
215.02 of the SEC Division of Corporation Finance's Regulation S-K Compliance & Disclosure Interpretations).

 As discussed elsewhere in this report, we consummated
the Merger on July 31, 2023, pursuant to which we acquired Serve and its subsidiary. Prior to the Merger, we were a "shell company"
(as defined in Rule 12b-2 under the Exchange Act). As a result, previously existing internal controls are no longer applicable or comprehensive
enough as of the assessment date as our operations prior to the Merger were insignificant compared to those of the consolidated entity
post-Merger. The design of our internal control over financial reporting following the Merger has required and will continue to require
significant time and resources from management and other personnel. Because of this, the design and ongoing development of our framework
for implementation and evaluation of internal control over financial reporting is in its preliminary stages. If management were to conduct
an assessment regarding our internal control over financial reporting, however, its scope would include the criteria set forth by the
Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on
an initial assessment, we concluded that our internal control over financial reporting was not effective as of December 31, 2023, because
of the material weakness described below.

 Material Weaknesses
in Internal Control Over Financial Reporting

 Although management did not conduct a formal assessment
of internal control over financial reporting, in connection with the audits of our consolidated financial statements for the years ended
December 31, 2023, and 2022, management has identified material weaknesses in internal control over financial reporting. Prior to the
Merger, our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision
and segregation of duties. Therefore, management concluded that we did not have a comprehensive and formalized accounting and financial
reporting policies and procedures manual which details the information needed for our financial reporting process and that we did not
have a robust review process by which management could monitor for potential errors or technical accounting requirements, which have resulted
in material weaknesses in internal control over financial reporting as of December 31, 2023.

 We intend to take measures to remediate the aforementioned
material weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting
policies and procedures are consistent across the organization and that we have adequate control over our Exchange Act reporting disclosures
and implementing a formal policies and procedures manual for accounting and financial reporting. The material weaknesses will not be considered
remediated until management designs and implements effective controls that operate for a sufficient period of time and management has
concluded, through testing, that these controls are effective. Our management will monitor the effectiveness of our remediation plans
and will make changes management determines to be appropriate.

 Changes in Internal Controls
over Financial Reporting

 During the quarter ended December 31, 2023, there
have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated
under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.

 Item 9B. Other Information

 During the fiscal quarter ended December 31, 2023,
none of our directors or officers informed us of the adoption, modification or termination of a "Rule 10b5-1 trading arrangement"
or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent
Inspections

 Not applicable.

 Item 10. Directors, Executive Officers and Corporate Governance

 Executive Officers and Directors

 The following table provides information regarding
our executive officers and directors as of February 23, 2024:

 Name

 Age

 Positions

 Executive Officers

 Chief Executive Officer and Chairman of the Board

 President, Chief Operating Officer and Director

 April Pannell

 Chief Financial Officer

 Senior Vice President of Hardware Engineering

 Non-Employee Directors

 James Buckly Jordan (2)(3)

 Sarfraz Maredia

 Ali Pourdad (1)(2)

 Olivier Vincent (2)(3)

 (1)
 Member of the nominating and governance committee.

 (2)
 Member of the audit committee.

 (3)
 Member of the compensation committee.

 Executive Officers

 Ali Kashani co-founded Serve Robotics
Inc. in January 2021 and has served as its Chief Executive Officer and a member of the board of directors of Serve since then. Prior
to co-founding Serve, he served as Vice President of Postmates Inc., an on-demand food delivery platform, from July 2017 to January 2021.
Dr. Kashani received both his Bachelor of Science in Computer Engineering and his Doctorate in Robotics from the University of British
Columbia. Dr. Kashani has served on the Board since the Company's formation, and we believe he is qualified to remain on the
Board due to the institutional knowledge he brings as Co-Founder and Chief Executive Officer of the Company and his business and robotics
experience.

 Touraj Parang has served as Serve's
Chief Operating Officer and as a member of the Board since March 2021, and was appointed President of Serve in July 2022. Prior
to joining Serve, Mr. Parang worked at GoDaddy Inc. (NYSE: GDDY) from May 2014 to March 2021, where he began as Senior
Director of Corporate Development and most recently served as Vice President of Corporate Development. Mr. Parang received his Bachelor
of Arts in Philosophy and Economics from Stanford University and his Juris Doctorate from Yale Law School. We believe that Mr. Parang
is qualified to serve on the Serve's Board due to his extensive experience with early-stage startups and prior leadership role at
a publicly traded company.

 Euan Abraham has served as Serve's
Senior Vice President of Hardware Engineering since January 2022. Prior to joining Serve, Mr. Abraham served as Senior Vice
President, Hardware Engineering at Latch, Inc. (NASDAQ: LTCH) from October 2018 to September 2021. Prior to that, he served
as Vice President, Hardware Engineering at GoPro, Inc. (NASDAQ: GPRO) from October 2015 to October 2018. Mr. Abraham received
his Bachelor of Engineering at the University of Sheffield.

 April Pannell has served as Serve's
Chief Financial Officer since May 1, 2023. Ms. Pannell has also served as Managing Partner and Director of AKW Financial since January 2019
and previously served as Chief Financial Officer and Global Controller of Fluitec, a company that provides green treatment solutions for
hydraulic fluids, from August 2011 to December 2018. Ms. Pannell holds a Bachelors degree in Accounting from American International
College.

 Non-Employee Directors

 James Buckly Jordan has served as
a member of Serve's Board since October 2021. Mr. Jordan founded Vebu Labs, a food robotics and automation solutions company,
in October 2018 and has served as its Chief Executive Officer since then. He is also the co-founder of Miso Robotics, a food robotics
company, which he co-founded in 2016 and for which he currently serves as the acting President and Chairman of the Board of Directors.
Mr. Jordan also founded Canyon Creek Capital, a venture capital fund, in July 2018 and has served as its Managing Partner since
then. He received his Bachelor of Arts in Political Science from Indiana University and his Master of Business Administration from the
University of California, Los Angeles Anderson School of Management. We believe Mr. Jordan is qualified to serve on our Board
due to his early-stage investment experience in technology companies.

 Sarfraz Maredia has served as a
member of our Board since July 2023. Since September 2014, Mr. Maredia has been employed at Uber, most recently as Vice President
for Delivery and Head of Americas at Uber, where he leads the largest segment of Uber Eats' marketplace business across the United
States, Canada, and Latin America as well as overseeing Postmates. In September 2011, Mr. Maredia joined IQVIA (formerly IMS Health),
a global information and technology services company focused on healthcare, where he was promoted to and served as Vice President of Corporate
Development until September 2014. He previously advised technology clients as a management consultant at Bain & Company and worked
as a private equity and public markets investor at TPG and Dodge & Cox, respectively. Mr. Maredia received his Bachelor's Degree
in Finance from the University of Texas at Austin. We believe that Mr. Maredia's unique position leading one of the world's
largest on-demand delivery platforms, and his experience in leadership, operations, finance, and technology qualify him to serve on the
Board.

 Ali Pourdad has served as a member
of our Board since July 2023. Since March 2021, Mr. Pourdad has served as Chief Executive Officer of Quantfury Trading Limited,
a global financial technology broker-dealer headquartered in the Bahamas ("Quantfury"). Prior to being named Chief Executive
Officer, Mr. Pourdad was an advisor to Quantfury from September 2019 to March 2021. From January 2013 to September 2019,
Mr. Pourdad served as Chief Executive Officer of Progressa, a consumer financial technology company. Mr. Pourdad is a Canadian
Chartered Professional Accountant and holds a Bachelors degree in Finance from Simon Fraser University. We believe that Mr. Pourdad
is qualified to serve on our Board due to his prior board experience and significant public company audit experience, including for NYSE
and TSX listed companies.

 Olivier Vincent has served as a
member of our Board since July 2023. Mr. Vincent co-founded and has served as Chief Executive Officer of Autozen Technology Ltd.,
a marketplace start-up in the automobile world since March 2020. Prior to joining Autozen, Mr. Vincent served as Chief Executive
Officer of Spliqs, an AI technology company from January 2019 until March 2020. From December 2016 until January 2019,
Mr. Vincent served as President of WeatherBug, a weather application. Mr. Vincent has served on the board of directors of Wishpond
Technologies Ltd., a Canadian public company traded on the TSX (OTCMKTS: WPNDF), since December 2020. Mr. Vincent holds a Masters
of Engineering in Computer Science from Ecole Nationale Superieure de Techniques Avanc es (ENSTA) Paris and a Masters of Business,
Entrepreneurship from Hautes Etudes Commerciales (HEC) Paris. We believe that Mr. Vincent is qualified to serve on our Board due to his
experience growing and managing technology companies.

 Corporate Governance

 Appointment of Officers

 Our executive officers are appointed by, and serve
at the discretion of, our Board provided, however, that the Board may empower the Chief Executive Officer of the Company to appoint any
officer other than the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer.

 Board Composition

 Our Board currently consists of six members: James
Buckly Jordan, Ali Kashani, Sarfraz Maredia, Touraj Parang, Ali Pourdad and Olivier Vincent.

 Each of our current directors will continue to
serve until the election and qualification of his or her successor, or his or her earlier death, resignation, disqualification or removal.

 Classified Board of Directors

 Our Board consists of six members, divided into
three classes of directors, designated Class I, Class II and Class III, with staggered three-year terms. At each annual
meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.
As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing
for the remainder of their respective three-year terms. Our current directors are divided among the three classes as follows:

 the Class I directors are Sarfraz Maredia and Ali Pourdad, and their terms will expire at the 2024
annual meeting of stockholders;

 the Class II directors are James Buckly Jordan and Olivier Vincent, and their terms will expire at
the 2025 annual meeting of stockholders; and

 the Class III directors are Ali Kashani and Touraj Parang, and their terms will expire at the 2026
annual meeting of stockholders.

 Each director's term continues until the
election and qualification of his or her successor, or his or her earlier death, resignation, disqualification or removal. Our amended
and restated certificate of incorporation and amended and amended and restated bylaws authorize, subject to the special rights of the
holders of any series of preferred stock to elect directors, only our Board to fill vacancies on the Board. Any increase or decrease in
the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third
of the directors. This classification of our Board may have the effect of delaying or preventing changes in control of our Company.

 Director Independence

 We evaluate independence by the standards for
director independence set forth in Nasdaq's listing requirements. The Nasdaq independence definition includes a series of objective
tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director
nor any of his or her family members has engaged in various types of business dealings with us. Under such rules, our Board has determined
that all members of the Board except Ali Kashani and Touraj Parang are independent directors. In making such independence determination,
our Board considered the relationships that each non-employee director has with us and all other facts and circumstances that our Board
deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

 Under the rules of Nasdaq, independent directors
must comprise a majority of a listed company's board of directors within a specified period of listing. In addition, rules require
that, subject to specified exceptions, each member of a listed company's audit, compensation, and nominating, governance, and corporate
responsibility committees be independent. Under such rules, a director will only qualify as an "independent director" if,
in the opinion of that company's board of directors, that person does not have a relationship that would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director.

 Audit committee members must also satisfy the
independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3,
a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the
board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory
fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.

 Our Board has undertaken a review of the independence
of each director and considered whether each director has a material relationship with us that could compromise his or her ability to
exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board determined that Messrs.
Jordan, Maredia, Pourdad and Vincent are "independent directors" as defined under the applicable rules and regulations of
the SEC and the listing requirements and rules of Nasdaq. In making these determinations, our Board reviewed and discussed information
provided by the directors and us with regard to each director's business and personal activities and current and prior relationships
as they may relate to us and our management, including the beneficial ownership of our capital stock by each non-employee director and
the transactions involving them described in Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence
 of this report.

 Family Relationships

 There are no family relationships by between or
among the members of the Board or other executive officers of the Company.

 Committees of the Board of Directors

 Our Board has an audit committee, a compensation
committee, and a nominating and governance committee, each of which, pursuant to its respective charter, have the composition and responsibilities
described below. Members serve on these committees until their resignation or until otherwise determined by our Board.

 Audit Committee

 Our audit committee is composed of Messrs. Jordan,
Pourdad and Vincent. Mr. Pourdad is the chair of our audit committee. Each member of our audit committee is financially literate.
Our Board has determined that each member of our audit committee is independent within the meaning of the Nasdaq director independence
standards and applicable rules of the SEC for audit committee members. Our Board has also determined that Mr. Pourdad qualifies as
an "audit committee financial expert" under the rules of the SEC.

 The primary purpose of our audit committee is
to discharge the responsibilities of the Board with respect to our corporate accounting and financial reporting processes, systems of
internal control and financial statement audits and to oversee our independent registered public accounting firm. The principal functions
of our audit committee include, among other things:

 helping the Board oversee our corporate accounting and financial reporting processes;

 managing the selection, engagement, qualifications, independence, and performance of a qualified firm
to serve as the independent registered public accounting firm to audit our financial statements;

 reviewing and discussing the scope and results of the audit with the independent registered public accounting
firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

 obtaining and reviewing a report by the independent registered public accounting firm at least annually
that describes our internal quality control procedures, any material issues with such procedures and any steps taken to deal with such
issues when required by applicable law;

 establishing procedures for employees to submit concerns anonymously about questionable accounting or
audit matters;

 overseeing our policies on risk assessment and risk management;

 overseeing compliance with our code of business conduct and ethics;

 reviewing related person transactions; and

 approving or, as required, pre-approving audit and permissible non-audit services to be performed by the
independent registered public accounting firm.

 Compensation Committee

 Our compensation committee is composed of Messrs.
Jordan and Vincent. Mr. Vincent is the chair of our compensation committee. The primary purpose of our compensation committee is
to discharge the responsibilities of the Board in overseeing our compensation policies, plans and programs and to review and determine
the compensation to be paid to our executive officers, directors and other senior management, as appropriate. The principal functions
of our compensation committee include, among other things:

 reviewing, approving and determining, or making recommendations to the Board regarding, the compensation
of our chief executive officer, other executive officers and senior management;

 reviewing, evaluating and recommending to the Board succession plans for our executive officers;

 reviewing and recommending to the Board the compensation paid to our non-employee directors;

 administering our equity incentive plans and other benefit programs;

 reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements,
profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers and
other senior management; and

 reviewing and establishing general policies relating to compensation and benefits of our employees, including
our overall compensation philosophy.

 Each member of our compensation committee is a
non-employee director as defined in Rule 16b-3 of the Exchange Act. Our Board has also determined that each member of our compensation
committee is also an independent director within the meanings of Nasdaq's director independence standards and applicable SEC rules.

 Nominating and Governance Committee

 Our nominating and governance committee is composed
of Ali Pourdad who also serves as the chair of our nominating and governance committee. Our nominating and governance committee's
principal functions include, among other things:

 identifying and evaluating candidates, including the nomination of incumbent directors for reelection
and nominees recommended by stockholders, to serve on the Board;

 considering and making recommendations to the Board regarding the composition and chairmanship of the
committees of the Board;

 instituting plans or programs for the continuing education of the Board and the orientation of new directors;

 developing and making recommendations to the Board regarding corporate governance guidelines and matters;

 overseeing our corporate governance practices;

 overseeing periodic evaluations of the Board' performance, including committees of the Board; and

 contributing to succession planning.

 Compensation Committee Interlocks and Insider
Participation

 None of the members of the compensation committee
is currently, or has been at any time, one of our officers or employees. In addition, none of our executive officers has served as a member
of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers
who served on our Board.

 Code of Business Conduct and Ethics

 The Board has adopted a Code of Business Conduct
and Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing similar functions. The Code of Business Conduct and Ethics
is available under the "Investors" tab of our website at  In addition, we intend to
post under the "Investors" tab on our website all disclosures that are required by law relating to any amendments to, or waivers
from, any provision of the Code of Business Conduct and Ethics.

 Delinquent Section 16(a) Reports

 Section 16(a) of the Exchange Act requires our
directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of our common stock and other equity securities.

 To our knowledge, based solely upon a review of
Forms 3, 4, and 5 filed with the SEC during the fiscal year ended December 31, 2023, we believe that our directors, executive officers,
and greater than 10% beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31,
2023.

 Item 11. Executive Compensation

 Information with respect to the Company's
directors and executive officers after the closing of the Merger is described in the Part III, Item 10. Directors, Executive Officers
and Corporate Governance of this report.

 Non-Employee Director Compensation Policy

 Since our incorporation, no compensation has been
earned or paid to Ian Jacobs or Mark Tompkins, who were our sole directors prior to the Merger. Serve became our wholly-owned subsidiary
upon the closing of the Merger on July 31, 2023. In connection with the closing of the Merger, Messrs. Jacobs and Tompkins resigned
from our board directors, and the current members were appointed to our Board, effective as of July 31, 2023.

 On February 16, 2024, we adopted our Outside Director
Compensation Policy (the "Director Compensation Policy"), effective as of January 1, 2024, pursuant to which we pay each non-employee
director annual cash retainers and equity awards, as further described below.

 Pursuant to the Director Compensation Policy,
each non-employee director is entitled to receive an annual cash retainer for service on the Board and an additional annual cash retainer
for service on each committee on which the non-employee director is a member. All annual cash retainers are paid quarterly in arrears.
In addition, James Buckly Jordan, Ali Pourdad and Olivier Vincent will each receive an initial cash compensation in the amount of $11,250,
payable on March 31, 2024. No compensation has previously been paid to our non-employee directors.

 The fees paid to non-employee directors for service
on the Board and for service on each committee of the Board of which the non-employee director is a member are as follows:

 Annual Board Member Service Retainer

 All non-employee directors: $20,000

 Annual Committee Member Service Retainer

 Member of the Audit Committee: $5,000

 Member of the Compensation Committee: $5,000

 Member of the Nominating and Corporate Governance Committee:
$5,000

 The Director Compensation Policy provides that
at each annual stockholder meeting following a non-employee director's appointment to the Board and subject to such non-employee
director's service on the Board since December 31st of the calendar year prior to such annual meeting, each non-employee director
will be granted an option to purchase 20,000 shares of our common stock under the 2023 Plan, which will vest in full upon the earlier
of the first anniversary of the date of grant or the next annual stockholder meeting, prorated for partial quarters of service (including
the initial quarter of service), subject to the applicable non-employee director's continuous service through the applicable vesting
date; provided that if we do not have an effective Form S-8 registration statement on file with the SEC with sufficient shares available
to cover the applicable equity award as of the date such award is granted (an "Effective S-8"), the grant of such equity award
shall be delayed until such time there is an Effective S-8.

 Notwithstanding the foregoing, for each non-employee
director who remains in continuous service as a member of our Board until immediately prior to the consummation of a change in control,
any unvested portion of an equity award granted in consideration of such non-employee director's service as a member of our Board
will vest in full immediately prior to, and contingent upon, the consummation of a change in control.

 The Director Compensation Policy further provides
that upon consummation of our initial public offering and listing of our common stock on The Nasdaq Stock Market, LLC or the New York
Stock Exchange, each non-employee director would be granted an option to purchase 20,000 shares of common stock under the 2023 Plan (each,
an "Initial Equity Grant"). Each Initial Grant shall vest in full on the one-year anniversary of the date of grant, subject
to the applicable the non-employee director's continued service as a member of the Board through such date; provided that if we
do not have an Effective S-8, the grant of such equity award shall be delayed until such time as there is an Effective S-8. Our Board
will have discretion to grant additional equity awards to certain non-employee directors for services that exceed the expectations for
a non-employee director or for other circumstances determined to be appropriate by our Board. We also reimburse our directors for their
reasonable out-of-pocket expenses in connection with attending meetings of our Board and Board committees.

 The non-employee director compensation program
is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve
as directors and to align our directors' interests with those of our stockholders.

 Executive Compensation

 Throughout this section, unless otherwise noted,
"we," "us," "our," "Company" and similar terms refer to Serve prior to the closing of
the Merger, and to the Company and its subsidiaries after the closing of the Merger.

 This section discusses the material components
of the executive compensation program for the Company's named executive officers who appear in the "2023 Summary Compensation
Table" below. In 2023, the "named executive officers" and their positions with the Company were as follows:

 Ali Kashani: Chief Executive Officer

 Touraj Parang: President & Chief Operating Officer

 Euan Abraham: Senior Vice President of Hardware Engineering

 This discussion may contain forward-looking statements
that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation
programs that we adopt may differ materially from the currently planned programs summarized in this discussion.

 2023 Summary Compensation Table

 The following table sets forth information concerning
the compensation of the named executive officers for the year ended December 31, 2023.

 Name and Principal Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards
 ($) (1)

 Option
 Awards
 ($) (1)

 Non-Equity
 Incentive Plan
 Compensation
 ($)

 All Other
 Compensation
 ($)

 Total
 ($)

 2023

 105,738

 —

 —

 36,984

 —

 —

 142,722

 Chief Executive Officer

 2022

 192,992

 —

 —

 —

 —

 —

 192,992

 2023

 238,500

 —

 —

 11,655

 —

 —

 250,155

 President &
 Chief Operating Officer

 2022

 260,583

 —

 —

 —

 —

 —

 260,583

 2023

 270,000

 —

 —

 10,393

 —

 —

 280,393

 Senior Vice President of Hardware Engineering

 2022

 295,000

 —

 —

 —

 —

 —

 295,000

 (1)
 Stock awards and option awards are reported at aggregate grant date fair value in the year granted, as
determined in accordance with the provisions of FASB ASC Topic 718. For the assumptions used in valuing these awards for purposes
of computing this expense, please see Note 10 of the Company's financial statements for the year ended December 31, 2023.

 Salaries

 In fiscal year 2023, Dr. Kashani, Mr. Parang,
and Mr. Abraham received an annual base salary of $105,738, $238,500, and $270,000, respectively, to compensate them for services rendered
to Serve. In fiscal year 2022, Dr. Kashani, Mr. Parang, and Mr. Abraham received an annual base salary of $192,991, $260,583,
and $295,000, respectively, to compensate them for services rendered to Serve. The base salary payable to each of Dr. Kashani, Mr. Parang,
and Mr. Abraham was intended to provide a fixed component of compensation reflecting the executive's skill set, experience,
role and responsibilities.

 Equity Awards

 On April 27, 2021, Dr. Kashani purchased
1,499,866 shares of Serve common stock for an aggregate purchase price of $1,866.67 (the "Kashani Time-Based Award").
On May 6, 2021, Mr. Parang purchased 535,163 shares of Serve common stock for an aggregate purchase price of $828.92 (the
"Parang Time-Based Award"). On December 23, 2021, Mr. Abraham was granted an option to purchase 200,875 shares
of Serve common stock (the "Abraham Time-Based Award" and together with the Kashani Time-Based Award and the Parang Time-Based
Award, the "Time-Based Awards"). The Kashani Time-Based Award, the Parang Time-Based Award, and the Abraham Time-Based Award
are each scheduled to vest as to 25% of the shares on February 18, 2022, March 22, 2022, and November 1, 2022, respectively,
and as to 1/48 th of the shares monthly over the 36 month-period thereafter, subject to the executive's continued employment
through each vesting date.

 On April 27, 2021, Dr. Kashani purchased
749,933 shares of Serve common stock for an aggregate purchase price of $933.34 (the "Kashani Milestone-Based Award").
On May 6, 2021, Mr. Parang purchased 267,581 shares of Serve common stock for an aggregate purchase price of $414.46 (the
"Parang Milestone-Based Award"). On December 23, 2021, Mr. Abraham was granted an option to purchase 100,437 shares
of Serve common stock (the "Abraham Milestone-Based Award" and together with the Kashani Milestone-Based Award and the Parang
Milestone-Based Award, the "Milestone-Based Awards").

 The Milestone-Based Awards are each scheduled
to vest as to 1/48 th of the shares monthly over the 48 month-period following the achievement of a milestone prior to September
30, 2022. Between October and November 2022, the Board retroactively amended the vesting schedule to permit the 48-month vesting
period to run from June 15, 2022, regardless of milestone achievement.

 On June 6, 2023, Dr. Kashani, Mr. Parang and Mr.
Abraham were each granted an option to purchase 45,182, 11,403, and 12,909 shares of Serve common stock, which fully vested on the one-month
anniversary of the closing of the Merger, subject to the executive's continued employment through the vesting date. In addition,
on June 6, 2023, Dr. Kashani, Mr. Parang and Mr. Abraham were each granted an option to purchase 19,373, 8,451, and 4,795 shares of Serve
common stock, which are scheduled to vest as to 1/48th of the option shares on July 1, 2023 and monthly thereafter, subject to the executive's
continued employment through each vesting date.

 Serve 2021 Stock Plan

 General. Serve's board of directors
originally adopted, and Serve's stockholders approved, the Serve Robotics Inc. 2021 Stock Plan (the "2021 Stock
Plan") in 2021. The 2021 Stock Plan provided for the grant of incentive stock options to Serve employees (and employees of
any parent or subsidiary of Serve) and for the grant of non-statutory stock options, restricted stock and restricted stock purchase rights
to Serve employees, directors and consultants (and employees and consultants of any parent, subsidiary or affiliate of Serve). The Serve
board of directors terminated the 2021 Stock Plan, effective as of and contingent upon the closing of the Merger. Following termination
of the 2021 Stock Plan, no new awards will be granted under such plan, but previously granted awards will continue to be subject
to the terms and conditions of the 2021 Stock Plan and the stock award agreements pursuant to which such awards were granted.

 Plan Administration. The Serve board of
directors has administered the 2021 Stock Plan.

 Types of Awards. The 2021 Stock Plan
provides for the grant of incentive stock options, non-statutory stock options, restricted stock and restricted stock purchase rights.

 Stock Options. The Serve board of directors
granted stock options under the 2021 Stock Plan. The exercise price per share applicable to such options was equal to at least the
fair market value per share of Serve common stock on the date of grant. The term of options granted under the 2021 Stock Plan did
not exceed 10 years; provided, however, that any incentive stock option granted to a participant who owned more than 10% of the total
combined voting power of all classes of Serve stock, or of certain of Serve's subsidiary corporations, did not have a term in excess
of five years and had an exercise price per share of at least 110% of the fair market value per share of Serve common stock on the grant
date. Subject to the provisions of the 2021 Stock Plan, the Serve board of directors determined the remaining terms of the options
(e.g., vesting). After the termination of service of an employee, director or consultant, the participant may exercise his or her option,
to the extent vested, for the period of time stated in his or her option agreement. Generally, if termination is due to death or disability,
the option will remain exercisable for 12 months. In all other cases except for a termination for cause, the option will generally
remain exercisable for three months following the termination of service. In the event of a termination for cause, the option will immediately
terminate. However, in no event may an option be exercised later than the expiration of its term.

 Restricted Stock. The Serve board of directors
granted stock options under the 2021 Stock Plan. Subject to the provisions of the 2021 Stock Plan, the Serve board of directors
determined the terms of the restricted stock, including the number of shares that the participant will be entitled to purchase, the price
to be paid, if any, the time within which such participant must accept the offer to purchase the restricted stock, and the other terms
applicable to the award. Unless the Serve board of directors determines otherwise, the restricted stock purchase agreement evidencing
the award grants Serve a repurchase option exercisable upon the voluntary or involuntary termination of the participant's service
for any reason at a purchase price equal the original purchase price paid by the participant. The Serve board of directors determines
the rate at which the repurchase option lapses. Once the restricted stock is purchased by the participant, the participant will have the
rights equivalent to those of a holder of Serve capital stock, and shall be a record holder when his or her purchase and the issuance
of the shares is entered upon the records of the duly authorized transfer agent of the Company.

 Non-transferability of Awards. Unless the
Serve board of directors provided otherwise, the 2021 Stock Plan generally did not allow for the transfer of awards or shares acquired
pursuant to an award and only the recipient of an option may exercise such an award during his or her lifetime.

 Certain Adjustments. In the event of certain
corporate events or changes in Serve's capitalization, to prevent diminution or enlargement of the benefits or potential benefits
available under the 2021 Stock Plan, the Serve board of directors will make adjustments to the number of shares reserved for issuance
under the 2021 Stock Plan, the exercise prices of and number of shares subject to each outstanding stock option and the purchase
prices of and number of shares subject to each other outstanding stock award.

 Corporate Transaction. The 2021 Stock
Plan provides that in the event of certain significant corporate transactions, including: (i) a transfer of all or substantially
all of Serve's assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction of
Serve with or into another corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions,
in which any person becomes the beneficial owner, directly or indirectly, of more than 50% of Serve's then outstanding capital stock,
each outstanding award will be treated as the Serve board of directors determines.

 Amendment or Termination. Serve's
board of directors may amend or terminate the 2021 Stock Plan at any time, provided such action does not materially and adversely
affect the rights of any participant without his or her consent. In addition, stockholder approval must be obtained to the extent necessary
and desirable to comply with applicable laws. The Serve board of directors terminated the 2021 Stock Plan, effective as of and contingent
upon the closing of the Merger. Following termination of the 2021 Stock Plan, no new awards will be granted under such plan, but
previously granted awards will continue to be subject to the terms and conditions of the 2021 Stock Plan and the stock award agreements
pursuant to which such awards were granted.

 Benefits

 In 2022, the Company provided benefits to its
named executive officers on the same basis as provided to all of its employees, including medical, dental, vision, life and AD&D,
and short- and long-term disability insurance, flexible spending accounts, vacation and paid holidays. The named executive officers are
also eligible to participate in the Company's 401(k) plan.

 Outstanding Equity Awards at Fiscal Year-End

 The following table sets forth information regarding
each unexercised stock option or unvested stock award held by each named executive officer as of December 31, 2023.

 Option Awards (1)

 Stock Awards (2)

 Name

 Grant Date

 Number of
 securities
 underlying
 unexercised
 options
 exercisable
 (#)

 Number of
 securities
 underlying
 unexercised
 options
 unexercisable
 (#)

 Option
 exercise
 price
 ($) (3)

 Option
 expiration
 date
 ($)

 Number
 of shares
 that have
 not
 vested
 (#)

 Market
 value of
 shares that
 have not
 vested
 ($) (4)

 4/27/2021

 —

 —

 —

 —

 437,461
 (5)

 $
 1,749,844

 4/27/2021

 —

 —

 —

 —

 468,708
 (6)

 $
 1,874,832

 (8)

 45,182

 —

 $
 0.95

 6/6/2028

 —

 —

 (9)

 2,421

 16,952

 $
 0.95

 6/6/2028

 —

 —

 5/6/2021

 —

 —

 —

 —

 167,238
 (7)

 $
 668,952

 5/6/2021

 —

 —

 —

 —

 167,238
 (6)

 $
 668,952

 (8)

 11,403

 —

 $
 0.86

 6/6/2033

 —

 —

 (9)

 1,055

 7,396

 $
 0.86

 6/6/2033

 —

 —

 12/23/2021
 (10)

 104,622

 96,253

 $
 0.49

 12/22/2031

 —

 —

 12/23/2021
 (11)

 37,664

 62,773

 $
 0.49

 12/22/2031

 —

 —

 (8)

 12,909

 —

 $
 0.86

 6/6/2033

 —

 —

 (9)

 4,196

 $
 0.86

 6/6/2033

 —

 —

 (1)
 All stock options listed above cover shares of our common stock following the closing of the Merger and
were granted under the 2021 Stock Plan.

 (2)
 All restricted shares listed above cover shares of our common stock following the closing of the Merger.
The restricted shares held by Mr. Parang were issued pursuant to the 2021 Stock Plan, while the restricted shares held by Dr. Kashani
were issued outside of the 2021 Stock Plan.

 (3)
 This column represents the fair market value of a share of Serve common stock on the date of grant, as
determined by the Serve board of directors.

 (4)
 This column represents the number of unvested restricted shares outstanding
as of December 31, 2023, multiplied by $4.00, which is the per share value of Serve common stock as of December 31, 2023that
is based upon the purchase price per share of common stock in the Private Placement in July through October 2023.

 (5)
 The restricted shares are subject to a 4-year vesting schedule, with 25% of the shares vesting on February 18,
2022 and 1/48 th of the shares vesting monthly over the 36 month-period thereafter, subject to the executive's continued
employment through each vesting date.

 (6)
 The restricted shares are subject to a 4-year vesting schedule running from the date the Board retroactively
determined that vesting should run regardless of Milestone achievement, with 1/48 th of the shares vesting on July 15,
2022 and monthly thereafter, subject to the executive's continued employment through each vesting date.

 (7)
 The restricted shares are subject to a 4-year vesting schedule, with 25% of the shares vesting on March 22,
2022 and 1/48 th of the shares vesting monthly over the 36 month-period thereafter, subject to the executive's continued
employment through each vesting date.

 (8)
 100% of the option shares vested and became exercisable on the one-month anniversary of the closing of
the Merger, subject to the executive's continued employment through the vesting date.

 (9)
 The options are subject to a 4-year vesting schedule, with 1/48 th of the option shares vesting
on July 1, 2023 and monthly thereafter, subject to the executive's continued employment through each vesting date.

 (10)
 The options are subject to a 4-year vesting schedule, with 25%
of the option shares vesting on November 1, 2022 and 1/48 th of the option shares vesting monthly over the 36-month period
thereafter, subject to the executive's continued employment through each vesting date.

 (11)
 The options are subject to a 4-year vesting schedule running
from the date the Board retroactively determined that vesting should run regardless of Milestone achievement, with 1/48 th
of the option shares vesting on July 15, 2022 and monthly thereafter, subject to the executive's continued employment through
each vesting date.

 Executive Compensation Arrangements

 Touraj Parang Offer Letter

 On March 1, 2021, Serve entered into an offer
letter with the Company's President and Chief Operating Officer, Touraj Parang, pursuant to which Mr. Parang is entitled to
an annual base salary of $250,000 per year.

 Mr. Parang is eligible to participate in
the Company employee benefits plans maintained by the Company and generally made available to similarly situated employees. Mr. Parang's
employment is "at-will" and may be terminated by either party at any time.

 Subject to the approval of the Board, Mr. Parang will be granted the
Parang Time-Based Equity Award which consists of restricted stock award to purchase 666,040 shares of the Company's common stock.
The Parang Time-Based Equity Award will vest over 4 years at the rate of 25% of the total number of the Parang Time-Based Equity Award
shares on the one-year anniversary of Mr. Parang's start date and 1/48th of the total number of the Parang Time-Based Equity Award
shares on each monthly anniversary thereafter, subject to his continuous service with the Company through each vesting date. In addition,
subject to the approval of the Board, Mr. Parang will be granted the Parang Milestone-Based Equity Award which consists of restricted
stock award to purchase 333,020 shares of the Company's common stock. Once the milestone is achieved, the Parang Milestone-Based
Equity Award will vest over 4 years thereafter at the rate of 1/48th of the total number of Parang Milestone-Based Equity Award shares
on each monthly anniversary of the Parang Milestone Achievement Date, subject to his continuous service with the Company through each
vesting date. For additional information regarding the Parang Time-Based Award and Parang Milestone-Based Award, please see the section
below titled " Potential Payments Upon Termination or Change in Control — Time-Based Awards and Milestone-Based Awards."

 Mr. Parang will continue to be employed by the
Company under the terms of his offer letter with the Company.

 For additional information regarding a termination
payment letter entered into with Mr. Parang in fiscal year 2021, please see the section below titled " Potential Payments
Upon Termination or Change in Control — Parang Termination Payment Letter."

 Euan Abraham Offer Letter

 On October 7, 2021, Serve entered into an
offer letter whereby Euan Abraham agreed to serve as the Company's Senior Vice President of Hardware Engineering beginning January 1,
2022 pursuant to which Mr. Abraham is entitled to an annual base salary of $300,000 per year. In November 2022, Mr. Abraham's
annual base salary was adjusted to $240,000 per year.

 Mr. Abraham is eligible to participate in
the Company employee benefits plans maintained by the Company and generally made available to similarly situated employees. Mr. Abraham's
employment is "at-will" and may be terminated by either party at any time.

 Mr. Abraham will continue to be employed
by the Company under the terms of his offer letter with the Company.

 Potential Payments Upon Termination or Change
in Control

 Time-Based Awards and Milestone-Based Awards

 The Time-Based Awards and Milestone-Based Awards
granted to Dr. Kashani and Mr. Parang will fully vest upon a termination of service by the Company without "cause"
or upon the executive's resignation for "good reason" (each, an "involuntary termination"). The acceleration
of the Kashani Time-Based Award and the Kashani Milestone-Based Award is subject to Dr. Kashani's return of all Company property
in his possession within 10 business days following the date of involuntary termination and his execution of a general release of
all claims that becomes effective no later than the 30th day after the date of involuntary termination.

 In the event the applicable executive's
service with the Company terminates for any reason, any unvested shares subject to the Time-Based Awards and Milestone-Based Awards granted
to Dr. Kashani and Mr. Parang may be repurchased by the Company within 3 months following the date of termination at the
original purchase price paid for the shares. In addition, in the event the applicable executive's service with the Company terminates
for any reason on or prior to February 18, 2025, any vested shares subject to the Milestone-Based Awards granted to Dr. Kashani
and Mr. Parang may be repurchased by the Company within 3 months following the date of termination at the lesser of (x) a
purchase price per share of the Company's common stock equal to $500 million divided by the then fully diluted capitalization
of the Company or (y) the then current fair market value per share of the Company's common stock (the "Award Call Option").

 For purposes of the Time-Based Awards and the
Milestone-Based Awards granted to Dr. Kashani and Mr. Parang, "cause" means: (i) any material breach by the
executive of any material written agreement between the executive and the Company and the executive's failure to cure such breach
within 30 days after receiving written notice thereof; (ii) any failure by the executive to comply with the Company's
material written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance
of the executive's duties and the executive's failure to cure such condition within 30 days after receiving written notice
thereof; (iv) the executive's repeated failure to follow reasonable and lawful instructions from the Board and the executive's
failure to cure such condition within 30 days after receiving written notice thereof; (v) the executive's conviction of,
or plea of guilty or nolo contendere to, any crime that results in, or is reasonably expected to result in, material harm to the business
or reputation of the Company; (vi) the executive's commission of or participation in an act of fraud against the Company; (vii) the
executive's intentional material damage to the Company's business, property or reputation; or (viii) the executive's
unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the executive
owes an obligation of nondisclosure as a result of the executive's relationship with the Company.

 For purposes of the Kashani Time-Based Award and
the Kashani Milestone-Based Award, "good reason" means the executive's resignation due to the occurrence of any of the
following conditions which occurs without the executive's written consent, provided that the requirements regarding advance notice
and an opportunity to cure set forth below are satisfied: (i) the executive's then-current base salary is reduced by more than
10% (other than as part of an across-the-board salary reduction applicable to all similarly situated employees); (ii) a material
reduction of the executive's duties, authority, responsibilities or reporting relationship, relative to the executive's duties,
authority, responsibilities or reporting relationship as in effect immediately prior to such reduction; or (iii) the Company (or
its successor) conditions the executive's continued service on the executive being transferred to a site of employment that would
increase the executive's one-way commute by more than 50 miles from the executive's then-principal residence. In order
for the executive to resign for good reason, the executive must provide written notice to the Company of the existence of the good reason
condition within 30 days of the initial existence of such condition. Upon receipt of such notice, the Company will have 30 days
during which it may remedy the condition and not be required to provide for the acceleration described herein as a result of such proposed
resignation. If the condition is not remedied within such 30-day period, the executive may resign based on the condition specified in
the notice effective no later than 60 days following the expiration of the Company's 30-day cure period.

 For purposes of the Parang Time-Based Award and
the Parang Milestone-Based Award, "good reason" means the executive's resignation due to the occurrence of any of the
following conditions which occurs without the executive's written consent, provided that the requirements regarding advance notice
and an opportunity to cure set forth below are satisfied: (i) a reduction of the executive's then current base salary by 10%
or more unless such reduction is part of a generalized salary reduction affecting similarly situated employees; (ii) a change in
the executive's position with the Company that materially reduces the executive's duties, level of authority or responsibility;
or (iii) the Company conditions the executive's continued service with the Company on the executive's being transferred
to a site of employment that would increase the executive's one-way commute by more than 35 miles from Purchaser's then principal
residence.

 Parang Termination Payment Letter

 On June 23, 2021, Serve entered into a termination
payment letter agreement with Mr. Parang (the "Termination Payment Letter"), which provides that if (i) the Company
terminates Mr. Parang's service with the Company without cause on or prior to February 18, 2025 and (ii) the Company
exercises its Award Call Option with respect to all or a portion of the Parang Milestone-Based Award, then the Company will pay Mr. Parang
a termination payment equal to the product of (i) the shares repurchased by the Company pursuant to the Award Call Option, multiplied
by (ii) the excess, if any, of (x) the purchase price per share of the Company's common stock equal to $500 million
divided by the Company's then fully diluted capitalization as of the date of termination over (y) the per share fair market
value of the Company's common stock as of the date of termination. The termination payment will be paid in a lump sum on the first
regularly scheduled payroll date after the 30 th day following the date of termination. The termination payment is subject
to Mr. Parang's return of all Company property in his possession within 10 business days following the date of involuntary
termination and his execution of a general release of all claims that becomes effective no later than the 30th day after the date
of termination.

 Kashani Termination Payment Letter

 On September 27, 2021, Serve entered into
a termination payment letter agreement with Dr. Kashani (the "Termination Payment Letter"), which provides that if (i) the
Company terminates Dr. Kashani's service with the Company without cause on or prior to February 18, 2025 and (ii) the
Company exercises its Award Call Option with respect to all or a portion of the Kashani Milestone-Based Award, then the Company will pay
Dr. Kashani a termination payment equal to the product of (i) the shares repurchased by the Company pursuant to the Award Call
Option, multiplied by (ii) the excess, if any, of (x) the purchase price per share of the Company's common stock equal
to $500 million divided by the Company's then fully diluted capitalization as of the date of termination over (y) the
per share fair market value of the Company's common stock as of the date of termination. The termination payment will be paid in
a lump sum on the first regularly scheduled payroll date after the 30 th day following the date of termination. The termination
payment is subject to Dr. Kashani's return of all Company property in his possession within 10 business days following
the date of involuntary termination and his execution of a general release of all claims that becomes effective no later than the 30th day
after the date of termination.

 Compensation Recovery Policy

 In accordance with the final rules adopted by
the SEC and Nasdaq implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act, our Board approved the Serve
Robotics Inc. Compensation Recovery Policy, effective as of October 2, 2023, which provides that in the event the Company is required
to restate any of its financial statements that have been filed with the SEC, then the Compensation Committee will seek to recover any
erroneously awarded performance-based incentive-based compensation (including any performance-based cash and equity awards and salary
increases earned wholly or in part based on the attainment of financial performance goals) received by any person who is or was a Section
16 officer during the three-fiscal year recovery period.

 Description of the 2023 Equity Incentive Plan

 Set forth below is a summary of the material features
of the 2023 Plan. The 2023 Plan is set forth in its entirety as an exhibit to this report, and all descriptions of the 2023 Plan
contained in this section are qualified by reference to the complete text of the 2023 Plan.

 Purpose

 The 2023 Plan is intended to (i) attract
and retain the best available personnel to ensure our success and accomplish our goals, (ii) incentivize employees, directors and
independent contractors with long-term equity-based compensation to align their interests with our stockholders, and (iii) promote the
success of our business.

 Types of Stock Awards

 The 2023 Plan permits the grant of incentive
stock options, nonstatutory stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs")
and stock bonus awards (all such types of awards, collectively, "stock awards").

 Share Reserve

 Number of Shares

 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 1,594,800 shares.
The shares may be authorized, but unissued, or reacquired common stock. Furthermore, subject to adjustments as set forth in the 2023 Plan,
in no event shall the maximum aggregate number of shares that may be issued under the 2023 Plan pursuant to Incentive Stock Options
exceed the number set forth above plus, to the extent allowable under Section 422 of the Code and the regulations promulgated thereunder,
any shares that again become available for issuance pursuant to the 2023 Plan.

 The number of shares available for issuance under
the 2023 Plan may, at the discretion of the Plan Administrator (as defined below), be increased on October 1st of each fiscal year
beginning with the 2023 fiscal year until the 2023 Plan terminates, in each case, in an amount equal to the lesser of (i) at
the discretion of our Board, 4% of the shares of common stock issued and outstanding on the last day of the immediately preceding month
on a fully-diluted and as-converted basis and (ii) such other number of shares determined by our Board.

 Lapsed Awards

 To the extent, stock awards or awards or shares
issued under the 2021 Plan that are assumed by the Company pursuant to the Merger Agreement ("Existing Plan Awards") expire
or are forfeited or becomes unexercisable for any reason without having been exercised in full, or are surrendered pursuant to an exchange
program (as defined in the 2023 Plan), the unissued shares that were subject thereto shall continue to be available under the 2023 Plan
for issuance pursuant to future stock awards. In addition, any shares which are retained by us upon exercise of a stock award or Existing
Plan Award in order to satisfy the exercise or purchase price for such stock award or Existing Plan Award or any withholding taxes due
with respect to such stock award or Existing Plan Award shall be treated as not issued and shall continue to be available under the 2023 Plan
for issuance pursuant to future stock awards. Shares issued under the 2023 Plan or an Existing Plan Award and later forfeited to
us due to the failure to vest or repurchased by us at the original purchase price paid to us for the shares (including without limitation
upon forfeiture to or repurchase by us in connection with a participant ceasing to be a service provider) shall again be available for
future grant under the 2023 Plan. To the extent a stock award under the 2023 Plan or Existing Plan Award is paid out in cash
rather than shares, such cash payment will not result in reducing the number of shares available for issuance under the 2023 Plan.

 Assumption or Substitution of Awards

 The Plan Administrator (as defined below), from
time to time, may determine to substitute or assume outstanding awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by either: (a) assuming such award under the 2023 Plan or (b) granting a stock award
under the 2023 Plan in substitution of such other company's award. Such assumption or substitution will be permissible if the
holder of the substituted or assumed award would have been eligible to be granted a stock award under the 2023 Plan if the other company
had applied the rules of the 2023 Plan to such grant. In the event the Plan Administrator elects to assume an award granted by another
company, subject to the requirements of Section 409A of the Code ("Section 409A"), the purchase price or the exercise
price, as the case may be, and the number and nature of shares issuable upon exercise or settlement of any such stock award will be adjusted
appropriately. In the event the Plan Administrator elects to grant a new option in substitution rather than assuming an existing option,
such new option may be granted with a similarly adjusted exercise price. Any awards that are assumed or substituted under the 2023 Plan
shall not reduce the number of shares authorized for grant under the 2023 Plan or authorized for grant to a participant in any fiscal
year.

 Eligibility

 Employees, directors and independent contractors
or our affiliates are all eligible to participate in the 2023 Plan. However, Incentive Stock Options may only be granted to employees.

 Administration

 The 2023 Plan is administered by our Board
or a committee thereof, which committee will be constituted to satisfy applicable laws (the "Plan Administrator"). To the
extent desirable to qualify transactions under the 2023 Plan as exempt under Rule 16b-3 of the Exchange Act, the transactions
contemplated un the 2023 Plan will be structured to satisfy the requirements for exemption under Rule 16b-3.

 Subject to the terms of the 2023 Plan, the
Plan Administrator has the authority, in its discretion, to (i) determine the fair market value in accordance with the 2023 Plan;
(ii) select the service providers to whom stock awards may be granted under the 2023 Plan; (iii) determine the number of
shares to be covered by each stock award granted under the 2023 Plan; (iv) approve forms of stock award agreements for use under
the 2023 Plan; (v) determine the terms and conditions, not inconsistent with the terms of the 2023 Plan, of any stock award granted
thereunder; (vi) institute and determine the terms and conditions of an exchange program under the terms of the 2023 Plan (subject
to stockholder approval); (vii) construe and interpret the terms of the 2023 Plan and stock awards granted pursuant to the 2023 Plan;
(viii) correct any defect, supply any omission or reconcile any inconsistency in the 2023 Plan, any stock award or any award
agreement; (ix) prescribe, amend and rescind rules and regulations relating to the 2023 Plan; (x) modify or amend each
stock award (subject to the terms of the 2023 Plan); (xi) adjust performance goals to take into account changes in applicable
laws or in accounting or tax rules, or such other extraordinary, unforeseeable, nonrecurring or infrequently occurring events or circumstances
as the Plan Administrator deems necessary or appropriate to avoid windfalls or hardships; (xii) allow participants to satisfy tax
withholding obligations in such manner as prescribed in the 2023 Plan; (xiii) authorize any person to execute on our behalf
any instrument required to effect the grant of a stock award previously granted by the Plan Administrator; (xiv) allow a participant
to defer the receipt of the payment of cash or the delivery of shares that would otherwise be due to such participant under a stock award;
and (xv) make all other determinations deemed necessary or advisable for administering the 2023 Plan.

 To the extent permitted by applicable law, the
Plan Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority
and powers under the 2023 Plan to one or more of our directors or officers. To the extent permitted by applicable laws, the Plan Administrator
may delegate to one or more officers who may be (but are not required to be) insiders subject to Section 16 of the Exchange Act,
the authority to do any of the following (i) designate employees who are not insiders to be recipients of stock awards, (ii) determine
the number of shares to be subject to such stock awards granted to such designated employees, and (iii) take any and all actions
on behalf of the Plan Administrator other than any actions that affect the amount or form of compensation of Insiders or have material
tax, accounting, financial, human resource or legal consequences to us or our affiliates; provided, however, that the Plan Administrator
resolutions regarding any delegation with respect to (i) and (ii) will specify the total number of shares that may be subject to the stock
awards granted by such officer and that such officer may not grant a stock award to himself or herself. Any stock awards will be granted
on the form of award agreement most recently approved for use by the Plan Administrator, unless otherwise provided in the resolutions
approving the delegation authority.

 The Plan Administrator will, in its sole discretion,
determine the performance goals, if any, applicable to any stock award (including any adjustment(s) thereto that will be applied in determining
the achievement of such performance goals) on or prior to the Determination Date (as defined in the 2023 Plan). The performance goals
may differ from participant to participant and from stock award to stock award. The Plan Administrator shall determine and approve the
extent to which such performance goals have been timely achieved and the extent to which the shares subject to such stock award have thereby
been earned. Please refer to the discussion below under "— Performance Goals " for more information.

 Stock awards granted to participants who are insiders
subject to Section 16 of the Exchange Act must be approved by two or more "non-employee directors" of the Board (as defined
in the regulations promulgated under Section 16 of the Exchange Act).

 Stock Options

 Each stock option will be designated in the stock
award agreement as either an incentive stock option (which is entitled to potentially favorable tax treatment) or a nonstatutory stock
option. However, notwithstanding such designation, to the extent that the aggregate fair market value of the shares with respect to which
incentive stock options are exercisable for the first time by the participant during any calendar year exceeds $0.10 million, such
stock options will be treated as nonstatutory stock options. Incentive stock options may only be granted to employees.

 The term of each stock option will be stated in
the stock award agreement. In the case of an incentive stock option, the term will be ten years from the date of grant or such shorter
term as may be provided in the stock award agreement. Moreover, in the case of an incentive stock option granted to a participant who
owns stock representing more than 10% of the total combined voting power of all classes of our stock or the stock of any subsidiary, the
term of the incentive stock option will be five years from the date of grant or such shorter term as may be provided in the stock award
agreement.

 The per share exercise price for the shares to
be issued pursuant to exercise of a stock option will be determined by the Plan Administrator, subject to the following: in the case of
an incentive stock option (i) granted to an employee who, at the time the incentive stock option is granted, owns stock representing
more than 10% of the voting power of all classes of our stock or the stock of any subsidiary, the per share exercise price will be no
less than 110% of the fair market value per share on the date of grant; and (ii) granted to any other employee, the per share exercise
price will be no less than 100% of the fair market value per share on the date of grant. In the case of a nonstatutory stock option, the
per share exercise price will be no less than 100% of the fair market value per share on the date of grant. Notwithstanding the foregoing,
stock options may be granted with a per share exercise price of less than 100% of the fair market value per share on the date of grant
pursuant to a corporate reorganization, liquidation, etc., described in Section 424(a) of the Code.

 At the time a stock option is granted, the Plan
Administrator will fix the period within which the stock option may be exercised and will determine any conditions that must be satisfied
before the stock option may be exercised. A stock option may become exercisable upon completion of a specified period of service with
us or one of our affiliates and/or based on the achievement of performance goals during a performance period as set out in advance in
the participant's award agreement. If a stock option is exercisable based on the satisfaction of performance goals, then the Plan
Administrator will: (x) determine the nature, length and starting date of any performance period for such stock option; (y) select
the performance goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should
apply. Please refer to the discussion below under " —Performance Goals " for more information. The Plan Administrator
will also determine the acceptable form of consideration for exercising a stock option, including the method of payment.

 If a participant ceases to be a service provider
other than for "Cause" (as defined in the 2023 Plan), the participant may exercise his or her stock option within such
period of time as is specified in the stock award agreement to the extent that the stock option is vested on the date of termination (but
in no event later than the expiration of the term of such stock option). In the absence of a specified time in the stock award agreement,
to the extent vested as of a participant's termination, the stock option will remain exercisable for 12 months following a
termination for death or disability, and 3 months following a termination for any other reason. Any outstanding stock option (including
any vested portion thereof) held by a participant shall immediately terminate in its entirety upon the participant being first notified
of his or her termination for Cause.

 Stock Appreciation Rights (SARs)

 The Plan Administrator will determine the terms
and conditions of each SAR, provided that the exercise price for each SAR will be no less than 100% of the fair market value of the underlying
shares of common stock on the date of grant. An SAR may become exercisable upon completion of a specified period of service with us or
one of our affiliates and/or based on the achievement of performance goals during a performance period as set out in advance in the participant's
award agreement. If an SAR is exercisable based on the satisfaction of performance goals, then the Plan Administrator will: (x) determine
the nature, length and starting date of any performance period for such SAR; (y) select the performance goals to be used to measure
the performance; and (z) determine what additional vesting conditions, if any, should apply. Please refer to the discussion below
under "— Performance Goals " for more information. Upon exercise of an SAR, a participant will receive payment
from us in an amount determined by multiplying the difference between the fair market value of a share on the date of exercise over the
exercise price by the number of shares with respect to which the SAR is exercised. SARs may be paid in cash or shares of common stock,
as determined by the Plan Administrator. SARs are exercisable at the times and on the terms established by the Plan Administrator.

 Restricted Stock and RSUs

 Restricted stock awards are grants of shares of
common stock that are subject to various restrictions, including restrictions on transferability and forfeiture provisions. Shares of
restricted stock will vest and the restrictions on such shares will lapse in accordance with terms and conditions established by the Plan
Administrator. Each RSU is a bookkeeping entry representing an amount equal to the fair market value of one share of common stock. Restrictions
may lapse upon the completion of a specified period of service with us or one of our affiliates and/or based on the achievement of performance
goals during a performance period as set out in advance in the participant's award agreement. If the unvested shares of restricted
stock or RSUs are being earned upon the satisfaction of performance goals, then the Plan Administrator will: (x) determine the nature,
length and starting date of any performance period for each unvested share or RSU; (y) select the performance goals to be used to
measure the performance; and (z) determine what additional vesting conditions, if any, should apply.

 In determining whether restricted stock or RSUs
should be granted, and/or the vesting schedule for such a stock award, the Plan Administrator may impose whatever conditions on vesting
as it determines to be appropriate. For example, the Plan Administrator may determine to grant restricted stock or RSUs only if performance
goals established by the Plan Administrator are satisfied. Any performance goals may be applied on a Company-wide or an individual business
unit basis, as determined by the Plan Administrator. Please refer to the discussion below under "— Performance Goals "
for more information.

 During the period of restriction, participants
holding restricted stock may exercise full voting rights and will be entitled to receive all dividends and other distributions paid, in
each case with respect to such shares unless the Plan Administrator determines otherwise. If any such dividends or distributions are paid
in shares, the shares will be subject to the same restrictions, including without limitation restrictions on transferability and forfeitability,
as the restricted stock with respect to which they were paid. During the period of restriction, such dividends or other distributions
shall be subject to the same restrictions and risk of forfeiture as the shares of restricted stock with respect to which the dividends
accrue and shall not be paid or distributed unless and until such related shares have vested and been earned.

 During the vesting period, participants holding
RSUs will hold no voting rights by virtue of such RSUs. The Plan Administrator may, in its sole discretion, award dividend equivalents
in connection with the grant of RSUs that may be settled in cash, in shares of equivalent value, or in some combination thereof.

 Stock Bonus Awards

 A stock bonus award is an award of shares to an
eligible person without a purchase price that is not subject to any restrictions. All stock bonus awards may but are not required to be
made pursuant to an award agreement. The Plan Administrator will determine the number of shares to be awarded to the participant under
a stock bonus award. Payment may be made in the form of cash, whole shares, or a combination thereof, based on the fair market value of
the shares subject to the stock bonus award on the date of payment, as determined in the sole discretion of the Administrator.

 Performance Goals

 The Plan Administrator in its discretion may make
performance goals applicable to a participant with respect to a stock award. In the Plan Administrator's discretion, one or more
of the following performance goals may apply: (1) sales or non-sales revenue; (2) return on revenues; (3) operating income;
(4) income or earnings including operating income; (5) income or earnings before or after taxes, interest, depreciation and/or
amortization; (6) income or earnings from continuing operations; (7) net income; (8) pre-tax income or after-tax income;
(9) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or
excluding charges attributable to the adoption of new accounting pronouncements; (10) raising of financing or fundraising; (11) project
financing; (12) revenue backlog; (13) gross margin; (14) operating margin or profit margin; (15) capital expenditures,
cost targets, reductions and savings and expense management; (16) return on assets, return on investment, return on capital, or return
on stockholder equity; (17) cash flow, free cash flow, cash flow return on investment, net cash provided by operations, or cash flow
in excess of cost of capital; (18) performance warranty and/or guarantee claims; (19) stock price or total stockholder return;
(20) earnings or book value per share; (21) economic value created; (22) pre-tax profit or after-tax profit; (23) strategic
business criteria; (24) objective goals relating to divestitures, joint ventures, mergers, acquisitions and similar transactions;
(25) objective goals relating to staff management, results from staff attitude and/or opinion surveys, staff satisfaction scores,
staff safety, staff accident and/or injury rates, compliance, headcount, performance management, completion of critical staff training
initiatives; (26) objective goals relating to projects; and (27) enterprise resource planning. Stock awards issued to participants
may take into account other criteria (including subjective criteria).

 Outside Director Limitations

 Stock awards granted during a single fiscal year
under the 2023 Plan or otherwise, taken together with any cash fees paid during such fiscal year for services on the Board, shall
not exceed $0.50 million in total value for any non-employee director ("Outside Director") (calculating the value of
any such stock awards, in each case, based on the grant date fair value of such stock awards for financial reporting purposes). Such applicable
limit shall include the value of any stock awards that are received in lieu of all or a portion of any annual committee cash retainers
or other similar cash based payments. Stock awards granted to an individual while he or she was serving in the capacity as an employee
or while he or she was an independent contractor but not an Outside Director will not count for purposes of these limitations.

 Leaves of Absence / Transfer Between Locations

 The Plan Administrator has the discretion to determine
at any time whether and to what extent the vesting of stock awards shall be suspended during any leave of absence; provided that in the
absence of such determination, vesting of stock awards will continue during any paid leave and will be suspended during any unpaid leave
(unless otherwise required by applicable laws). A participant will not cease to be an employee in the case of (i) any leave of absence
approved by the participant's employer or (ii) transfers between our locations or between us and any subsidiary. If an employee
holds an incentive stock option and such leave exceeds 3 months then, for purposes of incentive stock option status only, such employee's
service as an employee shall be deemed terminated on the first day following such 3 month period and the incentive stock option shall
thereafter automatically be treated for tax purposes as a nonstatutory stock option in accordance with applicable laws, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy.

 Change in Time Commitment

 In the event a participant's regular level
of time commitment in the performance of his or her services for us or one of our affiliates is reduced (for example, and without limitation,
if the participant is an employee and the employee has a change in status from full-time to part-time or takes an extended leave of absence)
after the date of grant of any stock award, the Plan Administrator, in its sole discretion, may (x) make a corresponding reduction
in the number of shares or cash amount subject to any portion of such stock award that is scheduled to vest or become payable after the
date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting schedule applicable
to such stock award (in accordance with Section 409A, as applicable). In the event of any such reduction, the participant will have
no right with respect to any portion of the stock award that is so amended.

 Nontransferability of Stock Awards

 Unless determined otherwise by the Plan Administrator,
a stock award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the
laws of descent or distribution and may be exercised, during the lifetime of the participant, only by the participant. If the Plan Administrator
makes a stock award transferable, such stock award will contain such additional terms and conditions as the Plan Administrator deems appropriate;
provided, however, that in no event may any stock award be transferred for consideration to a third-party financial institution.

 Recoupment Policy

 The Plan Administrator may specify in an award
agreement that the participant's rights, payments, and/or benefits with respect to a stock award will be subject to reduction, cancellation,
forfeiture, and/or recoupment upon the occurrence of certain specified events, in addition to any applicable vesting, performance or other
conditions and restrictions of a stock award. Notwithstanding any provisions to the contrary under the 2023 Plan, a stock award granted
under the 2023 Plan shall be subject to the Company's clawback policy as may be established and/or amended from time to time,
including the Compensation Recovery Policy. The Plan Administrator may require a participant to forfeit or return to and/or reimburse
us for all or a portion of the stock award and/or shares issued under the stock award, any amounts paid under the stock award, and any
payments or proceeds paid or provided upon disposition of the shares issued under the stock award, pursuant to the terms of such company
policy or as necessary or appropriate to comply with applicable laws. For the avoidance of doubt, each participant will be subject to
compliance with applicable laws, the Company's Code of Business Conduct and Ethics, and the Company's corporate policies,
as applicable, including without limitation the Company's Compensation Recovery Policy. Notwithstanding anything to the contrary
herein, (i) compliance with applicable law, the Company's Code of Business Conduct and Ethics, and the Company's corporate
policies, as applicable, will be a pre-condition to earning, or vesting in respect of, any award under the 2023 Plan and (ii) any
awards under the 2023 Plan which are subject to the Company's Compensation Recovery Policy will not be earned or vested, even if
already granted, paid or settled, until the Company's Compensation Recovery Policy ceases to apply to such awards and any other
vesting conditions applicable to such awards are satisfied.

 Adjustment

 In the event of a stock split, reverse stock split,
stock dividend, combination, consolidation, recapitalization or reclassification of the shares, subdivision of the shares, a rights offering,
a reorganization, merger, spin-off, split-up, repurchase, or exchange of common stock or other securities of us or other significant corporate
transaction, or other change affecting common stock occurs, the Plan Administrator, in order to prevent dilution, diminution or enlargement
of the benefits or potential benefits intended to be made available under the 2023 Plan, will, in such manner as it may deem equitable,
adjust the number, kind and class of securities that may be delivered under the 2023 Plan and/or the number, class, kind and price
of securities covered by each outstanding stock award; provided that all such adjustment will be made in a manner that does not result
in taxation under Section 409A.

 Corporate Transaction

 In the event of (i) a transfer of all or
substantially all of our assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction
of us with or into another corporation, entity or person, (iii) the consummation of a transaction, or series of related transactions,
in which any person becomes the beneficial owner directly or indirectly, of more than 50% of our then outstanding capital stock or (iv) a
Change in Control (as defined in 2023 Plan), each outstanding stock award (vested or unvested) will be treated as the Plan Administrator
determines, which determination may provide for one or more of the following: (a) the continuation of such outstanding stock awards
(if we are the surviving corporation); (b) the assumption of such outstanding stock awards by the surviving corporation or its parent;
(c) the substitution by the surviving corporation or its parent of new stock options or other equity awards for such stock awards;
(d) the cancellation of such stock awards in exchange for a payment to the participants equal to the excess of (1) the fair
market value of the shares subject to such stock awards as of the closing date of such corporate transaction over (2) the exercise
price or purchase price paid or to be paid (if any) for the shares subject to the stock awards (which payment may be subject to the same
conditions that apply to the consideration that will be paid to holders of shares in connection with the transaction, subject to applicable
law); (e) the full or partial acceleration of exercisability or vesting and accelerated expiration of an outstanding stock award
and lapse of our right to repurchase or re-acquire shares acquired under a stock award or lapse of forfeiture rights with respect to shares
acquired under a stock award; (e) the opportunity for participants to exercise the stock options prior to the occurrence of the corporate
transaction and the termination (for no consideration) upon the consummation of such corporate transaction of any stock options not exercised
prior thereto; or (f) the cancellation of outstanding stock awards in exchange for no consideration.

 Change in Control

 A stock award may be subject to additional acceleration
of vesting and exercisability upon or after a "Change in Control" (as defined in the 2023 Plan) as may be provided in
the award agreement for such stock award or as may be provided in any other written agreement between us or any affiliate and the participant,
but in the absence of such provision, no such acceleration will occur.

 Amendment, Termination and Duration of the
2023 Plan

 The 2023 Plan will continue in effect for
a term of 10 years measured from the date the 2023 Plan was approved by our Board, unless terminated earlier under the terms of the
2023 Plan. The Plan Administrator may at any time amend, alter, suspend or terminate the 2023 Plan.

 U.S. Federal Tax Aspects

 A participant who receives a stock option or SAR
will not have taxable income upon the grant of the stock option or SAR. For nonstatutory stock options and SARs, the participant will
recognize ordinary income upon exercise in an amount equal to the excess of the fair market value of the shares over the exercise price—the
appreciation value—on the date of exercise. Any additional gain or loss recognized upon any later disposition of the shares generally
will be long-term or short-term capital gain or loss, depending on whether the shares are held for more than one year.

 The purchase of shares upon exercise of an incentive
stock option will not result in any taxable income to the participant, except for purposes of the alternative minimum tax. Gain or loss
recognized by the participant on a later sale or other disposition of the shares will be capital gain or loss and/or ordinary income depending
upon whether the participant holds the shares transferred upon exercise for a specified period. If the shares are held for the specified
period, any gain generally will be taxed at long-term capital-gain rates. If the shares are not held for the specified period, generally
any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price will be treated as ordinary
income. Any additional gain generally will be taxable at long-term or short-term capital-gain rates, depending on whether the participant
held the shares for more than one year after the exercise date.

 A participant who receives restricted stock will
not have taxable income until vesting unless the participant timely files an election under Section 83(b) of the Code to be taxed
at the time of grant ("Section 83(b) election"). The participant will recognize ordinary income equal to the fair market
value of the shares at the time of vesting less the amount paid for such shares (if any) if no such election is made. Any additional gain
or loss recognized upon any later disposition of the shares generally will be long-term or short-term capital gain or loss, depending
on whether the shares are held for more than one year. If a participant timely files a Section 83(b) election, the participant will
recognize ordinary income equal to the fair market value of the shares at the time of purchase or grant less the amount paid for such
shares (if any).

 A participant who receives RSUs, performance units
or performance shares will not have taxable income upon grant of the stock award; instead the participant will be taxed upon settlement
of the stock award. The participant will recognize ordinary income equal to the fair market value of the shares or the amount of cash
received by the participant. In addition, Section 409A imposes certain restrictions on deferred compensation arrangements. Stock
awards that are treated as deferred compensation under Section 409A are intended to meet the requirements of this section of the
Code.

 The Plan Administrator may, at its discretion
and pursuant to such procedures as it may specify from time to time, permit a participant to satisfy such withholding or deduction obligations
or any other tax-related items, in whole or in part by (without limitation) paying cash, electing to have us withhold otherwise deliverable
cash or shares, or delivering to us already-owned shares; provided that, unless the Plan Administrator permits otherwise, any proceeds
derived from a cashless exercise must be an approved broker-assisted cashless exercise or the cash or shares withheld or delivered must
be limited to avoid financial accounting charges under applicable accounting guidance or shares must have been previously held for the
minimum duration required to avoid financial accounting charges under applicable accounting guidance. The fair market value of the shares
to be withheld or delivered will be determined based on such methodology that we deem to be reasonable and in accordance with applicable
laws.

 We will be entitled to a tax deduction in connection
with a stock award under the 2023 Plan only in an amount equal to the ordinary income realized by the participant and at the time
the participant recognizes the income. Section 162(m) of the Code places a limit of $1 million on the amount of compensation
that we may deduct as a business expense in any year with respect to certain of our most highly paid executive officers. While the Plan
Administrator considers the deductibility of compensation as one factor in determining executive compensation, the Plan Administrator
retains the discretion to award and pay compensation that is not deductible as it believes that it is in the best interests of our stockholders
to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective
in attracting, motivating and retaining key employees.

 New Plan Benefits

 The 2023 Plan does not provide for set benefits
or amounts of awards and we have not approved any stock awards that are conditioned on stockholder approval of the 2023 Plan. We
have not approved any stock awards under the 2023 Plan in connection with the Merger. All future awards to directors, executive officers,
employees and consultants under the 2023 Plan are discretionary and cannot be determined at this time.

 Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters

 The following table sets forth certain information with respect to
the beneficial ownership of our common stock as of February 23, 2024 by:

 each of our named executive officers;

 each of our directors;

 all of our current directors and executive officers as a group;
and

 each person, or group of affiliated persons, who beneficially
owned more than 5% of our common stock.

 We have determined beneficial ownership in accordance
with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as
indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below
have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable
community property laws.

 The percentage of shares beneficially owned is computed on the basis
of 24,832,814 shares of common stock outstanding as of February 23, 2024. Unless otherwise indicated, the address of each beneficial
owner in the table below is c/o Serve Robotics Inc., 730 Broadway, Redwood City, CA 94063.

 Shares of Common Stock Beneficially Owned

 Name

 Number

 Percentage

 5% Stockholders

 Postmates, LLC (1)

 3,963,808

 16.0
 %

 NVIDIA (2)

 2,676,904

 10.8
 %

 NEO 2.0 Entities (3)

 1,438,228

 5.8
 %

 Mark Tompkins (4)

 1,843,750

 7.4
 %

 Directors and Named Executive Officers

 Ali Kashani (5)

 2,360,543

 9.5
 %

 Shares subject to voting proxy (6)

 6,860,053

 27.6
 %

 Touraj Parang (7)

 815,904

 3.3
 %

 James Buckly Jordan (8)

 809,936

 3.3
 %

 Olivier Vincent

 9,928

 *

 Ali Pourdad (9)

 31,283

 *

 Euan Abraham (10)

 181,301

 *

 Sarfraz Maredia

 —

 —

 All directors and executive officers as a group (eight persons)

 8,020,574

 32.3
 %

 *
 Represents beneficial ownership of less than 1%.

 (1)
 Postmates is the wholly-owned subsidiary of Uber. The address of Uber
is 1725 3rd Street, San Francisco, California 94158.

 (2)
 The address of NVIDIA is 2788 San Tomas Expressway, Santa Clara,
California 95051.

 (3)
 Consists of (i) 1,420,228 shares of common stock held
by NEO 2.0, L.P. and (ii) 18,000 shares of Common stock held by NEO 2.0a, L.P. The general partner of each of NEO
2.0., L.P. and NEO 2.0a, L.P. is NEO GP 2.0, LLC. Ali Partovi is the Managing Director of NEO GP 2.0, LLC and has dispositive
power over the shares of common stock controlled thereby. The address of NEO GP 2.0, LLC is 2121 S. El Camino Real, Ste 200,
San Mateo, California 94403.

 (4)
 Consists of (i) 1,687,500 shares of common stock and
(ii) 156,250 shares of common stock underlying the Bridge Warrants.

 (5)
 Consists of (i) 2,205,309 shares of common stock held directly
by Ali Kashani, (ii) 16,070 shares of common stock held by Nikki Stoddart, the spouse of Dr. Kashani, (iii) 80,350 shares
of common stock held by Salma Kashani, (iv) 8,035 shares of common stock held by Ali Sadeghi Hariri, (v) 1,562 shares
underlying warrants to purchase common stock which are exercisable within 60 days of February 23, 2024, and (vi) 49,217 shares of
common stock underlying options which are or will become exercisable within 60 days of February 23, 2024. Dr. Kashani shares
control of the shares of common stock held by Ms. Stoddart. 1,124,900 shares of common stock held by Dr. Kashani are subject
to a repurchase option held by the Company in the event that Dr. Kashani's service with the Company is terminated.

 (6)
 Consists of shares of common stock held by holders of pre-Merger
common stock over which Dr. Kashani holds an irrevocable proxy, pursuant to the agreements between the Company and such stockholders.
The Company does not believe that the parties to these voting agreements constitute a "group" under Section 13 of the
Exchange Act, as Dr. Kashani exercises voting control over these shares. Dr. Kashani does not have dispositive control over
these shares of common stock.

 (7)
 Consists of (i) 794,709 shares of Common stock held by Touraj
Parang, (ii) 2,008 shares of common stock held by Armin Parang, Mr. Parang's brother, (iii) 2,008 shares
of common stock held by Payman Parang, Mr. Parang's brother, (iv) 2,008 shares of common stock held by Shaghayegh
Ahkami, Mr. Parang's sister-in-law, (v) 2,008 shares of common stock held by Shahyar Ahkami, Mr. Parang's
brother-in-law, and (vi) 13,163 shares of common stock underlying options which are or will become exercisable within 60 days
of February 23, 2024. Mr. Parang disclaims beneficial ownership of the shares of common stock held by Armin Parang, Payman Parang,
Shaghayegh Ahkami and Shahyar Ahkami. 412,521 shares of common stock held by Mr. Parang are subject to a repurchase option held
by the Company in the event that Mr. Parang's service with the Company is terminated.

 (8)
 Consists of (i) 659,035 shares of common stock held by Wavemaker
Global Select II, LLC, (ii) 9,200 shares held by Future VC, LLC, (iii) 77,291 shares of common stock held by Match
Robotics VC, LLC and (iv) 64,410 shares of common stock underlying warrants to purchase common stock which are exercisable within
60 days of February 23, 2024. James Buckly Jordan is the Managing Partner of Wavemaker Global Select II, LLC and has dispositive
power over the shares of common stock held thereby. Future VC, LLC and Match Robotics VC, LLC are controlled by James Buckly Jordan. The
address of Wavemaker Global Select II, LLC is 1 Nanson road #03-00, Singapore 238909. The address for Future VC, LLC is 1438 9th
St., Santa Monica, California 90401. The address for Match Robotics VC, LLC is 1134 11th Street, Suite 101, Santa Monica,
California 90403.

 (9)
 Shares of common stock are held by Pourdad Capital Corp. over which Ali Pourdad has control.

 (10)
 Consists of (i) 181,301 options to purchase shares of common stock
which are or will become exercisable within 60 days of February 23, 2024.

 Securities Authorized for Issuance under Equity
Compensation Plans

 The following table sets forth information as of December 31, 2023
regarding shares of common stock that may be used under our equity compensation plans.

 Plan Category

 Number of
 securities to be
 issued upon
 exercise of
 outstanding
 options, warrants
 and rights
 (a)

 Weighted-average exercise price of outstanding options, warrants and rights
 (b)

 Number of
 securities
 remaining
 available for
 future issuance
 under equity compensation plans (excluding securities reflected in column (a))
 (c)

 Equity compensation plans approved by security holders

 (1)

 $
 0.61

 1,313,949
 (2)

 Equity compensation plans not approved by security holders

 --

 --

 --

 Total

 (1)

 $
 0.61

 1,313,949
 (2)

 (1)

 Includes 1,515,386 shares of our common stock issuable upon exercise of options originally granted under the 2021 Plan.

 (2)

 Includes 1,313,949 shares of our common stock available for issuance under the 2023 Plan. The number of shares available for issuance under the 2023 Plan may, at the discretion of the Board or a committee thereof, be increased on October 1st of each fiscal year beginning with the 2023 fiscal year until the 2023 Plan terminates, in each case, in an amount equal to the lesser of (i) at the discretion of our Board, 4% of the shares of common stock issued and outstanding on the last day of the immediately preceding month on a fully-diluted and as-converted basis and (ii) such other number of shares determined by our Board.

 See "Description of the 2023 Equity Incentive Plan"
under Part III, Item 11. Executive Compensation and Note 10 of Notes to Financial Statements included in Part II, Item 8. Financial
Statements and Supplementary Data of this report for additional information about our equity compensation plans and arrangements.

 Item 13. Certain Relationships and Related Transactions, and Director
Independence

 Below, we describe transactions since January 1, 2022, in which
the amounts involved exceeded or will exceed the lesser of (i) $120,000 and (ii) 1% of the average total assets of the Company
at year end for the last two completed fiscal years, between the Company and any of our directors, executive officers, or beneficial holders
of more than 5% of Serve's pre-Merger capital stock. Other than as described below, there have not been transactions to which we
have been a party other than compensation arrangements, which are described under " Executive Compensation." The following
description is historical and has not been adjusted to give effect to the Merger.

 Secured Subordinated Promissory Note with Ali
Kashani

 On December 27, 2023, Serve issued a Secured
Subordinated Promissory Note (the "December 2023 Kashani Note") to Ali Kashani, a holder of greater than 5% of the capital
stock of Serve who serves as Chief Executive Officer and is a member of the Serve Board of Directors, in exchange for a loan with the
aggregate principal amount of $70,000. Pursuant to the December 2023 Kashani Note, the loan accrued interest on the unpaid principal
amount at a rate of 7.67% per annum, computed as simple interest. Serve repaid the December 2023 Kashani Note on January 3, 2024.

 On June 28, 2023, Serve issued a Secured
Subordinated Promissory Note (the "June 2023 Kashani Note") to Dr. Kashani, in exchange for a loan with the aggregate
principal amount of $449,000. Pursuant to the June 2023 Kashani Note, the loan accrued interest on the unpaid principal amount at
a rate of 7.67% per annum, computed as simple interest. Dr. Kashani was entitled to an exit fee equal to 16% of the stated principal amount
of the June 2023 Kashani Note, less the total amount of interest that accrued on the June 2023 Kashani Note prior to the closing
of the Merger (the "Kashani Exit Fee"). Serve paid the Kashani Exit Fee and repaid the June 2023 Kashani Note upon the closing
of the Merger. On August 4, 2023, payment of $520,840 was made to Dr. Kashani as repayment of the promissory note, which includes
$449,000 in principal and $71,840 in interest. No additional fees were paid.

 Related Party Transactions with Uber Technologies
Inc.

 As described elsewhere in this report, Serve is
a spin-off of Uber. Serve was initially formed in 2017 as the X division of Postmates, which was acquired by Uber in 2020. Uber held greater
than 5% of Serve's pre-Merger capital stock.

 Convertible Promissory Note

 On January 2, 2024, we issued a convertible
promissory note (the "Postmates Convertible Promissory Note") to Postmates. The Postmates Convertible Promissory Note bears
interest at a rate of 6.00% per year, compounded annually, and is due and payable upon request by Postmates on or after the 12-month anniversary
of the original issuance date of the Postmates Convertible Promissory Note. We may not prepay or repay the Postmates Convertible Promissory
Note in cash without Postmates' consent. The aggregate gross proceeds from the issuance of the Postmates Convertible Promissory
Note was $500,000.

 The issuance of the Postmates Convertible Promissory
Note was exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated
by the SEC thereunder.

 Master Framework Agreement and Project Plan

 Uber and the Company entered into the Master Framework
Agreement, effective September 3, 2021 which was amended by Amendment No. 1 to the Master Framework Agreement, dated June 7,
2022, Amendment No. 2 to the Master Framework Agreement, dated January 12, 2023, and Amendment No. 3 to the Master Framework
Agreement, dated September 6, 2023 (as amended, the "Master Framework Agreement"). The term of the Master Framework Agreement
has been extended twice and is currently effective until February 24, 2027 and automatically renews for one-year periods unless terminated.
Pursuant to the Master Framework Agreement, the Company agreed to provide delivery robots for Uber deliveries and Uber to pay delivery
fees based on the services provided by the delivery robots. In addition, among other things, under the Master Framework Agreement, the
Company is obligated to obtain and maintain the necessary regulatory approvals and licenses and certain types and levels of insurance
for the robots.

 The Company and Uber entered into separate Project
Plans on February 3, 2022 ("Project Plan #1") and May 26, 2022 ("Project Plan #2" and together
with Project Plan #1, the "Project Plans") for deployment of the Company's robots to perform concurrent deliveries
on Uber's platform. Under Project Plan #1, Uber and the Company worked together to onboard 10 robots to perform concurrent
deliveries on Uber's platform in a mutually agreed upon operating area in Los Angeles, California. Entering into Project Plan #2
signified satisfactory completion of Project Plan #1. Under Project Plan #2, Uber and the Company are working together to deploy
up to 2,000 robots on Uber's platform in multiple cities in the U.S. Each of these Project Plans is governed by the terms of
the Master Framework Agreement. Pursuant to the Project Plans, the Company and Uber have agreed to meet monthly to discuss completion
dates and key milestones for the Master Framework Agreement and to establish operating areas.

 The Master Framework Agreement provides for certain
negotiated indemnification terms, including indemnification by the Company for damages resulting from third-party intellectual property
rights claims. The Project Plans require the Company to maintain commercial insurance during the term of the Project Plans, including
for general liability, auto liability and workers' compensation.

 Wavemaker – Side Letter

 On December 5, 2022, the Company and Wavemaker
Pacific 4, L.P. entered into a SAFE along with a side letter to the SAFE dated as of December 15, 2022 (the "Wavemaker
Side Letter"). Wavemaker Pacific 4, L.P. holds greater than 5% of Serve's pre-Merger capital stock. Pursuant to the Wavemaker
Side Letter, Wavemaker Pacific 4, L.P. is granted preemptive rights to purchase preferred stock sold in an equity financing, among
other rights.

 NEO 2.0 LP – Side Letter

 On December 1, 2022, the Company, NEO 2.0,
L.P. ("NEO 2.0") and NEO 2.0a, L.P. ("NEO 2.0a," and together with NEO 2.0, the "NEO
Entities") entered into a SAFE along with a side letter dated as of December 5, 2022 (the "NEO Entities Side Letter").
The NEO Entities own greater than 5% of Serve's pre-Merger capital stock. Pursuant to the NEO Entities Side Letter, the NEO entities
are granted preemptive rights to purchase preferred stock sold in an equity financing, among other rights.

 Related Party Transactions with NVIDIA

 Convertible Promissory Note

 On January 2, 2024, we issued a convertible
promissory note ("the NVIDIA Convertible Promissory Note") to NVIDIA. The NVIDIA Convertible Promissory Note bears interest
at a rate of 6.00% per year, compounded annually, and are due and payable upon request by NVIDIA on or after the 12-month anniversary
of the original issuance date of the NVIDIA Convertible Promissory Note. We may not prepay or repay the NVIDIA Convertible Promissory
Note in cash without NVIDIA's consent. The aggregate gross proceeds from the issuance of the NVIDIA Convertible Promissory Note
was $2,500,000.

 Business Collaboration Agreement

 On February 2, 2022, the Company and NVIDIA
entered into a business collaboration agreement (the "Business Collaboration Agreement") pursuant to which the Company and
NVIDIA agreed to collaborate on the potential integration of NVIDIA's AI capabilities into the Company's robots, among other
things.

 NVIDIA Side Letter

 On February 4, 2022, the Company and NVIDIA
entered into a side letter (the "NVIDIA Side Letter") pursuant to which the Company granted NVIDIA contractual management
rights including inspection rights and a right of first refusal, among other things.

 Equity Financings

 2022 SAFEs

 Between February 4, 2022 and March 9,
2022, Serve issued SAFEs for an aggregate purchase amount of $10.59 million to investors of Serve (the "February 2022 SAFEs").
Between December 1, 2022 and January 18, 2023, Serve issued SAFEs for an aggregate purchase amount of $4.97 million to
investors of Serve (the "December 2022 SAFEs" and, together with the February 2022 SAFEs, the "2022 SAFEs").
The following table summarizes the purchase of 2022 SAFEs by related persons:

 Purchaser

 Aggregate
 Purchase
 Price for
 2022 SAFEs

 NEO 2.0, L.P. (1)

 $
 987,483

 NEO 2.0a, L.P. (1)

 $
 12,517

 NVIDIA

 $
 9,000,000

 Postmates, LLC (2)

 $
 2,000,000

 Wavemaker Pacific 4, L.P. (3)

 $
 1,000,000

 (1)
 The general partner of each of NEO 2.0., L.P. and NEO 2.0a,
L.P. is NEO GP. NEO GP and its affiliates hold greater than 5% of the pre-Merger capital stock of Serve.

 (2)
 Postmates, LLC is a wholly-owned subsidiary of Uber, which holds
greater than 5% of the pre-Merger capital stock of Serve. Sarfraz Maredia is VP, Head of Americas, Delivery at Uber and serves as a member
of the Serve Board of Directors.

 (3)
 Wavemaker Pacific 4, L.P. holds greater than 5% of Serve's
pre-Merger capital stock.

 Registration Rights Agreement

 In connection with the Merger and the Private
Placement, on July 31, 2023, we entered into a registration rights agreement (the "Registration Rights Agreement"), pursuant
to which we agreed that promptly, but no later than 60 calendar days from the final closing of the Private Placement, we would file, subject
to customary exceptions, a registration statement with the SEC covering the registrable securities (the "Registration Statement").
All of our directors, executive officers and holders of more than 5% of our capital stock are parties to the Registration Rights Agreement.
We must use commercially reasonable efforts to keep the Registration Statement effective for five years from the date it was declared
effective by the SEC or until the date on which all registrable securities have been transferred other than to certain enumerated permitted
assignees under the Registration Rights Agreement.

 Participation in Private Placement

 Certain of our existing investors, including investors
affiliated with certain of our directors and officers, have purchased an aggregate of 1,258,221 shares of our common stock in the
Private Placement, for an aggregate gross purchase price of $5.01 million. Such purchases were made on the same terms as the shares
that were sold to other investors in the Private Placement and not pursuant to any pre-existing contractual rights or obligations. Each
of NVIDIA, and Postmates, LLC, who hold more than 5% of our capital stock, and Olivier Vincent and Ali Kashani participated in the Private
Placement.

 Other Transactions

 We have granted stock options to our executive
officers and our directors. For a description of these stock options, see Part III, Item 11. Executive Compensation of this report.

 Indemnification Agreements

 We maintain indemnification agreements with each
of our current directors and executive officers. The indemnification agreements and our amended and restated bylaws require us to indemnify
our directors to the fullest extent not prohibited by DGCL. Subject to very limited exceptions, our amended and restated bylaws also require
us to advance expenses incurred by our directors and officers.

 Policies and Procedures for Related Party Transactions

 We did not have a formal review and approval policy
for related party transactions at the time of any of the transactions described above. However, all of the transactions described above
were entered into after presentation, consideration and approval by our Board. Subsequently, our audit committee adopted a charter which
requires the audit committee to conduct appropriate review and oversight of related party transactions.

 Item 14. Principal Accounting Fees and Services

 Raich Ende Malter & Co. LLP ("REM") was the Company's
independent registered public accounting firm from November 2020 through June 2022. Effective July 2022, Grassi & Co., CPAs, P.C.
("Grassi") were appointed as the Company's independent registered public accounting firm. Following the Merger, (i)
Grassi & Co., CPAs, P.C. ("Grassi"), was dismissed as the independent registered public accounting firm of the Company,
and (ii) our Board engaged dbbmckennon ("dbbmckennon") as the independent registered public accounting firm to audit the Company's
financial statements for the fiscal years ending December 31, 2023 and 2022. Set below are aggregate fees billed by dbbmckennon, Grassi
and REM for professional services rendered for the years ended December 31, 2023 and 2022.

 2023

 2022

 Audit fees (1)

 $
 144,507

 $
 135,667

 Audit-related fees (2)

 -

 -

 Tax fees (3)

 -

 1,750

 All other fees (4)

 -

 -

 Total fees

 $
 144,507

 $
 137,417

 (1) Audit fees consist of fees billed for professional
services rendered by our independent registered public accounting firm for the audit of our annual consolidated financial statements and
review of our interim consolidated financial statements or services that are normally provided by our independent registered public accounting
firm in connection with statutory and regulatory filings or engagements. The fees for the audit services billed and to be billed dbbmckennon
for the years ended December 31, 2023 and December 31, 2022 amounted to $144,507 and $111,917, respectively. The fees for the audit services
billed by Grassi and REM for the year ended December 31, 2022 amounted to $23,750.

 (2) Audit-related fees consist of fees billed
for professional services rendered to provide consent for incorporation by reference of audit reports in certain registration statements
and other forms filed with the SEC. The fees for the audit-related services billed or to be billed by dbbmckennon amounted to $0 for the
year ended December 31, 2023. There were no audit-related fees billed by Grassi and REM for the year ended December 31, 2022.

 (3) Tax fees consist of fees billed for professional
services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning. The fees for
the tax services billed and to be billed by dbbmckennon amounted to $0 for the year ended December 31, 2023. The fees for the tax services
billed and to be billed by Grassi and REM for professional services for tax compliance, tax advice, and tax planning for the year ended
December 31, 2022 amounted to $1,750.

 (4) All other fees consist of fees billed for
all other services. There were no fees billed by dbbmckennon, Grassi and REM for other products and services for the years ended December
31, 2023 and 2022.

 Audit Committee's Pre-Approval Policy
and Procedures

 Under the Audit Committee's charter, the Audit Committee is required
to pre-approve all audit and permitted non-audit services performed by our independent registered public accountants to ensure that the
provision of such services does not impair the public accountants' independence. All audit and audit-related fees billed by dbbmckennon
were approved by the Audit Committee in accordance with SEC requirements.

 Item 15. Exhibits, Financial Statement Schedules

 We have filed the following documents as part
of this Form 10-K:

 (1) Financial Statements

 See "Index to the Consolidated Financial
Statements" in Part II, Item 8. Financial Statements and Supplementary Data of this report.

 (2) Financial Statement Schedules

 All schedules have been omitted because they are
not required, not applicable, not present in amounts sufficient to require submission of the schedule, or the required information is
otherwise included.

 (3) Exhibits

 The exhibits filed in response to Item 601 of
Regulation S-K are listed in the Exhibit Index.

 Item 16. Form 10-K Summary

 None.

 EXHIBIT

 Exhibit No.

 Description

 2.1§

 Agreement and Plan of Merger and Reorganization among the Company, Serve Acquisition Corp. and Serve Robotics Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023)

 3.1

 Certificate of Merger relating to the merger of Serve Acquisition Corp. with and into Serve Robotics Inc., filed with the Secretary of State of the State of Delaware on July 31, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 3.2

 Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on July 31, 2023 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 3.3

 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 4.1

 Form of Bridge Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 4.2

 Form of Bridge Broker Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 4.3

 Form of Placement Agent A Warrant (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 4.4

 Form of Placement Agent B Warrant (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 4.5

 Form of Secured Subordinated Promissory Note (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on January 3, 2024).

 4.6

 Form of Convertible Promissory Note (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on January 3, 2024).

 4.7#

 Common Stock Warrant, dated February 7, 2024, issued by Serve Robotics Inc. to Magna New Mobility USA, Inc. (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on February 7, 2024).

 4.8*

 Description of Securities.

 10.1+§

 Offer Letter, dated as of March 1, 2021, by and between Touraj Parang and the Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.2+§

 Offer Letter, dated as of October 7, 2021, by and between Euan Abraham and the Company (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.3+

 Engagement Letter, dated as of May 18, 2023, by and between AKW Financial, LLC dba Vision Accounting & Tax (VAT) and the Company (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.4+

 Parang Termination Payment Letter, dated as of June 23, 2021, by and between Touraj Parang and the Company (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.5+

 Kashani Termination Payment Letter, dated as of September 27, 2021, by and between Ali Kashani and the Company (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.6

 Lease Agreement, dated as of February 25, 2021, by and between Bauen Fund 2018-730, LLC and the Company (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.7§

 Contribution Agreement, dated as of February 24, 2021, by and between Postmates, LLC and the Company (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.8#

 Amended and Restated Side Letter to the Contribution Agreement, dated as of January 12, 2023, by and between Postmates, LLC and the Company (incorporated by reference to Exhibit 10.8 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.9#

 Master Framework Agreement, dated as of September 3, 2021 by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.9 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.10#

 Amendment No. 1 to the Master Framework Agreement, dated as of May 26, 2022 by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.10 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.11#

 Amendment No. 2 to the Master Framework Agreement, dated as of January 12, 2023 by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.11 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.12#

 Amendment No. 3 to the Master Framework Agreement, dated as of September 6, 2023 by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.12 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.13#

 Project Plan #1, dated as of February 3, 2022, by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.13 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.14#

 Project Plan #2, dated as of May 26, 2022, by and between Uber Technologies, Inc. and the Company (incorporated by reference to Exhibit 10.14 to Amendment No. 2 to the Registration Statement on Form S-1 filed with the SEC on November 28, 2023).

 10.15

 Equipment Lease Agreement, dated as of June 6, 2022, by and between Farnam Street Financial, Inc. and the Company (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.16*

 Lease Schedule No. 001R, dated December 3, 2022, to Equipment Lease Agreement dated as of June 6, 2022, by and between Farnam Street Financial, Inc. and the Company.

 10.17*

 Lease Schedule No. 002, dated December 28, 2023, to Equipment Lease Agreement dated as of June 6, 2022, by and between Farnam Street Financial, Inc. and the Company.

 10.18#§

 Strategic Customer Agreement, dated as of December 31, 2021, by and between Ouster, Inc. and the Company (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.19§

 Loan and Security Agreement, dated as of March 1, 2022, by and between Silicon Valley Bank and the Company (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.20

 First Amendment to the Loan and Security Agreement, dated as of October 11, 2022, by and between Silicon Valley Bank and the Company (incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.21

 Second Amendment to the Loan and Security Agreement, dated as of April 21, 2023, by and between Silicon Valley Bank, a division of First-Citizens Bank & Trust Company and the Company (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.22

 Third Amendment to the Loan and Security Agreement, dated as of July 28, 2023, by and between Silicon Valley Bank, a division of First-Citizens Bank & Trust Company and the Company (incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.23*

 Fourth Amendment to the Loan and Security Agreement, dated as of January 3, 2024, by and between Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, the Company and Serve Operating Co.

 10.24

 Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.25

 Form of Pre-Merger Indemnification Agreement (incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.26

 Subscription Agreement, dated July 31, 2023, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.27

 Form of Registration Rights Agreement, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.28+

 2021 Stock Plan and form of award agreements (incorporated by reference to Exhibit 10.24 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 10.29+*

 2023 Equity Incentive Plan and form of award agreements.

 10.30#§

 Master Services Agreement, dated as of February 1, 2024 and effective as of January 15, 2024, by and between Magna New Mobility USA, Inc. and Serve Operating Co. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 7, 2024).

 10.31#

 Statement of Work, dated as of February 1, 2024 and effective as of January 15, 2024, by and between Magna New Mobility USA, Inc. and Serve Operating Co. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on February 7, 2024).

 10.32#

 License and Services Agreement, dated as of February 20, 2024, by and between Magna New Mobility USA, Inc. and Serve Operating Co. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 23, 2024).

 10.33*+

 Serve Robotics Inc. Outside Director Compensation Policy.

 16.1

 Letter from Grassi & Co., CPAs, P.C. as to the change in certifying accountant, dated August 4, 2023 (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 21.1

 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2023).

 31.1*

 Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2*

 Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1**

 Certification of Principal Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

 32.2**

 Certification of Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

 97.1*

 Serve Robotics Inc. Compensation Recovery Policy

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *
 Filed herewith.

 **
 This document is being furnished in accordance with Item 601(b)(32)(ii)
of Regulation S-K.

 +
 Indicates a management contract or any compensatory plan, contract
or arrangement.

 #
 Portions of this exhibit (indicated by asterisks) have been
omitted in accordance with Item 601(b)(10) of Regulation S-K. The registrant has furnished supplementally copies of the omitted
portions of this exhibit to the SEC upon its request.

 §
 Certain exhibits or schedules to this exhibit have been omitted
in accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally a copy of any omitted
exhibit or schedule to the SEC upon its request.

 SIGNATURES

 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

 SERVE ROBOTICS INC.

 Dated: February 29, 2024

 By:

 /s/ Ali Kashani

 Chief Executive Officer

 (Principal Executive Officer)

 Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons in the capacities indicated
on the date indicated.

 Signature

 Title

 Date

 /s/

 Chief Executive Officer, and Chairman of the Board
 of Directors

 (principal executive officer)

 /s/

 President and Chief Operating Officer and Director

 /s/
April Pannell

 Chief Financial Officer

 (principal financial and accounting officer)

 April Pannell

 /s/

 Senior Vice President of Hardware Engineering

 /s/
James Buckly Jordan

 James Buckly Jordan

 /s/
Sarfraz Maredia

 Sarfraz Maredia

 /s/
Ali Pourdad

 Ali Pourdad

 /s/
Olivier Vincent

 Olivier Vincent

 NONE 14204078 6896769 1.75 3.17 Future minimum payments under operating leases as of December 31, 2023, are as follows (in thousands):
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