Company: ARAI
Filing Date: 2025-05-14
Form Type: DRS
Source: 0001641172-25-010170
Chunk: 206

Company: Arrive AI Inc.
Filing Date: 2025-05-14
Form: DRS
Chunk 206
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 realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to the future realization of the deferred tax assets and has therefore established a full valuation allowance.

A reconciliation of the statutory tax rate to the Company’s effective tax rates as of December 31, 2023 and 2022 is as follows:

SCHEDULE OF RECONCILIATION OF STATUTOTY TAX RATE

|                              |     | 2023 |       |    |     | 2022 |       |    |
| Statutory federal income tax 
 rate                         |     |      |  21.0 | %  |     |      |  21.0 | %  |
| State taxes                  |     |      |   5.0 | %  |     |      |   5.0 | %  |
| Change in valuation          
 allowance                    |     |      | (26.0 | %) |     |      | (26.0 | %) |
| INCOME TAX BENEFIT           |     |      |   0.0 | %  |     |      |   0.0 | %  |

Economic Development for a Growing Economy (EDGE) Tax Credit

The EDGE Tax Credit (the Credit) provides an incentive to businesses to support job creation, capital investment and to improve the standard of living for Indiana residents. The refundable corporate income tax credit is calculated as a percentage (not to exceed 100%) of the expected increased tax withholdings generated from new job creation. The credit certification is phased in annually for up to ten years based on the employment ramp-up outlined by the business.

As identified in Note 1, the Company is not expected to have taxable income within the next operating year from the date these financial statements are issued, therefore, the Credit is classified as a long-term asset to be used against future Indiana taxable income. For the years ended December 31, 2023 and 2022, the Company was eligible for the Credit in the amount of $17,073 and $14,924, respectively. For the years ended December 31, 2023 and 2022, the Company recorded a valuation allowance against the available Credit as State taxable income is not