Company: ARAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023457
Chunk: 32

Company: Arrive AI Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 exchange
for 773 shares.

Additionally,
fully vested stock awards of 2,264 and 35,389
shares were issued under the Plan to employees during the three and nine months ended September 30, 2025 resulting in compensation
expense of $20,942 and $541,567, respectively.

18.RESEARCH
                                            AND DEVELOPMENT TAX CREDITS

The
Company qualifies as a small business under Internal Revenue Code Section 41(h) and has elected to apply a portion of its federal research
and development (R&D) credit against the employer portion of Social Security payroll taxes, in accordance with IRS Form 6765.

As
of September 30, 2025, the Company had $226,011 of unused payroll tax credits. These credits are being applied as an offset to the Company’s
payroll tax liability and are recognized as a reduction of payroll tax expense in the period the benefit is realized.

19.
SUBSEQUENT EVENTS

On
October 1, 2025, the Company signed a new five-year lease agreement for office space in Fishers Indiana. The lessor and building
owner is a related party owned by the Company’s CEO Dan O’Toole. Under the triple-net lease, the Company is responsible
for monthly rent expense plus taxes, insurance and common area maintenance. The lease term is October 1, 2025 through September 30,
2030, with a monthly rent payment of $54,366.

On
October 2, 2025 the Company was the plaintiff in a lawsuit filed in federal court in the Southern District of Indiana for misappropriation
of trade secrets. Taft, Stettinius & Hollister, LLP is representing the Company in the matter. Since this matter is still in its
initial stages, the Company is unable to predict the outcome at this time.

On
October 6, 2025, the Company awarded 21,876 restricted stock units with a fair value of $108,942 to three independent board members for
their services during the third quarter of 2025. These shares vest on September 30, 2026 and are expensed as compensation expense over the
vesting period.

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Item
2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The
following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations
for the periods indicated. The discussion should be read in conjunction with our una