Company: ARAI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023999
Chunk: 22

Company: Arrive AI Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 22
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As
a smaller reporting company under Rule 12b-2 of the Exchange Act, the Company is not required to provide risk factors in this report.
For our current risk factors relating to our operations see the section entitled “Risk Factors” contained in our Registration
Statement on Form S-1 filed with the SEC on December 23, 2024, and amended Form S-1/A filed with the SEC on May 13, 2025.

Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our
business, financial condition or future results.

Item
2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item
3. Defaults Upon Senior Securities

None.

Item
4. Mine Safety Disclosures

Not
applicable.

- 31 -

Item
5. Other Information

On August 11, 2025, the Company entered into a Pre-Paid Purchase No. 2 with Streeterville (the “Pre-Paid Purchase
No. 2”) pursuant to the Streeterville Purchase Agreement dated March 21, 2025. Under the Pre-Paid Purchase No. 2, the Investor paid
$4,000,000 to the Company, representing the purchase price for an unsecured promissory note with an original principal balance of $4,320,000,
which included a $320,000 original issue discount. The instrument bears interest at 8% per annum, compounded daily, and permits the Investor,
at its discretion, to apply amounts outstanding toward the purchase of shares of common shares of the Company (“Purchase Shares”)
at the lesser of (i) the initial listing reference price on the Company’s common stock on the Nasdaq Global Market, or (ii) 90%
of the lowest VWAP over the ten trading days prior to a purchase notice (but not below a $0.25 floor). The issuance of Purchase Shares
is subject to a 9.99% beneficial ownership limitation and must be free-trading under an effective registration statement or exemption.
The Company may prepay amounts at 115% of the principal being repaid with five trading days’ notice, subject to restrictions, and
is obligated to make monthly $550,000 cash repayments (plus accrued interest) upon certain “trigger” events, including sustained
price declines below the floor price of $0.25 per share or the share issuance nearing the threshold above which shareholders’ approval
is