Company: ARAI
Filing Date: 2025-05-14
Form Type: DRS
Source: 0001641172-25-010170
Chunk: 184

Company: Arrive AI Inc.
Filing Date: 2025-05-14
Form: DRS
Chunk 184
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. In the event that facts and circumstances indicate that the carrying amount of any long-lived assets may be impaired, an evaluation of recoverability is performed. If an evaluation was required, the estimated future undiscounted cash flows associated with the asset (or group of assets) would be compared to the assets’ (or group of assets’) carrying amount to determine if a write-down to fair value is required on the basis of the assets’ associated undiscounted cash flows. In 2023, certain capital costs included in construction-in-progress were identified as items with no future estimated cash flows, accordingly, the carrying costs of those items were identified as impaired and charged off as period cost.

The Company currently has the following types of long-lived assets: property and equipment, including a vehicle and aerial drones; construction-in-progress (CIP); and intangibles (patents). The vehicle and aerial drones were evaluated for impairments, and no impairments on those assets was considered necessary as of December 31, 2023.

In order to evaluate CIP for impairment, the accumulated costs were analyzed and categorized according to the specific generation of product to which they applied. It was determined that $630,657 was accumulated for the original mock-up unit in 2020, and the first 21 “Gen 1.0” units. These projects were fully complete by March 2023, and are now considered obsolete. The form and functionality of these prototypes have been superseded by “Gen 2.0”, starting in April 2023. As a result of this analysis, the Company has decided to write-off the accumulated cost of the prototype and Gen 1.0 units as of December 31, 2023. The remaining CIP balance consists of Gen 2.0 and 2.1 costs were also analyzed and determined to be impaired. Hence, the carrying cost of CIP related to Gen 2.0 and 2.1 amounting to $196,403 were written off as of December 31, 2023. Total impairment losses recognized on CIP amounted to $827,060 in 2023. No impairment was recognized in 2022.

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<div align='center'>ARRIVE TECHNOLOGY INC.

(FORMERLY DRONEDEK CORPORATION)

NOTES TO FINANCIAL STATEMENTS (Continued)</div>

The Company acquired intangible assets as part of the Airbox asset purchase in the form of a patent portfolio. As of December 31,