Company: ARAI
Filing Date: 2025-05-14
Form Type: DRS
Source: 0001641172-25-010170
Chunk: 63

Company: Arrive AI Inc.
Filing Date: 2025-05-14
Form: DRS
Chunk 63
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,824,923 from the prior year. The Company was previously capitalizing certain expenses related to the development of its products. During 2023, the Company performed an evaluation of these assets and determined that they were obsolete and fully impaired. An impairment expense ($827,060) was recorded in Q4 2023, to write off the accumulated construction in progress which had previously been capitalized. An additional impairment expense ($997,863) was recorded on the value of patents purchased in the acquisition of Airbox in Q4, 2023. As of December 31, 2023, the Company had not yet integrated these patents into its product development roadmap and could not determine a conclusive fair value.

Legal and professional fees decreased 62% ($1,015,988) for the period. In 2023, the Company recorded an accrual ($883,900) for unbilled legal expenses incurred for two merger transactions which were terminated. The Company relies on third-party firms for accounting, audit, tax, human resources and international patent applications, as well as general legal advice.

Research and development expense increased by 84% ($180,893) as the Company continues to invest in its technology.

Marketing expense decreased slightly ($18,158) due to the timing of advertising spend on video and media productions.

Insurance expense increased by 24% ($16,265) due to increased premiums for Directors and Officers insurance.

Rent increased by 62% ($25,290) due to the Company’s move to a new, larger office space in the second quarter of 2024.

Expenses for Travel, Meals and Entertainment collectively were lower by 26% ($26,853) due to less employee travel in the period.

Depreciation expense increased by 116% ($15,197) due to a full year depreciation on the drone hexacopter acquired from Airbox in late 2023, as well as amortization of the Company’s issued international patents.

Shipping and freight expense increased by 122% ($14,972) due to the increased quantity of finished units shipping from an international supplier.

Net other income and expense for the period was $20,948, of which the State of Indiana EDGE tax credit refund was $24,089 and grant income from Massachusetts Department of Transportation was $10,000. This income was offset by a one-time legal expense ($18,500) to settle an outstanding lawsuit from 2020.

Liquidity and Capital Resources

December 31,2024, Compared to December