Company: ARAI
Filing Date: 2025-07-15
Form Type: S-1/A
Source: 0001641172-25-019572
Chunk: 204

Company: Arrive AI Inc.
Filing Date: 2025-07-15
Form: S-1/A
Chunk 204
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,624 |
| VALUATION ALLOWANCE           |     | $ | 3,950,358 |     | $ | 2,717,209 |
| Ending balance                |     | $ | 3,950,358 |     | $ | 2,717,209 |

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate 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. The valuation allowance on deferred tax assets has increased by $ 1,233,149during the year ended December 31, 2024.

A reconciliation of the statutory tax rate to the Company’s effective tax rates as of December 31, 2024 and 2023 is as follows:

SCHEDULE OF RECONCILIATION OF THE STATUTORY TAX RATE

|                                   |     | 2024 |       |    |     | 2023 |       |    |
| Statutory federal income tax rate |     |      |  21.0 | %  |     |      |  21.0 | %  |
| State taxes                       |     |      |   3.9 | %  |     |      |   5.0 | %  |
| Change in valuation allowance     |     |      | (24.9 | %) |     |      | (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