Company: ARAI
Filing Date: 2025-04-18
Form Type: S-1/A
Source: 0001641172-25-005394
Chunk: 212

Company: Arrive AI Inc.
Filing Date: 2025-04-18
Form: S-1/A
Chunk 212
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NOTES TO FINANCIAL STATEMENTS (Continued)</div>

10. STOCKHOLDERS’ EQUITY (Continued)

Promissory Note

Effective November 19, 2021, the Company entered into a promissory note with a stockholder to issue 21,750 shares (on a post-reverse split basis) for $152,250 ($7.00 per share (as adjusted for the 1-for-4 reverse split)), which was receivable to the Company in thirty-seven (37) equal payment of $4,000 and one (1) final payment of $4,250, beginning January 2022 through March 2025. There is no interest assessed against the outstanding balance.

After three monthly payments of $4,000 were made (a total of $12,000) in exchange for 1,714 (on a post-reverse split basis) shares of stock, the Agreement was terminated with no cancellation or termination fees. Because the Agreement was canceled, the remaining shares were no longer deemed issued and outstanding. Because of the cancellation of this Agreement, within the statements of changes in stockholders’ equity, the shares purchased by this individual are included in the “issuance of common stock” line item as if the individual were a market investor.

Stock-Based Compensation - Employees and Non-Employees

Substantially all stock-based compensation, on the date of grant, is fully vested. In certain instances, there may be performance or service requirements in order to vest. As of December 31, 2023, all stocks issued as stock-based compensation were fully vested, except the three individuals, as discussed below. As there are no other classes of stock, all awards are in exchange for common stock.

Effective July 1, 2021, one individual was awarded 33,333 restricted shares, with 3,333 vesting quarterly (time-based) until December 31, 2023. At the grant date, the fair market value of these awarded shares was $27,333. As of December 31, 2023, the employee was fully vested. As of December 31, 2023, there was no unvested stock compensation to be expensed in future periods.

Effective January 1, 2023, two employees were issued 8,750 restricted shares, subject to a milestone-based vesting schedule, with shares vesting ratably over seven milestones. At the grant date, the fair market value of these