Company: ARAI
Filing Date: 2025-06-05
Form Type: 10-Q
Source: 0001641172-25-013826
Chunk: 12

Company: Arrive AI Inc.
Filing Date: 2025-06-05
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 the three months ended March 31, 2025 and 2024, respectively.

Stock-Based
Compensation

The
Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined
on the date of the grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual
grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation, as applicable.
For stock-based compensation with performance conditions, the Company records compensation expenses when the performance condition is
met. The Company uses the Black-Scholes model to estimate the fair value of stock options and forfeitures are accounted for when incurred.

The
average price of one (1) share of the Company’s common stock was determined to be $13.00 and $12.71 as of March 31, 2025 and December
31, 2024, respectively.

The
fair value of common stock is based on the prior Company’s transaction method. The prior company transaction method utilizes actual
transactions in the Company’s non-controlling, non-marketable private company equity interests. Therefore, the result is reflective
of a non-controlling, non-marketable private company value and no discount for lack of control or marketability was considered necessary
in the application of this methodology. As part of this methodology, there are a number of limiting assumptions,

however,
management believes it appropriately represents the fair market value indication for one (1) share of the Company’s common stock.
Since the Company’s stock is not publicly traded, the expected volatility is based on the historical and implied volatility of
similar companies whose stock or option prices are publicly available, after considering the industry, stage of the life cycle, size,
market capitalization, and financial leverage of the other companies.

     - 12 - 

ARRIVE
                                            AI INC. 

(FORMERLY
ARRIVE TECHNOLOGY INC.)

NOTES
TO FINANCIAL STATEMENTS (Continued)

2.SIGNIFICANT
                                            ACCOUNTING POLICIES (Continued)

Income
Taxes

Income
taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases, operating loss, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in