Company: ARAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023457
Chunk: 57

Company: Arrive AI Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 57
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 anticipated capital raising activities. These costs primarily consisted of legal, advisory,
and other professional service fees incurred in connection with financing efforts.

During
the nine months ended September 30, 2025, the Company raised gross proceeds of $9,037,007, which included $8,650,000 under prepaid purchase
agreements and $387,007 through a crowdfunding offering. Of the total deferred offering costs recognized, $869,868 and $1,741,750 were
allocated and recognized as a reduction of proceeds raised under the prepaid purchase agreements for the three and nine months ended
September 30, 2025, respectively, based on a pro-rata allocation of total expected funding (Note 9 and 12). In addition, $1,471 and $91,543
of offering costs were directly associated with the crowdfunding raise and were recognized as a reduction to the related proceeds for
the three and nine months ended September 30, 2025, respectively.

The
remaining deferred offering costs are included as current asset on the balance sheet and will be recognized as a reduction to additional
paid-in capital upon completion of the related equity offerings.

Research
and Development

Research
and development (R&D) costs, that do not meet the criteria for capitalization are expensed as incurred. Research and development
expenses include fees paid to outside consultants for the Company’s proprietary technology.

    - 12 -

ARRIVE
                                            AI INC. 

NOTES
                                            TO FINANCIAL STATEMENTS (Continued)

2.SIGNIFICANT
                                            ACCOUNTING POLICIES (Continued)

Research
and Development (Continued)

For
the three and nine months ended September 30, 2025, and 2024, the Company had R&D costs totaling $179,854 and $564,585 and $7,940
and $548,879, respectively.

Marketing
Expenses

The
Company uses various marketing methods to create brand awareness to promote and alert the public about future product and service offerings
to generate future capital or revenue when a viable product is created. The Company’s policy is to charge marketing costs to expenses
in the period they are incurred.

Marketing
expenses were $107,530 and $164,793 and $28,414 and $281,160 for the three and nine months ended September 30, 2025 and 2024, respectively.

Stock-Based
Compensation

The
Company measures and records the expense related to stock-based payment awards based