Company: ARAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023457
Chunk: 59

Company: Arrive AI Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 59
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 of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such
benefits.

The
Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the
statement of operations. As of January 1, 2025, the Company had no unrecognized tax benefits, or any tax related interest or penalties,
and it does not expect significant changes in the amount of unrecognized tax benefits to occur within the next twelve months. There were
no changes in the Company’s unrecognized tax benefits during the three and nine month period ended September 30, 2025. The Company
did not recognize any interest or penalties during 2025 related to unrecognized tax benefits.

With
few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2021 and thereafter are subject
to examination by the relevant taxing authorities. Net operating loss (NOL) carryforwards are subject to examination in the year they
are utilized regardless of whether the tax year in which they are generated has been closed by the statute. The amount subject to disallowance
is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOLs generated as such NOLs are utilized.

Fair
Value of Financial Instruments

The
carrying value of the Company’s short-term financial instruments such as cash, accounts receivable, prepaid expenses, accounts
payable and accrued expenses approximate their fair values because of their short maturities. The estimated fair value of the Company’s
debt approximates the carrying value due to the interest rates on the debt approximating current market interest rates.

Recently
Adopted Accounting Standard

In
November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07,
Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures about reportable segments
but does not change the definition of a segment or the guidance for determining reportable segments. The requirements are effective for
annual reporting periods beginning on January 1, 2024, and are required to be applied retrospectively. The Company has adopted the additional
disclosure requirements under ASU 2023-07. The additional requirements did not have a material impact on the financial statements.

    - 14 -

ARRIVE
                                            AI INC. 

NOTES
                                            TO FINANC