Company: ARAI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023457
Chunk: 106

Company: Arrive AI Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 106
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 predict the outcome at this time.

On
October 2, 2025, the Company was the plaintiff in a lawsuit Case No. 1:2025cv02026 filed in federal court in the Southern District of
Indiana for misappropriation of US federal and Indiana trade secrets. The defendants are former consultants, Myron Wright, an individual,
and Wright Flyer Consulting Group Inc., a Kentucky corporation. The Company is seeking compensatory and punitive damages, attorney fees
and costs as well as permanent injunctive relief against the defendants requiring the immediate cessation of all transactions utilizing
the Company’s Trade Secrets and return of materials constituting the Trade Secrets. Taft, Stettinius & Hollister, LLP is representing
the Company in the matter.

- 34 -

Item
1A. Risk Factors

As
a smaller reporting company under Rule 12b-2 of the Exchange Act, the Company is not required to provide risk factors in this report.
For our current risk factors relating to our operations see the section entitled “Risk Factors” contained in our Registration
Statement on Form S-1 filed with the SEC on December 23, 2024, and effective on May 13, 2025, and our Registration Statement on Form
S-1 filed with the SEC on June 17, 2025, and effective on July 28, 2025.

Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our
business, financial condition or future results.

While
we incorporate the Risk Factors in our previous SEC filings, we note the following material updates since that filing:

Dependence
on Streeterville Financing

Our
recent financings with Streeterville Capital involve pre-paid purchase agreements that permit the investor to acquire our common shares
at a discount to market price. These arrangements may cause significant shareholder dilution and could exert downward pressure on our
stock price. Certain triggers, including sustained declines in our share price, could accelerate cash repayment obligations, which we
may not be able to meet.

Customer
Concentration

Our
revenues to date have been derived from a limited number of customers. In the quarter ended September 30, 2025, more than 10% of our
total revenue came from a single customer. If we are unable to expand our customer base and generate recurring subscription revenue,
our results of operations will remain highly volatile.

Going
Concern

We
have incurred substantial operating losses