Company: ARAI
Filing Date: 2025-05-13
Form Type: S-1/A
Source: 0001641172-25-009841
Chunk: 70

Company: Arrive AI Inc.
Filing Date: 2025-05-13
Form: S-1/A
Chunk 70
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 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: |     |                      |            |   |     |      |            |   |
| Basic and diluted                           |     |                      | 28,971,543 |   |     |      | 29,680,228 |   |

| 29 |

Management Discussion of Results

For the year ended December 31, 2024, the Company’s net loss decreased from $7,321,134 to $4,537,901. General and administrative expenses for the period decreased 38% ($2,764,226).

Salaries and wages decreased by 9% ($225,482) due to lower stock-based compensation ($315,087), and employee benefits ($7,793), partially offset by an increase in base compensation ($79,195). The Company utilizes independent contractors to supplement the full-time workforce. For the year ended December 31, 2024, expenses related to these outside services increased by $98,425, or 37% from the prior year due to increased engineering and administrative workload.

No impairment expense was recorded for the year ended December 31, 2024, a reduction of $1,824,923 from the prior year. The Company was previously capitalizing certain expenses related to the development of its products. During 2023, the Company performed an evaluation of these assets and determined that they were obsolete and fully impaired. An impairment expense ($827,060) was recorded in Q4 2023, to write off the accumulated construction in progress which had previously been capitalized. An additional impairment expense ($997,863) was recorded on the value of patents purchased in the acquisition of Airbox in Q4, 2023. As of December 31, 2023, the Company had not yet integrated these patents into its product development roadmap and could not determine a conclusive fair value.

Legal and professional fees decreased 62% ($1,015,988) for the period. In 2023, the Company recorded an accrual ($883,900) for unbilled legal expenses incurred for two merger transactions which were terminated. The Company relies on third-party firms for accounting, audit, tax, human resources and international patent applications, as well as general legal advice.

Research and development expense increased by 84% ($180,893) as the Company continues to invest in its technology.

Marketing expense decreased slightly ($18,158) due to the timing of advertising spend on video and media productions.

Insurance expense increased by 24%