Arrive AI Inc. Stock Compensation Disclosure
The Company created the 2023 Equity Incentive Plan (the “Plan”) on April 27, 2023, under which stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other stock-based awards became available for issuance not to exceed 1,500,000. On November 6, 2025, the Board of Directors resolved to increase the share pool under the Plan to 7,000,000 shares. The Plan is designed to attract, retain, and motivate key employees. Currently, the fair value is recognized as an expense over the vesting period of the award. Options are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant, vest over a four-year period, and expire after five or ten years. There are certain situations that may accelerate the vesting or termination of all outstanding options, such as a change in control. Vesting of RSUs awarded to employees may be time- or performance-based. As of December 31, 2025, shares were available for grant under the Plan. The compensation expense related to stock-based awards is included in general and administrative expenses with a corresponding increase to additional paid-in capital.
| Number of Options | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||||
| OUTSTANDING, DECEMBER 31, 2023 | 569,331 | $ | 0.80 | $ | 10.80 | 6.66 | $ | 5,852,440 | ||||||||||||
| Granted | 45,565 | 0.76 | 11.80 | - | ||||||||||||||||
| Exercised | ||||||||||||||||||||
| Canceled/Expired | (192 | ) | 0.76 | 10.30 | - | |||||||||||||||
| OUTSTANDING, DECEMBER 31, 2024 | 614,704 | $ | 0.80 | $ | 10.88 | 5.89 | $ | 7,322,656 | ||||||||||||
| Granted | - | |||||||||||||||||||
| Exercised | (1,251 | ) | 0.76 | 10.30 | ||||||||||||||||
| Canceled/Expired | (4,135 | ) | 0.76 | 11.69 | - | |||||||||||||||
| OUTSTANDING, DECEMBER 31, 2025 | 609,318 | $ | 0.80 | $ | 10.87 | 4.90 | $ | 1,116,368 | ||||||||||||
| EXERCISABLE, DECEMBER 31, 2025 | 247,991 | $ | 0.80 | $ | 10.86 | 6.92 | $ | 453,656 | ||||||||||||
ARRIVE AI INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2025 AND 2024
| Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||||
| OUTSTANDING, DECEMBER 31, 2023 | 494,105 | $ | 0.80 | $ | 10.80 | 6.38 | $ | 5,080,434 | ||||||||||||
| Granted | 45,565 | 0.76 | 11.80 | - | - | |||||||||||||||
| Vested | (86,665 | ) | 0.79 | 10.89 | - | - | ||||||||||||||
| Canceled/Expired | (130 | ) | 0.76 | 10.30 | - | - | ||||||||||||||
| OUTSTANDING, DECEMBER 31, 2024 | 452,875 | $ | 0.80 | $ | 10.89 | 5.21 | $ | 5,397,813 | ||||||||||||
| Granted | - | - | ||||||||||||||||||
| Vested | (88,266 | ) | 0.79 | 10.29 | - | - | ||||||||||||||
| Canceled/Expired | (3,282 | ) | 0.76 | 11.72 | - | - | ||||||||||||||
| OUTSTANDING, DECEMBER 31, 2025 | 361,327 | $ | 0.80 | $ | 10.99 | 3.54 | $ | 662,712 | ||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying shares and the closing stock price of $ for the Company’s common shares on December 31, 2025 and the estimated share price of $ for the Company’s common shares at December 31, 2024.
There were options granted during the year ended December 31, 2025. As of December 31, 2025, there was $ unrecognized compensation expense related to nonvested stock options to be recognized through June 30, 2028. Total compensation expense related to stock options during the years ended December 31, 2025 and 2024 was $ and $, respectively. During the year ended December 31, 2025 there were options exercised in a cashless exchange for shares.
| Weighted-average volatility | % | |||
| Risk-free rate | % | |||
| Dividend yield | % | |||
| Expected term years |
ARRIVE AI INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2025 AND 2024
The following table summarizes the restricted stock units (“RSUs”) outstanding as of December 31, 2025 and activity during the year ended this date:
| Number of Restricted Stock Units | Weighted Average Grant Date Fair Value | |||||||
| OUTSTANDING, DECEMBER 31, 2024 | $ | |||||||
| Granted | 1,693,202 | 3.07 | ||||||
| OUTSTANDING, DECEMBER 31, 2025 | 1,693,202 | $ | 3.07 | |||||
During the year ended December 31, 2025, RSUs of shares were issued under the plan to employees with a total fair value of $5,204,697, based on grant date fair value. Of those shares, vest and are expensed on a straight line basis over a period of three months to four years. There were no shares vested, forfeited, cancelled, or modified during the year ended December 31, 2025. Total compensation expense related to time-based RSUs during the year ended December 31, 2025 was $.
The remaining shares vest over terms up to years upon the satisfaction of certain operational goals specified in the underlying agreements. Compensation expense for these performance-based restricted stock units is recognized in accordance with ASC 718 over the requisite service period, when achievement of the performance condition is considered probable. The Company reassesses the probability of achieving such performance conditions at each reporting period and adjusts compensation expense accordingly. To the extent applicable, compensation cost is recognized using an accelerated attribution method for awards with graded vesting features. Total compensation expense related to performance-based RSUs during the year ended December 31, 2025 was $36,830.
As of December 31, 2025, there was $ unrecognized compensation expense related to nonvested RSUs to be recognized through December 31, 2029.
Fully vested restricted stock awards of shares were issued under the Plan to employees during the year ended December 31, 2025 with a fair value of $ and was recorded as compensation expense.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.