Arrive AI Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
ARAI$0.10+8.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023747
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001493152-26-037755
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 157 current paragraphs.
76 unchanged; 33 reworded; 40 added; 6 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Standstill Agreement
Current report
On May 14, 2026, we entered into a Standstill Agreement (the “Standstill Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (the “Investor”). The Standstill Agreement was entered into in connection with that certain Securities Purchase Agreement, dated March 21, 2025, by and between us and the Investor (the “Purchase Agreement” and, together with all other documents entered into in connection therewith, the “Transaction Documents”), pursuant to which we previously sold and issued to the Investor a series of Pre-Paid Purchases.
Current report
Pursuant to the Standstill Agreement, the Investor has agreed, subject to certain conditions, to refrain from delivering Purchase Notices to us under any outstanding Pre-Paid Purchases for the period beginning on May 14, 2026 and ending on December 31, 2026 (the “Standstill Period”). Notwithstanding the foregoing, the Investor may submit purchase notices during the Standstill Period on any trading day on which our shares of common stock trade at a price that is at least fifteen percent (15%) greater than the Nasdaq Minimum Price (as defined under Nasdaq Rule 5635(d)) for such trading day.
Current report
Except as set forth in the Standstill Agreement, each outstanding pre-paid purchase remains in full force and effect in accordance with its terms. The Standstill Agreement will terminate upon the occurrence of any material breach of the Standstill Agreement by us or any event of default under any Transaction Document, at which time the Investor shall have the right to submit Purchase Notices in accordance with the applicable outstanding Pre-Paid Purchases. No additional cash or other property consideration was exchanged in connection with the Standstill Agreement.
Current report
The foregoing description of the Standstill Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Standstill Agreement, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2026, and is incorporated herein by reference.
Current report
Equity Distribution Agreement
Current report
On June 11, 2026, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with Maxim Group LLC (“Maxim”), to sell shares of its common stock, par value $0.0002 per share (the “Shares”), having an aggregate offering price of up to $14,967,247, from time to time, through an “at the market offering” program under which Maxim, acting as sales agent, will offer and sell the Shares. The Company will pay Maxim a commission rate equal to 2.5% of the gross sales price from each sale of Shares. The Sales Agreement contains customary representations and warranties and conditions to the sale of the Shares.
Current report
The Company is not obligated to sell any of the Shares under the Sales Agreement and may at any time suspend sales thereunder. The Sales Agreement may be terminated by the Company with five days’ notice following six months from the date of the Sales Agreement, or by Maxim with five days’ notice at any time, or earlier under certain circumstances.
Current report
The Shares will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-296392) filed by the Company with the SEC and declared effective by the SEC on June 11, 2026 (the “Registration Statement”). The Company filed a prospectus supplement (the “Prospectus Supplement”), dated June 12, 2026, to the Registration Statement with the SEC in connection with the offer and sale of the Shares.
Current report
The foregoing description of the Sales Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2026, and is incorporated herein by reference.
Current report
Departure of Chief Financial Officer and Director
Current report
On July 27, 2026, Todd Pepmeier, Chief Financial Officer of the Company, notified the Company of his resignation from his position as Chief Financial Officer, effective August 10, 2026.
Current report
On July 29, 2026, Laurie Tucker resigned from her position as a director of the Company. Ms. Tucker’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Current report
Floor Price Trigger
Current report
On August 6, 2026, our VWAP fell below the Floor Price of $0.25 per share for at least five Trading Days within a seven consecutive Trading Day period, constituting a Floor Price Trigger under the SPA. As a result of this triggering event, we became obligated to make mandatory monthly cash repayments totaling $962,500, plus accrued and unpaid interest, beginning three Trading Days after the trigger date. These mandatory repayments consist of $550,000 under Pre-paid Purchase Agreement 2 and $412,500 under Pre-paid Purchase Agreement 3. These mandatory repayment obligations will continue until such time as our VWAP exceeds 120% of the Floor Price (i.e., $0.30 per share) for five consecutive Trading Days. There can be no assurance that this cure condition will occur.
Current report
The Company is currently in discussions with Streeterville regarding potential remediation of the obligations arising from the Floor Price Trigger. There can be no assurance that the Company and Streeterville will reach any agreement with respect thereto.
Current report
Appointment of Chief Financial Officer
Current report
On August 10, 2026, our Board of Directors appointed Piyush Phadke as our Chief Financial Officer, with his duties and responsibilities as Chief Financial Officer commencing as of August 17, 2026. Mr. Phadke brings more than 20 years of capital markets and investment banking experience, including senior roles at Bank of America, BTIG, and Jefferies. For a more complete description of Mr. Phadke’s appointment, please refer to our Current Report on Form 8-K filed on August 12, 2026, which is incorporated herein by reference.
Current report
On June 2, 2026, we received an additional deficiency letter from Nasdaq notifying us that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we are not in compliance with the minimum bid price requirement of $1.00 per share for continued listing on The Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days, or until November 30, 2026, to regain compliance. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days prior to November 30, 2026.
Current report
If we do not regain compliance by November 30, 2026, we may be eligible for a second 180-day compliance period. However, such eligibility requires that we apply to transfer our listing from The Nasdaq Global Market to The Nasdaq Capital Market and that we meet all applicable initial listing standards for The Nasdaq Capital Market, other than the minimum bid price requirement, at the time of any such application. There can be no assurance that we would meet those standards or that Nasdaq would approve any such transfer. If we do not regain compliance within the first 180-day period and are not eligible for or do not obtain a second compliance period, Nasdaq will provide notice that our common stock will be subject to delisting, and we would be entitled to appeal that determination to a Nasdaq hearings panel.
Current report
The Minimum Bid Price deficiency notice has no immediate effect on the listing or trading of our common stock, which continues to trade on Nasdaq under the symbol “ARAI.” We intend to actively monitor our common stock bid price and evaluate available options to regain compliance, including the potential use of a reverse stock split, though there can be no assurance that we will be able to do so within the allotted compliance period.
Current report
Subsequent to June 30, 2026, on July 21, 2026, we received a new notification letter from Nasdaq advising that we were again not in compliance with the MVPHS Requirement under Nasdaq Listing Rule 5450(b)(2)(C), as we failed to meet the $15,000,000 minimum Market Value of Publicly Held Shares for 32 consecutive business days from June 3, 2026 to July 20, 2026. This is a renewed deficiency under the same rule for which we previously regained compliance, as described above. We have 180 calendar days, or until January 19, 2027, to regain compliance, which requires the MVPHS to equal or exceed $15,000,000 for a minimum of 10 consecutive business days prior to that date. If we do not regain compliance by that date, we may consider applying to transfer our listing to The Nasdaq Capital Market, subject to meeting that market’s initial listing standards. The notification letter has no immediate effect on the listing or trading of our common stock, which continues to trade on Nasdaq under the symbol “ARAI.”
Current report
As of the date of this Quarterly Report, we therefore have three separate outstanding Nasdaq continued listing deficiencies: the MVLS deficiency (cure deadline September 28, 2026), the Minimum Bid Price deficiency (cure deadline November 30, 2026), and the renewed MVPHS deficiency (cure deadline January 19, 2027).
Current report
Controlled Company Status
Current report
The Company ceased to be a “controlled company” within the meaning of the listing rules of The Nasdaq Stock Market LLC on or around April 9, 2026, and is permitted to continue to rely on exemptions from certain Nasdaq corporate governance requirements within a year following such date, including the requirement that a majority of the Board consist of independent directors and the requirement that the compensation and nominating committees be composed entirely of independent directors. The Company currently relies on these exemptions.
Current report
Notwithstanding these exemptions, the Company maintains an Audit and Finance Committee composed entirely of independent directors in accordance with applicable Nasdaq and SEC requirements.
Current report
During the three months ended June 30, 2025, we recognized total revenues of $90,725. Of this $89,000 was for design and consulting services, $1,500 for installation fees, and $225 for monthly subscriptions.
Current report
Other Income of $150,879 for the three months ended June 30, 2026 was primarily recognized from R&D Tax Credits of $94,589 and dividend and interest income of $56,290. Other income of $43,151 for the three months ended June 30, 2025 was recognized from the Indiana EDGE tax credits.
Current report
Loss on disposal of fixed assets was $5,974 and was the result of a partially depreciated Arrive Point taken out of service.
Current report
Comparison of the Six Months Ended June 30, 2026, and June 30, 2025
Current report
Financial Overview
Current report
Revenues
Current report
During the six months ended June 30, 2025, we recognized total revenues of $90,725. Of this $89,000 was for design and consulting services, $1,500 for installation fees, and $225 for monthly subscriptions.
Current report
Operating Expenses
Current report
General and administrative expenses were $8,258,917 for the six months ended June 30, 2026, an increase of $2,889,879, as compared to the six months ended June 30, 2025. Primary components of general and administrative expenses were:
Current report
Research and Development expenses were $703,614 for the six months ended June 30, 2026, an increase of $318,883 as compared to the same period in the prior year. This is primarily due to an increase in engineering projects resulting in an increase in expense of $359,670, offset by lower independent contractor spend of $40,787.
Current report
Other Income/Expenses
Current report
Loss on disposal of fixed assets was $5,974 and was the result of a partially depreciated Arrive Point taken out of service.
Current report
On June 11, 2026, the Company entered into an Equity Distribution Agreement with Maxim Group LLC providing for an at-the-market offering program under which the Company may sell shares of common stock with an aggregate offering price of up to $14,967,247. Sales under the ATM program are subject to market conditions, the trading price and volume of the Company’s common stock, and the continued effectiveness of the registration statement, and there can be no assurance as to the amount or timing of proceeds, if any.
Current report
Subsequent to June 30, 2026, on August 6, 2026, our VWAP fell below the Floor Price of $0.25 per share for at least five Trading Days within a seven consecutive Trading Day period, constituting a Floor Price Trigger under the SPA. As a result of this triggering event, we became obligated to make mandatory monthly cash repayments totaling $962,500, plus accrued and unpaid interest, beginning three Trading Days after the trigger date. These mandatory repayments consist of $550,000 under Pre-paid Purchase Agreement 2 and $412,500 under Pre-paid Purchase Agreement 3. These mandatory repayment obligations will continue until such time as our VWAP exceeds 120% of the Floor Price (i.e., $0.30 per share) for five consecutive Trading Days. There can be no assurance that this cure condition will occur. The Company is currently in discussions with Streeterville regarding potential remediation of the obligations arising from the Floor Price Trigger. There can be no assurance that the Company and Streeterville will reach any agreement with respect thereto.
Removed paragraphs (6)
Previous report
Shares Issued Under Purchase Agreement and Other Shares Issued
Previous report
Streeterville elected additional conversions as follows:
Previous report
In aggregate, $7,514,662 of principal was converted into 14,127,956 shares of common stock since March 31, 2026.
Previous report
Share Repurchase Program
Previous report
On September 8, 2025, we announced a share repurchase program of up to $10 million of the Company’s common stock, par value $0.0002 per share, which expired March 31, 2026.
Previous report
As an early stage company, during the three months ended March 31, 2025, we had no revenues.
Reworded paragraphs (33)
Previous wording
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations
Current wording
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous wording
ALM Marketplace. Our network of Arrive Points, the supporting software and AI plus ML, collectively create a platform that is intended to provide valuable services and insights to all stakeholders in the ALM ecosystem. For example, our automated delivery marketplace (“ADM”) will use a Google-AdSense-like market to help prioritize and optimize high-demand access schedules and space availability for our access point network. This platform will provide a broad array of critical functions for the ALM ecosystem including arrival/departure scheduling, space optimization, smart delivery notifications, micro weather conditions, local restrictions, transactional status updates, and automation issues/obstacles. These advanced capabilities will be introduced in our AP5 development and pilot program currently in development.
Current wording
Arrive Point Exchange. Our network of Arrive Points, the supporting software and AI plus ML, collectively create a platform that is intended to provide valuable services and insights to all stakeholders in the ALM ecosystem. For example, our automated delivery marketplace (“ADM”) will use a Google-AdSense-like market to help prioritize and optimize high-demand access schedules and space availability for our access point network. This platform will provide a broad array of critical functions for the ALM ecosystem including arrival/departure scheduling, space optimization, smart delivery notifications, micro weather conditions, local restrictions, transactional status updates, and automation issues/obstacles. These advanced capabilities will be introduced in our AP5 development and pilot program currently in development.
Previous wording
As of March 31, 2026, we had 37,731,391 shares outstanding. On a fully diluted basis, including outstanding warrants (exercisable for 107,741 shares), options (exercisable for 607,493 shares), and restricted stock units (4,024,760 shares) our total share count is 42,471,385. Additionally, under the Streeterville Purchase Agreement (the “Purchase Agreement”), approximately 19,055,032 shares may be issuable at a discount to the market price upon conversion of the outstanding principal and interest as of March 31, 2026. The Purchase Agreement also specifies the re-purchase of 2,937,500 outstanding pre-delivery shares at par value upon expiration or termination of the agreement.
Current wording
As of June 30, 2026, we had 51,859,347 shares outstanding. On a fully diluted basis, including outstanding warrants (exercisable for 28,252 shares), options (exercisable for 607,068 shares), and restricted stock units (4,730,248 shares) our total share count is 57,224,915. Additionally, under the Streeterville Purchase Agreement (the “Purchase Agreement”), approximately 16,090,884 shares may be issuable at a discount to the market price upon conversion of the outstanding principal and interest as of June 30, 2026. The Purchase Agreement also specifies the re-purchase of 2,937,500 outstanding pre-delivery shares at par value upon expiration or termination of the agreement.
Previous wording
Our revenues to date have been derived from a limited number of customers. In the three months ended March 31, 2026, more than 90% 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.
Current wording
Our revenues to date have been derived from a limited number of customers. In the six months ended June 30, 2026, more than 90% 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.
Previous wording
Revenue. Revenue currently consists of consulting services, installation services and subscription fees. Consulting services, and installation fees are typically project-based and non-recurring in nature. Subscription services are recurring and paid either up-front or monthly for an annual term. We anticipate these revenue streams to continue in future quarters while we develop new revenue models for the autonomous delivery marketplace and AI data insight monetization.
Current wording
Revenue. Revenue consists of consulting services, installation services and subscription fees. Consulting services, and installation fees are typically project-based and non-recurring in nature. Subscription services are recurring and paid either up-front or monthly for an annual term. We anticipate these revenue streams to continue in future quarters while we develop new revenue models for the autonomous delivery marketplace and AI data insight monetization.
Previous wording
For the three months ended March 31, 2026 and 2025, we generated revenues of $14,925 and $0, respectively, and reported net loss of $6,370,246 and $1,978,165, respectively. During the three months ended March 31, 2026, operating expenses reflect growing investment in the size of our team for product development, engineering and marketing activities. During the three months ended March 31, 2026, other expenses reflect the activities associated with our convertible notes payable facility.
Current wording
For the three months ended June 30, 2026 and 2025, we generated revenues of $14,700 and $90,725, respectively, and reported net loss of $14,076,388 and $3,689,071, respectively. During the three months ended June 30, 2026, operating expenses reflect growing investment in the size of our team for product development, engineering and marketing activities. During the three months ended June 30, 2026, other expenses reflect the activities associated with our convertible notes payable facility.
Previous wording
During the three months ended March 31, 2026, we recognized total revenues of $14,925 for monthly subscriptions to the Arrive Point network.
Current wording
During the three months ended June 30, 2026, we recognized total revenues of $14,700 for monthly subscriptions to the Arrive Point network.
Previous wording
General and administrative expenses were $4,210,066 for the three months ended March 31, 2026, an increase of $2,315,085, as compared to the three months ended March 31, 2025. Primary components of general and administrative expenses were:
Current wording
General and administrative expenses were $4,048,851 for the three months ended June 30, 2026, an increase of $574,792, as compared to the three months ended June 30, 2025. Primary components of general and administrative expenses were:
Previous wording
Research and Development expenses were $357,073 for the three months ended March 31, 2026, an increase of $265,810 as compared to the same period in the prior year. This is primarily due to the increase of engineering projects resulting in a increase in expense of $196,204, along with higher independent contractor spend of $69,607.
Current wording
Research and Development expenses were $346,541 for the three months ended June 30, 2026, an increase of $53,073 as compared to the same period in the prior year. This is primarily due to the increase of engineering projects resulting in an increase in expense of $163,466, offset by lower independent contractor spend of $110,394.
Previous wording
Change in fair value of derivative liabilities resulted in a non-cash gain of $1,129,769 in 2026, with no comparable amount in 2025. The embedded conversion feature of each convertible note was bifurcated as a derivative liability at issuance under ASC 815 due to the path-dependent lookback formula used to determine the conversion price. Each derivative is remeasured at fair value using a Monte Carlo simulation model at each reporting and conversion date, with changes recognized in earnings. The gain reflects the decline in the Company’s stock price from each issuance date to March 31, 2026, which reduced the expected value of the noteholder’s conversion optionality.
Current wording
Change in fair value of derivative liabilities resulted in a non-cash gain of $93,053 for the three months ended June 30, 2026, a decrease of $96,947 compared to the same period gain of $190,000 in 2025. The embedded conversion feature of each convertible note was bifurcated as a derivative liability at issuance under ASC 815 due to the path-dependent lookback formula used to determine the conversion price. Each derivative is remeasured at fair value using a Monte Carlo simulation model at each reporting and conversion date, with changes recognized in earnings. The gain reflects the decline in the Company’s stock price from each issuance date to June 30, 2026, which reduced the expected value of the noteholder’s conversion optionality.
Previous wording
Accretion of debt discount resulted in a non-cash charge of $250,969 in 2026, with no comparable amount in 2025, representing EIM accretion of the combined discount on the host convertible note instruments, consisting of original issue discount, the fair value of each bifurcated derivative at issuance, and allocable debt issuance costs, over the estimated three-year expected term of the notes.
Current wording
Accretion of debt discount resulted in a non-cash charge of $128,946 in 2026, an increase of $101,208 compared to the same period in 2025, representing EIM accretion of the combined discount on the host convertible note instruments, consisting of original issue discount, the fair value of each bifurcated derivative at issuance, and allocable debt issuance costs, over the estimated three-year expected term of the notes.
Previous wording
Loss on conversion of convertible notes payable of $2,345,613 in 2026 resulted from the issuance of common stock for the conversion of convertible notes payable with no comparable amount in 2025. Under ASC 470-50, each conversion was treated as a debt conversion, and the loss represents the difference between the net carrying value converted and the fair value of common stock issued.
Current wording
Loss on conversion of convertible notes payable of $9,696,797 for the three months ended June 30, 2026 resulted from the issuance of common stock for the conversion of convertible notes payable, an increase of $9,696,797 compared to the same period in 2025. Under ASC 470-50, each conversion was treated as a debt conversion, and the loss represents the difference between the net carrying value converted and the fair value of common stock issued.
Previous wording
Realized gains on investments were $446,324, and unrealized losses were $502,112 for the quarter ended March 31, 2026. During the quarter, the Company engaged in short-term investment activities, primarily options, resulting in a net realized gain of $576,970. The Company’s short-term investments, primarily in marketable securities, contributed a realized net loss of $130,646 and an unrealized net loss of $502,112 for the quarter. These activities are part of the Company’s strategy to generate short-term returns on excess cash.
Current wording
Realized losses on investments were $123,506, and unrealized gains were $241,136 for the three months ended June 30, 2026. During the quarter, the Company engaged in short-term investment activities, primarily options, resulting in a realized gain of $504,112 and unrealized loss of $26,500. The Company’s short-term investments, primarily in marketable securities, contributed a realized loss of $627,618 and an unrealized gain of $267,636 for the quarter. These activities are part of the Company’s strategy to generate short-term returns on excess cash.
Previous wording
Sales and marketing expenses were $111,350 for the three months ended March 31, 2026, an increase of $103,689 from the same period in the prior year. The increase is due to increased advertising expenses of $26,772, travel and meals and entertainment expense increase of $61,540, and trade show expense increase of $15,378.
Current wording
Sales and marketing expenses were $183,414 for the six months ended June 30, 2026, an increase of $126,152 from the same period in the prior year. The increase is due to increased advertising expenses of $49,976, travel and meals and entertainment expense increase of $60,401, and trade show expense increase of $15,776.
Previous wording
Interest expense of $361,870 for the three months ended March 31, 2026 was comprised primarily of the immediate expensing of the debt issuance costs associated with the bifurcated derivative of $92,400, stated interest on the convertible note of $239,866, and amortization of debt issuance costs of the convertible notes payable of $26,618. Other miscellaneous interest expense and bank fees were $2,986 during the three months ended March 31, 2026. Interest expense and bank fees for the three months ended March 31, 2025 was $1,175.
Current wording
Interest expense of $515,346 for the six months ended June 30, 2026 was comprised primarily of the immediate expensing of the debt issuance costs associated with the bifurcated derivative of $92,400, stated interest on the convertible note of $372,940, and amortization of debt issuance costs of the convertible notes payable of $41,527. Other miscellaneous interest expense and bank fees were $8,479 during the six months ended June 30, 2026. Interest expense and bank fees for the six months ended June 30, 2025 was $169,257.
Previous wording
Other Income of $177,789 for the three months ended March 31, 2026 was recognized from disgorged short-swing profits from two executive officers of $129,701 and dividend and interest income of $48,088. Other income of $16,915 for the three months ended March 31, 2025 was recognized from the Indiana EDGE tax credits.
Current wording
Other Income of $328,668 for the six months ended June 30, 2026 was recognized from disgorged short-swing profits from two executive officers of $129,701, R&D Tax Credits of $94,589, and dividend and interest income of $104,378. Other income of $60,066 for the six months ended June 30, 2025 was recognized from the Indiana EDGE tax credits.
Previous wording
As of March 31, 2026, the Company had cash and cash equivalents of approximately $5.7 million and short-term investments of approximately $2.8 million. As disclosed in Note 10 “Convertible Notes Payable” of the financial statements, on January 26, 2026, the Company received $9.6 million in net proceeds from a convertible note payable financing transaction with Streeterville Capital, LLC (“Streeterville”), representing $10.0 million in gross proceeds less approximately $0.4 million in banking fees.
Current wording
As of June 30, 2026, the Company had cash and cash equivalents of approximately $2,976,535 and short-term investments of approximately $2,160,954.
Previous wording
As disclosed in Note 10 of the financial statements, the Company is party to a convertible note payable financing arrangement with Streeterville (the “Streeterville Facility”), which initially provided a maximum facility of up to $40,000,000 in gross borrowings, subject to the terms and conditions of the agreement. The convertible note payable includes limitations that may restrict additional borrowings, including (i) a limitation on total outstanding indebtedness and (ii) a minimum market capitalization requirement of $100 million and (iii) a minimum book value of $4 million at the time of a draw. Availability under this facility is subject to the Company’s ability to satisfy these conditions, or the investor’s continued practice of extending funds, despite certain conditions not being met.
Current wording
As disclosed in Note 10 of the financial statements, the Company is party to a convertible note payable financing arrangement with Streeterville (the “Streeterville Facility”), which initially provided a maximum facility of up to $40,000,000 in gross borrowings, subject to the terms and conditions of the agreement. As of June 30, 2026, the remaining undrawn capacity under the facility is $19,000,000. The convertible note payable includes limitations that may restrict additional borrowings, including (i) a limitation on total outstanding indebtedness and (ii) a minimum market capitalization requirement of $100 million and (iii) a minimum book value of $4 million at the time of a draw. Availability under this facility is subject to the Company’s ability to satisfy these conditions, or the investor’s continued practice of extending funds, despite certain conditions not being met.
Previous wording
Management’s plans to address its liquidity needs include: (i) utilizing existing cash and cash equivalents of $5.7 million as of March 31, 2026, (ii) Liquidating approximately $2.8 million of existing short-term investments, and (iii) potentially drawing additional amounts under the Securities Purchase Agreement with Streeterville, which provides up to an additional $19.0 million in gross borrowings, subject to certain conditions including a limitation on total outstanding indebtedness, a minimum market capitalization of $100 million and a minimum book value of $4 million at the time of each draw. The Company’s ability to access these funds is dependent on satisfying these conditions and on Streeterville’s willingness to continue funding draws.
Current wording
Management’s plans to address its liquidity needs include: (i) utilizing existing cash and cash equivalents of $2,976,535 as of June 30, 2026, (ii) Liquidating $2,160,954 of existing short-term investments, (iii) accessing additional capital under the Company’s shelf registration statement on Form S-3, where the Company may sell shares of common stock with an aggregate offering price of up to $14,967,247, and (iv) potentially drawing additional amounts under the Securities Purchase Agreement with Streeterville, which provides up to an additional $19.0 million in gross borrowings, subject to certain conditions including a limitation on total outstanding indebtedness, a minimum market capitalization of $100 million and a minimum book value of $4 million at the time of each draw. The Company’s ability to access these funds is dependent on satisfying these conditions or obtain a waiver from Streeterville, if granted.
Previous wording
The Company’s continued existence is dependent on its ability to continue its operating plan and to access remaining funds under the Securities Purchase Agreement (“SPA”) or obtain additional debt or equity financing. Accordingly, substantial doubt about the Company’s ability to continue as a going concern is not alleviated by management’s plans. The accompanying Financial Statements do not include any adjustment that might result from the Company’s inability to continue as a going concern.
Current wording
The Company’s ability to continue as a going concern is dependent upon its ability to execute its operating plan and obtain additional financing, whether through additional borrowings under the Securities Purchase Agreement (“SPA”)or other debt or equity financings. There can be no assurance that the Company will be able to access funds under the SPA or obtain additional debt or equity financing. Accordingly, substantial doubt about the Company’s ability to continue as a going concern is not alleviated by management’s plans. The accompanying Financial Statements do not include any adjustment that might result from the Company’s inability to continue as a going concern.
Previous wording
As of May 12, 2026, the Company’s cash, cash equivalents, and short-term investments are approximately $7.1 million.
Current wording
As of August 13, 2026, the Company’s cash, cash equivalents, and short-term investments are approximately $3 million.
Previous wording
Net cash used in operating activities was $2,930,286 for the three months ended March 31, 2026, compared to $546,671 for the same period in 2025. The increase in cash outflows of $2,383,615 was primarily due to our increased net loss.
Current wording
Net cash used in operating activities was $6,257,843 for the six months ended June 30, 2026, compared to $3,799,494 for the same period in 2025. The increase in cash outflows of $2,458,349 was primarily due to our increased net loss.
Previous wording
For the three months ended March 31, 2026, our net loss of $6,370,246 was offset by non-cash items of stock-based compensation expense of $1,043,789, depreciation and amortization expense of $56,214, loss on conversion of convertible notes payable of $2,345,613 the accretion of a discount on the convertible notes payable of $250,969, the accretion of issuance costs on convertible notes payable of $119,018, and unrealized loss on investments of $502,112. These are offset by the change of derivative liability of $1,129,769 and the realized gain on investments of $446,324.
Current wording
For the six months ended June 30, 2026, our net loss of $20,446,633 was offset by non-cash items of stock-based compensation expense of $1,846,078, depreciation and amortization expense of $121,553, loss on conversion of convertible notes payable of $12,042,410 the accretion of a discount on the convertible notes payable of $379,915, the accretion of issuance costs on convertible notes payable of $133,927, unrealized loss on investments of $260,976, and other non-cash items of $16,515. These are offset by the change in fair value of derivative liabilities of $1,222,822 and the realized gain on investments of $322,818.
Previous wording
Other working capital movements in the period resulted in a positive net cash adjustment of $697,299, primarily due to an increase in accrued expenses of $952,486, an increase in accounts payable of $43,916, and a decrease in accounts receivable of $4,675. This positive adjustment was offset by an increase in other assets of $213,554 and an increase in prepaid expenses of $90,224.
Current wording
Other working capital movements in the period resulted in a positive net cash adjustment of $931,278, primarily due to an increase in accrued expenses of $1,408,768 and an increase in accounts payable of $65,618. This positive adjustment was offset by an increase in other assets of $235,624, an increase in prepaid expenses of $272,981, an increase to inventory of $29,378 and an increase in accounts receivable of $5,125.
Previous wording
For the three months ended March 31, 2025, operating cash flow used of $546,671 was composed of our net loss of $1,978,165, offset by non-cash items of stock-based compensation expense of $1,348,245 and depreciation and amortization of $7,391. Working capital movements in the prior-year period resulted in a positive net cash adjustment of $75,858 due to an increase in accrued liabilities of $133,627, prepaid expenses of $7,081, other current assets of $1,412, offset by decrease in accounts payable of $66,262.
Current wording
For the six months ended June 30, 2025, net cash flow used in operating activities of $3,799,494 was composed of our net loss of $5,667,236 and the change in fair value of derivative liabilities of $190,000, offset by non-cash items of stock-based compensation expense of $2,032,723, depreciation and amortization of $17,118, the accretion of a discount on the convertible notes payable of $27,738, and accretion of issuance costs on convertible notes payable of $165,869. Other working capital movements in the period resulted in a net cash outflow of $185,706, primarily due to an increase in prepaid expenses of $141,431, accounts receivable of $89,075, and a reduction of accrued expenses of $17,302 partially offset by increases in accounts payable of $61,131.
Previous wording
Net cash used for investing activities was $3,078,194 for the three months ended March 31, 2026. This was due to capital expenditures of $220,346. We also incurred a net cash outflow from sales and purchases of short-term investments of $2,857,848.
Current wording
Net cash used for investing activities was $2,479,970 for the six months ended June 30, 2026. This was due to capital expenditures of $439,688. We also incurred a net cash outflow from sales and purchases of short-term investments of $2,040,282.
Previous wording
Net cash used for investing activities was $2,832 for the three months ended March 31, 2025. This was due to an increase in construction in progress.
Current wording
Net cash used for investing activities was $47,827 for the six months ended June 30, 2025. This was due to an increase in capital expenditures for Arrive Point units.
Previous wording
Net cash provided by financing activities was $9,572,029 for the three months ended March 31, 2026. We received $10,000,000 in proceeds from issuance of convertible notes payable under the Purchase Agreement. These cash inflows were offset by payments made on an outstanding note payable of $2,222, payments for tax withholding for vested restricted stock units of $25,749, and payments of debt issuance costs of $400,000.
Current wording
Net cash provided by financing activities was $9,610,344 for the six months ended June 30, 2026. We received $10,000,000 in proceeds from issuance of convertible notes payable under the Purchase Agreement. These cash inflows were offset by payments made on an outstanding note payable of $4,486, payments for tax withholding for vested restricted stock units of $25,749, and payments of debt issuance costs of $400,000.
Previous wording
For the three months ended March 31, 2025, net cash provided by financing activities was $715,553, which included $717,628 from sales of common stock, offset by payments made on the note payable of $2,075.
Current wording
For the six months ended June 30, 2025, net cash provided by financing activities was $4,325,499, resulting from proceeds from the issuance of convertible note payable of $4,000,000 under the Streeterville Purchase Agreement, net proceeds of $444,360 from other sales of common stock, and $573,896 from exercise of outstanding warrants. These cash inflows were offset by payments made on the note payable of $4,187 and payments for deferred offering costs of $688,570.
Previous wording
Capital expenditures for the three months ended March 31, 2026 and 2025 were $220,346 and $2,832, respectively. Our future capital expenditures will depend on many factors, including, but not limited to our growth, our ability to attract and retain customers, market acceptance of our offerings, the time and extent of spending to support our efforts to develop our platform, the expansion of sales and marketing activities, and the timing and extent of spending for initiatives. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
Current wording
Capital expenditures for the six months ended June 30, 2026 and 2025 were $439,688 and $47,827, respectively. Our future capital expenditures will depend on many factors, including, but not limited to our growth, our ability to attract and retain customers, market acceptance of our offerings, the time and extent of spending to support our efforts to develop our platform, the expansion of sales and marketing activities, and the timing and extent of spending for initiatives. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
Previous wording
(2) Vehicle note payable matures in February 2027. The loan is secured by the related vehicle. The amounts presented represent scheduled principal.
Current wording
(2) The Vehicle note payable matures in February 2027 and the Equipment note payable matures in June 2030. Both loans are secured by the related asset. The amounts presented represent scheduled principal.
Previous wording
(5) The Company is party to an exclusive patent license agreement with its Chief Executive Officer, Daniel O’Toole, providing rights to certain patented technology through April 2040. The agreement requires fixed payments of $10,000 per month through the patent’s expiration. As of March 31, 2026, the remaining fixed commitment totals approximately $1,690,000. The agreement also provides for a $25 per unit royalty upon achievement of unit sales revenue milestones in excess of $10,000 a month. No royalties have been incurred to date, and future royalty obligations are not currently estimable due to the Company’s limited operating history and uncertain future sales volumes. The License Agreement constitutes a related-party transaction.
Current wording
(5) The Company is party to an exclusive patent license agreement with its Chief Executive Officer, Daniel O’Toole, providing rights to certain patented technology through April 2040. The agreement requires fixed payments of $10,000 per month through the patent’s expiration. As of June 30, 2026, the remaining fixed commitment totals approximately $1,660,000. The agreement also provides for a $25 per unit royalty upon achievement of unit sales revenue milestones in excess of $10,000 a month. No royalties have been incurred to date, and future royalty obligations are not currently estimable due to the Company’s limited operating history and uncertain future sales volumes. The License Agreement constitutes a related-party transaction.
Previous wording
Because the derivative valuation and host note carrying value share critical assumptions, particularly expected term and equity volatility, changes in those assumptions affect both the fair value of the derivative liabilities and the pattern of interest expense recognized on the host instruments and could have a material effect on our reported net loss in any given period. As of March 31, 2026, the aggregate fair value of the derivative liabilities was $1,440,000 and the net carrying value of the host instruments was $7,681,354. For the three months ended March 31, 2026, the net change in fair value of the derivative liabilities recognized in earnings was a gain of $1,129,769, and interest expense on the convertible notes consisted of stated interest of $239,866, EIM accretion of discount $250,969, and EIM accretion of debt issuance costs of $26,618.
Current wording
Because the derivative valuation and host note carrying value share critical assumptions, particularly expected term and equity volatility, changes in those assumptions affect both the fair value of the derivative liabilities and the pattern of interest expense recognized on the host instruments and could have a material effect on our reported net loss in any given period. As of June 30, 2026, the aggregate fair value of the derivative liabilities was $290,000 and the net carrying value of the host instruments was $3,460,834. For the six months ended June 30, 2026, the net change in fair value of the derivative liabilities recognized in earnings was a gain of $1,222,822, and interest expense on the convertible notes consisted of stated interest of $372,940, EIM accretion of discount $379,915, and EIM accretion of debt issuance costs of $41,527.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Sales and marketing expenses were $72,064 for the three months ended June 30, 2026, an increase of $22,462 from the same period in the prior year. The increase is due to increased advertising expenses of $23,204, increase in trade show expense of $398, offset by a decrease in travel and meals and entertainment expense of $1,140.
Current report — wording carried from elsewhere
Interest expense of $153,476 for the three months ended June 30, 2026 was comprised primarily of stated interest on the convertible note of $133,074, and amortization of debt issuance costs of the convertible notes payable of $14,908. Other miscellaneous interest expense and bank fees were $5,492 during the three months ended June 30, 2026. Interest expense and bank fees for the three months ended June 30, 2025 were $2,212.
Current report — wording carried from elsewhere
For the six months ended June 30, 2026 and 2025, we generated revenues of $29,625 and $90,725, respectively, and reported net loss of $20,446,633 and $5,667,236, respectively. During the six months ended June 30, 2026, operating expenses reflect growing investment in the size of our team for product development, engineering and marketing activities. During the six months ended June 30, 2026, other expenses reflect the activities associated with our convertible notes payable facility.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, we recognized total revenues of $29,625 for monthly subscriptions to the Arrive Point network.
Current report — wording carried from elsewhere
Change in fair value of derivative liabilities resulted in a non-cash gain of $1,222,822 for the six months ended June 30, 2026, an increase of $1,032,822 compared to the same period gain of $190,000 in 2025. The embedded conversion feature of each convertible note was bifurcated as a derivative liability at issuance under ASC 815 due to the path-dependent lookback formula used to determine the conversion price. Each derivative is remeasured at fair value using a Monte Carlo simulation model at each reporting and conversion date, with changes recognized in earnings. The gain reflects the decline in the Company’s stock price from each issuance date to June 30, 2026, which reduced the expected value of the noteholder’s conversion optionality.
Current report — wording carried from elsewhere
Accretion of debt discount resulted in a non-cash charge of $379,915 for the six months ended June 30, 2026, an increase of $352,177 compared to the same period in 2025, representing EIM accretion of the combined discount on the host convertible note instruments, consisting of original issue discount, the fair value of each bifurcated derivative at issuance, and allocable debt issuance costs, over the estimated three-year expected term of the notes.
Current report — wording carried from elsewhere
Loss on conversion of convertible notes payable of $12,042,410 for the six months ended June 30, 2026 resulted from the issuance of common stock for the conversion of convertible notes payable. This was an increase of $12,042,410 compared to the same period in 2025. Under ASC 470-50, each conversion was treated as a debt conversion, and the loss represents the difference between the net carrying value converted and the fair value of common stock issued.
Current report — wording carried from elsewhere
Realized gains on investments were $322,818, and unrealized losses were $260,976 for the six months ended June 30, 2026. During the six months ended June 30, 2026, the Company engaged in short-term investment activities, primarily options, resulting in a realized gain of $1,081,082 and unrealized losses of $26,500. The Company’s short-term investments, primarily in marketable securities, contributed a realized loss of $758,264 and an unrealized loss of $234,476 for the six months ended June 30, 2026. These activities are part of the Company’s strategy to generate short-term returns on excess cash.