Item 3. Legal Proceedings
Item
3. Legal Proceedings
From
time to time, Arrive AI Inc. (the “Company”) may be subject to various claims, lawsuits and other legal and
administrative proceedings arising in the ordinary course of business. Defending such proceedings is costly and may impose a
significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty,
and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of
management resources and other factors. Other than as set forth below, Arrive AI is not presently a party to any litigation the
outcome of which, if determined adversely to us, would in our estimation, have a material adverse effect on our business, operating
results, cash flows or financial condition. The following is a summary of the Company’s ongoing legal proceedings:
Byfield
Management, Inc. and Ohrn II, Richard B v. Dronedek Corporation . This is an employment action, originally filed in the Hamilton
County Superior Court of the State of Indiana CAUSE NO. 29 D05-2303-PL-002478. Ohrn, working as Byfield
Management, Inc., was the original chief financial officer of the Company under an oral agreement. The amount in dispute includes
two years of salary and stock awards. The Company terminated this executive contract for cause. The case was moved to Marion
Superior Court No. 2 of the State of Indiana on March 15, 2023 CAUSE NO. 49 D02-2305-PL-020604. Plaintiffs alleged breach of
employment agreement; breach of stock purchase agreement; breach of fiduciary duties and non-payment of salary, bonuses, and
benefits. Arrive terminated Ohrn/Byfield’s employment because of several misrepresentations in connection with the financial
stability by Ohrn, including bankruptcy and mortgage foreclosure. Indiana is an at-will employment state. Affirmative defenses and
counterclaims were filed, discovery documents have been exchanged by the parties, but no further motions are pending. No trial dates
or case management plan has been established. In May 2024, the court asked for a dismissal which prompted the plaintiff to request some
third-party documents. The settlement demand includes unpaid salary and stock awards. Arrive has engaged Taft Stettinius &
Hollister LLP as its external counsel to represent the company in this matter. Although plaintiff’s allegations amount to up
to $29 million in total damages, it is not possible at this time to ascertain the outcome of this litigation
through a court’s final decision, or whether any damages may be awarded.
An
initial Cease and Desist letter on Arrive AI’s trademark from Arrive Logistics was received July 19, 2023. An open, positive discussion
is ongoing between counsel.
On
September 9, 2025, the Company was named as a defendant in Case No. 3:2025cv00721, pending in U.S. District Court for the Eastern District
of Virginia. Plaintiffs John Doan and Jami Town claim the Company is in breach of contract for loans made to AirBox Technologies (“AirBox”).
The loans were for $25,000 extended to AirBox before the Company purchased its assets in 2023. Damage claims and fees have increased
that amount to $45,082. The Company explicitly acquired only the assets of AirBox and therefore does not believe it is liable for any
of its previous liabilities. The Company has filed for removal from the claim. The plaintiffs have filed to have the case remanded back
to Virginia state court, where it was originally filed on August 13, 2025. Since this matter is still in its initial stages, the Company
is unable to 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.
Item
4. Mine Safety Disclosures
Not
applicable.
31
Part
II