UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31 2020, 2022

[  ]☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-39132

EVmo, Inc.

(Exact name of registrant as specified in its charter)

4333201 N. Camden Drive, Suite 600Sepulveda Blvd. Manhattan Beach, CA90266

Beverly Hills, California 90210

(Address of principal executive offices) (Zip Code)

+1-310-926-26431-310-926-2643

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.000001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] ☐ No [X] ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] ☐ No [X] ☒

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] ☐ No [X] ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

As of JuneMarch 30, 2020,2023, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $4,136,945$7,058,962 based on the closing price as reported on the OTC.

As of March 29, 2021,30, 2023, there were 35,127,52471,302,649 shares of common stock, $0.000001 par value per share, outstanding.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on our management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the headings “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

All brand names or trademarks appearing in this Report are the property of their respective holders. Unless the context requires otherwise, references in this Report to “EVmo,” the “Company,” “we,” “us,” and “our” refer to EVmo, Inc., a Delaware corporation, and its consolidated subsidiaries.

PART I

ITEM 1. BUSINESS

Corporate History

EVmo Inc., a Delaware corporation, was initially formed on June 21, 2016 as a Delaware limited liability company under the name “YayYo, LLC.” The Company was subsequently converted into a Delaware corporation pursuant to the unanimous written consent of our former manager and members in a transaction intended to be tax-free under the Internal Revenue Code (the “Conversion”). Pursuant to the Conversion, the members of YayYo, LLC have assigned, transferred, exchanged and converted their respective limited liability company membership interests of YayYo, LLC, into shares of common stock, par value $0.000001 per share, of the Company (the “Common Stock”). All of YayYo, LLC’s liabilities and assets were automatically transferred to the Company and the Company assumed ownership of such assets and liabilities upon the filing of the “Certificate of Conversion from a Delaware Limited Liability Company to a Delaware Corporation” with the State of Delaware pursuant to Section 265 of the Delaware General Corporation Law.Law (the “DGCL”). The Company now operates as a “C” corporation formed under the laws of the State of Delaware.

On August 12,We became a reporting company when, on March 17, 2017, we announced that we were shifting our primary corporate focus in the transportation/ridesharing industry from being an exclusive provider of transportation networks systems towards a more diversified operating company with a direct focusoffering circular on the vehicle rental business and a related transportation network system.

PriorForm 1-A relating to March 2017, the Company’s operating expenses were covered almost entirely by start-up capital provided by its founder and financing from private investors. In March 2017, the Company launched a best-efforts offering of our common stock, par value $0.000001 per share (the “Common Stock”) pursuant to “Regulation A+” of the Securities Act of 1933, as amended (the “Securities Act”). The offering was for up to 6,250,000 shares of Common Stock at $8.00 per share when a Form 1-A relating to this offering, was qualified by the Securities &and Exchange Commission (the “SEC”). Then, on November 15, 2019, the Companywe completed itsan initial public offering of 2,625,000 shares of Common Stock, at $4.00 per share, for gross proceeds, before underwriting discounts and commissions and expenses, of $10.5 million and the shares becameour Common Stock was listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “YAYO.”

On February 10, 2020, after being advised by Nasdaq that it believed we no longer met the conditions for continued listing, the Company notified Nasdaq ofannounced its intent to voluntarily delist its Common Stock. In connection therewith, the Company filed a Form 25 with the SEC on or about February 20, 2020. The Company elected to effect the voluntary delisting of its common stock after discussions with Nasdaq’s staff, and based on the determination of the Company’s board of directors that voluntarily delisting the Common Stock from Nasdaq was in the best interests of the Company and its stockholders at that time. Since delisting from Nasdaq, our Common Stock has been quoted and traded on the Pink Open Market, which is operated by OTC Markets Group, under the same ticker symbol. The delisting was effective on March 1, 2020.

In September 2020, we changed our name from YayYo, Inc. to Rideshare Rental, Inc., in order for our corporate brand to better reflect our principal businesses, ridesharing and vehicle rentals. In MarchFebruary 2021, we decided to changeagain changed our name again, this time to EVmo, Inc., to underscore our commitment to making a full transition to electric vehicles overby the next several years.end of 2024.

Overview

Our address is 3201 N. Sepulveda Blvd. Manhattan Beach, CA 90266. Our telephone number is (310) 926-2643 and our website may be accessed at www.evmo.com.

Overview of the Company

EVmo, Inc. is a holding company operating principally through two wholly-owned subsidiaries: (i) Rideshare Car Rentals LLC, a Delaware limited liability company (“Rideshare”), and (ii) Distinct Cars, LLC, a Delaware limited liability company (“Distinct Cars”). Rideshare offers an online bookings platform to service the ridesharing and delivery gig industries (the “Rideshare Platform”). while Distinct Cars maintains a fleet of passenger vehicles and transit vans for use in the last-mile logistical space for rent to our customers.customers who are drivers in the ridesharing and delivery gig industries, while also providing them with insurance coverage and issuing them insurance cards in their own names. This enables such drivers to meet the vehicle suitability and other requirements of rideshare and delivery gig companies such as Uber, Lyft, DoorDash and Grubhub. Through Rideshare and Distinct Cars, the Company seekswe seek to become thea leading provider of rental vehicles to drivers in the ridesharing and delivery gig spaces, and an industry leader in supplying transit vans for last-mile logistics. “Gig” generally refers to a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

Drivers can rent their vehicles using the Rideshare Platform, which enables them to check inventory and performance and review vehicle data. Drivers have the ability to book vehicles online by the day, week or month, at their option, make payments, check insurance, or extend their rental with a minimum of inconvenience, while at the same time incurring no maintenance expenses. Depending on the make and model of the requested vehicle, rental prices begin at $39 per day or $795 per month before insurance. The Rideshare Platform is available on desktop, iOS and Android devices. We initially launched the Rideshare Platform in Los Angeles, CA and have since expanded it in the following markets: Oakland, CA; Las Vegas, NV; Chicago, IL; Newark, NJ.

In March 2021, we formed another wholly-ownedwholly owned subsidiary, EV Vehicles LLC, a Delaware limited liability company, which we intend to utilize as the corporate platform to executeimplement our strategy to transition our entire fleet of rental vehicles from standard vehicles with internal combustion engines to electric by 2026.

We generate the vast majority of our revenues through the rental of our fleet vehicles. We also receive an immaterial amount of revenue in the form of fees assessed through the Rideshare Platform, such as late fees in the event that a vehicle rental expires without being extended by the driver and the vehicle has not yet been returned, or when the Rideshare Platform is used in a vehicle not owned by us.

Our Market

We service drivers in the ridesharing and delivery gig industries by providing them with qualifying vehicles and insurance, enabling them to work for Transportation Network Companies (“TNCs”) such as Uber and Lyft. We strongly believe this is a vibrant and growing market, as the advent of ridesharing and food delivery gigs over the last decade has permanently changed the transportation industry. The U.S. Department of Labor-Bureau of Labor Statistics in its April 2021 report stated that consumer expenditures on transportation were approximately $1.1 trillion in 2019. Further, according to such statistics, transportation (including vehicle purchases and expenditures for gasoline and motor oil) was the second largest household expenditure after housing and the aggregate consumer spending on transportation was almost twice as large as that of healthcare and three times as large as entertainment. The use of rideshare and food delivery gig applications on smart phones has been transformative, allowing Uber, for example, to announce in mid-2016 that it had completed its two billionth ride only six months after it marked its first one billion rides.

One of the challenges the ridesharing and delivery gig industries faces is ensuring that driver growth keeps pace with the massive demand. Lyft recently reported an increase in active riders by over 940,000 in the first quarter of 2021 than in the fourth quarter of 2020, and that by the end of February 2021 rider growth had exceeded driver growth. Uber had 3.5 million active drivers on its platform during the first three months of the year but is also reporting a shortage. In April 2021, it announced a $250 million stimulus to entice both former and new drivers to work for them.

Accordingly, the TNCs have actively taken steps to satisfy their driver demand by setting up programs designed to get eligible drivers into qualified cars. Uber has entered into multiple partnerships with car rental companies, and Lyft Express Driver is partnered with Hertz. We believe EVmo can be a major independent player in this space, since we also supply TNC drivers with qualifying vehicles, which we expect will eventually be electric vehicles, strategy.

The Rideshare Platform

On October 31, 2017, the Company created Rideshareand provide them access to incubate the concept of the Rideshare Platform, which is a proprietary, peer-to-peer booking platform, intendeddriver-friendly mechanism to rent passengermanage their vehicle rental and allowing them to generate income.

Our Growth Strategy

Our current growth strategy, which we formulated in early 2021, centers around our goal to transition our entire vehicle fleet to electric vehicles. We initiated this strategy for several reasons. First, we believe that industry trends are clear that electric vehicles will become the mainstay of the automobile market over the next 10 years. According to Forbes, EV sales in the United States in the second quarter of 2022 accounted for 5.6% of the total auto market, up from 2.7% in the second quarter of 2021. Further, per a report by Automotive News that relied on data collected by Experian, EV registrations in the U.S. were 60% higher in the first quarter of 2022 even as new car registrations overall dropped by 18%. California, our principal market, has the most EV sales over the last 10 years of any state in the U.S, per tracking done by Veloz, with a total of 1,304,581 sold out of 3,057,859 nationwide. We expect these trends will only accelerate as EV charging stations become more prevalent and major automobile manufacturers continue to gradually shift away from internal combustion engine vehicles to self-employedEVs. In January 2023, Goldman Sachs Research issued a report that predicts that EVs will constitute 16% of all global automobile sales by 2025, 33% by 2030, and greater than 50% soon after 2035, respectively.

Second, we believe that both drivers and riders will be increasingly drawn to electric vehicles for their environmental benefits, especially as they become comparable to combustion cars in terms of pricing, mileage and the number of available options to choose from. The demand for clean energy products is undeniable, and electric vehicles should be no exception as consumers continue to seek out eco-friendly alternatives.

Finally, we have concluded that governmental policies and mandates will ultimately force the hand of both the automobile industry and consumers. The Inflation Reduction Act of 2022 provides a tax credit of $7,500 for qualifying EV purchases and the Biden Administration has set a goal of 50% EV sales in the U.S. by 2030. The governor of California has announced that by 2035 the state will require all new vehicles sold to be EVs or plug-in hybrid electrics. In Oregon, residents can receive a rebate of up to $2,500 on the purchase or lease of a qualifying electric vehicle.

While we will incur a considerable short-term operating expense in turning over our fleet, we firmly believe that the reputational and brand benefits we will realize from being known as a TNC vehicle provider with an entirely electric fleet will quickly allow us to differentiate ourselves and significantly grow our business. The trends we describe above will directly impact the ridesharing and delivery gig industries, as we believe that both TNC drivers and riders will increasingly express a preference for electric vehicles. As an early industry leader in this area, we believe that we will be well-positioned to market ourselves successfully and become profitable, using our current business model of vehicle rentals to TNC drivers. TheCurrently, approximately 35% of our fleet is electric or plug-in hybrid. By the end of 2023, we expect over 50% of our fleet to be electric or plug-in hybrid vehicles with continue effort to be 100% electric or plug-in hybrid by the end of 2025.

Impact of COVID-19 on our Business

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, it characterized the outbreak as a “pandemic.” In response, numerous states and cities ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and similar restrictions were recommended by the federal government. Beginning in the first quarter of 2020, which saw the initial rapid spread of COVID-19, rideshare companies were severely and negatively impacted, as demand plummeted. Consequently, the Company has since deployedexperienced a decline in revenue during the first half of 2020, which had a negative impact on our cash flows, but we then saw a positive upward movement in revenue during the second half of 2020, which continued through fiscal 2021. Currently, through fiscal 2022, the demand for Rideshare remains high with little impact remaining from the COVID-19 pandemic.

Given the current prevalence of FDA-approved eligible vaccines across most age groups, the marked decrease in the number of COVID-19 infections, hospitalizations and launcheddeaths in 2022, and the resulting easement of pandemic restrictions in our active markets, we are optimistic that COVID-19 will not have a material impact on our operations in the current fiscal year. However, certain factors- including, for example, a new, more aggressive and deadly variant that is resistant to the vaccines could alter our prediction.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). As an “emerging growth company,” we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include, but are not limited to:

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We will continue to remain an emerging growth company until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.07 billion; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We are also a “smaller reporting company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies. To the extent that we continue to qualify as a smaller reporting company after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including exemption from compliance with the auditor attestation requirements pursuant to SOX and reduced disclosure about our executive compensation arrangements. We will continue to be a “smaller reporting company” until we have $250 million or more in public float (based on the price of our Common Stock) measured as of the last business day of our most recently completed second fiscal quarter or, in the event we have no public float or a public float that is less than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

We may choose to take advantage of some, but not all, of these exemptions. We have taken advantage of reduced reporting requirements in this Report. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to avail ourselves of the extended transition period for complying with new or revised financial accounting standards. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.

Our Business Model and Our Future Opportunities

We have developed what we believe is an innovative and effective business model in which we not only provide ridesharing and delivery gig drivers with the necessary technology to operate, through the Rideshare Platform, onbut also the Company’s e-commerce website, http://www.ridesharerental.com.vehicles themselves, via Distinct Cars, should the driver either not have a qualified vehicle to use or prefers to not use a personal vehicle for this type of work. Our two principal operating subsidiaries have a rare corporate synergy that enables us to both diversify and create complementary revenue streams. Further, as we continue our transition to electric vehicles, we believe we are in the vanguard of a new era in commercial transportation and that our early presence in this industry will further distinguish us from a competitive standpoint.

Prior to 2020, we only supplied vehicles to drivers in the ridesharing space but we expanded our service in that year to the delivery gig space, which has provided us with another form of service diversity, one with fewer barriers to entry. The requirements for vehicles operated by delivery gig drivers are significantly less onerous than those operated by rideshare drivers, as delivery gig drivers are not transporting people.

We currently have four priorities: diversifying our revenues by expanding into different markets in North America and continuing our transition to electric vehicles; improving our operating efficiencies, particularly through training our sales force; meeting our customers’ expectations by continuing to provide TNC drivers with quality vehicles and reliable service via the Rideshare Platform; and disciplined capital and fleet management, in which our management team allocates our resources effectively.

Rideshare Car Rentals, LLC

In October 2017, the Company created Rideshare in order to launch the Rideshare Platform, a booking platform developed, coded and wholly-owned by us, and used primarily to rent our Distinct Car vehicles to TNC ridesharing and delivery gig drivers. The Rideshare Platform also commercially markets the Company’s ownDistinct Cars fleet of cars as well as those(and to a lesser extent the vehicles of other fleet owners and selected individual car owners, providing them with an opportunityowners) to monetize their vehicles by renting them out to ridesharing drivers. Our business strategy with our Rideshare Platform is to further develop and expand our brand equity and establish ourselves as the premier peer-to-peer Transportation Network Company (“TNC”) vehicle rental business for the ridesharing and delivery gig industries that matches the owners and/or operators of passenger vehicles (including the Company’s fleet of maintained vehicles) to existing or prospective ridesharing and delivery gig drivers. The Company initially launched the Rideshare Platform in Los Angeles, CA and has since expanded it into multiple other markets, includingto Oakland, CA; Las Vegas, NV; Chicago, IL; Newark, NJ; Baltimore, MD; and Dallas, TX.NJ.

The Rideshare Platform’s functionality provides drivers with access to certain data emitted from their respective CompanyDistinct Cars rental vehicle(s) through a personal Rideshare dashboard. Vehicle owners can also access and manage data emitted from their personal vehicle(s) under rental to a third-party from the Rideshare Platform inventory dashboard and can further manage the other aspects of the vehicle rental transaction through the Rideshare Platform, including rental extension options. All transactional aspects of the rental vehicle(s) (including, but not limited to, background checks, terms, deposits and insurance costs) are run securely through the Rideshare Platform. In addition, our Rideshare website not only effectively monetizes Company-ownedthe Distinct Cars vehicle fleets, made available through Distinct Cars,fleet, but also generates revenue by charging transactional fees to other vehicle owners and ridesharing and delivery gig drivers for all rental transactions consummated on the Rideshare Platform. The Rideshare Platform is available on desktop, iOS and Android devices. The development and functionality of our mobile applications are a material component to our business as drivers are more likely to transact via mobile devices.

Most importantly, all passenger vehicles and transit vans made available on the Rideshare Platform not owned by us are fully qualified by the Company and guaranteed to meet the necessary TNC qualification requirements.

The Company believes that due to the rapid development of the ridesharing and delivery gig economies and their anticipated growth trajectories, these markets will continue to rewardDistinct Cars

In June 2017, the Company as an early entrantformed Distinct Cars for the purpose of developing a fleet management business to the third-party vehicle rental business. Undercouple with the Rideshare Platform, we intend to become the go-to booking destination and brand for ridesharing and delivery gig vehicle rentals inwhich was then under development. District Cars maintains a TNC marketplace that connects owners and/or operatorsfleet of new standard and, increasingly and ultimately exclusively, electric passenger vehicles and transit vans for the last-mile logistical space withto be rented directly to drivers in the ridesharing and delivery gig economies through the Rideshare Platform. The Company’s fleet of vehicles, under lease contract and maintained by Distinct Cars, as well as other third-party vehicles, have been made commercially available for rental bookings on the Rideshare Platform. Distinct Cars markets and manages short and long-term vehicle rentals to ridesharing and delivery gig economy drivers. We believe thatAs of the date of this Report, approximately half of these drivers are located in greater Los Angeles while the other half are located in the other six cities where we have operations.

In August 2017, we entered into a leasing arrangement for an initial group of twelve (12) vehicles, with the intent of testing our productconcept within the ridesharing industry. Following the Company’s proof of concept period, we expanded in December 2017 by adding an additional 135 vehicles to our fleet. As of January 3, 2022, Distinct Cars includes a fleet of approximately 1,000 vehicles- including standard internal combustion engine and service offerings onelectric passenger vehicles as well as transit vans for the Rideshare Platform will continue to be an attractive proposition for alllast-mile logistical space- under lease contract. Generally, professional ridesharing and delivery gig economy drivers either simply requiring a standard passengercontract for vehicle rental periods ranging from less than three days to operate,six months. The rental vehicles made available to TNC drivers by the Company are configured and guaranteed to be compliant with the same vehicle requirements promulgated by the largest private ridesharing TNCs, Uber and Lyft.

The Company believes that customers will rent vehicles offered by Distinct Cars in order to reduce the complexity and cost associated with vehicle ownership, and to guarantee compliance with the TNC vehicle requirements. Depending on the make and model of the requested vehicle, our rental prices begin at $39 per day or preferring$795 per month. Under our full-service rental agreement, the Company provides and fully maintains the vehicle; the services provided include preventive and regular maintenance, advanced diagnostics through our GPS solution software, emergency road service, fleet services, and safety programs, through our Company-operated facilities.

Commercial Fleet Purchase Programs

As of December 31, 2022 our fleet consists of Tesla Model 3, Hyundai Elantra, Chevy Bolt, Hyundai Ionic, Kia Forte, Nissan Sentra and Nissan Altimas. Through direct ordering from OEM Manufacturers and dealers, we are able to procure vehicles at or below MSRP pricing through bulk purchases and developed relationship channels.

Vehicles are financed through several developed capital lease financing partners: ACME Financing, Utica Leasing, Liberty Commercial and NFS Leasing.

Additionally, we have added an operating lease partner, Spring Free EV, to assist with additional electric vehicle procurement and financing.

Neither partnership is in the form of a supply or strugglingrequirements contract. We submit, on an as-needed basis, purchase orders for vehicles and these orders are fulfilled on the general terms established at the inception of the partnership program, including below-MSRP pricing.

Vehicle and Driver Requirements

We generally impose the same requirements on both drivers and vehicles as those of Uber and Lyft. Any driver who wishes to qualify their personal vehicles under vehicle inspection requirements. While the Company will require additional capital investment to continue funding Rideshare and the Rideshare Platform, including furthering our technology, facilitating payments torent a car from us and advertising, we believe there is a strong opportunity to grow and scaleor use the Rideshare Platform in their own vehicle is screened and evaluated to ensure that he or she:

As noted, each of our Distinct Cars vehicles meets both existingUber and new geographical territoriesLyft vehicular requirements. If a driver does not rent a vehicle from our fleet we obtain a motor vehicle report for purposeshis or her vehicle at the outset of developingtheir use of the Rideshare Platform, and strengtheningrenew it every six months. The requirements any vehicle using the Company’s brandRideshare Platform, whether from Distinct Cars or not, must meet are as follows:

Also, a vehicle used by a ridesharing driver must be able to pass an inspection test, which typically includes headlights, tail-lights, indicator lights, stop lights, foot brakes, emergency/parking brake, steering mechanism, windshield, heat and competitive advantage in the ridesharingair conditioning, front, rear and delivery gig vehicle rental markets.side windows, front seat adjustment mechanism, door controls (open, close, lock), horn, speedometer, body condition/ damage, muffler and exhaust system, condition or tires, interior and exterior rear-view mirrors and safety belts for driver and passengers.

Insurance

Insurance

As of the date of this Report, the Company, together with our managing general underwriter, American Business Insurance Services, Inc. (the “MGU”), maintains an insurance policy on behalf of the Company. Under the policy the MGU handles all back-end insurance generation and processing through an application programming interface (API) connection with the Company��sCompany’s databases. We believe that this MGU insurance policy has made it possible for us to maintain our Rideshare Platform, which allows the Company to have other third-party fleet owners supply vehicles to drivers through our platform and have them covered under the terms of our insurance policy. Our insurance policy provides physical damage and liability coverage to all rideshare drivers under the Rideshare Platform. Under the terms of our policy, both Rideshare Platform drivers acquiring vehicles through Fleet Management (as defined below)Distinct Cars as well as owners of their own vehicles are provided with an insurance ID card that lists each party’s name and the vehicle VIN number. Our Rideshare Platform customers pay daily (for the duration of the rental period) to become designated as a supplemental insured party under the Company’s insurance policy. Under the terms of our policy, insurance coverage is valid from the date of commencement of the rental period up until the date that the vehicle is returned.

Further, the Company’s car liability and physical damage insurance policies cover both third-party vehicle owners as well as ridesharing and delivery gig drivers under rental contract. These policies provide insurance on all listed vehicles, provided that the coverage is suspended during periods when the ridesharing driver under rental contract with the Company is actively operating on either the Uber or Lyft platform.

Distinct Cars Fleet Management Business

On June 10, 2017,In September 2022, the Company formed Distinct Carsadded Premier Mobility Insurance Company to place additional physical damage insurance for the purpose of developing a fleet management business (“Fleet Management”). Fleet Management maintains a fleet of new standardour owned and increasingly, electric passenger vehicles and transit vans for the logistical space to be rented directly to drivers in the ridesharing and delivery gig economies through the Rideshare Platform. The Company’s fleet of vehicles, under lease contract and maintained by Distinct Cars, as well as other third-party vehicles have been made commercially available for rental bookings on the Rideshare Platform. The Company seeks to provide drivers in the ridesharing and delivery gig markets with full-service vehicle rentals and fleet contract maintenance solutions for commercial standard and electric passenger vehicles, as well as transit vans in the logistical space. As a provider of comprehensive, integrated vehicle rental and management solutions, Fleet Management markets and manages short and long-term vehicle rentals to ridesharing and delivery gig economy drivers. As of the date of this Report, approximately half of these drivers are located in greater Los Angeles while the other half are located in the other six cities where we have operations.leased fleet.

The Company is focused on operating, developing and investing in its vehicle rental business with a focus on marketing directly to the peer-to-peer car sharing and ridesharing industry professionals. The Company is capable of meeting customers’ needs, including but not limited to a guaranty that all vehicles maintained under Fleet Management will comply with and pass the Ridesharing Qualification Requirements. Fleet Management product and service offering includes full-service vehicle rental(s) and contract maintenance, along with distribution center management and transportation management service. As of the date of this Report, the Company’s customer base is primarily ridesharing and delivery gig drivers located within our markets that are operating and performing driving services on behalf of a host of the private ridesharing and delivery TNCs (primarily Lyft and Uber in ridesharing, and DoorDash and GrubHub for delivery). The Company hopes to aggressively expand our Fleet Management services and product offerings nationally.

In August 2017, following our announcement that we were shifting our primary corporate operations, we entered into a leasing arrangement for an initial group of twelve (12) vehicles, with the intent of testing our Fleet Management concept within the ridesharing industry. Following the Company’s proof of concept period, we expanded our Fleet Management business in December 2017 by adding an additional 135 vehicles to our fleet. As of March 24, 2021, Fleet Management includes a fleet of approximately 626 vehicles- including standard and electric passenger vehicles as well as transit vans for the last-mile logistical space- under lease contract. Generally, professional ridesharing and delivery gig economy drivers contract with private ridesharing TNCs for vehicle rental periods generally ranging from less than three days to six months. The rental vehicles made available to customers by the Company are configured and guaranteed to be compliant with the same vehicle inspection requirements imposed on ridesharing (not delivery) vehicles by the largest private ridesharing TNCs (specifically, Uber and Lyft).

The Company believes that customers will rent vehicles offered by our Fleet Management business in order to reduce the complexity, cost and total capital associated with vehicle ownership. Further, we believe that due to our market focus on the ridesharing industry and the additional imposition of the ridesharing qualification requirements imposed on ridesharing vehicles by the dominant private ridesharing TNCs, our customers will be further incentivized to rent our Fleet Management vehicles to guarantee compliance with those requirements.

Under a full-service rental agreement, the Company provides and fully maintains the vehicle, which is generally specifically configured to meet the ridesharing qualification requirements. The services provided under full-service rental and contract maintenance agreements generally include preventive and regular maintenance, advanced diagnostics, emergency road service, fleet services, and safety programs, through our company-operated facilities.

Fleet Management Software

The Company has been an early adopter of technologies to leverage the Fleet Management business. To ensure that the Company’s fleet of vehicles meet and comply with the standard ridesharing qualification requirements and transmit relevant data to our customers, the Company has fit its Fleet Management vehicles with our proprietary fleet management GPS solution software, providing open platform fleet management solutions to businesses of all sizes. These full-featured solutions help the Company manage its drivers and vehicles by extracting accurate and actionable intelligence from real-time and historical location trip data. The telematics solutions for fleet optimization provide our Fleet Management vehicles with fitted software analytics and data involving (i) fuel efficiency; (ii) management of vehicle maintenance and (iii) prevention of vehicle wear and tear.

Commercial Partnership Programs

In June 2017, the Company entered into a strategic partnership arrangement with Hyundai USA, a subsidiary of the Hyundai Motor Group (“Hyundai”) for purposes of entering into a fleet purchase program. The Hyundai program has provided the Company with competitive pricing options (or best available pricing) below manufacturer suggested retail prices on all purchases for brand-new Hyundai vehicles and priority status on the availability and delivery of all Hyundai vehicles under contract with the Company. The vehicle purchases are currently financed by ACME Auto Leasing and LMP Financial Services, with title to the vehicles held by the Company under liens held by the financiers.

The Company has entered into a similar partnership program with Hyundai’s affiliate, Kia Motors America, Inc., and in March 2021 we entered into a separate partnership with Tesla, Inc., which is intended to facilitate our strategy to transition to all-electric vehicles.

Our Business Model and Our Future Opportunities

We have developed what we believe is an innovative business model in which we not only provide ridesharing and delivery gig drivers with the necessary technology to operate, through the Rideshare Platform, but also the vehicles themselves, via Fleet Management, should the driver not have a qualified vehicle to use. Our two principal operating subsidiaries have a rare corporate synergy that enables us to both diversify and create complementary revenue streams. Further, as we continue our transition to all-electric vehicles, we believe we are in the vanguard of a new era in commercial transportation and that our early presence in this industry will further distinguish us from a competitive standpoint.

While we cannot at this time assess the ultimate effect of COVID-19 and its resulting restrictions on our Company, as of the date of this Report these restrictions appear to be slowly abating. We believe that consumer options in ridesharing will continue to expand to an even larger audience, such as carpooling and private bus services. The expansion of consumer options has also attracted mass transit customers to more expensive luxury options. Our Fleet Management business is designed to put more certified ridesharing vehicles on the roadways to meet the increasing consumer demand of the availability of ridesharing services.

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Moreover, our entry during 2020 into the delivery gig space has provided us with another form of service diversity, one with fewer barriers to entry, as the requirements for vehicles operated by delivery gig drivers are significantly less onerous than those operated by rideshare drivers, as delivery gig drivers are not transporting people. The increasing demand for ridesharing and delivery gig services has produced an increase in demand by TNC businesses for more ridesharing and delivery gig drivers and vehicles on the road at any given time. The growing demographic of ridesharing and delivery gig drivers, as determined on a global basis, has drawn drivers to these industries to perform services for a host of private TNC businesses, such as Uber, Lyft, DoorDash, and GrubHub. The Company estimates that private TNC businesses are hiring more than 50,000 drivers a month to keep pace with the current commercial demand for ridesharing and delivery gig services.

Vehicle and Driver Requirements

We believe that many potential ridesharing drivers are deterred from applying for or are turned away from employment by certain TNCs on account of the fact that their personal vehicles would fail or are failing to meet the qualification requirements imposed by those TNCs. We address this directly by enabling such drivers to rent vehicles from us, through Fleet Management. Each of our vehicles meets if not exceeds the qualification requirements we impose on privately-owned vehicles operated by prospective rideshare drivers.

Ridesharing and Delivery Gig Qualification Requirements

Before initiating employment of a driver using his or her own vehicle, we screen and evaluate the prospective driver and we obtain a Motor Vehicle Report (“MVR”) for his or her vehicle, if the driver does not intend to rent a vehicle from our fleet. We obtain a new MVR for a vehicle not from our fleet that utilizes the Rideshare Platform every six months.

We, and other TNCs, generally impose the following requirements on potential ridesharing and delivery gig driver applicants seeking employment:

As mentioned above, certain cosmetic features may prevent a potential ridesharing driver’s vehicle from qualifying under the vehicle inspection on account of the following: (i) the vehicle includes a full-body wrap containing advertisements, or any large ads; (ii) the vehicle has holes or damage to the exterior; (iii) the vehicle has taxi decals or taxi-style paint; (iv) the vehicle has significant damage to the interior (including any torn seats, large permanent stains, strong permanent odors); (v) the vehicle has paint oxidation; or (vi) the vehicle has different colored hoods/doors; and (vii) the vehicle has objectionable aftermarket modification.

As also noted above, we, as well as other private ridesharing companies, also require all potential ridesharing drivers to undergo a vehicle inspection test on all personal driver vehicles to be used by the potential ridesharing driver to perform ridesharing services on behalf of the private ridesharing company. A 19-point inspection is a standard vehicle inspection procedure to check a car in 19 specific areas to ensure that it conforms to safety and operational requirements. While the 19 points are typically the same for different companies, their procedures differ slightly. The process also varies based on the geographical location where the inspection is performed. The 19 points of the vehicle checked for inspection include headlights, tail-lights, indicator lights, stop lights, foot brakes, emergency/parking brake, steering mechanism, windshield, heat and air conditioning, front, rear and side windows, front seat adjustment mechanism, door controls (open, close, lock), horn, speedometer, body condition/ damage, muffler and exhaust system, condition or tires, interior and exterior rear-view mirrors and safety belts for driver and passengers. Any vehicle having a problem or issue with any of the inspection points will generally not pass the vehicle inspection and we will refuse the opportunity to become a ridesharing driver for us.

Company Growth Strategy

Our long-term strategy is focused on four priorities: expanding and diversifying our revenues; improving our operating effectiveness; enhancing the customer experience; and disciplined capital management.

Expand and Diversify Revenues—Our strategy to achieve ongoing growth is driven by initiatives that expand and diversify our revenues through customer- and market-focused initiatives. We are actively working to expand our Fleet Management business and use of the Rideshare Platform and we intend to convert our entire fleet inventory over to electric vehicles. We will continue to offer a comprehensive equipment rental fleet to maintain and hopefully grow our market position. We plan to continue to expand our footprint in North America, with a focus on increasing the following: (i) the number of major geographical markets served on our Rideshare Platform; (ii) the number of vehicles maintained and managed under the Company’s Fleet Management business, with a strong focus on adding electric vehicles, which will eventually constitute our entire fleet population; and (iii) to continue to reinforce our existing locations with additional fleet and enhance our expertise tailored to local markets. Our footprint expansion will include new locations served under our Rideshare Platform and Fleet Management operations to better support our growing ridesharing rental business. We will continue to pursue initiatives that allow us to drive sales through our existing locations and geographical territories.

Improve Operating Effectiveness—We are focused on generating continuous improvement across our operations, with an emphasis on building a strong safety culture, fleet management business, e-commerce bookings website, fleet availability and improving margins. We are continuing to build a highly professional and technology-enabled sales force and to optimize our sales territories to support our revenue growth objectives. We will continue to improve the effectiveness of our sales team with focused training, strong customer relationship management capabilities, and ongoing technology enhancements.

Enhance the Customer Experience—We seek to differentiate our business by delivering a superior customer experience through the variety and quality of the vehicles and services we offer, the ease of doing business with us and the added value we offer through services, products and technologies. Our focus on quality vehicle brands tailored to meet the qualification requirements of the ridesharing industry is intended to meet the needs and preferences of ridesharing drivers, including the expectations for reliable, safe, efficient and effective maintained vehicles. We expect to add more expertise across our team to help our customers achieve the best results for their projects. In developing and providing vehicle rental related technologies, we are focused on meeting customer expectations related to convenience and on-demand access to data and information.

Disciplined Asset Management—We manage our vehicle rental fleet to optimize the timing of fleet rentals, repairs and maintenance, while at the same time satisfying our customers’ needs. Through continued use and development of our disciplined approach to efficient fleet management, we seek to maximize our utilization and return on investment.

Intellectual Property

As of the date of this Report, we have two registered trademarks “YayYo®” and the service mark for a stylized design representing an automobile that is present in our web sites and our marketing materials. We have no applications for other trademarks as of the date of this Report.at present. We have no patents or copyrights.

Human Capital

As of the date of this Report, we had approximately 3527 full-time employees, all of which are based at our offices. None of our employees are subject to a collective bargaining agreement, and we believe that our relations with our employees generally are good.

Regulation

We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business. These laws and regulations may involve privacy, data protection, intellectual property, competition, consumer protection, export taxation or other subjects. Many of the laws and regulations to which we are subject are still evolving and being tested in courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry in which we operate. Because laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. In addition to the foregoing, we are also subject to the following:

While we are actively working to mitigate the impact of vehicle-related regulations through our strategy of transitioning our vehicle fleet to all-electric,electric, until such time as at least the majority of our fleet has switched, we will remain subject to such regulations.

Changes in the U.S. legal and regulatory environment that affect our operations, including laws and regulations relating to taxes, automobile related liability, insurance rates, insurance products, consumer privacy, data security, employment matters, licensing and franchising, automotive retail sales, cost and fee recovery and the banking and financing industry could disrupt our business, increase our expenses or otherwise have a material adverse effect on our results of operations, financial condition, liquidity and cash flows.

Competition

Competition

The market for providing vehicles to TNC drivers is competitive. We believe our principal competitors to be HyreCar, a publicly-traded company that also rentsregional car rental companies with capabilities to provide the rental of vehicles for use by drivers who work for Uber, Lyft,ridesharing and food delivery gig platforms, and Lyft Express, which makes rental vehicles available to Lyft drivers. National car rental companies such as Hertz and Avis also have programs directed at ridesharing and delivery drivers. These companies are all larger and better-resourced than we are at present and have superior market presence and reputation.

However, we believe we enjoy a competitive advantage vis-à-vis the above companies through our ability to directly rent cars to our customers from our Distinct Cars fleet and the high functionality of the Rideshare Platform. We also believe that our transition to electric vehicles over the coming years will enhance our brand and further distinguish us from our competitors.

Additional Information

Our website address is www.evmo.com. This site includes a link to the Rideshare Platform site, located at www.ridesharerental.com. It also includes all of the press releases we have issued since our formation and an investor relations page. Our investor relations page includes a link to all of our registration statements and periodic reports posted on the SEC’s EDGAR site, including but not limited to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act. These reports are available free of charge and may be accessed via our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

ITEM 1A. RISK FACTORS

Under current SEC rules, and regulations, as a smaller reporting company, we are not required to provide risk factor disclosure in this Report or in any of our periodic reports until such time as we no longer qualify as a smaller reporting company. If and whenHowever, we next fileincluded a comprehensive set of risk factors in a registration statement on Form S-1 in connection with an offeringthat was declared effective by the SEC on December 23, 2021, and can be accessed here: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001691077/000149315221031270/forms-1a.htm. Most of securities, we will includethese risk factor disclosure as part of that filing.factors remain applicable to our business and operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

We lease and maintain our principal offices at 433 North Camden Drive, Suite 600, Beverly Hills, California 90210. We also lease and maintain other offices at 195 South Robertson Drive, Beverly Hills,2301 N. Sepulveda Blvd. Manhattan Beach, CA 90210,90266, which is where the majority of our operational staff conducts its activities on a day-to-day basis. We do not currently own any real estate.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. Except as described below, asWe have included a description of the date of this Report the Company is currently not aware of anypending legal proceedings or potential claims against itus whose outcome would be likely,may, either individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.

Anthony Davis v. EVmo, Inc. (formerly YayYo, Inc.), and Ramy El-Batrawi

This action was filed on March 5, 2020,flows, in Note 12 to the Superior Court of the State of Californiaaudited financial statements for the County of Los Angeles. Plaintiff Anthony Davis acted as the Company’s Chief Executive Officer from approximatelyfiscal year ended December 2016 through April 2017. Mr. El-Batrawi is the founder of the Company and its former Chief Executive Officer and director, and was involved, the complaint alleges,31, 2022 included elsewhere in Mr. Davis’s hiring and termination after a brief tenure as CEO. As part of his severance compensation, Mr. Davis was granted stock options to purchase shares of Common Stock. Mr. Davis claims that the Company breached its agreement to award him these stock options and includes a claim for wage and hour violations. The lawsuit also seeks declaratory and injunctive relief. Mr. Davis also included a claim under the California Unfair Practices Act. The Company has denied all liability, asserts that it has paid Mr. Davis all amounts due to him under his separation agreement with the Company, and has vigorously defended this lawsuit. The Company has filed a demurrer in connection with this litigation and that demurrer is expected to be resolved at a hearing in May 2021. If the case is not dismissed at that time, the Company will conduct discovery and file a motion for summary judgment.Report.

In Re YayYo Securities Litigation

Two actions styled as securities class actions were filed in the United States District Court for the Central District of California, on September 9, 2020 (Hamlin v. YayYo) and September 18, 2020, respectively (Koch v. YayYo et al). The plaintiffs to each action individually alleged misrepresentations and material omissions in the registration statement on Form S-1 that the Company filed with the SEC in connection with its initial public offering, which was declared effective on November 13, 2019, claiming violations of Sections 11 and 15 of the Securities Act. Each purported action involved securities class action claims. The district court consolidated the two actions, and the Hamlin action was since dismissed. The district court indicated in its order consolidating the actions that the new caption for the case would be “In Re YayYo Securities Litigation.” The Company filed an answer, denying liability and asserted that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its registration statement, related public filings and other public statements, and further asserted that the alleged violations of Sections 11 and 15 of the Securities Act are baseless. Each of the parties to this litigation has mutually agreed to request a stay of the proceedings pending a mediation that is tentatively scheduled for April 29, 2021 in which a global settlement, also involving the plaintiff class representative identified in the case described immediately below,

Michael Vanbecelaere v. YayYo, Inc, et al.

Two actions styled as securities class actions were filed in the Superior Court of the State of California for the County of Los Angeles, on July 22, 2020 and July 23, 2020, respectively. The plaintiffs to each action individually alleged misrepresentations and material omissions in the registration statement on Form S-1 that the Company filed with the SEC in connection with its initial public offering, which was declared effective on November 13, 2019, claiming violations of Sections 11 and 15 of the Securities Act. Each action purported to bring a securities class action against the Company; one of the two lawsuits was dismissed on the basis that the lead plaintiff in one of the actions was not a suitable class representative, and that plaintiff later joined the lawsuit brought by the other one. In its answer, the Company denied liability and asserted that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its registration statement, related public filings and other public statements, and further asserted that the alleged violations of Sections 11 and 15 of the Securities Act are baseless. Each of the parties to this litigation has mutually agreed to request a stay of the proceedings pending a mediation that is tentatively scheduled for April 29, 2021, which will also include the parties to the action described immediately above.

Uptick Capital, LLC v. EVmo, Inc. (formerly YayYo, Inc.)

On March 5, 2021, Uptick Capital, LLC (“Uptick”), filed an arbitration demand with the American Arbitration Association (“AAA”) alleging breach of contract with respect to an Advisory Agreement that Uptick asserts it entered into with the Company on August 7, 2017. The claim filed with the AAA alleges that “pursuant to the terms of the Advisory Agreement, Uptick was entitled to receive $2,500.00 per month for three months” plus “an issuance of restricted shares of $50,000.00 worth of YayYo common stock in exchange for providing certain consulting services to YayYo.” The agreement, according to the demand, was renewed once. The Company has not yet formally responded to the arbitration claim but denies liability and intends to vigorously defend this arbitration on the basis that Uptick failed to comply with the contract. It is unknown what the potential liabilities are but, as of the date of this Report, the Company believes they should not exceed $10,000 in cash and $100,000 worth of stock.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Common Stock is currently quoted on the OTC Markets, also known as the “Pink Sheets.” The ticker symbol remains “YAYO,” which is based on our original name. From the date of our initial public offering in November 2019 until February 10, 2020, the Common Stock was traded on the Nasdaq Capital Market, but we voluntarily delisted from that exchange as of that date.

Holders

As of March 29, 2021,30, 2023, there were approximately 1,0771,070 holders of record of theour Common Stock.

Dividends

To date, we have not paid any dividends to the holders of Common Stock and do not anticipate doing so for the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

Pursuant to outstanding SEC guidance, we have disclosed this information in Part III of this Report, under “Item 12- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT- Equity Compensation Plan Information.”

Stock Performance Graph

As a smaller reporting company, we are not required to provide a stock performance graph in this Report.

Unregistered Sales of Equity Securities

We engaged in threeThere were no unregistered sales of equity securities by the Company in fiscal 2022. The Company issued 100,000 shares of Common Stock to select investors during fiscal 2020. The sales areMr. Shawn Mesaros as follows:consideration for services and support in connection with the Common Stock offering completed on January 6, 2022.

Each of these sales was made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act, i.e. a private transaction by an issuer not involving a public offering.

Stock Repurchases

We didhave not makemade any repurchases of the Common Stock in the fourth quarter of 2020, or in any other quarterly period, since our initial public offering in November 2019.

ITEM 6. SELECTED FINANCIAL DATA[RESERVED]

Pursuant to recent SEC rule amendments,No disclosure is required under this item has been removed and reserved and, as a smaller reporting company, we were not required to provideat this information in any case.time.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Our Corporate History and Background

The CompanyEVmo was initially formed on June 21, 2016 as a Delaware limited liability company under the name “YayYo, LLC,LLC.” whichThe Company was subsequently converted into a Delaware corporation pursuant to Section 265 of the unanimous written consent of our former manager and members in a transaction intended to be tax-free under the Internal Revenue CodeDelaware General Corporation Law (the “Conversion”“DGCL”). All of YayYo, LLC’s liabilities and assets, including its intellectual property, were automatically transferred to the Company and the Company has assumed ownership of such assets and liabilities. The Company now operates as a “C” corporation formed under the laws of the State of Delaware. On September 11, 2020, YayYo, Inc. changed its name to Rideshare Rental, Inc. On

We became a reporting company when, on March 1, 2021, the Company changed its name from Rideshare Rental, Inc. to EVmo, Inc.

The Company is a holding company operating through its wholly-owned subsidiaries, Distinct Cars, LLC and Rideshare Car Rentals, LLC.

The Company’s operating business divisions include (i) an online rideshare vehicle booking platform to service the ridesharing economy through Rideshare Car Rentals, i.e. the Rideshare Platform, and (ii) the maintenance of a fleet of standard passenger vehicles to be made commercially available for rent through Distinct Cars, i.e. Fleet Management. The Company seeks to become the leading provider of a standard rental vehicles to drivers in the ridesharing economy.

On March 16, 2018, we completed17, 2017, an offering under Regulationcircular on Form 1-A relating to a best-efforts offering of our Common Stock pursuant to “Regulation A+” of the Securities Act whichof 1933, as amended (the “Securities Act”), was qualified by the SECSecurities and Exchange Commission (the “SEC”). Then, on March 15, 2017. We sold a total of 365,306 shares of Common Stock. We received cash proceeds of $1.8 million, net of commissions and other costs associated with the gross offering proceeds or payable by us.

On November 15, 2019, the Company closed itswe completed an initial public offering of 2,625,000 common shares of Common Stock, at $4.00 per share, for gross proceeds, before underwriting discounts and commissions and expenses, of $10.5 million and the shares becameour Common Stock was listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “YAYO.”

On February 10, 2020, after being advised by Nasdaq that it believed we no longer met the conditions for continued listing, the Company notified Nasdaq ofannounced its intent to voluntarily delist its Common Stock from Nasdaq. In connection therewith, the Company notified Nasdaq of the Company’s intention to file a Form 25 with the SEC on or about February 20, 2020. The Company elected to effect the voluntary delisting of its Common Stock after discussions with Nasdaq’s staff, and based on the determination of the Company’s board of directors that voluntarily delisting the Common Stock from Nasdaq was in the best interests of the Company and its stockholders. FollowingStock. Since delisting from Nasdaq, theour Common Stock now tradeshas been quoted and traded on the Pink Open Market, which is operated by OTC Markets stillGroup, under the trading symbol, “YAYO.”same ticker symbol. The delisting was effective on March 1, 2020.

In September 2020, we changed our name from YayYo, Inc. to Rideshare Rental, Inc., in order for our corporate brand to better reflect our principal businesses, ridesharing and vehicle rentals. In February 2021, we again changed our name to EVmo, Inc., to underscore our commitment to making a full transition to electric vehicles by the end of 2024. In January 2022, we completed a follow-on offering of 27,400,000 shares of our Common Stock, at $0.50 per share, for gross proceeds, before underwriting discounts and expenses, of $13,700,000.

We are a holding company operating principally through two wholly-owned subsidiaries: Rideshare and Distinct Cars. The Rideshare Platform provides TNC drivers with an online booking platform, while Distinct Cars maintains a fleet of passenger vehicles and transit vans for use in the last-mile logistical space for rent to our TNC driver customers, enabling such drivers to meet the vehicle suitability and other requirements of rideshare and delivery gig companies such as Uber, Lyft, DoorDash and Grubhub. Through Rideshare and Distinct Cars, we seek to become a leading provider of rental vehicles to drivers in the ridesharing and delivery gig spaces, and an industry leader in supplying transit vans for last-mile logistics.

Impact of COVID-19 on our business

In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organizationit characterized the outbreak as a “pandemic.” The governors of New York, CaliforniaIn response, numerous states and several other states, as well as mayors on many cities ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have beenwere recommended by the federal authorities and authoritiesgovernment. Beginning in many other states and cities. From the first quarter of 2020, andwhich saw the initial rapid spread of COVID-19, rideshare companies were severely and negatively impacted. As Americans began to practice social distancing and self-isolation, Uber, Lyft, and other rideshare companies experienced a steep decline in ridership and revenue. As a result,impacted, as demand plummeted. Consequently, the Company sawexperienced a decline in revenue during the first half of 2020, which had a negative impact on our cash flows, but we then saw a positive upward movement in revenue during the second half of 2020. This has2020, which continued through fiscal 2021. Currently, through fiscal 2022, the demand for Rideshare remains high with little impact remaining from the COVID-19 pandemic.

Given the current prevalence of FDA-approved eligible vaccines across most age groups, the marked decrease in the early monthsnumber of 2021. As of the date of this Report, several vaccinations for COVID-19 have received emergency-use authorization from the Food and Drug Administration and many of the lockdown restrictions imposed by state and local governments, including those of the markets in which we operate, appear to be abating. Still, the pandemic has not yet ended, and there have been multiple waves where infections, hospitalizations and deaths have sharply increased. The Company therefore cannot predictin 2022, and the ultimate impactresulting easement of pandemic restrictions in our active markets, we are optimistic that COVID -19 may have on its business this year. If another lockdown, even a partial one, were to occur in any of our markets, the Company could be forced to scale back its operations and its expansion plans, which could ultimatelyCOVID-19 will not have a significant negativematerial impact on us.our operations in the current fiscal year. However, certain factors- including, for example, a new, more aggressive and deadly variant that is resistant to the vaccines could alter our prediction.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars LLC and RideShare Car Rentals, LLC.RideShare. (As of the date of this Report, our other wholly-owned subsidiary, EV Vehicles, has no material assets and generates no revenue,) All significant intercompany transactions and balances have been eliminated.

Consolidated Results of Operations—Year ended December 31, 2020,2022, Compared to Year ended December 31, 2019.2021.

Total Revenues

Revenue for the year ended December 31, 20202022 was $7,621,180,$12,558,427, an increase of $706,270$2,322,797 or 10.2%22.69% compared to revenue for the year ended December 31, 20192021 of $6,914,910.$10,235,630 The increase is principally dueattributed to improved operating results stemming from, in part, drivers who regularly extend their vehicle rentals through Rideshare and an increase in our rental fleet offset by a decrease in our average weekly rental income levels throughout the year ended December 31, 2020 due to the COVID-19 outbreak. During the year ended December 31, 2020, the average weekly rental income persize of Distinct Cars’ vehicle placed in service was $308 compared to $335 for the same period in 2019. Our revenues declined in March and April due to COVID -19 and began to recover in May and June 2020. Our revenue since June is back to pre-COVID-19 levels, but there is no assurance that this trend will continue.fleet.

Cost of Revenues

Cost of revenues for the year ended December 31, 20202022 were $5,263,474,$10,068,469, an increase of $589,604$1,517,015 or 12.6%17.74% compared to cost of revenues for the year ended December 31, 20192021 of $4,673,870.$8,551,454. Depreciation expense on the vehicles is included in cost of revenues. The increase is due to higher depreciation expenseexpenses due to an increase in fleet size and higher repairs and maintenance, dueincluding body shop expenses to the age of the fleet.redeploy vehicles. For the yearyears ended December 31, 20202022 and 20192021 our cost of revenue including vehicle depreciation was 69.1%19.8% and 67.6%22.0% of our revenue, respectively. The increase in the cost of revenue as a percentage of revenue is mainly attributed to an increase in body shop-related expenses, depreciation expense, auto maintenance expenses and registration expenses due to the decreaseincrease in average weekly rental income due to the COVID – 19 outbreak.fleet size in 2022.

If we exclude vehicle depreciation, gross profit the year ended December 31, 2022 was $5,465,531, an increase of $799,183 or 17.1% compared to gross profit for the year ended December 31, 2021 of $4,666,348. Excluding vehicle depreciation, gross margin the year ended December 31, 2022 was 43.5%, as compared to gross margin for the year ending December 31, 2021 of 45.5%.

Selling and Marketing Expenses

Selling and marketing expenses for the year ended December 31, 20202022 were $490,403,$348,277 representing a decreasean increase of $275,038$65,096 or 35.9%23.0% over the year ended December 31, 20192021 of $765,441.$283,181. The decreaseincrease is dueattributed to better management of media placements for our advertising and a change in the vendor we used to spearhead ourtargeted marketing efforts to ridesharing and delivery gig drivers.rent the additions to our fleet in each of our five operations locations.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 20202022 were $5,288,316,$6,451,021, representing an increasea decrease of $1,264,395$1,946,128 or 31.4% over23.2% below the year ended December 31, 20192021 of $4,023,921. The increase$8,397,149. This decrease is principally dueattributable to higher payroll costs (including stock option expensespending efficiency, reduction of $739,973) as we hired additional personnel for our expanding operationslegal fees/settlements, and higher management salaries; and higher occupancy costs.reduced professional fees.

Loss on the Settlement of Debt

Loss on the settlement of debt for the year ended December 31, 2020 was $0 as compared to $252,900 for the same period in 2019. During the year ended December 31, 2019, we settled outstanding debt of $421,500 with 84,300 shares of common stock valued at $674,400.

Total Operating Expenses

Total operating expenses for the year ended December 31, 20202022 were $5,779,719,$7,042,287, representing an increasea decrease of $722,957$1,837,796 or 14.3%20.7% compared to the year ended December 31, 20192021 of $5,055,762.$8,880,083. The increasedecrease is due to the aggregate reasons described in the expense-related disclosure above.

Interest Expense, Net

Interest and financing expenses for the year ended December 31, 20202022 were $265,839$2,589,898 compared to $1,115,499$6,296,524 for the year ended December 31, 2019.2021. The decrease in interest and financing cost for the year ended December 31, 20202022 was due to a decreasethe completion of our capital raise in outstanding debt.January 2022.

Gain on Forgiveness of Debt

Gain on forgiveness of debt for the year ended December 31, 20202022 was $184,775$0 as compared to $0$8,000 for the same period in 2019,2021, as, during the year ended December 31, 2020,2021, a small balance remaining on an Economic Impact Disaster Loan granted by the entire loan of that amount we received under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security ActSmall Business Administration Loan was forgiven.

Net Loss

The net loss for the year ended December 31, 20202022 was $3,502,077,$(7,142,227), representing a decreasean improvement of $428,144$7,842,651 or 10.9%52.3% compared to the net loss for the year ended December 31, 20192021 of $3,930,221.$(14,984,878). The decreaseincrease and improvement is due to the aggregate reasons described in the expense-related disclosure above.

Liquidity, Capital Resources and Plan of Operations

OnIn November 15, 2019, we completed our initial public offering of Common Stock, after our registration statement on Form S-1 under the Securities Act was declared effective by the SEC on November 13, 2019. Weand sold a total of 2,625,000 common shares at a price of $4.00 per share. Total gross proceeds from the offering were $10,500,000, before deducting underwriting discounts and commissions and other offering expenses.

During the year ended December 31, 2020, we sold an aggregate of 2,553,571 shares of Common Stock to three investors for cash proceeds of $275,000, of which 125,000 shares was sold to a member of our Board of Directors for cash consideration of $25,000.

OnIn January 8, 2021, we received $500,000 from a convertible note from one of our stockholders.stockholders in exchange for a convertible note. The note iswas convertible into shares of Common Stock at $0.50 per share. The noteshare and was converted into 1,000,000 shares of Common Stock in February 2021.

In April 2021, as part of a securities purchase agreement, we issued and sold to an investor a 12.5% original issue discount convertible promissory note and a Common Stock purchase warrant. The note had an original principal amount of $2,250,000, with an original issue discount of $250,000. It bore interest at a fixed rate of ten percent (10%), was convertible into shares of Common Stock at a price of $3.00 per share (subject to adjustment), and was to mature on January 12, 2022. The warrant granted the investor the right to purchase 187,500 shares of Common Stock at an exercise price of $3.00, subject to adjustment; it is exercisable at any time within five (5) years of the date of issuance and additional warrants, each for 93,750 shares of Common Stock with an exercise price of $3.00 per share, were to be issued by the Company to the investor each month that the note remains outstanding.

In July 2021, we entered into a term loan, guarantee and security agreement we entered into with EICF Agent LLC, as agent for the lenders, and Energy Impact Credit Fund I, LP, as lender, providing for a secured term loan facility in an aggregate principal amount of up to $15.0 million, consisting of a $7.5 million closing date term loan facility and up to $7.5 million of borrowings under a delayed draw term loan facility. The initial loan was fully drawn on the closing date. The term loan agreement will mature on July 9, 2026.

In connection with the term loan, we entered into an exchange agreement with the investor who we entered into the securities purchase agreement in April 2021. As part of the exchange agreement, the investor agreed to exchange the note we issued to it in April 2021 for 230,375 shares of Series B Preferred Stock, and a warrant. The warrant granted the investor the right to purchase 93,750 shares of Common Stock at an exercise price of $3.00, subject to adjustment. This warrant is exercisable in full at any time within five (5) years of the date of issuance. Additional warrants on substantially identical terms were issued by the Company to the investor monthly until such time as the Preferred Stock was redeemed or converted in full, after which a final warrant was issued. All of the shares of Series B Preferred Stock were converted by their holder into shares of Common Stock, or redeemed by us, in the first quarter of 2022.

In January 2022, we completed a follow-on offering of 27,400,000 shares of Common Stock at a price of $0.50 per share, for total gross proceeds of $13,700,000.

Current Assets, Liabilities and Working Capital

At December 31, 2020,2022, the Company’s current assets totaled $215,990,$2,625,891, current liabilities totaled $4,461,560,$7,583,679, and working capital was a deficit of $4,245,570.$4,957,788. At December 31, 2019,2021, the Company’s current assets totaled $2,098,660,$4,077,934, current liabilities totaled $2,655,055,$7,051,073, and working capital was a deficit of $556,395.$2,973,139.

Regarding current liabilities, the amounts categorized as accounts payable and accrued expenses totaled $2,119,003$2,051,926 and $951,231$4,940,580 as of December 31, 20202022 and 2019,2021, respectively, an increasea decrease of $1,167,772$2,888,654 or 123%58.5%.

Since inception, our principal sources of operating funds have beenbeen: (i) proceeds from equity financingfinancings, including two public offerings of our Common Stock and the saleprivate sales of our Common Stock to initialcertain investors known to managementin transactions exempt from registration under the Securities Act; (ii) the term loan for $7.5 million described above; and principal shareholders of the Company. We do not expect that(iii) revenues generated from our current cash on hand will fund our existing operations and future business growth. We will need to raise additional capital in order execute our business plan and growth goals for at least the next twelve-month period thereafter. If the Company is unable to raise sufficient additional funds, it will have to execute a slower than planned growth path, reduce overhead and scale back its business plan until sufficient additional capital is raised to support further operational expansion and growth.operations. As of December 31, 2020,2022, the Company had $72,890$1,702,942 in cash. The Company generated $536,723cash and cash equivalents. As of cash forthe date of this Report, we do not believe that we have sufficient capital to finance our operating activitiesexpenses for the remainder of this fiscal year ended December 31, 2020. The Company is seeking to raise additional capital. Ifand the Company is not successful in raising additional capital it will be forced to significantly scale back its business operations and it growth plans. In addition, the COVID-19 virus and the related impact it is having on the U.S. economy is currently having a negative impact on the cash flowsactively seeking new sources of our business. However, we were able to obtain two loans totaling $342,675 related to new legislation passed as a result of COVID-19, of which $184,775 was forgiven in 2020.capital.

Capital Expenditures

During the year ended December 31, 2020,2022, the Company had capital expenditures of $3,705,417$16,807,593 in leased vehicles. At December 31, 2020, mostMost of the Company’s vehicles were financeare financed with leases. At December 31, 20202022 the Company had $9,067,885$27,702,758 of rental vehicles, net of accumulated depreciation in the amount of $2,871,452,$7,001,331, totaling $6,196,433$20,701,427 in net rental vehicles. At December 31, 20192021 the Company had $6,284,211$13,514,619 of rental vehicles, net of accumulated depreciation in the amount of $1,547,164,$4,627,300, totaling $4,737,047$8,887,319 in net rental vehicles. Additionally, the Company purchased $132,000 in kiosks for the launch of the Trek World project in Illinois. A contract is in place with Trek World to guarantee the costs of the kiosks through rental of the vehicles and a revenue share potential on the point-of-sale device merchant fees. Should Trek World terminate the rental agreements. Payment in full for the $132,000 is to be reimbursed at termination of the rentals from Trek World. The Company’s rental vehicles and kiosks are depreciated over their estimated useful life of five years. The lease terms for those rental vehicles that are leased are generally for one to three years and the Company has the right to purchase the leased vehicle at the end of the lease terms.

Statement of Cash Flows

Cash Flows from Operating Activities

Net cash generatedexpended by operating activities for the year ended December 31, 20202022 totaled $536,723,$(7,453,435), which was ana increase of $3,952,946$5,999,241 from the net cash expended ingenerated from operating activities of $3,416,223$(1,454,194) for the same period in 2019.2021. The increasedecrease is principallyprimarily due to the change in prepaid expenses, other assets, accounts payable and accrued expenses, and non-cash expense items.acquisition of leased vehicles increasing the fleet size.

Cash Flows from Financing Activities

Net cash expended ingenerated from financing activities for the year ended December 31, 20202022 totaled $1,720,262,$7,434,449, which was a changean increase of $6,504,550$2,465,882 from the net cash generated byexpended in financing activities of $4,784,288$4,968,567 for the same period in 2019.2021. The change is principally due to the IPO proceeds receivedcapital raise completed in 2019, increase in payments on financing lease obligations in 2020 and repayments of notes payable in 2019.January 2022.

Current Plan of Operations

Our plan of operations is currently focused on the growth and ongoing development of our operating businesses: (i) the Rideshare Platform, offered through Rideshare, and (ii) Fleet Management, madeour vehicle fleet, which is commercially available through Distinct Cars.Cars, and (iii) our fleet management initiatives. We expect to incur substantial expenditures in the foreseeable future for the enhancedcontinuing operations of our businesses and related, ongoing, internal research and development. Moreover, we havebusinesses. We embarked on “EV strategy”our EV strategy in 2021, in which we intendset a goal to replace our entire fleet of vehicles with all electric vehicles within a relatively short period of time.by 2026. At this time, we cannot reliably estimate the nature, timing or aggregate amount of all of the costs associated with these.

The continuationthese efforts and, as of our current planthe date of operations may require usthis Report, we cannot continue to raise significant additional capital within a short period of time. If we are successful in raising capital, we believe that the Company will have sufficient cash resources to fund its plan of operations. The cash flow from our Rideshare Platform and, especially, Fleet Management businesses and our existing capital resources are sufficient for us to continue our current operations, but for us to fully execute our business planEV strategy until such time as we will likely require significant additionalhave secured new sources of capital.

We continually evaluatereevaluate our plan of operations discussed above to determine the manner in whichhow we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors, several of which are beyond our control. There iscan be no assurance that our current capital resources will be adequate to continue to fund our ongoing operations, nor can there be any assurance that, should we require additional capital, we will successfully obtain the requiredit on favorable terms, or at all. The potential inadequacy of our existing capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations. The inability to secure additional capital wouldcould have a material adverse effect on us, including the possibility that we would have to sell or forego a portion or all of our assets or cease operations. If we discontinue our operations, we willmay not have sufficient funds to pay any amounts to our stockholders.

Even if we raise additional capital in the near future, ifIf our operating businesses fail to achieve anticipated financial results, our existing capital will likely be depleted more quickly than we anticipate and our ability to raise additional capital in the future to fund our operations would likely be seriously impaired. If in the future we are not able to demonstrate favorable financial results or projections from our operating businesses, we willmay not be able to raise the capital we need to continue our then current business operations and business activities, and we will likely not have sufficient liquidity or cash resources to continue operating.operations.

Because ourOur working capital requirements depend upon numerous factors and there can be no assurance that our current cash resources will be sufficient to fund our short-term operations. At present, weWe have no committed externaldetermined that our long-term operations will require new sources of capital, and do not expect any significant product revenues for the foreseeable future. Thus,which we will require immediate additional financing to fund future operations. There can be no assurance, however, that we will be ableare actively working to obtain funds on acceptable terms, if at all.this time.

Contractual Obligations, Commitments and Contingencies

The Company has enteredperiodically enters into a series of monthly vehicle leasing agreements with ACME Auto Leasing, and LMPUtica Leasing Company, NFS Financial Services, Liberty Financial and Spring Free EV each with an approximate lease term of 12 to 3660 months. As of December 31, 20202022 and December 31, 2019,2021, the Company had total principal lease obligations before residuals and interest expense in the amount of $2,352,878$13,675,268 and $2,400,565,$3,989,210, respectively. The Company owes monthly payments under each Lease Agreementlease agreement ranging from approximately $285 per month to $621$1,150 per month. At the end of the term of the Lease Agreement, lessee hasmost lease agreements, we have the right to purchase ownership and title of the subject vehicle for a nominal payment. In addition, the Lease Agreementslease agreements are subject to and secured by a grant of a purchase money security interest on each leased vehicle. We expect the useful life of each vehicle to be approximately five years but also expect to cycle vehicles at three years.

We lease and maintain our principal offices at 433 North Camden Drive, Suite 600, Beverly Hills, California 90210. We also lease and maintain other offices at 195 South Robertson Drive, Beverly Hills,2301 N. Sepulveda Blvd. Manhattan Beach, CA 90210,90266 where the majority of our operational staff conducts its activities on a day-to-day basis. We do not currently own any real estate.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of our business, we are not exposed to market riskimpacted by increasing interest rates. Future financing of leased vehicles cost is accelerated due the sort that may arise from changes inrising interest rates or foreignalong with some of our vehicle leases adjust as the prime rates change. Additionally, our current note payable with Energy Impact Partners monthly interest costs accelerate as prime rates are increases.

Foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.derivatives do not have an impact on our business.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. In many instances, we could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of non-current assets and valuation allowance for deferred tax assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our judgments and estimates.

There is one material deviation from GAAP related to ASC 842. The lease balances presented represent remaining principal balances of each lease as of December 31, 2022. The disclosure identifies the future interest payments to represent the full lease payment obligations. The current treatment is a material deviation from GAAP and ASC 842 but consistent with prior year treatment. An ASC 842 study is planned for 2023 and the Company expects to modify and adjust to comply with ASC 842 by fiscal year end 2023.

Equipment and Rental Vehicles

Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows:

The Company has not changed its estimate for the useful lives of its equipment and rental vehicles, but would expect that a decrease in the estimated useful lives of equipment and rental vehicles of one year would result in an annual increase to depreciation expense of approximately $450,000,$675,000, and an increase in the estimated useful lives of equipment and rental vehicles of one year would result in an annual decrease to depreciation expense of approximately $300,000.$450,000.

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not changed itits methodology for estimating the valuation allowance. A change in valuation allowance affect earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

Revenue Recognition

The Company recognizes revenue from renting its fleet of cars to ridesharing and delivery gig drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers.

We consider a signed contract or other similar documentation reflecting the terms and conditions under which products will be provided to be persuasive evidence of an arrangement. Collectability is assessed based on a number of factors, including payment history and the creditworthiness of a customer. If it is determined that collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide this information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See “Index to Consolidated Financial Statements” which appears on page F-1 of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC. Disclosure controls and procedures are, without limitation, also intended to ensure that such information is gathered and communicated to management, including our Chief Executive Officerchief executive officer (“CEO”) and Chief Financial Officerchief financial officer (“CFO”), or persons performing similar functions, as appropriate, to facilitate timely decisions regarding required disclosure.

In accordance with Rule 13a-15(b) under the Exchange Act, as of the end of the period covered by this Report, an evaluation was carried out under the supervision and with the participation of our management, including our CEO and CFO, to assess the effectiveness of our disclosure controls and procedures as of December 31, 2020.2022. Based on that evaluation, our CEO and CFO have concluded that, at December 31, 2020,2022, such disclosure controls and procedures were not effective. We elaborate on the basis for this conclusion in the discussion contained in our “Management’s Report on Internal Control over Financial Reporting” below.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our CEO and CFO have concluded, based on their evaluation as of the end of the fiscal year covered by this Report, that our disclosure controls and procedures were not effective as a result of a control issue described herein; however, it is possible that this evaluation failed to identify other control issues that would have reinforced this conclusion, and for which we have not yet initiated any remedial action.

Management’s Report on Internal Control over Financial Reporting

As required by SEC rules and regulations for the implementation of Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2020.2022. In making these assessments,this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission COSO (2013 framework). Based on our assessments and those criteria, management determined that we did not maintain effective internal control over financial reporting at December 31, 2020.2022.

Our management has determinedconcluded that our internal control over financial reporting contains a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We do not have sufficient segregation of duties within our accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets, and the recording of transactions should be performed by separate individuals. Management weighed the impact of our failure to have a proper segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the resulting control deficiency represented a material weakness.

To address this material weakness, management has performedimplemented procedures to ensure that the financial statements balances included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. In 2021, the Company plansimproved oversight relating to continueits accounting and finance functions, but has yet to hire a sufficient number of additional accounting and finance staff to furtherfully address the material weakness identified herein. However,Therefore, as of the date of this Report, this material weakness still exists and is the basis for our conclusion that our disclosure controls and procedures were, at December 31, 2020,2022, and remain, not effective.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The following sets forth information about our directors and executive officers as of the date of this Report:

*-Ms. DiGiovanni resigned as the Company’s Chief Operating Officer effective at the end of the first quarter of fiscal 2021. Her successor in that role has not yet been appointed.

Executive Officers

Stephen M. Sanchez has been one of our directors since January 2020 and was appointedhas served as the Company’s Chief Executive Officer inon a part-time basis since February 2021. Mr. Sanchez has over 30 years of experience in the logistics industry, particularly in the design, implementation and operation of last-milelast- mile delivery services. Since November 2019, Mr. Sanchez has servedalso serves as the Chief Executive OfficerCEO of PDQ Pickup LLC, a moving and logistics company, or PDQ Pickup. From August 2019 until November 2019, Mr. Sanchez was the Chief Operating Officer of PDQ pickup. PDQ Pickup. From January 2018 until August 2019, Mr. Sanchez was Senior Vice President of Operations and Business Development for Boxbot, Inc., a robotics company focusing on the development and sale of autonomous last-mile delivery vehicles. From November 2015 until January 2018, Mr. Sanchez was Senior Manager of Final Mile Process Engineering for Amazon, Inc. From September 2014 until November 2015, Mr. Sanchez served as Vice President/Director of Supply Chain – Hub and Network Planning, for LaserShip Inc., a regional provider of same-day and next-day delivery services. Mr. Sanchez, who is a veteran of the U.S. Navy, also has held positions of increasing responsibility with affiliates of DHL International GmbH, as well as with National Express Corporation and United Parcel Service. We believe that Mr. Sanchez is qualified to serve as a director of our company as a result of his extensive leadership experience in logistics and business development.

Ryan Saathoffhas served as the Company’s Chief Financial Officer on a part-time basis since April 2020. In addition, Mr. Saathoff is the founder, chief executive officer,CEO, and managing partner at RG Alliance, a privately-held full back office solutions company, with over 50 employees and 10% of its business outside the U.S. He has served as CEO of RG Alliance since 2012, and is responsible for all strategic outcome planning, financial strategy, process optimization, and leveraging business intelligence from key metrics. In that role, he has been significantly involved in supporting his clients through multiple large public and private financial acquisitions and has guided several client executive teams in taking their companies public. He also serves on the boards of several non-profit companies and is affiliated with numerous professional and industry associations. Mr. Saathoff holds a Bachelor of Arts degree from California State University, San Marcos.

Laurie DiGiovanniMichael Harris has served as the Company’s Chief Operating Officer since May 2016. In addition, Ms. DiGiovanni served as interim Chief Executive Officer of the Company from October 4, 2018 to November 17, 2018. Since 2012, Ms. DiGiovanni has held marketing and operating executive positions at Beverly Hills Rent a Car and Executive Transportation pursuant to which Ms. DiGiovanni managed national corporate expansions and activation of transportation industry leading brands andJanuary 2022. Effective January 3, 2023, Michael Harris was executive producer for a range of marketing campaigns at auto shows and transportation industry live events. Ms. DiGiovanni manages all business operations of the Company and its subsidiaries including driver training and the Fleet Management business. Ms. DiGiovanni is the founder of the Association for Finance and Insurance Professionals (AFIP), an association that has certified tens of thousands for more ethical car buying practices, and mandatory for auto industry employees and implemented in leading global automotive markets. She also played key roles in the launch of many automotive initiatives, including managing new divisions and brands for Beverly Hills Travel and Lifestyle and American Dream Classics; serving as Director of Training for CarsDirect.com; and leading marketing and customer experience campaigns for Barrett-Jackson Car Auction. Ms. DiGiovanni also has direct brand experience within the automotive industry, including project management and training positions with Toyota, Mazda, and Nissan. Ms. DiGiovanni has a Bachelor of Arts degree from California State University, Fullerton.

As noted above, Ms. DiGiovanni has resigned asappointed Chief Operating Officer with such resignation to be effective at the end(“COO”) of the first quarterCompany. Mr. Harris, who had previously served as the Company’s Executive Vice President, Operations and Engineering, succeeds Gregory Miller, who resigned as COO in August 2022. The Board approved and ratified Mr. Harris’s promotion to COO at a meeting held on November 29, 2022. Mr. Harris, 42, joined the Company in March 2021 as Vice President of fiscal 2021. Her successor has not yet been appointed.Engineering. Prior to then, he worked at OnTrac for over 5 years as senior manager of industrial engineering and for 12 years at FedEx Ground Shipping as an engineering manager. Mr. Harris holds a bachelor of science degree from West Virginia University and a Master of Business Administration from Mount St. Mary’s University.

Board of Directors

Departures:

Terren S. Peizer has beenwas appointed the Executive Chairman of the Board of Directors sincein February 2021. He is a highly successful entrepreneur and investor, having founded and commercialized several public and private companies. Mr. Peizer is the founder, Boardresigned and Chairman Chief Executive Officer and majority stockholder of OnWrak Inc., a leading AI and telehealth-enabled, virtualized healthcare treatment company. Mr. Peizer is also the Board Chairman, Chief Executive Officer and majority shareholder of BioVie, Inc., which isfrom the industry leader in the development of two orphan drug candidates for the treatment of rare liver diseases. In addition, Mr. Peizer is founder, Chairman and CEO and majority shareholder of four privately-held companies. He was Chairman of Cray, Inc., which he bought from Silicon Graphics for assumption of debt and recently sold to Hewlett Packard for approximately $1.4 billion. Mr. Peizer is chairman and sole shareholder of Acuitas Group Holdings, LLC, his personal investment holding company. In addition, Mr. Peizer has held senior executive positions at Goldman, Sachs & Co., First Boston, and Drexel Burnham Lambert. We believe that Mr. Peizer’s vast experience as a corporate executive, particularly with several public companies, qualifies him to serve on and chair our Board of Directors.Directors on February 10, 2023.

Harbant S. Sidhu has served as a director of the Company sincebeginning in January 2020. Mr. Sidhu isresigned as a design engineer and founder of Advanced Tek Group, Inc. (formerly Magnaspec, Inc.), a private aerospace manufacturing business. Since 2012, Mr. Sidhu has operated Advanced Tek Group, Inc., managing all aspectsmember of the operating business. Mr. Sidhu has experience in personnel management and oversite, aerospace and defense engineering, sales, manufacturing, accounting and operational experience in the aerospace and defense manufacturing industry. Mr. Sidhu has performed unclassified contracting work in components production in Mexico. Mr. Sidhu graduated as an electrical engineer in 1980 from Punjab University, India. Mr. Sidhu’s experience in human resources coupled with his business experience qualifies him to serve on our Board of Directors.Directors on January 3, 2023.

Current Board of Directors:

Douglas M. Moxhas been one of our directors since January 2020. Mr. Mox has extensive experience in financial management and strategic planning, as well as logistics, engineering and operations. Since January 2013, Mr. Mox has been the Chief Operating Officer of Grace Thomas Investment, a private equity firm. Prior thereto, Mr. Mox, who has a B.S. degree in aviation management/logistics, worked as a senior manager at DHL Worldwide Express, an affiliate of DHL International GmbH, and as an industrial engineering manager for United Parcel Service. The Company believes that Mr. Mox is qualified to serve as a director of the Company as a result of his financial expertise and his extensive experience in the private equity and logistics industries.

John P. O’Neillhas been one of our Directordirectors since January 2020. Mr. O’Neill is a 45-year veteran of the logistics industry and has worked both in the U.S. and internationally over the course of his career. Since 1990, Mr. O’Neill has been employed by affiliates of DHL International GmbH in positions of increasing responsibility in the U.S. and throughout Asia. SinceFrom March 2013 through April 2020, Mr. O’Neill has beenwas the Deputy Managing Director of DHL-Sinotrans International Air Courier, in Beijing. Mr. O’Neill returned to the U.S. and retired from DHL at the end of April 2020. Currently he provides consulting services in the logistics industry and actively manages various investments. The Company believes that Mr. O’Neill is qualified to serve as a director of the Company as a result of his extensive leadership experience in the logistics industry.

Stephen M. Sanchez has been one of our directors since January 2020 and has served as the Company’s Chief Executive Officer on a part-time basis since February 2021. Mr. Sanchez has over 30 years of experience in the logistics industry, particularly in the design, implementation and operation of last- mile delivery services. Since November 2019, Mr. Sanchez also serves as the CEO of PDQ Pickup LLC, a moving and logistics company, or PDQ Pickup. From August 2019 until November 2019, Mr. Sanchez was the Chief Operating Officer of PDQ Pickup. From January 2018 until August 2019, Mr. Sanchez was Senior Vice President of Operations and Business Development for Boxbot, Inc., a robotics company focusing on the development and sale of autonomous last-mile delivery vehicles. From November 2015 until January 2018, Mr. Sanchez was Senior Manager of Final Mile Process Engineering for Amazon, Inc. From September 2014 until November 2015, Mr. Sanchez served as Vice President/Director of Supply Chain – Hub and Network Planning, for LaserShip Inc., a regional provider of same-day and next-day delivery services. Mr. Sanchez, who is a veteran of the U.S. Navy, also has held positions of increasing responsibility with affiliates of DHL International GmbH, as well as with National Express Corporation and United Parcel Service. We believe that Mr. Sanchez is qualified to serve as a director of our company as a result of his extensive leadership experience in logistics and business development. Mr. Sanchez has been serving as the acting Board Chair since the resignation from the Board of Mr. Peizer on February 10, 2023.

CORPORATE GOVERNANCE

Board of Directors

The Company’s Board of Directors (the “Board of Directors” or the “Board”) oversees our business affairs and monitors the performance of management. In accordance with our corporate governance principles, the Board of Directors does not involve itself in day-to-day operations of the Company. The directors keep themselves informed through discussions with the Chief Executive Officer, other keysenior executives and by reading the reports and other materials that we send them, and by participatingtheir participation in Board of Directors and committee meetings.

Term of Office

Each of our current directors, with the exception of our Executive Chairman Terren S. Peizer, was elected to the Board in January 2020 in accordance with Section 3 of the Company’s By-Laws. Mr. Peizer was appointed to the Board by a unanimous vote of the directors in connection with an expansion of the Board that was authorized in February 2021. Since the current term of office for each director is one year, and the Board has not yet scheduled an annual meeting of Company shareholders or arranged to take action by unanimous written consent of a majority of Company shareholders, each director other than Mr. Peizer may, as of the date of this Report, be considered a “holdover director.”

The Board size was recently expanded in February 2021 from five to seven members, andalthough the Board is currently workinghas yet to take action to fill the vacancies in its membership. OnceAt such time as the Board has been fully constituted, it intends to take action to elect its membership either at a meeting of Company shareholders or by unanimous written consent of a majority of Company shareholders.

Director Independence

Our Board of Directors is comprised of a majority of “independent directors” as defined under Rule 803 of the rules of Nasdaq.NYSE American Company Guide (“Rule 803”). Although we are not currently listed on Nasdaq orthe NYSE American (or any other exchange,national securities exchange), we use theare using Rule 803’s definition of “independence” of Nasdaq to make this determination. Nasdaq Listing Rule 5605(a)(2)803 provides that an “independent director” is a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provideRule 803 further provides that a director cannot be considered independent if:

Under such definitions, our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our Board has determined that Douglas M. Mox and John P. O’Neill and Harbant S. Sidhu are all independent directors of the Company. However, our Common Stock is not currently quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of our Board be independent and, therefore, the Company is not subject to any director independence requirements.

Board Leadership Structure and Risk Oversight

The Board oversees our business and considers the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a whole. Each of the Board committees, as set forth below, will also provide risk oversight in respect of its areas of concentration and reports material risks to the board for further consideration.

Board of Directors Meetings and Attendance

During the fiscal year ended December 31, 2020,2022, the Board of Directors held 12three (3) meetings. Each director attended all of these Board meetings.There was a quorum present at each meeting.

Code of Ethics

Although we are not required to do so, as theour Common Stock is not listed on a national securities exchange in which an adopted Code of Ethics would be a listing requirement, our Board plans at some point to adopt a written code of business conduct and ethics (“Code”(a “Code”) that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. We intend to post on our website a current copy of the Code and all disclosures that are required by law in regard to any amendments to, or waivers from, any provision of the Code.

Committees of the Board of Directors

Our Board has established an audit committee and a compensation committee. The composition and responsibilities of each of the committees of our Board is described below. Members serve on these committees until their resignation or until as otherwise determined by our boardBoard of directors.Directors.

Audit Committee

We have established an audit committee consisting of Douglas M. Mox and John P. O’Neill (the “Audit Committee”). The Audit Committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

The

Consistent with the requirements of Rule 803, the Audit Committee is composed exclusively of “independent directors” who areindependent directors, at least one of whom has past employment experience in finance or accounting, holds a professional certification in accounting, or has some other comparable experience or background that results in the individual being “financially literate” as defined under the Nasdaq listing standards we neededsophisticated,” including but not limited to complybeing a CEO, CFO or other senior officer with at the time of our initial public offering. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.oversight. However, neither of Messrs. Mox or O’Neill qualifies as an “Audit Committee financial expert,” as that term is defined in current SEC regulations. The Board size has recently been expanded and we expect that one if not more than one of our new directors to be added to the Board will so qualify. For now, the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.

During the fiscal year ended December 31, 2020,2022, the Audit Committee held one meeting.

Compensation Committee

We have established a compensation committee of the Board of Directors, which consists of Harbant S. SidhuDouglas Mox and Stephen M. Sanchez, the former of whom is an independent director. Mr. SidhuMox is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, or Rule 16b-3, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code, or Section 162(m). Mr. Sanchez is the chairman of the compensation committee. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

During the fiscal year ended December 31, 2020,2022, the Compensation Committee held one meetings.meeting.

Nominating Committee

We do not currently have a nominating committee. Instead of having such a committee, our Board of Directors historically has searched for and evaluated qualified individuals to become nominees for membership on our Board of Directors. The directors recommend candidates for nomination for election or reelection and, as necessary, to fill vacancies and newly created directorships.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. In the event such a proposal is made, all members of our Board will participate in the consideration of director nominees.

Non-Employee Director Compensation

Directors do not currently receive compensation for their services on the Board or on any Board committees.

Family Relationships

There are no family relationships among any of our officers or directors.

Involvement in Certain Legal Proceedings

To our knowledge, none of our current directors or executive officers has, during the past ten years:

Except as set forth above and in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Shareholder Communications

Currently, we do not have a process for shareholders to send communications to the Board of Directors. To date, no shareholders have made any recommendations to us to adopt such a policy.

Delinquent Section 16(a) Reports

Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, except as noted in the table below, we believe as of the date of this Report that our current executive officers, directors and greater than 10 percent beneficial owners have filed on a timely basis all Section 16(a) reports required to be filed during the year ended December 31, 2020. To our knowledge, the failure to timely file each such report listed below was the result of an administrative error by the filer.2022.

ITEM 11. EXECUTIVE COMPENSATION

The following table provides information regarding the compensation earned for the years ended December 31, 20202022 and 2019,2021, for (i) all individuals serving as our principal executive officer or acting in a similar capacity during 20192022 (“PEO”), and (ii) our two most highly compensated executive officers other than the PEO who were serving as executive officers at the end of 2020:2022:

Bonuses

Mr. Rosen was paid a bonus of $25,000 upon completion of the Company’s initial public offering in November 2019. No other bonuses were paid that year and none were paid in 2020.

Employment Agreements

The Company had entered into an oral agreement with its former Chief Executive Officer, Jonathan Rosen, for an annual salary of $300,000, retroactive to his start date of February 1, 2019. The Company and Mr. Rosen entered into an Executive Employment Agreement on January 10, 2020, pursuant to which Mr. Rosen would serve as Chief Executive Officer of the Company. Pursuant to the agreement, Mr. Bishop was to receive a base annual salary at a rate of $300,000 per annum. Additional performance-based incentive compensation was to be negotiated by the Company and the Mr. Rosen in good faith. Mr. Rosen was also granted an option to purchase up to 500,000 shares of our common stock at a price of $4.00 per share, with 166,000 shares vesting on the date of the agreement and thereafter 13,917 shares vesting in each succeeding month of his employment, except in the 24th month the number of shares to vest would be 13,909. On January 26, 2020, Mr. Rosen resigned from his position as the Company’s Chief Executive Officer.

The Company and Boyd Bishop entered into an Executive Employment Agreement on December 23, 2019, pursuant to which Mr. Bishop would serve as President of the Company effective January 6, 2020. Pursuant to the agreement, Mr. Bishop was to receive a base annual salary at a rate of $350,000 per annum. Mr. Bishop was to receive a signing bonus of $100,000 with $50,000 payable upon his first day of employment and $50,000 payable on the three-month anniversary of his first day of employment if he was still employed by the Company. Future bonuses, up to the amount of his annual salary, were to be based on the number of vehicles rented, location openings and other metrics. The fiscal year 2020 bonus was to be a minimum of $40,000 for each 1,000 additional cars placed in service during 2020 over the number of cars in service on December 31, 2019, and other criteria as mutually established by the executive and the Board in good faith within 180 days after the effective date of the agreement. Mr. Bishop was also granted an option to purchase up to 1,000,000 shares of our common stock at a price to be determined by the Board within 30 days of the execution of the Agreement. The 1,000,000 options were to vest upon the following schedule: (a) 250,000 shares at the rate of 1/60th per day during the 60 days following the date of the agreement, and (b) 22,058 shares on each subsequent monthly anniversary of the date of the agreement, with 22,086 on the last monthly anniversary until the 1,000,000 shares have all vested. On March 1, 2020, Boyd Bishop resigned from his position as President of the Company, and future bonus payments and unvested options were cancelled.

Laurie DiGiovanni, who serves as Chief Operating Officer, entered into a written employment agreement with the Company as of June 30, 2020. This agreement provided for Ms. DiGiovanni to continue to serve as Chief Operating Officer for a three-year term, in which Ms. DiGiovanni would be paid a base salary of $200,000 per annum and would receive up to 750,000 in incentive stock options, with 250,000 to be granted upon execution of the agreement and the remainder to be granted on a quarterly basis for the life of the agreement, Ms. DiGiovanni was not entitled to any guaranteed bonus payments under the agreement, although it provides that the Company’s Board of Directors may award her a discretionary bonus. Her employment under the agreement was mutually considered by her and the Company to be “at-will,” terminable by either party at its discretion, and Ms. DiGiovanni is subject to non-competition and non-solicitation provisions for up to twelve (12) months after termination of her employment. Ms. DiGiovanni has tendered her resignation as Chief Operating Officer, such resignation to be effective as of the end of the first quarter of fiscalexecutive officers in 2022 or 2021. Under the terms of her agreement, she is entitled to severance pay totaling three months of her base salary.

Employment Agreements

No other current executive officer of the Company has, as of the date of this Report, entered into an employment agreement with the Company. Upon the entry into any such employment agreement, the Company will file it with a future periodic report.

Director Compensation

Directors are currently compensated for their service on the Board through a quarterly grant of 5,000 non-qualified stock options, entitling the director to receive one share of Common Stock for each option granted at a strike price of the closing price of the Common Stock as of the grant date. Directors do not receive any additional compensation for their service on a Board committee, if any.

*- Mr. Peizer joined the Board as its Executive Chairman in February 2021. He did not take any compensation for his service as a director. Mr. Peizer resigned from the board of directors and as Executive Chairman on February 10, 2023

**-Mr. Sidhu resigned from the Board of Directors on January 3, 2023.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the beneficial ownership of our Common Stock (our only outstanding calls of voting securities) as of March 29, 2021,December 31, 2022, of (i) each person known to us to be the beneficial owner of at least five percent (5%) of our outstanding Common Stock; (ii) each director; (iii) each executive officer; and (iv) all directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Shares of Common Stock subject to options and warrants currently exercisable or exercisable within 60 days as of March 29, 2021,December 31, 2022, are deemed outstanding and beneficially owned by the person holding such options or warrants for purposes of computing the number of shares and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, the persons or entities named have sole voting and investment power with respect to all shares of our Common Stock shown as beneficially owned by them.

The percentages in the table below are based on 35,127,524an aggregate of 69,802,649 outstanding shares of Common Stock. Unless otherwise indicated, the principal mailing address of each of the persons below is c/o EVmo, Inc., 4333201 N. Camden Drive, Suite 600, Beverly Hills, California, 90210.Sepulveda Blvd. Manhattan Beach, CA 90266. The Company’s executive office is also located at 4332301 N. Camden Drive, Suite 600, Beverly Hills, California, 90210.Sepulveda Blvd. Manhattan Beach, CA 90266.