UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20212022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number: 001-38561
HyrHyreCar Inc.eCar Inc.
(Exact name of registrant as specified in its charter)
Delaware |
| |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
|
| |
(Address of principal executive offices) | (Zip Code) |
(888) 688-6769
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value | HYRE | The Nasdaq Stock Market LLC |
Indicate by check mark 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 ☒ 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 ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |
Emerging growth company | ☒ |
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No☒
As of May 13, 2021,2022, the registrant had 20,374,320 shares21,800,913 shares of common stock, $0.00001 par value per share, issued and outstanding.
Contents | ||
| ||
Cautionary Note Regarding Forward-Looking Statements and Industry Data | ii | |
Item 1. | ||
Consolidated Balance Sheets as of March 31, | ||
Consolidated Statements of Operations for the Three months ended March 31, | ||
Consolidated Statements of Cash Flows for the Three months ended March 31, | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
CAUTIONARY NOTE REGARDINGABOUT FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”). These statements may be identified by such forward-looking terminology as "may," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue"“may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
● |
| the impacts of COVID-19, or other future pandemics on our business, results of operations, financial position and cash |
● |
| our ability to effectively manage our growth and maintain and improve our corporate |
��
● |
| the potential benefits of and our ability to maintain, our relationships with ridesharing companies, and to establish or maintain future collaborations or strategic relationships, |
● |
| our marketing capabilities and strategy; |
● |
| our ability to maintain a cost-effective insurance |
● |
| our industry |
● | our history of operating losses, and the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
● | our |
● |
| our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; |
● |
| our competitive position, and developments and projections relating to our competitors and our industry; |
● |
| our |
● | the outcome of pending, threatened or future litigation; |
● | our ability to comply with existing, modified, or new laws and regulations applying to our |
● | those factors discussed in “Part II, Item IA. Risk Factors” in this Quarterly Report on Form 10-Q. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the "SEC") could materially and adversely affect our business, prospects, financial condition and results of operations. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.
References to HyreCar
Throughout this Quarterly Report on Form 10-Q, the "Company," "HyreCar," "we," "us,"“Company,” “HyreCar,” “we,” “us,” and "our"“our” refers to HyreCar Inc. and "our board“our Board of directors"Directors” refers to the boardBoard of directorsDirectors of HyreCar Inc.
HYRECAR INC.
CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | |||||||
2022 | 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,977,260 | $ | 11,499,136 | ||||
Restricted cash | 2,994,542 | 3,248,271 | ||||||
Accounts receivable | 405,893 | 162,586 | ||||||
Insurance and security deposits | 140,564 | 95,000 | ||||||
Other current assets | 870,959 | 1,061,520 | ||||||
Total current assets | 12,389,218 | 16,066,513 | ||||||
Property and equipment, net | 4,654 | 5,265 | ||||||
Intangible assets, net | 574,898 | 372,592 | ||||||
Right of use assets | 939,706 | 0 | ||||||
Total assets | $ | 13,908,476 | $ | 16,444,370 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,044,065 | $ | 5,567,233 | ||||
Accrued liabilities | 2,252,427 | 2,877,438 | ||||||
Insurance reserve | 2,105,773 | 2,330,190 | ||||||
Right of use liabilities (current) | 329,625 | 0 | ||||||
Deferred revenue | 50,846 | 52,192 | ||||||
Total current liabilities | 11,782,736 | 10,827,053 | ||||||
Right of use liabilities | 656,618 | 0 | ||||||
Total liabilities | 12,439,354 | 10,827,053 | ||||||
Commitments and contingencies | — | — | ||||||
Stockholders' equity: | ||||||||
Preferred stock, 15,000,000 shares authorized, par value $0.00001, 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 0 | 0 | ||||||
Common stock, 50,000,000 shares authorized, par value $0.00001, 21,761,283 and 21,609,409 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 218 | 216 | ||||||
Additional paid-in capital | 76,986,139 | 75,806,853 | ||||||
Accumulated deficit | (75,517,235 | ) | (70,189,752 | ) | ||||
Total stockholders' equity | 1,469,122 | 5,617,317 | ||||||
Total liabilities and stockholders' equity | $ | 13,908,476 | $ | 16,444,370 | ||||
(Unaudited)
|
| March 31, |
|
| December 31, |
| ||
Assets |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalent |
| $ | 25,499,635 |
|
| $ | 4,923,515 |
|
| Restricted cash | 751,625 | 0— | ||||||
Accounts receivable |
|
| 132,827 |
|
|
| 109,366 |
|
| Deferred offering costs | 0— | 33,164 | ||||||
| Insurance deposits | 1,749,454 | 749,454 | ||||||
Other current assets |
|
| 644,099 |
|
|
| 313,812 |
|
Total current assets |
|
| 28,777,640 |
|
|
| 6,129,311 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| 7,624 |
|
|
| 8,425 |
|
Intangible assets, net |
|
| 61,562 |
|
|
| 80,031 |
|
Other assets |
|
| 0— |
|
|
| 95,000 |
|
Total assets |
| $ | 28,846,826 |
|
| $ | 6,312,767 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity (Deficit) |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 4,497,276 |
|
| $ | 2,275,559 |
|
Accrued liabilities |
|
| 826,724 |
|
|
| 4,359,348 |
|
Insurance reserve |
|
| 1,747,134 |
|
|
| 2,113,039 |
|
| Note payable, current portion | 1,890,062 | 1,554,548 | ||||||
Deferred revenue |
|
| 60,056 |
|
|
| 76,059 |
|
Total current liabilities |
|
| 9,021,252 |
|
|
| 10,378,553 |
|
|
|
|
|
|
|
|
|
|
| Note payable, net of current portion | 109,113 | 444,627 | ||||||
Total liabilities |
|
| 9,130,365 |
|
|
| 10,823,180 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 3) |
|
| 0— |
|
|
| 0— |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit): |
|
|
|
|
|
|
|
|
Preferred stock, 15,000,000 shares authorized, par value $0.00001, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively |
|
| 0— |
|
|
| 0— |
|
Common stock, 50,000,000 shares authorized, par value $0.00001, 20,353,429 and 17,741,713 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively |
|
| 203 |
|
|
| 177 |
|
Additional paid-in capital |
|
| 71,158,828 |
|
|
| 39,725,445 |
|
Accumulated deficit |
|
| (51,442,570 | ) |
|
| (44,236,035 | ) |
Total stockholders' equity (deficit) |
|
| 19,716,461 |
|
|
| (4,510,413 | ) |
Total liabilities and stockholders' equity (deficit) |
| $ | 28,846,826 |
|
| $ | 6,312,767 |
|
See accompanying notes to the unaudited consolidated financial statements
(Unaudited)
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
Net Revenue | $ | 9,550,592 | $ | 7,448,400 | ||||
Cost of revenue | 6,603,621 | 4,716,150 | ||||||
Gross profit | 2,946,971 | 2,732,250 | ||||||
Operating Expenses: | ||||||||
General and administrative | 4,546,350 | 5,704,453 | ||||||
Sales and marketing | 2,227,456 | 2,707,191 | ||||||
Research and development | 1,503,810 | 1,526,718 | ||||||
Total operating expenses | 8,277,616 | 9,938,362 | ||||||
Operating loss | (5,330,645 | ) | (7,206,112 | ) | ||||
Other (income) expense | ||||||||
Interest expense | 288 | 1,906 | ||||||
Other income | (3,450 | ) | (1,483 | ) | ||||
Total other (income) expense | (3,162 | ) | 423 | |||||
Loss before provision for income taxes | (5,327,483 | ) | (7,206,535 | ) | ||||
Provision for income taxes | 0 | 0 | ||||||
Net loss | $ | (5,327,483 | ) | $ | (7,206,535 | ) | ||
Weighted average shares outstanding - basic and diluted | 21,747,675 | 19,234,382 | ||||||
Weighted average net loss per share - basic and diluted | $ | (0.24 | ) | $ | (0.37 | ) | ||
|
| Three Months Ended March 31, |
|
| Three Months Ended March 31, |
| ||
|
|
|
|
|
|
| ||
Revenues |
| $ | 7,448,400 |
|
| $ | 5,780,413 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
| 4,716,150 |
|
|
| 3,605,301 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
| 2,732,250 |
|
|
| 2,175,112 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
| 5,704,453 |
|
|
| 3,228,172 |
|
Sales and marketing |
|
| 2,707,191 |
|
|
| 2,290,172 |
|
Research and development |
|
| 1,526,718 |
|
|
| 743,813 |
|
Total operating expenses |
|
| 9,938,362 |
|
|
| 6,262,157 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
| (7,206,112 | ) |
|
| (4,087,045 | ) |
|
|
|
|
|
|
|
|
|
Other (income) expense |
|
|
|
|
|
|
|
|
Interest expense |
|
| 1,906 |
|
| 19 |
| |
Other income |
|
| (1,483) |
|
| (29,648 | ) | |
Total other income |
|
| 423 |
|
| (29,629 | ) | |
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes |
|
| (7,206,535 | ) |
|
| (4,057,416 | ) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
| 0— |
|
|
| 800 |
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (7,206,535 | ) |
| $ | (4,058,216 | ) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic and diluted |
|
| 19,234,382 |
|
|
| 16,424,969 |
|
Weighted average net loss per share - basic and diluted |
| $ | (0.37 | ) |
| $ | (0.25 | ) |
See accompanying notes to the unaudited consolidated financial statements
(DEFICIT)
(Unaudited)
Subscription | ||||||||||||||||||||||||||||||||
Additional | Receivable - | Total | ||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Related | Accumulated | Stockholders' | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Party | Deficit | Equity (Deficit) | |||||||||||||||||||||||||
December 31, 2020 | 0 | $ | 0 | 17,741,713 | $ | 177 | $ | 39,725,445 | $ | 0 | $ | (44,236,035 | ) | $ | (4,510,413 | ) | ||||||||||||||||
Stock option compensation | — | 0 | — | 0 | 6,647 | 0 | 0 | 6,647 | ||||||||||||||||||||||||
Restricted stock unit compensation | — | 0 | — | 0 | 3,761,027 | 0 | 0 | 3,761,027 | ||||||||||||||||||||||||
Warrants exercised for cash | 0 | 0 | 20,232 | 1 | 64,539 | 0 | 0 | 64,540 | ||||||||||||||||||||||||
Warrants exercised - cashless | 0 | 0 | 61,484 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Common stock issued for cash | 0 | 0 | 2,530,000 | 25 | 29,727,475 | 0 | 0 | 29,727,500 | ||||||||||||||||||||||||
Offering costs | — | 0 | — | 0 | (2,126,305 | ) | 0 | 0 | (2,126,305 | ) | ||||||||||||||||||||||
Net loss | — | 0 | — | 0 | 0 | 0 | (7,206,535 | ) | (7,206,535 | ) | ||||||||||||||||||||||
March 31, 2021 (unaudited) | 0 | $ | 0 | 20,353,429 | $ | 203 | $ | 71,158,828 | $ | 0 | $ | (51,442,570 | ) | $ | 19,716,461 | |||||||||||||||||
December 31, 2021 | 0 | $ | 0 | 21,609,409 | $ | 216 | $ | 75,806,853 | $ | 0 | $ | (70,189,752 | ) | $ | 5,617,317 | |||||||||||||||||
Restricted stock unit compensation | 0 | 0 | 0 | 0 | 1,179,288 | 0 | 0 | 1,179,288 | ||||||||||||||||||||||||
Shares issued for vested restricted stock units | 0 | 0 | 151,874 | 2 | (2 | ) | 0 | 0 | 0 | |||||||||||||||||||||||
Net loss | — | 0 | — | 0 | 0 | 0 | (5,327,483 | ) | (5,327,483 | ) | ||||||||||||||||||||||
March 31, 2022 (unaudited) | 0 | $ | 0 | 21,761,283 | $ | 218 | $ | 76,986,139 | $ | 0 | $ | (75,517,235 | ) | $ | 1,469,122 | |||||||||||||||||
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Subscription Receivable - Related |
|
| Accumulated |
|
| Total Stockholders' |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Party |
|
| Deficit |
|
| Equity |
| ||||||||
December 31, 2019 |
|
| 0— |
|
| $ | 0— |
|
|
| 16,393,171 |
|
| $ | 164 |
|
| $ | 35,857,835 |
|
| $ | (7,447 | ) |
| $ | (29,015,134 | ) |
| $ | 6,835,418 |
|
Stock option compensation |
|
| — |
|
|
| 0— |
|
|
| — |
|
|
| 0— |
|
|
| 252,072 |
|
|
| 0— |
|
|
| 0— |
|
|
| 252,072 |
|
Restricted stock unit compensation |
|
| — |
|
|
| 0— |
|
|
| — |
|
|
| 0— |
|
|
| 163,100 |
|
|
| 0— |
|
|
| 0— |
|
|
| 163,100 |
|
Stock options exercised |
|
| 0— |
|
|
| 0— |
|
|
| 40,869 |
|
|
| 0— |
|
|
| 28,575 |
|
|
| 0— |
|
|
| 0— |
|
|
| 28,575 |
|
Stock options exercised – cashless |
|
| 0— |
|
|
| 0— |
|
|
| 2,645 |
|
|
| 0— |
|
|
| 0— |
|
|
| 0— |
|
|
| 0— |
|
|
| 0— |
|
Shares issued for vested restricted stock units |
|
| 0�� |
|
|
| 0— |
|
|
| 36,650 |
|
|
| 0— |
|
|
| 0— |
|
| 0— |
|
|
| 0— |
|
|
| 0— |
| |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (4,058,216 | ) |
|
| (4,058,216 | ) |
March 31, 2020 (unaudited) |
|
| 0— |
|
| $ | 0— |
|
|
| 16,473,335 |
|
| $ | 164 |
|
| $ | 36,301,582 |
|
| $ | (7,447 | ) |
| $ | (33,073,350 | ) |
| $ | 3,220,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
| 0— |
|
| $ | 0— |
|
|
| 17,741,713 |
|
| $ | 177 |
|
| $ | 39,725,445 |
|
| $ | 0— |
| $ | (44,236,035 | ) |
| $ | (4,510,413 | ) | |
Stock option compensation |
|
| — |
|
|
| 0— |
|
|
| — |
|
|
| 0— |
|
|
| 6,647 |
|
|
| 0— |
|
|
| 0— |
|
|
| 6,647 |
|
Restricted stock unit compensation |
|
| — |
|
|
| 0— |
|
|
| — |
|
|
| 0— |
|
|
| 3,761,027 |
|
|
| 0— |
|
|
| 0— |
|
|
| 3,761,027 |
|
Warrants exercised for cash |
|
| 0— |
|
|
| 0— |
|
|
| 20,232 |
|
|
| 1 |
|
|
| 64,539 |
|
|
| 0— |
|
|
| 0— |
|
|
| 64,540 |
|
| Warrants exercised - cashless | 0— | 0— | 61,484 | 0— | 0— | 0— | 0— | 0— | ||||||||||||||||||||||||
| Common stock issued for cash | 0— | 0— | 2,530,000 | 25 | 29,727,475 | 0— | 0— | 29,727,500 | ||||||||||||||||||||||||
| Offering costs | — | 0— | — | 0— | (2,126,305 | ) | 0— | 0— | (2,126,305 | ) | ||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
| $ | (7,206,535 | ) |
|
| (7,206,535 | ) |
March 31, 2021 (unaudited) |
|
| 0— |
|
| $ | 0— |
|
|
| 20,353,429 |
|
| $ | 203 |
|
| $ | 71,158,828 |
|
| $ | 0— |
| $ | (51,442,570 | ) |
| $ | 19,716,461 |
| |
See accompanying notes to the unaudited consolidated financial statements
(Unaudited)
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (5,327,483 | ) | $ | (7,206,535 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 6,767 | 19,270 | ||||||
Stock-based compensation | 1,179,288 | 3,767,674 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (243,307 | ) | (23,461 | ) | ||||
Insurance and Security deposits | (45,564 | ) | (1,000,000 | ) | ||||
Other current assets | 190,561 | (235,287 | ) | |||||
Right of use assets | (939,706 | ) | 0 | |||||
Accounts payable | 1,476,832 | 1,808,861 | ||||||
Accrued liabilities | (625,011 | ) | (3,532,625 | ) | ||||
Insurance reserve | (224,417 | ) | (365,905 | ) | ||||
Right of use liabilities (current) | 329,625 | 0 | ||||||
Deferred revenue | (1,346 | ) | (16,003 | ) | ||||
Right of use liabilities | 656,618 | 0 | ||||||
Net cash used in operating activities | (3,567,143 | ) | (6,784,011 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of intangible assets | (208,462 | ) | 0 | |||||
Net cash used in investing activities | (208,462 | ) | 0 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from sale of common stock | 0 | 29,727,500 | ||||||
Offering costs associated with public offering | 0 | (1,680,284 | ) | |||||
Proceeds from exercise of warrants | 0 | 64,540 | ||||||
Net cash provided by financing activities | 0 | 28,111,756 | ||||||
Increase (decrease) in cash, cash equivalents and restricted cash | (3,775,605 | ) | 21,327,745 | |||||
Cash, cash equivalents and restricted cash | ||||||||
Cash, cash equivalents and restricted cash - beginning of period | 14,747,407 | 4,923,515 | ||||||
Cash, cash equivalents and restricted cash - end of period | $ | 10,971,802 | $ | 26,251,260 | ||||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets | ||||||||
Cash and cash equivalents | $ | 7,977,260 | $ | 25,499,635 | ||||
Restricted cash | 2,994,542 | 751,625 | ||||||
Total cash, and cash equivalents and restricted cash to the consolidated balance sheets | $ | 10,971,802 | $ | 26,251,260 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for: | ||||||||
Interest expense | $ | 0 | $ | 0 | ||||
Income taxes | $ | 800 | $ | 0 | ||||
Non-cash investing and financing activities: | ||||||||
Offering costs within accounts payable | $ | 0 | $ | 446,021 | ||||
Reclass of prior year offering costs | $ | 0 | $ | 33,164 | ||||
Right of use asset and liability | $ | 997,109 | $ | 0 | ||||
|
| Three Months Ended March 31, |
|
| Three Months Ended March 31, |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net loss |
| $ | (7,206,535 | ) |
| $ | (4,058,216 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 19,270 |
|
|
| 19,157 |
|
Stock-based compensation |
|
| 3,767,674 |
|
|
| 415,172 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (23,461 | ) |
|
| 6,131 |
|
| Insurance deposits | (1,000,000 | ) | 0— | |||||
Other current assets |
|
| (235,287 | ) |
|
| 17,637 | |
Accounts payable |
|
| 1,808,861 |
|
|
| 646,484 |
|
Accrued liabilities |
|
| (3,532,625 | ) |
|
| (18,914 | ) |
Insurance reserve |
|
| (365,905 | ) |
|
| 120,365 |
|
Deferred revenues |
|
| (16,003 | ) |
|
| (10,564 | ) |
Net cash used in operating activities |
|
| (6,784,011 | ) |
|
| (2,862,748 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
| 0— |
|
|
| 0— | |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| Proceeds from sale of common stock | 29,727,500 | 0— | ||||||
| Offering costs | (1,680,284 | ) | 0— | |||||
Proceeds from exercise of warrants |
|
| 64,540 |
|
|
| 0— |
|
Proceeds from exercise of stock options |
|
| 0— |
|
|
| 28,575 |
|
Net cash provided by financing activities |
|
| 28,111,756 |
|
|
| 28,575 |
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash, cash equivalents and restricted cash |
|
| 21,327,745 |
|
| (2,834,173 | ) | |
| Cash, cash equivalents and restricted cash | ||||||||
Cash, cash equivalents and restricted cash - beginning of period |
|
| 4,923,515 |
|
|
| 10,657,140 |
|
Cash, cash equivalents and restricted cash - end of period |
| $ | 26,251,260 |
|
| $ | 7,822,967 |
|
|
|
|
|
|
|
|
|
|
| Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets | ||||||||
| Cash and cash equivalents | $ | 25,499,635 | $ | 7,822,967 | ||||
| Restricted cash | 751,625 | 0— | ||||||
| Total cash, and cash equivalents and restricted cash to the consolidated balance sheets | $ | 26,251,260 | $ | 7,822,967 | ||||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
| Cash paid for: | ||||||||
Interest expense |
| $ | 0— |
|
| $ | 19 |
|
Income taxes |
| $ | 0— |
|
| $ | 0— |
|
| Non-cash investing and financing activities: | ||||||||
| Offering costs within accounts payable | $ | 446,021 | $ | 0— | ||||
| Reclass of prior year offering costs | $ | 33,164 | $ | 0— | ||||
See accompanying notes to the unaudited consolidated financial statements
| 4 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)NOTE 1– DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
NOTE 1 – NATURE OF OPERATIONSOrganization and Description of Business
HyreCar Inc. (which may be referred to herein as "HyreCar,"“HyreCar,” the "Company," "we," "us"“Company,” “we,” “us” or "our"“our”) was incorporated on November 24, 2014 ("Inception"(“Inception”) in the State of Delaware. The Company's headquarters are located in Los Angeles, California. The Company operates a web-based marketplace that allows car and fleet owners to rent their cars to Uber, Lyft and other gig economy service drivers safely, securely and reliably. The consolidated financial statements of HyreCar Inc. are prepared in accordance with accounting principles generally accepted in the United States of America ("(“ U.S. GAAP"GAAP”).
Strategic Partnership, Automobile Liability Insurance Program, Uber Agreement and Recent PublicAt-The-Market Offering
On January 28, 2021, the Company announced a new and expanded strategic partnerships topartnership with AmeriDrive Holdings (“AmeriDrive”) intended to create a national network of vehicle supply and fleet maintenance operations. TheIn connection therewith, the Company entered into a Collateral Pledge Agreement (“Agreement”) with Cogent Bank assigning all right, title and interest in a Company deposit account of $750,000 plus 5% fees to secure that certaina revolving line of credit made by the bank to AmeriDrive.
On February The restricted deposit account was gradually expanded to a $1,500,000 pledge during the quarter ended September 30, 2021 resulting from a greater revolving line of credit for AmeriDrive under the same terms. Further on November 4, 2021, the Company expanded its partnership with Cogent and AmeriDrive in an effort to help drive additional car supply to the Company’s platform. As part of the agreement, the Company agreed to increase the collateral held by Cogent bank by $1,500,000 (now $3,000,000 in total) in exchange for a credit line increase to expand AmeriDrive's vehicle fleet contributed exclusively to the Company platform.
On May 20, 2021, the Company renewed its Automobile Liability Insurance Program with Apollo 1969 of Lloyd’s until 2023 at our current rates, providing stable predictable insurance pricing for the next two years. Further, the Company has completed integration with Sedgwick, a leading insurance claim processing partner for many companies in rideshare transportation and food delivery.
On July 26, 2021, the Company entered into a certain Vehicle Rental Strategic Relationship Agreement with Uber Technologies, Inc. to become an official vehicle solution provider on the Uber platform for both electric vehicles and internal combustion engine vehicles. We are currently piloting the vehicle solutions program with Uber and refining the terms of the program as we gather additional performance data.
On November 9, 2021, the Company entered into an underwriting agreementEquity Offering Sales Agreement (the “ATM Agreement”), with Lake Street Capital Markets, LLCD.A. Davidson & Co. and Northland Securities, Inc. (collectively, the “Agents"), pursuant to which each Agent acts as the Company’s sales agents with respect to the offer and sale from time to time of common stock having an aggregate gross sales price of up to $50.0 million in “at-the market-offerings”, as representatives ofdefined in Rule 415(a)(4) under the several underwriters, in connection with the public offering (the "2021 offering") ofSecurities Act, and pursuant to a total of 2,530,000 shares of Company common stock. The initial closing of the offering occurredregistration statement on February 8, 2021. The net proceeds from the 2021 offeringForm S-3 that was approximately $27.6 million, after deducting the underwriting discounts and commissions and offering expenses payablepreviously declared effective by the Company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESSEC.
Management's Plans
We have incurred operating losses since Inception and historically relied on debt and equity financing for working capital. Throughout the next 12 months, the Company intends to fund its operations through revenue from operations, the remaining capital raised through the 2021 offering described in Note 1. The funds received from the 2021 offering, our existing capital and the ability to reduce expense levels further if necessary depending on the duration of the COVID-19 pandemic, causes us to continue to believe the Company has sufficient resources to continue as a going concern.
In March 2020, COVID-19 began spreading rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response. Such measures included restrictions on travel and business operations, temporary closures of businesses, quarantines and shelter-in-place orders. The full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, and the imposition of protective public safety measures.
Basis of Presentation – Unaudited Interim Financial Information
The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within“U.S. GAAP” and include the rules and regulationsaccounts of the United States SecuritiesCompany. All significant intercompany balances and Exchange Commission (the "SEC"). Certain information and disclosures normally transactions have been eliminated.
The consolidated balance sheet as of December 31, 2021 included inherein was derived from the annual consolidatedaudited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.as of that date. The accompanying unaudited interim consolidated financial statements have been prepared on athe same basis consistent withas the auditedannual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting ofwhich include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, stockholders’ equity, and cash flows for the fair presentation of the results for the interim periods presented, and of the financial condition as of the date of the interim consolidated balance sheet. The financial data and the other information disclosed in these notes to the interim consolidated financial statements related to the three-month periodsbut are unaudited. Unaudited interim consolidated results are not necessarily indicative of the results of operations to be anticipated for the full fiscal year.any future annual or interim period. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2020 2021 and notes thereto that are included in the Company's Annual Report on Form 10-K.
10-K.
NOTE 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BasisManagement's Plans
We have incurred operating losses since inception and historically relied on equity financing for working capital. Throughout the next 12 months, the Company intends to fund its operations through revenue from operations, current cash reserves and through equity/debt financial instruments including the available ATM Agreement. The estimated cash flows combined with opportunities to access capital lead us to believe the Company will have sufficient resources to operate its business.
Based on the tight current car supply environment reflected by used car prices up 14% YoY as of Presentation April 2022 and up about 60% higher than April 2019, according to Barron's, our main concern remains the supply of vehicles to the platform to satisfy latent driver demand and our strategic direction reflects that need. In addition to pursuing traditional organic car listings, we have been exploring partnerships and investments to continue expanding exclusive commercial car supply to the platform from strategic partners, such as our agreement with AmeriDrive and Cogent Bank. Management is focused on driving scale through those partnerships to accelerate cash flow break even for HyreCar. Most recently however, based on Cox Automotive's Manheim used car price index, early 2022 trends seem to indicate some relief with used vehicle prices gradually decreasing by ~7% from January to April 2022.
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of revenuesrevenue and expenses during the reporting period. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term. All significant intercompany accounts and transactions are eliminated upon consolidation.
The Company’s most significant estimates and judgments involve recognition of revenue and estimates for future contingent customer incentive obligations, insurance reserves, and the measurement of the Company’s stock-based compensation.
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.
Level 3 - Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 20212022 and December 31, 2020.2021. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, accounts payable, and accrued liabilities. Fair values for these items were assumed to approximate carrying values because of their short-term nature or they are payable on demand.
Cash and Cash Equivalents
For purpose of the consolidated statement of cash flows, the Company considers institutional money market funds and all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Restricted Cash
Restricted Cash
Restricted cash consist primarily of amounts held in a restricted bank account at Cogent Bank as collateral for the amount pledged by the Company to secure certaina revolving line of credit.credit made by Cogent Bank to AmeriDrive, as well as escrow accounts held for our insurance claims processing partner to pay out claims in a timely fashion.
Accounts Receivable
Accounts receivable are reported net of allowance for expected losses. It represents the amount management expects to collect from outstanding balances. Differences between the amount due and the amount management expects to collect are charged to operations in the year in which those differences are determined, with an offsetting entry to a valuation allowance. As of March 31, 20212022 and as of December 31, 2020,2021, the Company has 0a reserve allowance.
HYRECAR INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Insurance Reserve and Insurance Deposits
The Company records a loss reserve for physical damage and other liability coverage caused to owner vehicles up to the Company's insurance deductibles or relevant limits. This reserve represents an estimate for both reported accidents, claims not yet paid, and claims incurred but not yet reported and are recorded on a non-discounted basis. The lag time in reported claims for physical damage is minimal and as such represents a low risk of unreported claims being excluded from the loss reserve assessment. The adequacy of the reserve is monitored quarterly and is subject to adjustment in the future based upon changes in claims experience, including the number of incidents for which the Company is ultimately responsible and changes in the cost per claim, or changes to the Company’s insurance policy which dictates what amounts of a claim will be paid by the Company. Company. Effective March 1, 2021, the Company entered into a two-yeartwo-year claim adjusting agreement with Sedgwick which included an escrow account requirement of $1,750,000 to be held by Sedgwick for claim payments. This escrow account is replenished by the Company on a quarterly basis or more frequently dependent on the actual claims paid during that quarter.quarter. Separate from the escrow account, as of As of March 31, 20212022 and December 31, 2020, $1,747,134 2021, $2,105,773 and $2,113,039 was$2,330,190, respectively, were included in the accompanying consolidated balance sheets, respectively, related to the estimated loss reserve, where the expense is included in costs of revenues.revenue.
Effective May 15, 2021, the Company entered into a new policy term for its automobile liability insurance program. As part of this program the Company has paid deposit premiums of $1,500,000 and $250,000 for the primary and excess, respectively which will be available to offset premiums due during the final quarter or offset past due premiums during the policy period. In addition, effective June 15, 2021, a separate primary automobile liability policy was placed related only to California operations, which required a $300,000 deposit premium that will be used to pay for and offset premiums due during the policy period.
While certain liability claims may take several years to completely settle, the Company's liability exposure limit is generally met in the near term. Due to our limited operational history, the Company makes certain assumptions based on both currently available information to estimate the insurance reserves as well as third party claims adjuster data provided on existing claims. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends, venue, and the results of relatedsimilar litigation. Furthermore, claims may emerge in future periods for events that occurred in a prior period that differs from expectations. Accordingly, actual losses may vary significantly from the estimated amounts reported in the consolidated financial statements. Reserves are reviewed quarterly and adjusted as necessary as experience develops or new information becomes known. However, ultimate results may differ from the Company’s estimates, which could result in losses over the Company’s reserved amounts. Such adjustments are recorded in costs of revenues.revenue.
The Company has analyzed, reviewed and made adjustments to the claims settlement process and related processing guidelines during the quarters ended September 30, 2021 and December 31, 2021 which reduced insurance claims costs going forward. We will continue to monitor the claims process and claims portfolio to make future adjustments, to our processes that will further improve our claims adjusting performance.
Revenue Recognition
The Company generates the majority of its revenue from its ridesharingcar sharing marketplace platform that connects vehicle owners and drivers and the related insurance issued for each rental. Vehicle owners and drivers agree to terms of service with the Company in order to use the HyreCar platform and enter into a rental contract that governs each rental. In entering into a rental agreement, the driver is charged in a single transaction: the base rental fee as agreed upon between the driver and vehicle owner, a 10%-20% HyreCar fee on the base rental fee, and a daily insurance charge (“Insurance and administrative fees”), all based on the number of days the vehicle is to be rented within the contract. HyreCar retains 15-25%15%-30% of the base rental fee by offering physical damage protection plans and remits the remaining portion to the vehicle owner. The 10%-20% fee collected from the driver and 15-25%15-30% retained from the owner are considered “Transaction Fees” and the recorded on a net basis as described below. The Company recognizes revenue daily during the rental periods as the Company is required to maintain insurance underlying the transaction and as a customary business practice, a driver can return a vehicle early for a refund of the unused rental period. Insurance and transaction fees are charged to a driver in a single transaction. Drivers currently do not have an option to decline insurance at any point during the transaction.
The Company also recognizes revenue from other sources such as referrals, motor vehicle record fees (application fees), late rental fees, and other fees charged to drivers in specific situations. situations.
In applying the guidance of ASC Accounting Standards Codification (“ ASC” ) 606, the Company 1)(i) identifies the contract with the customer, 2)(ii) identifies the performance obligations in the contract, 3)(iii) determines the transaction price, 4)(iv) determines if an allocation of that transaction price is required to the performance obligations in the contract, and 5)(v) recognizes revenue when or as the companiesCompany satisfies a performance obligation.
Refunds may occur when the driver returns the owner vehicle early based on the terms of the original contract or cancels the rental prior to completing the exchange. In limited circumstances, the Company provides contingent consideration in the form of a rebate that is redeemable only if the customer completes a specific level of transaction over a specific time period. In such cases, the rebate or refund obligation is recognized as a reduction of revenues.revenue. The Company defers revenue in all instances when the earnings process is not yet complete.complete.
The following is a breakout of revenue components by subcategory for the three months ended March 31, 2021 2022 and 2020.2021.
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
|
| 2021 |
| 2020 |
| 2022 | 2021 | |||||||||
Insurance and administration fees |
| $ | 3,748,199 |
| $ | 2,873,843 |
| $ | 5,145,271 | $ | 3,748,199 | |||||
Transaction fees |
| 3,416,721 |
| 2,558,295 |
| 4,044,139 | 3,416,721 | |||||||||
Other fees |
| 331,327 |
| 507,477 |
| 472,276 | 331,327 | |||||||||
Incentives and rebates |
|
| (47,847 | ) |
|
| (159,202 | ) | (111,094 | ) | (47,847 | ) | ||||
Net revenue |
| $ | 7,448,400 |
| $ | 5,780,413 |
| $ | 9,550,592 | $ | 7,448,400 | |||||
Principal Agent Considerations
The Company evaluates our service offerings to determine if we are acting as the principal or as an agent, which we consider in determining if revenue should be reported gross or net. One of our primary revenue sources is a transaction fee made from a confirmed booking of a vehicle on our platform. Key indicators that we evaluate to reach this determination include:
● |
| the terms and conditions of our contracts; |
● |
| whether we are paid a fixed percentage of the arrangement's consideration or a fixed fee for each transaction; |
● |
| the party which sets the pricing with the end-user, has the credit risk and provides customer support; and |
● |
| the party responsible for delivery/fulfillment of the product or service to the end consumer. |
We have determined we act as the agent in the transaction for vehicle bookings (Transaction Fees), as we are not the primary obligor of the arrangement and receive a fixed percentage of the transaction. Therefore, revenue is recognized on a net basis.basis.
For other fees such as insurance, referrals, and motor vehicle records (application fees) we have determined revenue should be recorded on a gross basis. In such arrangements, the Company sets pricing, has risk of economic loss, has certain credit risk, provides support services related to these transactions, and has decision making ability about service providers used.used.
Cost of RevenuesRevenue
Cost of revenuesrevenue primarily include direct fees paid for insurance to cover the vehicle driver and owner, insurance claim payments and estimated liabilities based on the policy in effect at the time of loss, merchant processing fees, technology and hosting costs, and motor vehicle record fees incurred for paid driver applications. General liability insurance that covers corporate risk from activity on our platform is included in general and administrative costs.
Advertisingcosts.
Advertising
The Company expenses the cost of advertising and promotionsmarketing as incurred. Advertising expense wasand marketing expenses were $710,562 and $582,244 and $785,228 for the three months ended March 31, 2021 2022 and 2020,2021, respectively.
Research and Development
We incur research and development costs during the process of researching and developing our technologies and future offerings. Our research and development costs consist primarily of non-capitalized development and maintenance costs. We expense these costs as incurred unless such costs qualify for capitalization under applicable guidance.guidance.
Stock-Based Compensation
The Company accounts for stock awards issued under ASC 718, Compensation – Stock Compensation. Under ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award. Stock-based compensation is recognized as expense over the employee'semployee’s requisite vesting period and over the nonemployee'snonemployee’s period of providing goods or services. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes option valuation model. Restricted shares are measured based on the fair market value of the underlying stock on the grant date.
Stock-based compensation is included in the consolidated statements of operations as follows:
|
| Three Months Ended March 31, |
|
| Three Months Ended March 31, |
| ||
General and administrative |
| $ | 2,405,436 |
|
| $ | 281,953 |
|
Sales and marketing |
|
| 664,463 |
|
|
| 41,282 |
|
Research and development |
| $ | 697,775 |
|
| $ | 91,937 |
|
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
General and administrative | $ | 645,906 | $ | 2,405,436 | ||||
Sales and marketing | 400,194 | 664,463 | ||||||
Research and development | 133,188 | 697,775 | ||||||
| $ | 1,179,288 | $ | 3,767,674 | |||||
Loss per Common Share
The Company presents basic loss per share ("EPS"(“EPS”) and diluted EPS on the face of the consolidated statements of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods in which we incur a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted EPS calculations. For the three months ended March 31, 2021 2022 and 2020,2021, there were 251,846680,255 and 2,680,093251,846 options and warrants excluded, and 789,289780,602 and 403,100789,289 restricted stock units excluded, respectively. Further, there were no forfeitable restricted stock shares excluded for the three months ended March 31, 2021 and 2020.
Concentration of Credit Risk
The Company maintains its cash with a major financial institution located in the United States of America which it believes to be credit worthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000.$250,000. At times, the Company maintains balances in excess of the federally insured limits.
Other Concentrations
The Company has historically relied on a single insurance broker and underwriterone to two underwriters at any given time to provide all automobile insurance on vehicles rentals on the HyreCar platform. There are multiple brokers and carriers who issue this type of insurance coverage, and the Company is regularly reviewing leading insurers in the transportation and mobility sectors as this is an important part of our operations. The Company does not believe the loss of our current broker or underwriterunderwriters would have a material effect on our operations.operations.
New Accounting Standards
In February 2016, the Financial Accounting Standards Board ("FASB"(“FASB”) issued Accounting Standards Update ("ASU"(“ASU”) No. 2016-02,2016-02, Leases (Topic 842)842), specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of consolidated financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors' accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes severalseveral practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021 for emerging growth companies, with early adoption permitted. The Company has reviewed and adopted the provisions of the new standard but it is not expectedstarting January 1, 2022. The standard will require all lease to havebe reported on a significant impact oncompany's balance sheets as assets and liabilities. See Other section of Note 3 - Commitments and Contingencies for breakdown of lease Liability for the Company.
term of the lease.
HYRECAR INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions in existing guidance and improves consistency in application by clarifying and amending existing guidance. This guidance is effective for annual periods beginning after December 15, 2021, and interim periods within those annual periods, where the transition method varies depending upon the specific amendment. Early adoption is permitted, including adoption in any interim period. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period, and all amendments must be adopted in the same period. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company.Company.
HYRECAR INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our consolidated financial statements.statements.
NOTE 3– COMMITMENTS AND CONTINGENCIES
Settlement and Legal
We are not currently On August 27, 2021, a party putative securities class action complaint captioned Baron v. Hyrecar Inc. et al., Case No.21-cv-06918, was filed in the United States District Court for the Central District of California against the Company; its Chief Executive Officer, Joseph Furnari; and its former Chief Financial Officer, Robert Scott Brogi. This action asserts claims and seeks damages for alleged violations of sections 10(b) and 20(a) of securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The alleged class period is May 14, 2021 to any on-going legal proceedings, and we are not aware of any claimsAugust 10, 2021, inclusive. Pursuant to the Private Securities Litigation Reform Act, on November 19, 2021, the Court appointed Turton Inc. to serve as Lead Plaintiff. Lead Plaintiff then filed an amended complaint (the “First Amended Complaint”). The First Amended Complaint alleged that defendants made material misrepresentations or actions pending or threatened against us. In the future, we might from timefailed to time become involved in litigation relating to claims arising from our ordinary course of business, the resolution of which we do not anticipate would have adisclose material adverse impact on our financial position, results of operations or cash flows.
On November 13, 2018, two founders offacts that, among other things, the Company (the “Claimant Founders”), initiated two lawsuitshad materially understated its expenses and insurance reserves in the Superior Court of California, County of San Francisco, entitled Nathaniel Farber v. HyreCar Inc., Case No. CGC-18-571257 and Josiah Larkin v. HyreCar Inc., Case No. CGC-18-571258. The complaints for the lawsuits,coordination with a third-party adjuster which were largely duplicative,Lead Plaintiff alleged that the Company breached a Settlement Agreement by and between was conflicted. On December 27, 2021, the Company and the Claimant Founders by not allowingindividual defendants moved to dismiss the Claimant FoundersFirst Amended Complaint, arguing that Lead Plaintiff failed to sell stock inadequately plead that any of the Company’s initial public offering (“IPO”), failingstatements were materially false or misleading, or that defendants acted with scienter– meaning defendants either knew those statements were false or were deliberately reckless to buyback Claimant Founders’ stocktheir truth or falsity at the time they were made. On February 16, 2022, the Court (Hon. Percy Anderson) granted defendants’ motion to dismiss on the basis that Lead Plaintiff failed to adequately plead any of defendants’ statements were materially false or misleading. Because the Court ruled that Lead Plaintiff did not sufficiently plead falsity, the Court did not address the additional arguments regarding scienter at the time. The Court permitted Lead Plaintiff leave to amend its complaint. Plaintiff filed its Second Amended Complaint on March 21, 2022. The Second Amended Complaint asserts the same violations of the IPO, allowing Exchange Act and Rule 10b-5, again alleging, among other things, HyreCar made materially false or misleading statements related to its first quarter 2021 reserves, and by extension misstated expenses and revenues. On April 4, 2022, the issuance of certain stock without proportionately increasingCompany and individual defendants moved to dismiss the stock ownership of Claimant Founders, Second Amended Complaint on the basis that Plaintiff failed to plead sufficient facts that would cure the deficiencies identified in the Court’s order on the first motion to dismiss—i.e., that Plaintiff again failed to plead that any statements were materially false or misleading when made—and not providing certain required informationPlaintiff failed to plead that defendants acted with scienter. On April 21, 2022, the Claimant Founders.case was transferred to a new judge, and on April 27, 2022, the Court issued a Reassignment Order that, among other things, vacated all hearing dates. The Company strongly disagreed will re-notice the hearing for its motion to dismiss the Second Amended Complaint and expects it will be heard on August 25,2022. The Company believes that the allegations in this lawsuit are without merit and will continue to vigorously defend against them. The Company’s chances of success on the merits are still uncertain and any possible loss or range of loss cannot be reasonably estimated.
Other
In November 2021, the Company entered into a lease in Los Angeles, California commencing January 1, 2022, with allthe ability to occupy the facility in January 2022. The lease term is 48 months from the commencement date. The lease required a deposit of $25,563. Per the lease agreement, the monthly rate will range from $23,394 to $25,563 a month prior to discounts and abatements that may apply. The Company also rents office furniture and incurs ancillary fees for building services and shared expenses. In accordance with ASC 842 mentioned above, the Company will record a Right to Use asset account and Lease Liability account for $997,109 as of January 1, 2022 (the present value of the allegationslease payments) and vigorously contested both lawsuits. The Company believe that, at all times, its actions were consistent withthose accounts will be amortized over the terms, conditions, and context48 month period of the Settlement Agreement,lease agreement. Rent expense for the three months ended March 31, 2022 and 2021 was $53,219 and $69,931, respectively.
We connect drivers and vehicle owners in many tax jurisdictions throughout the United States. After the Supreme Court of the United States decision in South Dakota v. Wayfair Inc. (Wayfair) in June 2018, states commenced enacting laws that would require certain online sellers to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions. A successful assertion by one or more states requiring us to collect taxes could result in tax liabilities, including taxes on past sales, as well as applicable law. Pursuantpenalties and interest. Based on our analysis of certain state regulations on peer-to-peer activities, we do not believe risk of loss is probable on historical revenue activities. We continuously monitor state regulations as it relates to a motion brought by the Company, the two lawsuits were joined for pretrialpeer-to-peer vehicle rental activities and trial purposes. As the case progressed, the Claimant Founders narrowed their allegations significantly. Mr. Larkin dismissed allwill implement required collection and remittance procedures if and when we believe we would become subject to such regulations.
HYRECAR INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4– DEBT AND LIABILITIES
Accrued Liabilities
A summary of accrued liabilities as of March 31, 20212022 and December 31, 20202021 is as follows:
March 31, | December 31, | |||||||
2022 | 2021 | |||||||
Accrued payables | $ | 1,129,393 | $ | 1,737,473 | ||||
Insurance premiums | 401,360 | 333,493 | ||||||
Driver deposit | 369,326 | 336,787 | ||||||
Payroll tax liabilities | 301,502 | 417,493 | ||||||
Other accrued liabilities | 50,846 | 52,192 | ||||||
Accrued liabilities | $ | 2,252,427 | $ | 2,877,438 | ||||
As of March 31, 2022, the accrued payables amounted to $ 1,129,393, which consists of incurred but not invoiced business expenditures including legal fees, professional services and other operational expenditures
|
| March 31, 2021 |
|
| December 31, 2020 |
| ||
Accrued payables |
| $ | 347,861 |
|
| $ | 747,361 |
|
| Insurance premiums | 120,000 | 3,243,509 | ||||||
Driver deposit |
|
| 196,572 |
|
|
| 168,855 |
|
Deferred rent |
|
| 24,932 |
|
|
| 46,261 |
|
Payroll liabilities |
|
| 77,303 |
|
|
| 77,303 |
|
Other accrued liabilities |
|
| 60,056 |
|
|
| 76,059 |
|
Accrued liabilities |
| $ | 826,724 |
|
| $ | 4,359,348 |
|
Notes Payable
On April 13, 2020,. As of March 31, 2022, the Company entered into a loan with JPMorgan Chase Bank, N.A. as the lender (“Lender”) in an aggregate principal amount of $2,004,175 pursuantpayroll tax liabilities amounted to the Paycheck Protection Program ("PPP") under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP Loan is evidenced by a promissory note (“Note”). Subject to the terms$301,502, which consists of the Note, the PPP Loan bears interest at a fixed rate of one percent (1%) per annum, with the first six months of interest deferred, has an initial term of two years,employer and is unsecured and guaranteed by the Small Business Administration. The Company may apply to the Lender for forgivenessemployees share of the PPP Loan, with the amount which may be forgiven equalpayroll tax liabilities related to the sum of payroll costs, covered rent,stock options exercised and covered utility payments incurred by the Company during the 24-week period beginning on April 13, 2020, calculated in accordance with the terms of the CARES Act. The Note provides for customary events of default including, among other things, cross-defaults on any other loan with the Lender. The PPP Loan may be accelerated upon the occurrence of an event of default.
As of March 31, 2021, the amount payable under the Note is $1,999,175. The PPP Loan proceeds were used for payroll, covered rent and other covered payments and the loan is expected to be forgiven based on current information available. The Company is in the process of applying to the Lender for forgiveness of the PPP Loan as of the date of this report and we expect the full PPP Loan amount to be forgiven.
NOTE 5– STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock
The Company is authorized to issue 50,000,000 shares of common stock, $0.00001 par value per share.
Stock Options
In 2016,, the Board of Directors adopted the HyreCar Inc. 2016 Incentive Plan (the "“2016 Plan" Plan”). The 2016 Plan provides for the grant of equity awards to highly qualified personnel, including stock options, restricted stock, stock appreciation rights, and restricted stock units to purchase shares of common stock. Up to 2,227,777 shares of common stock may be issued pursuant to awards granted under the 2016 Plan.The 2016 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board of Directors. The Company does not currently utilize the 2016 Plan for equity award grants.
In 2018, the Board of Directors adopted the HyreCar Inc. 2018 Incentive Plan (the "2018 Plan"“2018 Plan”). The 2018 Plan provides for the grant of equity awards to purchaseacquire shares of common stock. Three million shares of common stock were initially reserved for issuance under the 2018 Plan, for issuance pursuant to awards granted underwith the2018 Plan, with share reserve number subject to increases that occur starting in 2021.2021. The 2018 Plan is administered by the Board of Directors, and expires tenten years after adoption, unless terminated earlier by the Board.
In 2021, the Board of Directors adopted the HyreCar Inc. 2021 Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of equity awards to acquire shares of common stock. Three million shares of common stock were initially reserved for issuance under the 2021 Plan, with the share reserve number subject to increases that occur starting in 2024. The 2021 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board. As of March 31, 2022, the Company has not utilized the 2021 Plan for any equity award grants.
NaN stock options were granted during the three months ended March 31, 2022 and 2021 or March 31, 2020.
. Stock-based compensation expense for the vesting of stock options for the three months ended March 31, 2021 2022 and 20202021 was $6,647 and $252,072, respectively.immaterial. As of March 31, 2021, the total estimated2022, there is no remaining stock-based compensation expense for unvested stockas all options is approximately $4,000 which is expected to be recognized over a weighted average periodare fully vested.
NOTE 6– RELATED PARTY TRANSACTIONS
Insurance
The president of the Company’s former primary insurance broker through June 2020 is also a minority Company stockholder and holder of warrants.warrants. As of March 31, 20212022 and December 31, 2020,2021, the Company hadno outstanding balances to the insurer totaling $0 and $144,669,broker included in accounts payable or accrued liabilities, respectively. During the three months ended March 31, 2021 2022 and 2020,2021, the Company paid the insurerbroker approximately $0 and $1,388,000,$0, respectively. On June 15, 2020, the Company completed moving its primary and excess automobile insurance liability programs over to a new insurance broker and is no longer using the related party broker.
NOTE 7– SUBSEQUENT EVENTS
On April 12, 2021, the Company granted a total of 206,068 restricted stock units to certain membersNo material subsequent events have been identified as of the Boarddate of Directors.this filing.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes for the year ended December 31, 20202021 included in our most recent Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss certain factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q.10-Q, particularly in the sections entitled “Risk Factors” and “Note About Forward-Looking Statements.”
Our Company
We operate in the car sharing marketplace for ride sharing through our proprietary marketplace platform. The Company has established a leading presence in Transportation as a Service (TaaS)Transportation-as-a-Service (“TaaS”) through vehicle owners and institutions, such as franchise car dealerships, independent car dealerships and rental car companies, who have been disrupted by automotive asset sharing. We are based in Los Angeles, California and car owners and drivers currently use the platform nationwide. Our unique revenue opportunity for both owners and drivers are providing a safe, secure, and reliable marketplace. We categorize our operations into one reportable business segment: Rental, consisting primarily of our vehicle rental operations in the United States.
Business and Trends
We generate revenue by taking a fee out of each rental processed on our platform. Each rental transaction represents a ride-sharing service driver (each, a "Driver"“Driver”) renting a car from a participating car owner (each, an "Owner"“Owner”). Drivers pay a daily rental rate set by the Owner, plusa 10%-20% HyreCar Driver Feefee and direct daily insurance costs. Owners receive their daily rental rate minus a 15-25%15%-30% HyreCar Owner Fee.fee. For example, as of March 31, 2021,2022, the average daily rental rate of a HyreCar vehicle nationally is approximately $36.00 ("$38 (“Daily Rental Rate"Rate”), plus a 10%-20% HyreCar Driver fee ($3.60)6) and daily direct insurance fee of $13.00,$15 on average, totaling $52.60$59 in total daily gross billings in paid by the Driver via a creditpayment card transaction. On average approximately 80%77% of the daily rental is transferred to the Owner via our merchant processing partner. HyreCar earns revenuesrevenue from the two revenue share fees and the insurance totaling approximately $24.16$30 per day. Accordingly, the GAAP reportable revenue recognized by HyreCar is $24.16$30 in this example transaction as detailed in the following table:
Daily Gross Revenue Example | Daily Gross Revenue Example |
| Daily Net (GAAP) Revenue Example | Daily Gross Revenue Example | Daily Net (GAAP) Revenue Example | ||||||||||||||
|
|
|
|
|
| ||||||||||||||
National Average Daily Rental Rate |
| $ | 36.00 |
|
| HyreCar Owner Fee (~21% average) |
| $ | 7.56 |
| $ | 38 | HyreCar Owner Fee (~23% Average) | $ | 9 | ||||
|
|
|
|
|
| ||||||||||||||
Driver Fee |
| $ | 3.60 |
|
| HyreCar Driver Fee (10% rate) |
| $ | 3.60 |
| $ | 6 | HyreCar Driver Fee (~15% Average) | $ | 6 | ||||
|
|
|
|
|
| ||||||||||||||
Daily Insurance Fee |
| $ | 13.00 |
|
| Insurance Fee (100% of fee) |
| $ | 13.00 |
| $ | 15 | Insurance Fee (100% of fee) | $ | 15 | ||||
|
|
|
|
|
| ||||||||||||||
Daily Gross Billing Paid by Driver |
| $ | 52.60 |
|
| Daily Average Net Revenue |
| $ | 24.16 |
| $ | 59 | Daily Average Net Revenue | $ | 30 | ||||
During the quarter ended March 31, 2022, the Company monitored the market's competitive prices to maintain good performance levels. The dynamic pricing of the daily gross and net rental rates were adjusted depending on the variations in demand and competition. The daily average gross rental rate for the three months ended March 31, 2022 was $59, an increase of $6 or 12% from the $53 daily average gross rental rate recognized during the three months ended March 31, 2021.
Gross billingbillings is an important measure by which we evaluate and manage our business. We define gross billings as the amount billed to Drivers, without any adjustments for amounts paid to Owners or refunds. It is important to note that gross billing is a non-GAAP measure and as such, is not recorded in our consolidated financial statements as revenue. However, we use gross billings to assess our business growth, scale of operations and our ability to generate gross billings is strongly correlated to our ability to generate revenues.revenue. Gross billings may also be used to calculate net revenue margin, defined as the company's GAAP reportable revenue over gross billings. Using the definition of net revenue margin and the example above, HyreCar's net revenue margin is equal to approximately 46.4%51% ($7,448,4009,550,592 HyreCar's GAAP revenue over $16,056,275$18,835,166 Total Gross Billings). for the three months ended March 31, 2022. A breakout of revenue components is provided in the section of this Quarterly Report on Form 10-Q titled "“Management's Discussion and Analysis of Financial Condition and Results of Operations"” and the footnotesnotes to the consolidated financial statements.
Non-GAAP Financial Measures
Gross Billings
Gross billing is an important measure by which we evaluate and manage our business. We define gross billings as the amount billed to Drivers, without any adjustments for amounts paid to Owners or refunds. Gross billings include transactions from both our revenues recorded on a net and a gross basis. It is important to note that gross billing is a non-GAAP measure and as such, is not recorded in our consolidated financial statements as revenue. However, we useManagement believes gross billings provides useful information to investors and others in understanding our ability to generate revenue since our ability to generate gross billings is correlated to our ability to generate revenue. In addition, management uses gross billings to assess our business growth scale of operations and our ability to generate gross billings is strongly correlated to our ability to generate revenues.scale operations. Gross billings may also be used to calculate net revenue margin, defined as the Company's GAAP reportable revenue over gross billings. The presentation of the non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
The following table provides a reconciliation of our GAAP reported revenues to gross billings for the three months ended March 31, 2021 and 2020:
|
| Three Months Ended March 31, |
|
| Three Months Ended March 31, |
| ||
Revenues (U.S. GAAP reported revenues) |
| $ | 7,448,400 |
|
| $ | 5,780,413 |
|
Add: Refunds, rebates and deferred revenue |
|
| 529,324 |
|
|
| 428,529 |
|
Add: Owner payments (not recorded in financial statements) |
|
| 8,081,050 |
|
|
| 6,931,756 |
|
Gross billings (non-U.S. GAAP measure not recorded in financial statements) |
| $ | 16,056,275 |
|
| $ | 13,140,698 |
|
Adjusted EBITDA
Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance and the operating leverage in our business.business, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance.We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Because Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. We expect Adjusted EBITDA will increase over the long term as we continue to scale our business and achieve greater efficiencies in our operating expenses.
We calculate Adjusted EBITDA as net loss, adjusted to exclude:
● |
| other income (expense), net; |
● |
| provision for income taxes; |
● |
| depreciation and amortization; |
● |
| stock-based compensation expense; and |
● |
| prior expenses expected to be settled in stock included in liabilities. |
For more information regarding the limitations of Adjusted EBITDA and a reconciliation of net loss to Adjusted EBITDA, see the section titled "Reconciliation of Non-GAAP Financial Measures."
Reconciliation of Non-GAAP Financial Measures
We use Adjusted EBITDA in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Furthermore, these measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Thus, our Adjusted EBITDA should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
We compensate for these limitations by providing a reconciliation of Adjusted EBITDA to the related GAAP financial measures, revenue and net loss, respectively.loss. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Adjusted EBITDA in conjunction with their respective related GAAP financial measures.
Reconciliation of Non-GAAP Financial Measures
The following table provides a reconciliation of our GAAP reported revenue to gross billings for the three months ended March 31, 2022 and 2021:
Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
Revenue (U.S. GAAP reported revenue) | $ | 9,550,592 | $ | 7,448,400 | ||||
Add: Refunds, rebates and deferred revenue | 708,987 | 529,324 | ||||||
Add: Owner payments (not recorded in financial statements) | 8,575,587 | 8,081,050 | ||||||
Gross billings (non-U.S. GAAP measure not recorded in financial statements) | $ | 18,835,166 | $ | 16,058,774 | ||||
The following table provides a reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 20212022 and 2020:2021:
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
|
| Three Months Ended March 31, |
| Three Months Ended March 31, |
| 2022 | 2021 | |||||||||
Net loss |
| $ | (7,206,535 | ) |
| $ | (4,058,216 | ) | $ | (5,327,483 | ) | $ | (7,206,535 | ) | ||
Adjusted to exclude the following: |
|
|
|
|
| |||||||||||
Other expense (income), net |
| 423 |
| (29,629 | ) | (3,162 | ) | 423 | ||||||||
Provision for income taxes |
| — |
| 800 |
| — | — | |||||||||
Depreciation and amortization |
| 19,270 |
| 19,157 |
| 6,767 | 19,270 | |||||||||
Stock-based compensation expense |
| 3,767,674 |
| 415,172 |
| 1,179,288 | 3,767,674 | |||||||||
Prior expenses expected to be settled in stock included in liabilities |
|
| — |
|
| 363,155 |
| |||||||||
Adjusted EBITDA |
| $ | (3,419,168 | ) |
| $ | (3,289,561 | ) | $ | (4,144,590 | ) | $ | (3,419,168 | ) | ||
Our operating results are subject to variability due to seasonality, macroeconomic conditions such as the effects of the COVID-19 pandemic and other factors. Car rental volumes tend to be associated with travel and driving holidays, where there is an influx of Uber and Lyft demand. Thus far in 2021,2022, we have continued to operate in an uncertain and uneven economic environment marked by heightened economic and geopolitical risks due to the COVID-19 pandemic.
Our objective is to focus on strategically accelerating our growth, strengthening our position as a leading provider of vehicle rental services to ridesharing (Lyft and Uber) and delivery (Door Dash, Instacart, Postmates) drivers, continuing to enhance our customers' rental experience, and controlling costs and driving efficiency throughout the organization. We operate in a high growth industry and we expect to continue to face challenges and risks. We seek to mitigate our exposure to risks in numerous ways, including delivering upon our core strategic initiatives, continued growth of fleet levels to match changes in demand for vehicle rentals, and appropriate investments in technology.
Some highlightsSignificant changes in our results of operations for the three months ended March 31, 20212022 include:
● |
| Net rental days totaled approximately |
● |
|
|
● | |||
| Cost of |
● |
| Gross profit totaled |
● | O |
|
● | Net loss totaled $(5.3) million for the three months ended March 31, |
2022 |
|
● |
| Adjusted EBITDA (which is a non-GAAP financial measure as described above) totaled |
| 15 |
Management's Plan
We have incurred operating losses since Inception and historically relied on debt and equity financing for working capital. Going forward, the Company intends to fund its operations through increased revenuesrevenue from operations and the funds raised through recent public securities offerings.sales of its securities. We completed an underwritten public equity offering on February 9, 2021, consisting of an aggregate of 2,530,000 million shares of our common stock at a public offering price of $11.75 per share, which included the exercise in full of the underwriters’ option. This provided approximately $29.7 million in gross proceeds to the Company, before underwriting expenses and other costs. As a result, the Company believes it currently is sufficiently capitalized to pursue expanded business opportunities into the 2021 fiscal year.
With over 300,000approximately 314,000 quarterly rental days in the first quarter of 2022, our annualized rental day run rate has increasedis close to over 1,200,0001.3M per year. Our business model and platform allow us to potentially leverage new opportunities and create a larger market with ridesharing, food and package delivery services,services. Two thirds of the Drivers on our platform are now predominantly delivery oriented and the opportunity is accelerating in the local delivery now accounting for more than half.as a service environment. We expectcontinue to realize steadyexpect revenue growth through 2021.during the remainder of 2022 and beyond as we continue to focus on increasing our car supply to meet the driver demand and other promotional efforts related to our car sharing marketplace platform.
The Company announced a new
As part of our focus to increase car supply, the Company's strategic partnership with AmeriDrive Holdings is intended to create a national network of vehicle supply and fleet maintenance operations in January 2021 and is in the process of expanding our operations starting in the Southeast United States. OnOn February 10, 2021, TrueCar announced a partnership with HyreCar to provide its car sharing marketplace with a modern digital car buying and trade-in solution. The TrueCar partnership offers a potential way to address this significantthe automobile trade-in market in a relevant and effective manner for dealers and customers. TrueCar helps create awareness that vehicle dealers can benefit from serving the Transportation -as-a-Service ("TaaS") industry via the Company's platform. We believe both the AmeriDrive and TrueCar relationships enhance HyreCar’s opportunityour ability to increase revenue.
Throughout the next 12 months, the Company intends to fund its operations through revenue from operations, current cash reserves and profitability duringthrough equity/debt financial instruments including the current fiscal year.
Based on theavailable ATM Agreement. The estimated cash flows combined with opportunities to access capital currently on hand, as well as increasing revenue levels through the normal course of business, welead us to believe the Company’s hasCompany will have sufficient resources to continue to operate its business for at least the next 12 months. Ourbusiness. The current top 10 U.S. state markets in our geographic footprint, withand our volumes of quarterly rental days and net revenuesrevenue from the quarters ended March 31, 20192020 through March 31, 2021,2022, is detailed below.
Components of Our ResultsResults of Operations
The following describes the various components that make up our results of operations, discussed below:
Revenue is earned from fees associated with matching Drivers to Owners of cars that meet the strict requirements imposed by ride-sharing services such as Uber and Lyft with Drivers. A Driver will typically rent a car through one transaction via our on-line marketplace. We recognize GAAP reportable revenue primarily from a transaction fee and an insurance fee when a car is rented on our platform when the Company, 1) identifies the contract with the customer, 2) identifies the performance obligations in the contract, 3) determines the transaction price, 4) determines if an allocation of that transaction price is required to the performance obligations in the contract, and 5) recognizes revenue when or as the Company satisfies a performance obligation.
Cost of revenuesrevenue primarily include direct fees paid for driver insurance, insurance claim payments based on the policy in effect at the time of loss, merchant processing fees, technology and hosting costs, and motor vehicle record fees incurred for paid driver applications.
General and administrative costs include all corporate and administrative functions that support our business. These costs also include payroll for officers and operational staff, stock-based compensation expense, consulting costs, professional fees, and other costs that are not included in cost of revenues.revenue. Research and development costs are related to activities such as user experience and user interface development, database development and maintenance, and technology related expenses to research, improve, implement, or maintain technology and systems utilized throughout our enterprise. Research and development costs are expensed as incurred. Sales and marketing expenses primarily consist of personnel-related compensation costs, commissions expenses, advertising expenses, and marketing partnerships with third parties. Sales and marketing costs are expensed as incurred.incurred.
Other income/expense includes non-operating income and expenses including interest income and expense.
Results of Operations
Three Months Ended March 31, 20212022 compared to Three Months Ended March 31, 20202021
RevenuesRevenue and Gross Profit.Revenues Revenue totaled $7.4$9.6 million for the three months ended March 31, 2021,2022, an increase of $1.7$2.2 million or 28.9%28.2% over the $5.8 $7.4million of revenues revenue recognized during the three months ended March 31, 2020. Gross profit2021. Rental days totaled approximately 314,000, an increase of 14,000 rental days or 4.7%$2.7 million compared to the prior year period. The daily average net rental rate for the three months ended March 31, 2022 was $30, an increase of $6 or 24% from $24 daily average net rental rate recognized during the three months ended March 31, 2021 an increase of $0.6 . Gross profit totaled $2.9million for or 25.6%over the $2.2 million gross profit recognized during the three months ended March 31, 2020. 2022As, a result,modest increase of $0.2 million or 7% over the Gross Profit Margin slightly decreased to 36.7% for$2.7 million gross profit recognized during the three months ended March 31, 2021 from 37.6% for the three months ended March 31, 2020.. The increase in revenuesgross profit was primarily attributed to favorable pricing and higher rental days partially offset by increasehigher insurance and claims-related costs. Gross profit margin was seasonally slightly lower at 31% for the three months ended March 31, 2022 compared to 34% in insurance costs particularly on the insurance premium and claims expenses.Q4 of 2021 up from a normalized 24% in Q2 of 2021. This decrease was attributed to due to more frequent losses during winter months.
Operating Expenses. Operating expenses, consisting of general and administrative, sales and marketing, and research and development expenses totaled $9.9 $8.3million for the three months ended March 31, 2021,2022, an increasedecrease of $3.7 $1.7million or 58.7%17% over $6.3 $9.9million in such expenses recognized during the three months ended March 31, 2020. The increase in operating expenses was related to the scaling of our business across all functional areas and one-time non-cash stock-based compensation expense of annual equity grants.2021. General and administrative expenses totaled $5.7 $4.5million for the three months ended March 31, 2021,2022, an increasedecrease of $2.5 $1.2million or 76.7%20% over $3.2 $5.7million recognized during the three months ended March 31, 2020. The increases were primarily attributed to increase in non-cash2021, achieved through a focused reduction of non-growth related expenses and decreased stock-based compensation expense, salaries, operations and support functions.compensation. Sales and marketing expenses totaled $2.7 $2.2million for the three months ended March 31, 2021,2022, an increasedecrease of $0.4 $0.5million or 18.2%18% over $2.3 $2.7million of sales and marketing expenses recognized during the three months ended March 31, 2020. The increase was primarily attributed2021, thanks to increaseefficiency gains in non-cash stock-based compensation expense and commissions expense and partially offset by savings achieved through utilization of digital advertising.both sales headcount as well as more targeted marketing spend. Research and development expenses totaled $1.5 $1.5million for the three months ended March 31, 2021, an increase of $0.8 2022million , compared to $or 105.3% over $0.7 1.5million of research and development expenses recognized during the three months ended March 31, 2020. The increase was primarily attributed to 2021increases, a stable result highlighting: increased efficiency in non-cashautomation of recurring spend and decrease in stock-based compensation, expenseoffset with re-invested spend into platform optimization, new features and growth in the technology team related to the enhancement and maintenance of our digital marketplace technology platform.scaling.
Loss from Operations.Loss from operations totaled $7.2 $(5.3)million for the three months ended March 31, 2021,2022, an increasedecrease of $3.1 $1.9million or 76.3%26% over 4.1 a $(7.2)million loss from operations for the three months ended March 31, 2020.2021. The increasedecrease in loss from operations was primarily driven by the higher operating costs and non-cash stock-based compensation expense savings described above, partially offset byabove.
Other (Income) Expense. Other (Income) Expense totaled ($3,162) for the higherthree months ended March 31, 2022, an increase of $3,585 in income or 848% compared to $423 of net revenues expense for the three months ended March 31, 2021.
Net Loss. Net loss totaled $(5.3) million for the three months ended March 31, 2022, an decrease of $1.9 million or 26% over a $(7.2) million net loss recognized during the three months ended March 31, 2021.
Other (Income) Expense. Other (Income) Expense totaled $423 for the three months ended March 31, 2021, a decrease of $30,052 in income or 101.4% compared to $29,629 of income for the three months ended March 31, 2020. The decrease in income was primarily due to lower interest income and partially offset by non-operational expenses and loan interest expense.
Net Loss. Net loss totaled $7.2 million for the three months ended March 31, 2021, an increase of $3.1 million or 77.6% over $4.1 million recognized during the three months ended March 31, 2020. The increase in net loss was driven by the higher operating costs and non-cash stock-based compensation expense described above, partially offset by the higher net revenues recognized during the three months ended March 31, 2021.
Liquidity and Capital Resources
As of March 31, 2021,2022, our principal sources of liquidity were cash and cash equivalents of $25,499,6357,977,260 compared to $4,923,51511,499,136 as of December 31, 2020.2021. Cash and cash equivalents include money market deposit accounts denominated in U.S. dollars. We also had additional Restricted Cash balances of $2,994,542 as March 31, 2022 which relates to amounts held in a restricted bank account at Cogent Bank as collateral for the amount pledged by the Company to secure a revolving line of credit made by Cogent Bank to AmeriDrive, as well as escrow accounts held for our insurance claims processing partner to pay out claims. Cash, cash equivalents and restricted cash altogether totaled $ 10,971,802 as of March 31, 2022.
In FebruaryOn November 9, 2021, we received net proceeds of $27.6 million upon the completionCompany entered into an underwritten public offering of an aggregate of 2,530,000 million shares Equity Offering Sales Agreement (the “ATM Agreement”), with D.A. Davidson & Co. and Northland Securities, Inc. (collectively, the “Agents"), pursuant to which the Agents act as the Company’s sales agent with respect to the offer and sale from time to time of common stock at a public offeringhaving an aggregate gross sales price of $11.75 per share, after deducting underwriting discounts and commissions and offering expenses.up to $50 million in “at-the market-offerings.” We did not effect any sales of shares under the ATM program in 2021 nor by the date of this report in 2022, however, can utilize the program if the need arises.
We have primarily financed our operations through proceeds from public offerings, PPP loan proceeds, in addition to revenues received through our platform. As a result of the February 2021 financing, we believe our existing cash and cash equivalents andequivalent assets, together with proceeds from revenue generating activities and access to liquidity through our ATM program and other equity/debt offerings will be sufficient to meet our working capital and capital expenditures needs over at least the next 12 months more fully described in Management's Plan“Management's Plan” above.
Our future capital requirements will depend on many factors, including, but not limited to our growth, our ability to attract and retain drivers and car owners on our platform, the continuing market acceptance of our service offerings, the timing and extent of spending to support our efforts to improve our customer experience, actual insurance payments for which we have made reserves, the timing and extent of investment we are making in policy, government relations, and the expansion of sales and marketing activities. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services and technologies. We may decide to, or be required to, seek additional equity or debt financing for any of these reasons, or others that may arise. If we are unable to raise additional capital in the future, we may need to curtail expenditures by scaling back certain sales, marketing and marketing expenses.development expenses.
Cash Flows
Net cash used in operating activities was $3,567,143 for the three months ended March 31, 2022. This consisted primarily of a net loss of $ (5,327,483) offset by non-cash stock-based compensation expense of $1,179,288 largely driven by the recognition of costs related to restricted stock unit grants. Additionally, there were material increases in accounts payable of $1,476,832, partially offset by decreased accrued liabilities of $625,011 for the three months ended March 31, 2022.
Net cash used in operating activities was $6,784,011 for the three months ended March 31, 2021. This consisted primarily of a net loss of $7,206,535 offset by non-cash stock-based compensation expense of $3,767,674 largely driven by the recognition of costs related to restricted stock units annual equity grants. Additionally, there was an increaseincrease in accounts payable of $1,808,861 and offset by decrease insurance reserves of $365,905 and accrued liabilities $3,532,625.The decrease
Net cash used in accrued liabilitiesinvesting activities was primarily driven by the insurance premiums accrual$208,462 for the three months ended March 31, 2021 compared for2022. This reflects the year ended December 31, 2020 whereininvestment in software capitalized as intangible asset during the revised contract allowed deferral of payment for approximately six months.quarter.
Net cash used in operatinginvesting activities was $0 for the three months ended March 31, 2020 resulted in2021.
Net cash outflows of $2,862,748. This consisted primarily of a net loss of $4,058,216 offsetprovided by non-cash stock-based compensation expense of $415,172 and non-cash depreciation and amortization of $19,157. Additionally, therefinancing activities was an increase in accounts payable of $646,484 partially offset by decrease in accrued liabilities of $120,365.$0 for the three months ended March 31, 2022.
Net cash provided by financing activities was $28,111,756 for the three months ended March 31, 2021, which primarily consists of gross proceeds from the sale of common stock in our February 2021 public offering of $29,727,500, proceeds from the exercise of warrants of $64,540, partially offset by offering costs of $1,680,284.
Net cash provided by financing activities was $28,575 for the three months ended March 31, 2020, which primarily consists of proceeds from the exercise of warrants and stock options.
Capital Management
We aim to manage capital so that we will maintain optimal returns to shareholders and benefits for other stakeholders. We also aim to maintain a capital structure that ensures the lowest cost of capital available to the Company. We regularly review the Company’s capital structure and seek to take advantage of available opportunities including financial equity financing and debt leverage to improve outcomes for the Company and its shareholders.accelerate growth opportunities.
For the three months ended March 31, 2022 and 2021, and 2020, there were no dividends paid and we have no plans to commence the payment of dividends. We have no current plans to issue furtherraise capital through the sale of shares on the marketof our common stock, but willwe continue to assess market conditions and the Company’s cash flow requirements to ensure the Company is appropriately funded.funded.
Except for PPP Loans, thereThere is no significant external borrowing at the reporting date.as of March 31, 2022. Neither the Company nor any of the subsidiaries are subject to externally imposed capital requirement.requirement.
Critical Accounting Policies, Judgments, and Estimates
Our consolidated financial statements and the related notes thereto are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements also 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 under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. There have been no material changes to our critical accounting policies and estimates as of March 31, 2021.2022.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements (as defined in the rules and regulations of the SEC) that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material investors.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our financial statements appearing in this Quarterly Report on Form 10-Q.
Emerging Growth Company Status
Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards.
The Company is not required to provide the information required by this Item as it is a "smaller“smaller reporting company,"” as defined in Rule 229.10(f)(1).
Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
The term "disclosure“disclosure controls and procedures,"“ as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact there are resource constraints and management are required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded our disclosure controls and procedures were effective as of March 31, 2021.2022.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(f) and 15d-15(f) under the Exchange Act) has occurred during the three months ended March 31, 20212022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We
On August 27, 2021, a putative securities class action complaint captioned Baron v. Hyrecar Inc. et al., Case No. 21-cv-06918, was filed in the United States District Court for the Central District of California against the Company; its Chief Executive Officer, Joseph Furnari; and its former Chief Financial Officer, Robert Scott Brogi. This action asserts claims and seeks damages for alleged violations of sections 10(b) and 20(a) of securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The alleged class period is May 14, 2021 to August 10, 2021, inclusive. Pursuant to the Private Securities Litigation Reform Act, on November 19, 2021, the Court appointed Turton Inc. to serve as Lead Plaintiff. Lead Plaintiff then filed an amended complaint (the “First Amended Complaint”). The First Amended Complaint alleged that defendants made material misrepresentations or failed to disclose material facts that, among other things, the Company had materially understated its expenses and insurance reserves in coordination with a third-party adjuster which Lead Plaintiff alleged was conflicted. On December 27, 2021, the Company and the individual defendants moved to dismiss the First Amended Complaint, arguing that Lead Plaintiff failed to adequately plead that any of the Company’s public statements were materially false or misleading, or that defendants acted with scienter– meaning defendants either knew those statements were false or were deliberately reckless to their truth or falsity at the time they were made. On February 16, 2022, the Court (Hon. Percy Anderson) granted defendants’ motion to dismiss on the basis that Lead Plaintiff failed to adequately plead any of defendants’ statements were materially false or misleading. Because the Court ruled that Lead Plaintiff did not sufficiently plead falsity, the Court did not address the additional arguments regarding scienter at the time. The Court permitted Lead Plaintiff leave to amend its complaint. Plaintiff filed its Second Amended Complaint on March 21, 2022. The Second Amended Complaint asserts the same violations of the Exchange Act and Rule 10b-5, again alleging, among other things, HyreCar made materially false or misleading statements related to its first quarter 2021 reserves, and by extension misstated expenses and revenues. On April 4, 2022, the Company and individual defendants moved to dismiss the Second Amended Complaint on the basis that Plaintiff failed to plead sufficient facts that would cure the deficiencies identified in the Court’s order on the first motion to dismiss—i.e., that Plaintiff again failed to plead that any statements were materially false or misleading when made—and Plaintiff failed to plead that defendants acted with scienter. On April 21, 2022, the case was transferred to a new judge, and on April 27, 2022, the Court issued a Reassignment Order that, among other things, vacated all hearing dates. The Company will re-notice the hearing for its motion to dismiss the Second Amended Complaint and expects it will be heard on August 25, 2022. The Company believes that the allegations in this lawsuit are not currently a partywithout merit and will continue to vigorously defend against them. The Company’s chances of success on the merits are still uncertain and any on-going legal proceedings, and we are not awarepossible loss or range of any claims or actions pending or threatened against us. In the future, we might from time to time become involved in litigation relating to claims arising from our ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows.loss cannot be reasonably estimated.
Item 1A. Risk Factors
Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our most recent Annual Report on Form 10-K for the year ended December 31, 2020,2021, the occurrence of any one of which could have a material adverse effect on our actual results.
There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
None.
Item 6. Exhibits
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Exhibit | Incorporated by Reference | Filed | ||||||||||
Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||
3.1 | Amended and Restated Certificate of Incorporation of the Registrant. | S-1 | 333-225157 | 3.5 | May 23, 2018 | |||||||
3.2 | S-1 | 333-225157 | 3.7 | May 23, 2018 | ||||||||
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101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | �� | X | |||||||||
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104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||
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| This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HyreCar Inc. | |||
Date: May | By: | /s/ Joseph Furnari | |
Joseph Furnari | |||
Chief Executive Officer (Principal Executive Officer) | |||
HyreCar Inc. | |||
Date: May 16, 2022 |
| /s/ Serge De Bock | |
Serge De Bock | |||
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Chief Financial Officer | |||