Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 27, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | YayYo, Inc. | ||
Entity Central Index Key | 0001691077 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,647,980 | ||
Entity Common Stock, Shares Outstanding | 29,427,803 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 1,256,429 | $ 277,444 |
Accounts receivable | 59,331 | |
Prepaid expenses | 782,900 | 108,900 |
Total current assets | 2,098,660 | 386,344 |
Equipment, net | 3,395 | 5,092 |
Rental vehicles, net | 4,737,047 | 5,115,117 |
Deposit on vehicles | 164,080 | |
Deferred offering costs | 66,500 | |
Other assets | 200,000 | |
TOTAL ASSETS | 7,203,182 | 5,573,053 |
Current Liabilities: | ||
Accounts payable (including $394,183 and $334,471 to related party) | 545,254 | 719,386 |
Accrued expenses (including $171,665 and $419,593 to related party) | 405,977 | 494,066 |
Notes payables, current (net of discount of $32,289 and $72,211) | 287,378 | 2,617,970 |
Finance lease obligations, current | 1,416,446 | 1,562,651 |
Total current liabilities | 2,655,055 | 5,394,073 |
Finance lease obligations, net of current portion | 984,119 | 2,227,496 |
TOTAL LIABILITIES | 3,639,174 | 7,621,569 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; nil shares issued and outstanding | ||
Common stock, $0.000001 par value; 90,000,000 shares authorized; 29,427,803 and 26,718,676 shares issued and outstanding | 29 | 27 |
Additional paid-in capital | 28,735,894 | 19,193,151 |
Accumulated deficit | (25,171,915) | (21,241,694) |
Total stockholders' deficit | 3,564,008 | (2,048,516) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 7,203,182 | $ 5,573,053 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts payable related party | $ 394,183 | $ 334,471 |
Accrued expenses related party | 171,665 | 419,593 |
Net of debt discount, current | $ 32,289 | $ 72,211 |
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 29,427,803 | 26,718,676 |
Common stock, shares outstanding | 29,427,803 | 26,718,676 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 6,914,910 | $ 3,289,478 |
Cost of revenue | 4,673,870 | 2,374,397 |
Gross profit | 2,241,040 | 915,081 |
Operating expenses: | ||
Selling and marketing expenses | 765,441 | 482,811 |
Product development | 13,500 | 9,699 |
General and administrative expenses | 4,023,921 | 6,584,251 |
Impairment of leased assets | 2,388,000 | |
Loss on the settlement of debt | 252,900 | |
Total operating expenses | 5,055,762 | 9,464,761 |
Loss from operations | (2,814,722) | (8,549,680) |
Other income (expense): | ||
Interest and financing costs | (1,115,499) | (4,639,442) |
Total other income (expense) | (1,115,499) | (4,639,442) |
Net loss | $ (3,930,221) | $ (13,189,122) |
Weighted average shares outstanding : | ||
Basic | 27,112,557 | 26,321,137 |
Diluted | 27,112,557 | 26,321,137 |
Loss per share | ||
Basic | $ (0.14) | $ (0.5) |
Diluted | $ (0.14) | $ (0.5) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 26 | $ 7,879,189 | $ (8,052,572) | $ (173,357) |
Balance, shares at Dec. 31, 2017 | 25,770,551 | |||
Issuance of common stock for cash | 307,924 | 307,924 | ||
Issuance of common stock for cash, shares | 46,330 | |||
Value of common stock issued with notes payable | 407,791 | 407,791 | ||
Value of common stock issued with notes payable, shares | 155,850 | |||
Value of warrants issued with notes payable | 3,726,506 | 3,726,506 | ||
Value of common stock issued with capital lease obligation | 2,388,000 | 2,388,000 | ||
Value of common stock issued with capital lease obligation, shares | 298,500 | |||
Issuance of common stock for services | $ 1 | 3,459,999 | 3,460,000 | |
Issuance of common stock for services, shares | 432,500 | |||
Issuance of common stock for accounts payable | 119,274 | 119,274 | ||
Issuance of common stock for accounts payable, shares | 14,945 | |||
Stock option expense | 904,468 | 904,468 | ||
Net loss | (13,189,122) | (13,189,122) | ||
Balance at Dec. 31, 2018 | $ 27 | 19,193,151 | (21,241,694) | (2,048,516) |
Balance, shares at Dec. 31, 2018 | 26,718,676 | |||
Correction to outstanding shares | ||||
Correction to outstanding shares, shares | (173) | |||
Proceeds from the sale of common stock | $ 2 | 10,499,998 | 10,500,000 | |
Proceeds from the sale of common stock, shares | 2,625,000 | |||
Offering costs | (1,631,655) | (1,631,655) | ||
Issuance of common stock for settlement of debt | 674,400 | 674,400 | ||
Issuance of common stock for settlement of debt, shares | 84,300 | |||
Net loss | (3,930,221) | (3,930,221) | ||
Balance at Dec. 31, 2019 | $ 29 | $ 28,735,894 | $ (25,171,915) | $ 3,564,008 |
Balance, shares at Dec. 31, 2019 | 29,427,803 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,930,221) | $ (13,189,122) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 995,228 | 500,622 |
Stock option expense | 904,468 | |
Common stock issued for services | 3,460,000 | |
Amortization of debt discounts | 39,922 | 4,460,931 |
Gain on disposal of assets | (17,360) | |
Impairment of leased assets | 2,388,000 | |
Loss on the settlement of debt | 252,900 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (59,331) | |
Prepaid expenses | (674,000) | (95,494) |
Other assets | (200,000) | |
Accounts payable | (174,132) | 673,836 |
Accrued expenses | 333,411 | 489,963 |
Net cash used in operating activities | (3,416,223) | (424,156) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (2,840) | |
Purchase of vehicles | (225,000) | |
Deposit for vehicles | (164,080) | |
Net cash used in investing activities | (389,080) | (2,840) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock | 10,500,000 | 307,924 |
Offering costs paid | (1,565,155) | |
Proceeds from notes payable | 2,009,300 | 7,746,378 |
Repayment of note payable | (4,379,814) | (6,111,263) |
Payment for debt issuance costs | (178,228) | |
Repayment of finance lease obligations | (1,780,043) | (1,369,109) |
Net cash provided by (used in) financing activities | 4,784,288 | 395,702 |
NET INCREASE (DECREASE) IN CASH | 978,985 | (31,294) |
CASH, BEGINNING OF PERIOD | 277,444 | 308,738 |
CASH, END OF PERIOD | 1,256,429 | 277,444 |
CASH PAID FOR: | ||
Interest | 1,105,049 | 139,825 |
Income taxes | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Payment of accounts payable/accrued expenses with common stock | 421,500 | 119,274 |
Value of equity recorded as debt discounts | 4,134,297 | |
Finance lease obligations | $ 1,159,470 | $ 3,700,674 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1 - Organization and Basis of Presentation Organization and Line of Business YayYo, Inc. (“YayYo” or the “Company”) was incorporated on June 21, 2016 under the laws of the state of Delaware originally as a limited liability company and subsequently changed to a C corporation. The accompanying financial statements are retroactively restated to present the Company as a C corporation from June 21, 2016. The Company rents cars to Uber and Lyft drivers. Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP). Risk and Uncertainties In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The governors of New York, California and several other states, as well as mayors on many cities, have ordered their residents , and could ultimately have a significant negative impact on the Company. The Company cannot at this time estimate the long term effect of this unprecedented situation on the rideshare market in general or the Company in particular. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars, LLC, RideShare Car Rentals, LLC, RideYayYo, LLC and Savy, LLC. All significant intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved. Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less. Equipment and Rental Vehicles Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows: Computer equipment 5 years Vehicles 5 years Long-Lived Assets The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment Revenue Recognition The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements. Stock-Based Compensation The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share Advertising Costs The Company expenses the cost of advertising as incurred. Advertising costs for the years ended December 31, 2019 and 2018 were $765,441 and $482,811, respectively. Research and Development Costs The Company expenses its research and development costs as incurred. Research and developments costs for the years ended December 31, 2019 and 2018 were $13,500 and $9,699, respectively. Fair Value Measurements The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. At December 31, 2019 and 2018, the Company did not identify any liabilities that are required to be presented on the balance sheet at fair value. Recent Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Equipment
Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Note 3 – Equipment At December 31, 2019 and 2018 equipment consisted of the following: 2019 2018 Computer equipment $ 6,046 $ 6,046 6,046 6,046 Less accumulated depreciation (2,651 ) (954 ) Equipment, net $ 3,395 $ 5,092 Depreciation expense for equipment for the years ended December 31, 2019 and 2018 was $1,697 and $636, respectively. |
Rental Vehicles
Rental Vehicles | 12 Months Ended |
Dec. 31, 2019 | |
Rental Vehicles | |
Rental Vehicles | Note 4 – Rental Vehicles At December 31, 2019 and 2018 all of the Company’s rental vehicles consisted of the following: 2019 2018 Rental vehicles $ 6,284,211 $ 5,661,749 6,284,211 5,661,749 Less accumulated depreciation (1,547,164 ) (546,632 ) Rental vehicles assets, net $ 4,737,047 $ 5,115,117 The Company’s rental vehicles are depreciated over their estimated useful life of five years. Depreciation expense for leased assets for the years ended December 31, 2019 and 2018 was $933,531 and $499,986, respectively. A majority of the rental vehicles are leased with terms are generally for 30 to 36 months and the Company has the right to purchase the vehicles for $1 each at the end of the lease terms. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 5 – Notes Payable Notes payable at December 31, 2019 and 2018 consisted of the following: 2019 2018 Note payable to investor; accrue interest at 5% per annum; due December 31, 2019; unsecured $ - $ 790,000 Notes payable to individual investors; accrue interest at 8% per annum; principal payments equal to 1/12 of original balance plus interest due quarterly; due from dates ranging from August 9, 2020 to March 26, 2021; unsecured (A) 319,667 319,667 Note payable to investor; accrue interest at 6% per annum; due November 30, 2018; unsecured (B) - 222,222 Note payable to investor; original issue discount of $117,828; due he earlier of November 30, 2019 or closing of a public offering; secured by assets of the Company (C) - 1,296,018 Note payable to merchant bank; accrues interest at 15% per annum; daily payments of $813 - 37,308 Line of credit; $65,000 limit; accrues interest at 15% per annum; weekly payments of $3,038 - 24,966 Total notes payable 319,667 2,690,181 Unamortized debt discount (32,289 ) (72,211 ) Notes payable, net discount 287,378 2,617,970 Less current portion (287,378 ) (2,617,970 ) Long-term portion $ - $ - (A) In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $39,922 and $37,949, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $32,289 at December 31, 2019. (B) This note payable was issued with an original issuance discount of $22,222 which is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $0 and $21,505, respectively, was charged to interest expense as amortization of the discount, with an unamortized balance of $0 at December 31, 2019. (C) On March 8, 2018, the Company issued a note payable for $6,000,000. The note accrues interest at LIBOR plus 100 basis points and is due five years from the date of issuance. The note payable is secured by the restricted cash balance. In addition, the Company issued to the note holder 150,000 shares of the Company’s common stock and 1,500,000 warrants to purchase shares of the Company’s common stock for $4.00 per shares. The warrants expire five years from the date of issuance. The Company also paid $178,228 of issuance costs associated with this note. The relative fair value of the 150,000 shares of common stock was $378,916 and the relative fair value of the 1,500,000 warrants was $3,726,506 and both were recorded as a discount on the note payable and as additional paid in capital. In addition, the issuance costs of $178,228 have also been recorded as a debt discount. The debt discount of $4,283,650 is being amortized over the term of the note payable. On September 12, 2018, the Company entered into a new note payable agreement with this investor whereby, the Company repaid $4,821,810 of the original $6,000,000 note payable and with the balance of $1,178,190 plus an original issue discount of $117,828 being rolled into the September 12, 2018 note payable for $1,296,018. The original issue discount of $117,828 is being amortized to interest expense over the term of the new note payable. As a result of the $6,000,000 note payable being repaid in September 2018, the Company amortized to interest expense the remaining debt discount associated with the note payable of $4,018,560. During the years ended December 31, 2019 and 2018, $0 and $4,401,477, respectively, was charged to interest expense as amortization of the debt discounts associated with the notes payable to this investor, with an unamortized balance of $0 at December 31, 2019. A rollforward of notes payable from December 31, 2017 to December 31, 2019 is below: Notes payable, December 31, 2017 $ 807,099 Issued for cash 7,746,378 Repayments (6,111,263 ) Accrued interest converted to note payable 27,350 Debt discount related to notes payable (4,312,525 ) Amortization of debt discounts 4,460,931 Notes payable, December 31, 2018 2,617,970 Issued for cash 2,009,300 Repayments (4,379,814 ) Amortization of debt discounts 39,922 Notes payable, December 31, 2019 $ 287,378 |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease Obligations | Note 6 – Lease Obligations Lease obligations at December 31, 2019 and 2018 consisted of the following: 2019 2018 Lease obligations $ 2,400,565 $ 3,790,147 Less current portion (1,416,446 ) (1,562,651 ) Long-term portion $ 984,119 $ 2,227,496 A rollforward of lease obligations from December 31, 2017 to December 31, 2019 is below: Lease obligations, December 31, 2017 $ 1,593,291 New lease obligations 3,700,674 Disposal of leased vehicles (134,709 ) Payments on lease obligations (1,369,109 ) Lease obligations, December 31, 2018 3,790,147 New lease obligations 1,159,470 Disposal of leased vehicles (769,009 ) Payments on lease obligations (1,780,043 ) Lease obligations, December 31, 2019 $ 2,400,565 Future payments under lease obligations are as follows: Twelve months ending December 31, 2020 $ 1,511,672 2021 857,353 2020 163,630 Total payments 2,532,655 Amount representing interest (132,090 ) Lease obligation, net $ 2,400,565 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7 – Stockholders’ Equity The Company authorized 100,000,000 shares of capital stock with consists of 90,000,000 shares of common stock, $0.000001 par value per share and 10,000,000 shares of preferred stock, $0.000001 par value per share. Common Stock During the years ended December 31, 2019, the Company: · issued 84,300 shares of common stock to vendors in satisfaction of $421,500 of accounts payable and accrued expenses. The 84,300 shares were valued at $674,000; therefore the Company took a charge to earnings of $252,900 related to the settlement of debt during the years ended December 31, 2019; · issued 2,625,000 shares of common shares in connection with its initial public offering at $4.00 per share. Total gross proceeds from the offering were $10,500,000, before deducting underwriting discounts and commissions and other offering expenses. During the years ended from December 31, 2018, the Company: · sold 46,330 shares of common stock to investors for gross cash proceeds of $307,924; · issued 155,850 shares of common stock in connection with the issuance of notes payable; · issued 91,500 shares of common stock in connection with lease obligations; · issued 432,500 shares of common stock for services rendered valued at $3,460,000. The value was determined based on the shares price for recent sales of the Company’s common stock; and · issued 14,945 shares of common stock for payment of accounts payable of $119,274. Stock Options The following is a summary of stock option activity: Weighted Weighted Average Average Remaining Aggregate Options Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2017 750,000 $ 3.80 1.80 $ 3,150,000 Granted - $ Forfeited (450,000 ) 1.00 Exercised - Outstanding, December 31, 2018 300,000 $ 8.00 2.00 $ - Granted - $ Forfeited - Exercised - Outstanding, December 31, 2019 300,000 $ 8.00 1.00 $ - Exercisable, December 31, 2019 300,000 $ 8.00 1.00 $ - The exercise price for options outstanding and exercisable at December 31, 2019: Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 300,000 $ 8.00 $ 300,000 8.00 300,000 300,000 The following is a summary of warrant activity: Weighted Weighted Average Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2017 - Granted 1,500,000 $ 4.00 Forfeited - Exercised - Outstanding, December 31, 2018 1,500,000 $ 4.00 4.44 $ 6,000,000 Granted 131,250 5.00 Forfeited - Exercised - Outstanding, December 31, 2019 1,631,250 $ 4.08 3.38 $ - Exercisable, December 31, 2019 1,631,250 $ 4.08 3.38 $ - The exercise price for warrants outstanding at December 31, 2019: Outstanding and Exerciseable Number of Exercise Warrants Price 1,500,000 $ 4.00 131,250 5.00 1,631,250 In connection with the Company’s initial public offering, the Company issued the underwriters a total of 131,250 warrants to purchase shares of the Company’s common stock for $5.00 per share. The warrants expire in November 2024. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 – Related Party Transactions During the years ended December 31, 2018, the Company paid management fees of $205,000, to a company that is owned by the Company’s Chief Executive Officer and director. Beginning on February 1, 2019, the Company entered into a consulting agreement with this individual and paid $167,000 under the consulting agreement. The consulting agreement was terminated effective September 1, 2019. During the years ended December 31, 2019 and 2018, the Company expensed $587,261 and $334,471, respectively, in advertising expense from a company whose CEO was also a former director of the Company. At December 31, 2019 and 2018, $394,183 and $334,471, respectively, was owed to this company and is included in accounts payable in the accompanying consolidated balance sheets. During the years ended December 31, 2019 and 2018, the Company expensed $2,214,985 and $1,069,163, respectively, in insurance expense related to insuring the Company fleet of vehicles from an insurance brokerage firm whose owner is also a stockholder of the Company. At December 31, 2019 and 2018, $171,665 and $419,593, respectively, was owed to this insurance brokerage from and is included in accrued expenses in the accompanying consolidated balance sheets. At December 31, 2019 and 2018, the Company had a note payable to a stockholder for $0 and $790,000, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 – Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against all net deferred tax assets as of December 31, 2019 and 2018 based on estimates of recoverability. While the Company has optimistic plans for its business strategy, it determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its business model. Because of the impacts of the valuation allowance, there was no income tax expense or benefit for the years ended December 31, 2019 and 2018. A reconciliation of the differences between the effective and statutory income tax rates for the years ended December 31, 2019 and 2018: 2019 2018 Amount Percent Amount Percent Federal statutory rates $ (825,346 ) 21.0 % $ (2,769,716 ) 21.0 % State income taxes (275,115 ) 7.0 % (923,239 ) 7.0 % Permanent differences (69,409 ) 1.8 % 3,144,503 -23.8 % Valuation allowance against net deferred tax assets 1,169,870 -29.8 % 548,452 -4.2 % Effective rate $ - 0.0 % $ - 0.0 % At December 31, 2019 and 2018, the significant components of the deferred tax assets are summarized below: 2019 2018 Deferred income tax asset Net operation loss carryforwards 2,419,531 1,497,497 Accrued expenses 159,887 - Total deferred income tax asset 2,579,418 1,497,497 Less: valuation allowance (2,579,418 ) (1,497,497 ) Total deferred income tax asset $ - $ - The valuation allowance increased by $1,081,921 in 2019 as a result of the Company generating additional net operating losses. The valuation allowance increased by $175,612 in 2018 of which $548,452 was a result of the Company generating additional net operating losses offset by $372,840 as a result of the change in the corporate tax rate from 34% to 21%. The Company has recorded as of December 31, 2019 and 2018 a valuation allowance of $2,549,418 and $1,497,497, respectively, as it believes that it is more likely than not that the deferred tax assets will not be realized in future years. Management has based its assessment on the Company’s lack of profitable operating history. The Company conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of December 31, 2019 and 2018. The Company has net operating loss carry-forwards of approximately $8,600,000. Such amounts are subject to IRS code section 382 limitations and expire in 2031. The 2017, 2018 and 2019 tax year is still subject to audit. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 10 - Contingencies Legal Proceedings From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows. Social Reality Inc. v. YayYo, Inc. This action was filed on February 11, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Social Reality Inc. is a media company that claims to have provided media services to the Company. Plaintiff has sued the Company for breach of contract and related causes of action, arising from its claims that we have failed to pay for past outstanding invoices for services rendered. The plaintiff has also filed a motion for prejudgment attachment which is set for a hearing on April 28, 2020. The Company believes that it has valid defenses to the lawsuit, and expects to file counterclaims that will offset or negate any monies owed to plaintiff; it will vigorously defend both the lawsuit and plaintiff’s application for attachment. Anthony Davis v. YayYo, Inc., and Ramy El-Batrawi This action was filed on March 5, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Anthony Davis was hired by the Company as its Chief Executive Officer in or about December 2016. Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and director, and was involved, the complaint alleges, in Plaintiff’s hiring. As part of his compensation, Mr. Davis claims that he expected to receive stock options in the Company. He has alleged that “after several months of unsuccessfully attempting to persuade the Company’s founder to implement certain protocols and procedures” he resigned from his executive officer and director positions, and entered into a written agreement with the Company for services to be rendered as a consultant. Mr. Davis claims that the Company breached its agreement to award him certain stock options and includes a claim for wage and hour violations. The lawsuit also includes a request for declaratory and injunctive relief. He also included a claim under California Unfair Practices Act. The Company denies liability and asserts that it has paid Davis all amounts due to him under the contract. It intends to vigorously defend the lawsuit, by, inter alia |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Subsequent to December 31, 2019, the Company issued 166,00 stock options with an exercise price of $4.00 per share that expire on December 31, 2022 to its former Chief Executive Officer and issued 250,000 stock options to its former President. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars, LLC, RideShare Car Rentals, LLC, RideYayYo, LLC and Savy, LLC. All significant intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved. |
Cash Equivalents | Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less. |
Equipment and Rental Vehicles | Equipment and Rental Vehicles Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows: Computer equipment 5 years Vehicles 5 years |
Long-Lived Assets | Long-Lived Assets The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements. |
Stock-Based Compensation | Stock-Based Compensation The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising as incurred. Advertising costs for the years ended December 31, 2019 and 2018 were $765,441 and $482,811, respectively. |
Research and Development Costs | Research and Development Costs The Company expenses its research and development costs as incurred. Research and developments costs for the years ended December 31, 2019 and 2018 were $13,500 and $9,699, respectively. |
Fair Value Measurements | Fair Value Measurements The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. At December 31, 2019 and 2018, the Company did not identify any liabilities that are required to be presented on the balance sheet at fair value. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Lives of Equipment | Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows: Computer equipment 5 years Vehicles 5 years |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Equipment | At December 31, 2019 and 2018 equipment consisted of the following: 2019 2018 Computer equipment $ 6,046 $ 6,046 6,046 6,046 Less accumulated depreciation (2,651 ) (954 ) Equipment, net $ 3,395 $ 5,092 |
Rental Vehicles (Tables)
Rental Vehicles (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Rental Vehicles | |
Schedule of Rental Vehicles | At December 31, 2019 and 2018 all of the Company’s rental vehicles consisted of the following: 2019 2018 Rental vehicles $ 6,284,211 $ 5,661,749 6,284,211 5,661,749 Less accumulated depreciation (1,547,164 ) (546,632 ) Rental vehicles assets, net $ 4,737,047 $ 5,115,117 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable at December 31, 2019 and 2018 consisted of the following: 2019 2018 Note payable to investor; accrue interest at 5% per annum; due December 31, 2019; unsecured $ - $ 790,000 Notes payable to individual investors; accrue interest at 8% per annum; principal payments equal to 1/12 of original balance plus interest due quarterly; due from dates ranging from August 9, 2020 to March 26, 2021; unsecured (A) 319,667 319,667 Note payable to investor; accrue interest at 6% per annum; due November 30, 2018; unsecured (B) - 222,222 Note payable to investor; original issue discount of $117,828; due he earlier of November 30, 2019 or closing of a public offering; secured by assets of the Company (C) - 1,296,018 Note payable to merchant bank; accrues interest at 15% per annum; daily payments of $813 - 37,308 Line of credit; $65,000 limit; accrues interest at 15% per annum; weekly payments of $3,038 - 24,966 Total notes payable 319,667 2,690,181 Unamortized debt discount (32,289 ) (72,211 ) Notes payable, net discount 287,378 2,617,970 Less current portion (287,378 ) (2,617,970 ) Long-term portion $ - $ - (A) In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $39,922 and $37,949, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $32,289 at December 31, 2019. (B) This note payable was issued with an original issuance discount of $22,222 which is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $0 and $21,505, respectively, was charged to interest expense as amortization of the discount, with an unamortized balance of $0 at December 31, 2019. (C) On March 8, 2018, the Company issued a note payable for $6,000,000. The note accrues interest at LIBOR plus 100 basis points and is due five years from the date of issuance. The note payable is secured by the restricted cash balance. In addition, the Company issued to the note holder 150,000 shares of the Company’s common stock and 1,500,000 warrants to purchase shares of the Company’s common stock for $4.00 per shares. The warrants expire five years from the date of issuance. The Company also paid $178,228 of issuance costs associated with this note. The relative fair value of the 150,000 shares of common stock was $378,916 and the relative fair value of the 1,500,000 warrants was $3,726,506 and both were recorded as a discount on the note payable and as additional paid in capital. In addition, the issuance costs of $178,228 have also been recorded as a debt discount. The debt discount of $4,283,650 is being amortized over the term of the note payable. On September 12, 2018, the Company entered into a new note payable agreement with this investor whereby, the Company repaid $4,821,810 of the original $6,000,000 note payable and with the balance of $1,178,190 plus an original issue discount of $117,828 being rolled into the September 12, 2018 note payable for $1,296,018. The original issue discount of $117,828 is being amortized to interest expense over the term of the new note payable. As a result of the $6,000,000 note payable being repaid in September 2018, the Company amortized to interest expense the remaining debt discount associated with the note payable of $4,018,560. During the years ended December 31, 2019 and 2018, $0 and $4,401,477, respectively, was charged to interest expense as amortization of the debt discounts associated with the notes payable to this investor, with an unamortized balance of $0 at December 31, 2019. |
Schedule of Outstanding Notes Payable | A rollforward of notes payable from December 31, 2017 to December 31, 2019 is below: Notes payable, December 31, 2017 $ 807,099 Issued for cash 7,746,378 Repayments (6,111,263 ) Accrued interest converted to note payable 27,350 Debt discount related to notes payable (4,312,525 ) Amortization of debt discounts 4,460,931 Notes payable, December 31, 2018 2,617,970 Issued for cash 2,009,300 Repayments (4,379,814 ) Amortization of debt discounts 39,922 Notes payable, December 31, 2019 $ 287,378 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Obligations | Lease obligations at December 31, 2019 and 2018 consisted of the following: 2019 2018 Lease obligations $ 2,400,565 $ 3,790,147 Less current portion (1,416,446 ) (1,562,651 ) Long-term portion $ 984,119 $ 2,227,496 |
Schedule of Outstanding Lease Obligations | A rollforward of lease obligations from December 31, 2017 to December 31, 2019 is below: Lease obligations, December 31, 2017 $ 1,593,291 New lease obligations 3,700,674 Disposal of leased vehicles (134,709 ) Payments on lease obligations (1,369,109 ) Lease obligations, December 31, 2018 3,790,147 New lease obligations 1,159,470 Disposal of leased vehicles (769,009 ) Payments on lease obligations (1,780,043 ) Lease obligations, December 31, 2019 $ 2,400,565 |
Schedule of Future Lease Obligations | Future payments under lease obligations are as follows: Twelve months ending December 31, 2020 $ 1,511,672 2021 857,353 2020 163,630 Total payments 2,532,655 Amount representing interest (132,090 ) Lease obligation, net $ 2,400,565 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following is a summary of stock option activity: Weighted Weighted Average Average Remaining Aggregate Options Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2017 750,000 $ 3.80 1.80 $ 3,150,000 Granted - $ Forfeited (450,000 ) 1.00 Exercised - Outstanding, December 31, 2018 300,000 $ 8.00 2.00 $ - Granted - $ Forfeited - Exercised - Outstanding, December 31, 2019 300,000 $ 8.00 1.00 $ - Exercisable, December 31, 2019 300,000 $ 8.00 1.00 $ - |
Schedule of Options Outstanding by Exercise Price Range | The exercise price for options outstanding and exercisable at December 31, 2019: Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 300,000 $ 8.00 $ 300,000 8.00 300,000 300,000 |
Summary of Warrant Activity | The following is a summary of warrant activity: Weighted Weighted Average Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2017 - Granted 1,500,000 $ 4.00 Forfeited - Exercised - Outstanding, December 31, 2018 1,500,000 $ 4.00 4.44 $ 6,000,000 Granted 131,250 5.00 Forfeited - Exercised - Outstanding, December 31, 2019 1,631,250 $ 4.08 3.38 $ - Exercisable, December 31, 2019 1,631,250 $ 4.08 3.38 $ - |
Schedule of Warrants Outstanding by Exercise Price Range | The exercise price for warrants outstanding at December 31, 2019: Outstanding and Exerciseable Number of Exercise Warrants Price 1,500,000 $ 4.00 131,250 5.00 1,631,250 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconcilation Between Effective and Statutory Income Tax Rates | A reconciliation of the differences between the effective and statutory income tax rates for the years ended December 31, 2019 and 2018: 2019 2018 Amount Percent Amount Percent Federal statutory rates $ (825,346 ) 21.0 % $ (2,769,716 ) 21.0 % State income taxes (275,115 ) 7.0 % (923,239 ) 7.0 % Permanent differences (69,409 ) 1.8 % 3,144,503 -23.8 % Valuation allowance against net deferred tax assets 1,169,870 -29.8 % 548,452 -4.2 % Effective rate $ - 0.0 % $ - 0.0 % |
Schedule of Significant Components of Deferred Tax Assets | At December 31, 2019 and 2018, the significant components of the deferred tax assets are summarized below: 2019 2018 Deferred income tax asset Net operation loss carryforwards 2,419,531 1,497,497 Accrued expenses 159,887 - Total deferred income tax asset 2,579,418 1,497,497 Less: valuation allowance (2,579,418 ) (1,497,497 ) Total deferred income tax asset $ - $ - |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of incorporation | Jun. 21, 2016 |
Place of incorporation | DE |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of stock options shares outstanding | 300,000 | 300,000 | 750,000 |
Potentially dilutive securities outstanding | 1,800,000 | ||
Advertising costs | $ 765,441 | $ 482,811 | |
Research and developments costs | $ 13,500 | $ 9,699 | |
Warrant [Member] | |||
Number of stock options shares outstanding | 1,500,000 | ||
Options [Member] | |||
Number of stock options shares outstanding | 300,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Lives of Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer Equipment [Member] | |
Estimated lives | 5 years |
Vehicles [Member] | |
Estimated lives | 5 years |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation expense | $ 933,531 | $ 499,986 |
Equipment [Member] | ||
Depreciation expense | $ 1,697 | $ 636 |
Equipment - Schedule of Equipme
Equipment - Schedule of Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Equipment, gross | $ 6,046 | $ 6,046 |
Less accumulated depreciation | (2,651) | (954) |
Equipment, net | 3,395 | 5,092 |
Computer Equipment [Member] | ||
Equipment, gross | $ 6,046 | $ 6,046 |
Rental Vehicles (Details Narrat
Rental Vehicles (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation expense for leased assets | $ 933,531 | $ 499,986 |
Payments to acquire leased assets in future | $ 1 | |
Minimum [Member] | ||
Finance lease term | 30 months | |
Maximum [Member] | ||
Finance lease term | 36 months | |
Vehicles [Member] | ||
Estimated useful life | 5 years |
Rental Vehicles - Schedule of F
Rental Vehicles - Schedule of Finance Leased Right-of-Use Assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Rental Vehicles assets, gross | $ 6,284,211 | $ 5,661,749 |
Less accumulated depreciation | (1,547,164) | (546,632) |
Rental Vehicles assets, net | 4,737,047 | 5,115,117 |
Vehicles [Member] | ||
Rental Vehicles assets, gross | $ 6,284,211 | $ 5,661,749 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total notes payable | $ 319,667 | $ 2,690,181 | ||
Unamortized debt discount | (32,289) | (72,211) | ||
Notes payable, net discount | 287,378 | 2,617,970 | $ 807,099 | |
Less current portion | (287,378) | (2,617,970) | ||
Long-term portion | ||||
Unsecured Note Payable to Investor [Member] | ||||
Total notes payable | 790,000 | |||
Unsecured Note Payable To Individual Investors [Member] | ||||
Total notes payable | [1] | 319,667 | 319,667 | |
Unsecured Note Payable to Investor [Member] | ||||
Total notes payable | [2] | 222,222 | ||
Unsecured Note Payable to Investor [Member] | ||||
Total notes payable | [3] | 1,296,018 | ||
Notes Payable to Merchant Bank [Member] | ||||
Total notes payable | 37,308 | |||
Line of Credit [Member] | ||||
Total notes payable | $ 24,966 | |||
[1] | In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $39,922 and $37,949, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $32,289 at December 31, 2019. | |||
[2] | This note payable was issued with an original issuance discount of $22,222 which is being amortized over the term of the notes payable. During the years ended December 31, 2019 and 2018, $0 and $21,505, respectively, was charged to interest expense as amortization of the discount, with an unamortized balance of $0 at December 31, 2019. | |||
[3] | On March 8, 2018, the Company issued a note payable for $6,000,000. The note accrues interest at LIBOR plus 100 basis points and is due five years from the date of issuance. The note payable is secured by the restricted cash balance. In addition, the Company issued to the note holder 150,000 shares of the Company's common stock and 1,500,000 warrants to purchase shares of the Company's common stock for $4.00 per shares. The warrants expire five years from the date of issuance. The Company also paid $178,228 of issuance costs associated with this note. The relative fair value of the 150,000 shares of common stock was $378,916 and the relative fair value of the 1,500,000 warrants was $3,726,506 and both were recorded as a discount on the note payable and as additional paid in capital. In addition, the issuance costs of $178,228 have also been recorded as a debt discount. The debt discount of $4,283,650 is being amortized over the term of the note payable. On September 12, 2018, the Company entered into a new note payable agreement with this investor whereby, the Company repaid $4,821,810 of the original $6,000,000 note payable and with the balance of $1,178,190 plus an original issue discount of $117,828 being rolled into the September 12, 2018 note payable for $1,296,018. The original issue discount of $117,828 is being amortized to interest expense over the term of the new note payable. As a result of the $6,000,000 note payable being repaid in September 2018, the Company amortized to interest expense the remaining debt discount associated with the note payable of $4,018,560. During the years ended December 31, 2019 and 2018, $0 and $4,401,477, respectively, was charged to interest expense as amortization of the debt discounts associated with the notes payable to this investor, with an unamortized balance of $0 at December 31, 2019. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 12, 2018 | Mar. 08, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Amortization of debt discounts | $ 39,922 | $ 4,460,931 | |||
Shares issued during period, value | 307,924 | ||||
Repayments of notes | 4,379,814 | 6,111,263 | |||
Notes payable | $ 287,378 | $ 2,617,970 | $ 807,099 | ||
Unsecured Note Payable to Investor [Member] | |||||
Debt instrument interest rate | 5.00% | ||||
Debt instrument maturity date | Dec. 31, 2019 | ||||
Unsecured Note Payable To Individual Investors [Member] | |||||
Debt instrument interest rate | 8.00% | 8.00% | |||
Debt instrument payment terms | Principal payments equal to 1/12 of original balance plus interest due quarterly | Principal payments equal to 1/12 of original balance plus interest due quarterly | |||
Debt instrument maturity date, description | Due from dates ranging from August 9, 2020 to March 26, 2021 | Due from dates ranging from August 9, 2020 to March 26, 2021 | |||
Shares issued during period as incentive for loans | 24,050 | ||||
Shares issued during period as incentive for loans, value recorded as discount | $ 119,875 | ||||
Amortization of debt discounts | 119,875 | ||||
Interest expense | 39,922 | $ 37,949 | |||
Unamortized debt discount | $ 32,289 | ||||
Unsecured Note Payable To Individual Investors [Member] | Minimum [Member] | |||||
Debt instrument maturity date | Aug. 9, 2020 | Aug. 9, 2020 | |||
Unsecured Note Payable To Individual Investors [Member] | Maximum [Member] | |||||
Debt instrument maturity date | Mar. 26, 2021 | Mar. 26, 2021 | |||
Unsecured Note Payable to Investor [Member] | |||||
Debt instrument interest rate | 6.00% | 6.00% | |||
Debt instrument maturity date | Nov. 30, 2018 | ||||
Interest expense | $ 0 | $ 21,505 | |||
Unamortized debt discount | 0 | ||||
Original issue discount | $ 22,222 | ||||
Unsecured Note Payable to Investor [Member] | |||||
Debt instrument maturity date | Nov. 30, 2019 | Nov. 30, 2019 | |||
Original issue discount | $ 117,828 | $ 117,828 | |||
Secured Notes [Member] | |||||
Amortization of debt discounts | $ 117,828 | $ 4,283,650 | |||
Interest expense | 4,018,560 | 0 | $ 4,401,477 | ||
Unamortized debt discount | $ 0 | ||||
Original issue discount | 117,828 | ||||
Debt instrument face amount | 1,178,190 | $ 6,000,000 | |||
Debt instrument interest rate terms | The note accrues interest at LIBOR plus 100 basis points | ||||
Debt maturity term | 5 years | ||||
Shares issued during period | 150,000 | ||||
Warrants purchase to shares of common stock | 1,500,000 | ||||
Shares issued price per share | $ 4 | ||||
Warrants term | 5 years | ||||
Debt issuance costs | $ 178,228 | ||||
Shares issued during period, value | 378,916 | ||||
Fair value of warrants | $ 3,726,506 | ||||
Repayments of notes | 4,821,810 | ||||
Notes payable | $ 1,296,018 | ||||
Notes Payable to Merchant Bank [Member] | |||||
Debt instrument interest rate | 15.00% | ||||
Debt instrument frequency of periodic payment | daily | ||||
Debt instrument periodic payment | $ 813 | ||||
Line of Credit [Member] | |||||
Debt instrument interest rate | 15.00% | ||||
Debt instrument frequency of periodic payment | weekly | ||||
Debt instrument periodic payment | $ 3,038 | ||||
Line of credit, maximum borrowing capacity | $ 65,000 |
Notes Payable - Schedule of Out
Notes Payable - Schedule of Outstanding Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Notes payable, beginning of the period | $ 2,617,970 | $ 807,099 |
Issued for cash | 2,009,300 | 7,746,378 |
Repayments | (4,379,814) | (6,111,263) |
Accrued interest converted to note payable | 27,350 | |
Debt discount related to notes payable | (4,312,525) | |
Amortization of debt discounts | 39,922 | 4,460,931 |
Notes payable, end of the period | $ 287,378 | $ 2,617,970 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Lease Obligations (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | |||
Lease obligations | $ 2,400,565 | $ 3,790,147 | $ 1,593,291 |
Less current portion | (1,416,446) | (1,562,651) | |
Long-term portion | $ 984,119 | $ 2,227,496 |
Lease Obligations - Schedule _2
Lease Obligations - Schedule of Outstanding Lease Obligations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Lease obligations, beginning balance | $ 3,790,147 | $ 1,593,291 |
New lease obligations | 1,159,470 | 3,700,674 |
Disposal of leased vehicles | (769,009) | (134,709) |
Payments on lease obligations | (1,780,043) | (1,369,109) |
Lease obligations, ending balance | $ 2,400,565 | $ 3,790,147 |
Lease Obligations - Schedule _3
Lease Obligations - Schedule of Future Lease Obligations (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | |||
2020 | $ 1,511,672 | ||
2021 | 857,353 | ||
2022 | 163,630 | ||
Total payments | 2,532,655 | ||
Amount representing interest | (132,090) | ||
Lease obligation, net | $ 2,400,565 | $ 3,790,147 | $ 1,593,291 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Capital stock shares authorized | 100,000,000 | |
Common stock shares authorized | 90,000,000 | 90,000,000 |
Common stock par value | $ 0.000001 | $ 0.000001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock par value | $ 0.000001 | $ 0.000001 |
Number of shares issued during period, value | $ 307,924 | |
Charge to earnings for settlement of debt | $ 252,900 | |
Stock issued during period for services, value | $ 3,460,000 | |
Number of warrants issued to purchase shares of common stock | 131,250 | |
Warrants exercise price per share | $ 5 | |
Common Stock [Member] | ||
Number of shares issued during period, shares | 46,330 | |
Number of shares issued during period, value | ||
Stock issued during period for services, shares | 432,500 | |
Stock issued during period for services, value | $ 1 | |
In Connection with Issuance of Notes Payable [Member] | ||
Number of shares issued during period, shares | 155,850 | |
In Connection with Lease Obligations [Member] | ||
Number of shares issued during period, shares | 91,500 | |
Payment of Accounts Payable [Member] | ||
Number of shares issued during period, shares | 14,945 | |
Accounts Payable | $ 119,274 | |
IPO [Member] | ||
Number of shares issued during period, shares | 2,625,000 | |
Sale of stock, price per share | $ 4 | |
Proceeds from issuance of public offering | $ 10,500,000 | |
Vendors [Member] | ||
Number of shares issued during period, shares | 84,300 | |
Accounts payable and accrued expenses | $ 421,500 | |
Number of shares issued during period, value | $ 674,000 | |
Investors [Member] | ||
Number of stock sold during period | 46,330 | |
Gross proceeds received in sale of stock | $ 307,924 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of Shares Options Outstanding, Beginning Balance | 300,000 | 750,000 |
Number of Options, Granted | ||
Number of Options, Forfeited | (450,000) | |
Number of Options, Exercised | ||
Number of Shares Options Outstanding, Ending Balance | 300,000 | 300,000 |
Number of Shares Options, Exercisable | 300,000 | |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 8 | $ 3.80 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Forfeited | 1 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price Outstanding, Ending Balance | 8 | $ 8 |
Weighted Average Exercise Price, Exercisable Ending Balance | $ 8 | |
Weighted Average Remaining Contractual Life Outstanding, Beginning | 2 years | 1 year 9 months 18 days |
Weighted Average Remaining Contractual Life Outstanding, Ending | 1 year | 2 years |
Weighted Average Remaining Contractual Life, Exercisable | 1 year | |
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ 3,150,000 | |
Aggregate Intrinsic Value Outstanding, Ending Balance | ||
Aggregate Intrinsic Value Outstanding, Exercisable Ending |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Options Outstanding by Exercise Price Range (Details) | Dec. 31, 2019$ / sharesshares |
Number of Options Outstanding | 300,000 |
Number of Options Exercisable | 300,000 |
Exercise Price Range [Member] | |
Number of Options Outstanding | 300,000 |
Exercise Price Outstanding | $ / shares | $ 8 |
Number of Options Exercisable | 300,000 |
Exercise Price Exercisable | $ / shares | $ 8 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Warrant Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of Shares, Warrants Outstanding Beginning | 1,500,000 | |
Number of Shares, Warrants Granted | 131,250 | 1,500,000 |
Number of Shares, Warrants Forfeited | ||
Number of Shares, Warrants Exercised | ||
Number of Shares, Warrants Outstanding Ending | 1,631,250 | 1,500,000 |
Number of Shares, Warrants Exercisable Ending | 1,631,250 | |
Weighted Average Exercise Price, Warrants Outstanding Beginning | $ 4 | |
Weighted Average Exercise Price, Warrants Granted | 5 | 4 |
Weighted Average Exercise Price, Warrants Forfeited | ||
Weighted Average Exercise Price, Warrants Exercised | ||
Weighted Average Exercise Price, Warrants Outstanding Ending | 4.08 | $ 4 |
Weighted Average Exercise Price, Per Share Exercisable | $ 4.08 | |
Weighted Average Remaining Contractual Life, Warrants Outstanding Beginning | 4 years 5 months 9 days | |
Weighted Average Remaining Contractual Life, Warrants Outstanding Ending | 3 years 4 months 17 days | 4 years 5 months 9 days |
Weighted Average Remaining Contractual Life, Warrants Exercisable | 3 years 4 months 17 days | |
Aggregate Intrinsic Value, Warrants Outstanding Beginning | $ 6,000,000 | |
Aggregate Intrinsic Value, Warrants Outstanding Ending | $ 6,000,000 | |
Aggregate Intrinsic Value, Exercisable |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrants Outstanding by Exercise Price Range (Details) | Dec. 31, 2019$ / sharesshares |
Number of Warrants Outstanding and Exercisable | 1,631,250 |
Exercise Price Range [Member] | |
Number of Warrants Outstanding and Exercisable | 1,500,000 |
Exercise Price Outstanding and Exercisable | $ / shares | $ 4 |
Exercise Price Range Two [Member] | |
Number of Warrants Outstanding and Exercisable | 131,250 |
Exercise Price Outstanding and Exercisable | $ / shares | $ 5 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Advertising expense | $ 765,441 | $ 482,811 |
Accounts payable to related party | 394,183 | 334,471 |
Owed insurance brokerage | 171,665 | 419,593 |
Notes payable | 0 | 790,000 |
Chief Executive Officer and Director [Member] | ||
Paid management fees | 205,000 | |
Paid for consulting agreement amount | 167,000 | |
Chief Executive Officer [Member] | ||
Advertising expense | 587,261 | 334,471 |
Insurance expenses paid during period | $ 2,214,985 | $ 1,069,163 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Increase (decrease) in valuation allowance | $ 1,081,921 | $ 175,612 |
Valuation allowance against net deferred tax assets, amount | 1,169,870 | 548,452 |
Net operating loss | $ 372,840 | |
Effective income tax rate | 21.00% | |
Valuation allowance | $ 2,549,418 | $ 1,497,497 |
Operating loss carryforwards, net | $ 8,600,000 | |
Operating loss carryforwards expiration description | Expire in 2031 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconcilation Between Effective and Statutory Income Tax Rates (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rates, amount | $ (825,346) | $ (2,769,716) |
Federal statutory rates, percent | 21.00% | 21.00% |
State income taxes, amount | $ (275,115) | $ (923,239) |
State income taxes, percent | 7.00% | 7.00% |
Permanent differences, amount | $ (69,409) | $ 3,144,503 |
Permanent differences, percent | 1.80% | (23.80%) |
Valuation allowance against net deferred tax assets, amount | $ 1,169,870 | $ 548,452 |
Valuation allowance against net deferred tax assets, percent | (29.80%) | (4.20%) |
Effective rate, amount | ||
Effective rate, percent | 0.00% | 0.00% |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operation loss carryforwards | $ 2,419,531 | $ 1,497,497 |
Accrued expenses | 159,887 | |
Total deferred income tax asset | 2,579,418 | 1,497,497 |
Less: valuation allowance | (2,579,418) | (1,497,497) |
Total deferred income tax asset |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | 3 Months Ended |
Mar. 30, 2020$ / sharesshares | |
Chief Executive Officer [Member] | |
Number of shares issued to options | 16,600 |
Options exercised price | $ / shares | $ 4 |
Expire date | Dec. 31, 2022 |
Former President [Member] | |
Number of shares issued to options | 250,000 |