| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation – Unaudited
Interim Financial Information The accompanying balance sheet as of June
30, 2018, the statements of operations for the three and six months ended June 30, 2018 and 2017, and cash flows for the six
months ended June 30, 2018 and 2017 are unaudited. The unaudited interim financial statements and related notes have
been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the
United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally
included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to
such rules and regulations. The unaudited interim financial statements have been prepared on a basis consistent with the
audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring
adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2018 and results of
operations and cash flows for the three and six months ended June 30, 2018 and 2017. The financial data and the other
information disclosed in these notes to the interim financial statements related to the three and six month periods are
unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited
interim financial statements should be read in conjunction with the financial statements of the Company for the year ended
December 31, 2017 and notes thereto that are included in the prospectus, dated June 26, 2018, that formed a part of the
registration statement on Form S-1 (File No. 333-225157), which was declared effective by the SEC on June 26, 2018. 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 increased revenue from operations and the funds raised through the IPO. Based
on our current capital and ability to reduce cash burn if needed, as well as the increasing revenues through normal course of
business, we believe that substantial doubt about the Company’s ability to continue as a going concern has been alleviated. Use of Estimates The preparation of financial statements
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 revenues 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. The Company’s most significant estimates
and judgments involve recognition of revenue, calculating the reserves for insurance, the measurement of the Company’s stock-based
compensation, including the estimation of the underlying deemed fair value of common stock in periods prior to the date of the
Company’s IPO, the estimation of the fair value of market-based awards, the valuation of warrants, allowance for doubtful
accounts, and the fair value of financial instruments 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 June
30, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These
financial instruments include cash, accounts payable, accrued liabilities, notes payable, convertible debt and settlement payable.
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 statement of cash flows,
the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash
equivalents. Insurance Liability The Company records a loss reserve
for insurance deductible or damage that the Company pays to car owners based on the Company’s policy in relation to the
insurance policy in effect at the time, as it may be amended. This reserve is based on changes to the
Company’s insurance policy that occurred during the second quarter of 2018 in relation to the insurance policy in
effect for car owners. This reserve represents an estimate for both reported accident 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 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 policy as to what amounts of the deductible or claim will be paid by the Company. As of June 30, 2018,
$162,375 was included in accrued liabilities related to the loss reserve, where the expense is reflected in the general and
administrative within the statements of operations. No such liability was recorded as of December 31, 2017 as
the Company’s policy was such that it was not responsible for any claims at the time. Offering Costs The Company accounts for offering costs
in accordance with Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs. Prior to the completion
of an offering, offering costs were capitalized as deferred offering costs on the balance sheet. The deferred offering costs are
netted against the proceeds of the offering in stockholders’ deficit or the related debt, as applicable. Convertible Debt and Warrant Convertible debt is accounted for under
the guidelines established by ASC 470-20, Debt with Conversion and Other Options. ASC 470-20 governs the calculation of an embedded
beneficial conversion and/or debt issued with warrants, which is treated as a discount to the instruments where derivative accounting
does not apply. The discounts are accreted over the term of the debt. The Company calculates the fair value of
warrants and conversion features issued with convertible instruments using the Black-Scholes valuation method, using the same assumptions
used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except the contractual life
of the warrant or conversion feature is used. Under these guidelines, the Company allocates the value of the proceeds received
from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a
relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected
term of the convertible debt to interest expense. Preferred Stock ASC 480, Distinguishing Liabilities from
Equity, includes standards for how an issuer of equity classifies and measures on its balance sheet certain financial instruments
with characteristics of both liabilities and equity. Management is required to determine the
presentation for the preferred stock because of the redemption and conversion provisions, among other provisions. Specifically,
management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related
to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should
be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely
related (both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required. Management
determined the host contract of the preferred stock is more akin to equity, and accordingly, derivative liability accounting is
not required by the Company. The Company has presented preferred stock within stockholders’ equity (deficit) section of the
balance sheet. Costs incurred directly for the issuance
of the preferred stock were recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred
stock. In connection with the closing of the Company’s
IPO, all outstanding shares of convertible preferred stock were converted into 2,429,638 shares of common stock. Revenue Recognition The Company recognizes revenue primarily
from insurance and transaction fees when a car is rented on the Company’s platform when (a) persuasive evidence an agreement
exists which occurs when the rental contract is signed electronically between the two parties involved; (b) the services have been
delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts
due is reasonably assured which occurs simultaneously when the booking is accepted and the credit card or account on file is charged.
The Company defers revenue where the earnings process is not yet complete. 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. In limited circumstances, the Company provides
contingent consideration in the form of a rebate or refund 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.
Measurement of the total rebate or refund obligation is based on management estimates using historical data. The following is a breakout of revenue
components by subcategory for the three and six months ended June 30, 2018 and 2017:
Three Months Three Months Six Months Six Months
Insurance and administration fees $ 1,237,443 $ 316,536 $ 2,194,610 $ 566,598
Transaction fees 834,163 281,040 1,529,101 503,061
Other fees 294,165 43,169 444,506 76,410
Incentives and rebates (92,272 ) (9,500 ) (180,535 ) (9,500 )
Net revenue $ 2,273,499 $ 631,245 $ 3,987,682 $ 1,136,569 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. Principal Agent Considerations In accordance with ASC 605-45, Revenue
Recognition: Principal Agent Considerations, we evaluate 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. Our primary revenue source 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, 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. 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. Gross billings is an important measure
by which we evaluate and manage our business. We define gross billings as the amount billed to drivers and other customers, 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 billings is a non-U.S. GAAP measure and as such, is not recorded in our financial statements
as revenue. However, we use gross billings to asses our business growth, scale of operations and our ability to generate gross
billings is strongly correlated to our ability to generate revenues. Gross billings may also be used to calculate net revenue margin,
defined as the Company’s U.S. GAAP reportable revenue over gross billings. The table below sets forth a reconciliation
of our U.S. GAAP reported revenues to gross billings as follows:
Three Months ended Three Months ended Six Months ended Six Months ended
Revenues (U.S. GAAP reported revenues) $ 2,273,499 $ 631,245 $ 3,987,682 $ 1,136,569
Add: Refunds, rebates and deferred revenue 146,811 167,518 530,998 303,685
Add: Owner payments (not recorded in financial statements) 2,773,457 1,020,835 5,121,217 1,770,735
Gross billings (non-U.S. GAAP measure not recorded in financial statements) $ 5,193,767 $ 1,819,598 $ 9,639,897 $ 3,210,989 Cost of Revenues Cost of revenues primarily include direct
fees paid for driver insurance, merchant processing fees, and motor vehicle record fees incurred for paid driver applications. Stock-Based Compensation The Company accounts for stock options
issued to employees under ASC 718, Compensation – Stock Compensation. Under ASC 718, stock-based compensation cost to employees
is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s
requisite vesting period. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes
option valuation model. The Company measures compensation expense
for its non-employee stock-based compensation under ASC 505, Equity. The fair value of the option issued or committed to be issued
is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured
at the value of the Company’s common stock or equity award on the date that the commitment for performance by the counterparty
has been reached or the counterparty’s performance is complete. Stock-based compensation is included in
the statements of operations as follows:
Three months ended June 30, 2018 Three Months ended June 30, 2017 Six months ended June 30, 2018 Six Months ended June 30, 2017
General and administrative $ 1,708,917 $ 110,103 $ 1,890,988 $ 110,103
Sales and marketing 105,034 70,858 126,745 70,858
Research and development $ 41,395 $ 14,847 $ 47,988 $ 14,847 Loss per Common Share The Company presents basic loss per share
(“EPS”) and diluted EPS on the face of the 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 six months
ended June 30, 2018 and 2017, there were 2,526,856 and 984,394 options or warrants excluded, respectively. As of June 30, 2018,
and 2017, there were no debts convertible into common stock. As of June 30, 2018, and 2017 there was 0 and 2,429,638 shares of
preferred stock convertible into common stock outstanding. As of June 30, 2018, there were 825,000 shares of restricted common
stock (Note 5) that were excluded. 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. At times, the Company maintains balances in excess of the
federally insured limits. Other Concentrations The Company relies on two insurance agencies
to provide all insurance on vehicles in service. The loss of either of these insurance carriers would have a negative effect on
our operations. New Accounting Standards In June 2018, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, Compensation - Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 eliminates the
separate accounting model for nonemployee share-based payment awards and generally requires companies to account for share-based
payment transactions with nonemployees in the same way as share-based payment transactions with employees. The accounting remains
different for attribution, which represents how the equity-based payment cost is recognized over the vesting period, and a contractual
term election for valuing nonemployee equity share options. ASU 2018-07 is effective for fiscal years, and interim periods within
those years, beginning after December 15, 2018 with early adoption permitted. The Company is in process of assessing the impact
of the adoption of ASU 2018-07 on the financial statements. In January 2017, the FASB issued ASU No. 2017-04, Goodwill and Other
(Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating
Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or
negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the
goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine
if the quantitative impairment test is necessary. This guidance is effective for the annual or any interim goodwill impairment
tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment
tests performed on testing dates after January 1, 2017. The Company is currently reviewing the provisions of the new standard,
but it is not expected to have a significant impact on the Company. In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 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 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 several
practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2018, with early adoption permitted. The Company is currently reviewing the provisions of the new standard. In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This new standard will
replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides
a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity
expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods beginning
after December 15, 2017 for public business entities and December 31, 2018 for all other entities. The standard may be applied
either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company has elected the extended transition period for complying with any new or revised financial accounting
standards afforded to emerging growth companies, and is
currently reviewing the provisions of the new standard. 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 financial statements. |
