Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 10, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HyreCar Inc. | |
Entity Central Index Key | 0001713832 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Trading Symbol | HYRE | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Local Phone Number | 688-6769 | |
Entity Address, Address Line One | 355 South Grand Avenue, | |
Entity Address, Address Line Two | Suite 1650 | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90071 | |
Entity Address, City or Town | Los Angeles | |
City Area Code | (888) | |
Entity File Number | 001-38561 | |
Entity Tax Identification Number | 47-2480487 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Security Exchange Name | NASDAQ | |
Title of 12(g) Security | Common Stock, par value $0.00001 per share | |
Entity Common Stock, Shares Outstanding | 17,726,601 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 6,788,335 | $ 10,657,140 |
Accounts receivable | 72,454 | 84,680 |
Insurance deposit | 749,454 | |
Other current assets | 430,579 | 379,425 |
Total current assets | 8,040,822 | 11,121,245 |
Property and equipment, net | 9,225 | 9,138 |
Intangible assets, net | 98,499 | 153,905 |
Other assets | 95,000 | 95,000 |
Total assets | 8,243,546 | 11,379,288 |
Current liabilities: | ||
Accounts payable | 2,465,099 | 2,232,629 |
Accrued liabilities | 1,970,509 | 903,912 |
Insurance reserve | 1,521,115 | 1,332,892 |
Note payable - current portion | 1,219,895 | |
Deferred revenue | 54,244 | 64,808 |
Related party advances | 9,629 | 9,629 |
Total current liabilities | 7,240,491 | 4,543,870 |
Note payable, net of current portion | 779,280 | |
Total liabilities | 8,019,771 | 4,543,870 |
Commitments and contingencies (Note 3) | ||
Stockholders' equity: | ||
Preferred stock, 15,000,000 shares authorized, par value $0.00001, no shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | ||
Common stock, 50,000,000 shares authorized, par value $0.00001, 17,726,601 and 16,393,171 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 177 | 164 |
Additional paid-in capital | 38,997,490 | 35,857,835 |
Subscription receivable - related party | (7,447) | (7,447) |
Accumulated deficit | (38,766,445) | (29,015,134) |
Total stockholders' equity | 223,775 | 6,835,418 |
Total liabilities and stockholders' equity | $ 8,243,546 | $ 11,379,288 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 17,726,601 | 16,393,171 |
Common stock, shares outstanding | 17,726,601 | 16,393,171 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 6,813,825 | $ 3,710,272 | $ 18,177,626 | $ 11,022,089 |
Cost of revenues | 3,917,365 | 2,219,275 | 10,568,392 | 6,344,516 |
Gross profit | 2,896,460 | 1,490,997 | 7,609,234 | 4,677,573 |
Operating Expenses: | ||||
General and administrative | 2,080,037 | 2,342,103 | 9,219,274 | 5,849,828 |
Sales and marketing | 1,824,938 | 2,271,892 | 5,986,209 | 4,709,519 |
Research and development | 759,686 | 560,242 | 2,118,965 | 1,608,895 |
Total operating expenses | 4,664,661 | 5,174,237 | 17,324,448 | 12,168,242 |
Operating loss | (1,768,201) | (3,683,240) | (9,715,214) | (7,490,669) |
Other (income) expense | ||||
Interest expense | 22,787 | 639 | 34,116 | 2,500 |
Other (income) expense | 48,632 | (61,214) | 1,181 | (124,217) |
Total other (income) expense | 71,419 | (60,575) | 35,297 | (121,717) |
Loss before provision for income taxes | (1,839,620) | (3,622,665) | (9,750,511) | (7,368,952) |
Provision for income taxes | 800 | |||
Net loss | $ (1,839,620) | $ (3,622,665) | $ (9,751,311) | $ (7,368,952) |
Weighted average shares outstanding - basic and diluted | 17,711,132 | 15,323,776 | 17,108,075 | 13,140,280 |
Weighted average net loss per share - basic and diluted | $ (0.10) | $ (0.24) | $ (0.57) | $ (0.56) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Total | Preferred Stock | Common Stock [Member] | Additional Paid-in Capital | Subscription Receivable - Related Party | Accumulated Deficit |
Balance at Dec. 31, 2018 | $ 5,352,930 | $ 117 | $ 21,857,017 | $ (7,447) | $ (16,496,757) | |
Balance, shares at Dec. 31, 2018 | 11,708,041 | |||||
Stock option compensation | 789,106 | 789,106 | ||||
Restricted stock unit compensation | 204,925 | 204,925 | ||||
Warrants exercised | 873,403 | $ 3 | 873,400 | |||
Warrants exercised, shares | 274,224 | |||||
Stock options exercised | 81,459 | $ 1 | 81,458 | |||
Stock options exercised, shares | 70,703 | |||||
Stock options exercised – cashless | ||||||
Stock options exercised – cashless, shares | 2,188 | |||||
Shares issued for services | 555,150 | $ 1 | 555,149 | |||
Shares issued for services, shares | 115,000 | |||||
Warrants exercised – cashless | $ 2 | (2) | ||||
Warrants exercised – cashless, shares | 174,502 | |||||
Shares issued to investor from prior offering | ||||||
Shares issued to investor from prior offering, shares | 2,513 | |||||
Common stock issued for cash | 12,075,000 | $ 40 | 12,074,960 | |||
Common stock issued for cash, shares | 4,025,000 | |||||
Offering costs | (980,123) | (980,123) | ||||
Net loss | (7,368,952) | (7,368,952) | ||||
Balance at Sep. 30, 2019 | 11,582,898 | $ 164 | 35,455,890 | (7,447) | (23,865,709) | |
Balance, shares at Sep. 30, 2019 | 16,372,171 | |||||
Balance at Jun. 30, 2019 | 3,726,137 | $ 123 | 23,976,505 | (7,447) | (20,243,044) | |
Balance, shares at Jun. 30, 2019 | 12,331,348 | |||||
Stock option compensation | 272,074 | 272,074 | ||||
Restricted stock unit compensation | 102,734 | 102,734 | ||||
Stock options exercised | 9,741 | $ 1 | 9,740 | |||
Stock options exercised, shares | 13,635 | |||||
Stock options exercised – cashless | 12,075,000 | $ 40 | 12,074,960 | |||
Stock options exercised – cashless, shares | 4,025,000 | |||||
Common stock issued for cash | ||||||
Common stock issued for cash, shares | 2,188 | |||||
Offering costs | (980,123) | (980,123) | ||||
Net loss | (3,622,665) | (3,622,665) | ||||
Balance at Sep. 30, 2019 | 11,582,898 | $ 164 | 35,455,890 | (7,447) | (23,865,709) | |
Balance, shares at Sep. 30, 2019 | 16,372,171 | |||||
Balance at Dec. 31, 2019 | 6,835,418 | $ 164 | 35,857,835 | (7,447) | (29,015,134) | |
Balance, shares at Dec. 31, 2019 | 16,393,171 | |||||
Stock option compensation | 302,510 | 302,510 | ||||
Stock option compensation modification | 1,434,132 | $ 8 | 1,434,124 | |||
Stock option compensation modification, shares | 822,500 | |||||
Restricted stock unit compensation | 384,200 | 384,200 | ||||
Restricted stock unit compensation, shares | ||||||
Stock options exercised | 72,160 | $ 1 | 72,159 | |||
Stock options exercised, shares | 70,394 | |||||
Stock options exercised – cashless | ||||||
Stock options exercised – cashless, shares | 2,645 | |||||
Shares issued for vested restricted stock units | ||||||
Shares issued for vested restricted stock units, shares | 38,925 | |||||
Shares issued for legal services and settlement of payables and accrued liabilities | 567,613 | $ 2 | 567,611 | |||
Shares issued for legal services and settlement of payables and accrued liabilities, shares | 254,535 | |||||
Shares issued for settlement | $ 233,853 | $ 1 | 233,852 | |||
Shares issued for settlement, shares | 84,431 | |||||
Shares issued for services | $ 145,200 | $ 1 | 145,199 | |||
Shares issued for services, shares | 60,000 | |||||
Net loss | (9,751,311) | (9,751,311) | ||||
Balance at Sep. 30, 2020 | 223,775 | $ 177 | 38,997,490 | (7,447) | (38,766,445) | |
Balance, shares at Sep. 30, 2020 | 17,726,601 | |||||
Balance at Jun. 30, 2020 | 1,880,960 | $ 176 | 38,815,056 | (7,447) | (36,926,825) | |
Balance, shares at Jun. 30, 2020 | 17,692,201 | |||||
Stock option compensation | 24,277 | 24,277 | ||||
Restricted stock unit compensation | 99,303 | 99,303 | ||||
Restricted stock unit compensation, shares | ||||||
Stock options exercised | 38,335 | $ 1 | 38,334 | |||
Stock options exercised, shares | 26,525 | |||||
Shares issued for vested restricted stock units | ||||||
Shares issued for vested restricted stock units, shares | 1,875 | |||||
Shares issued for settlement | 20,520 | 20,520 | ||||
Shares issued for settlement, shares | 6,000 | |||||
Net loss | (1,839,620) | (1,839,620) | ||||
Balance at Sep. 30, 2020 | $ 223,775 | $ 177 | $ 38,997,490 | $ (7,447) | $ (38,766,445) | |
Balance, shares at Sep. 30, 2020 | 17,726,601 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (9,751,311) | $ (7,368,952) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 55,319 | 51,243 |
Stock-based compensation | 2,610,412 | 1,485,181 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12,226 | (8,299) |
Deferred expense | 9,003 | |
Insurance deposit | (749,454) | |
Other current assets | (51,154) | (34,308) |
Accounts payable | 596,840 | 202,744 |
Accrued liabilities | 1,159,323 | (285,288) |
Insurance reserve | 188,223 | 292,195 |
Deferred revenues | (10,564) | (8,027) |
Net cash used in operating activities | (5,940,140) | (5,664,508) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (1,208) | |
Deposits and other | (5,000) | |
Net cash used in investing activities | (6,208) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 72,160 | 81,459 |
Proceeds from note payable | 2,004,175 | |
Principal repayment on note payable | (5,000) | |
Proceeds from exercise of warrants | 873,403 | |
Proceeds from sale of common stock | 12,075,000 | |
Offering costs associated with underwriters in public offering | (753,750) | |
Offering costs | (226,373) | |
Net cash provided by financing activities | 2,071,335 | 12,049,739 |
Decrease in cash and cash equivalents | (3,868,805) | 6,379,023 |
Cash and cash equivalents, beginning of period | 10,657,140 | 6,764,870 |
Cash and cash equivalents, end of period | 6,788,335 | 13,143,893 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | $ 800 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 – NATURE OF OPERATIONS HyreCar Inc. (which may be referred to herein as “HyreCar,” the “Company,” “we,” “us” or “our”) was incorporated on November 24, 2014 (“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”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 prior public offerings and cash received on April 13, 2020 through a Paycheck Protection Plan Loan (“PPP Loan”). T he PPP Loan proceeds were used for payroll, covered rent and other covered payments and is expected to be forgiven based on current information available. Due to COVID-19, we have examined operational expenses appropriate for the situation. The PPP Loan, in addition to our existing capital and the ability to reduce expense levels further if necessary, depending on the duration of the COVID-19 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, and 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. Refer to Part I, Item 1A of the 2019 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors,” for more information. Basis of Presentation – Unaudited Interim Financial Information The unaudited interim consolidated 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 consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary 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 nine-month periods are unaudited. Unaudited interim consolidated results are not necessarily indicative of the results for the full fiscal year. 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, 2019 and notes thereto that are included in the Company’s Annual Report on Form 10-K. Use of Estimates The preparation of consolidated 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 and estimates for future contingent customer incentive obligations, calculating 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 Level 1 Level 2 Level 3 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 September 30, 2020 and December 31, 2019. 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. Insurance Reserve The Company records a loss reserve for physical damage and other liability coverage caused to owner vehicles up to the Company's insurance deductibles, which vary by state. 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 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. While certain liability insurance 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 and the results of related 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 Recognition The Company generates the majority of its revenue from its ridesharing marketplace that connects vehicle owners and drivers and the related insurance issued for each rental. The Company also recognizes revenue from other sources such as referrals, motor vehicle record fees (application fees), late rental fees, dealership subscription fees, and other fees charged to drivers in specific situations. In applying the guidance of ASC 606, 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 companies 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. The Company defers revenue in all instances when the earnings process is not yet complete. The following is a breakout of revenue components by subcategory for the three and nine months ended September 30, 2020 and 2019. Three Months ended September 30, 2020 Three Months ended Nine Months ended Nine Months ended Insurance and administration fees $ 3,422,809 $ 1,848,524 $ 9,346,517 $ 5,390,289 Transaction fees 3,019,518 1,614,001 8,077,555 4,385,885 Other fees 428,886 382,361 1,055,444 1,640,232 Incentives and rebates (57,388 ) (134,614 ) (301,890 ) (394,317 ) Net revenue $ 6,813,825 $ 3,710,272 $ 18,177,626 $ 11,022,089 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 o n 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, motor vehicle records (application fees), and dealer subscription 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. Cost of Revenues Cost of revenues 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. Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising expense was $1,696,452 and $1,888,931 for the nine months ended September 30, 2020 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’s requisite vesting period and over the nonemployee’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 September 30, 2020 Three Months ended September 30, 2019 Nine months ended September 30, 2020 Nine months ended September 30, 2019 General and administrative $ 77,101 $ 479,308 $ 2,149,160 $ 1,155,482 Sales and marketing 27,605 71,233 287,680 241,346 Research and development $ 39,394 $ 24,092 $ 173,572 $ 88,353 Loss per Common Share The Company presents basic loss per share (“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 nine months ended September 30, 2020 2,754,945 options or warrants excluded, 301,700 and 351,900 restricted stock units excluded, and 100,000 and 100,000 forfeitable restricted stock shares excluded, respectively. 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 has historically relied on a two primary insurance brokers and underwriters to provide automobile insurance on vehicles in service. There are multiple brokers and carriers who issue this type of insurance coverage, and the Company is regularly making 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 underwriter would have a material effect on our operations. New Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 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 several 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 the provisions of the new standard, but it is not expected to have a significant impact on the Company. 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, 2020, 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. In January 2020, the FASB issued ASU No. 2020-01, "Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815", which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This guidance is effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company. In August 2020, the FASB issued ASU No. 2020-06, “Debt - Debt In October 2020, the FASB issued ASU No. 2020-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Accounting for Premium Amortization on Purchased Callable Debt Securities", which clarifies amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess shall be amortized to the next call date. This new standard will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company. 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 3 – COMMITMENTS AND CONTINGENCIES Legal Proceedings We are not currently involved in any significant legal arbitration or governmental proceedings, and we are not aware of any claims or actions pending or threatened against us. From time to time, as an operating business, we are involved in disputes (both formal and informal) with customer, partners and employees. The resolution of which we do not anticipate would have a material adverse impact to the financial statements. |
Debt and Liabilities
Debt and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT AND LIABILITIES | NOTE 4 – DEBT AND LIABILITIES Accrued Liabilities A summary of accrued liabilities as of September 30, 2020 and December 31, 2019 is as follows: 2020 2019 Accrued payables $ 1,669,736 $ 394,896 Driver deposit 210,401 161,601 Deferred rent 67,591 98,000 Payroll liabilities — 161,113 Accrued interest expense 22,781 — Other accrued liabilities — 88,302 Accrued liabilities $ 1,970,509 $ 903,912 Note Payable On April 13, 2020, 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 Subject to the terms of the Note, the PPP Loan bears interest at a fixed rate of one ( 1 two years 24 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 September 30, 2020, t he PPP amount payable under the Note is $1,999,175. T |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 5 – STOCKHOLDERS’ 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”). 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. In 2018, the Board of Directors adopted the HyreCar Inc. 2018 Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the grant of equity awards to purchase shares of common stock. Up to 3,000,000 shares of common stock may be issued pursuant to awards granted under the 2018 Plan, subject to increases that occur starting in 2021. The 2018 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board. No stock options were granted during the nine months ended September 30, 2020. During the nine months ended September 30, 2019, the Board of Directors approved the grant of 1,125,000 stock options to various contractors and employees. The 2019 granted options had exercise prices ranging from $3.20 to $5.53 ten years two four years used the Black- three and nine months ended September 30, 2019 Three Month Ended Nine Months Ended September 30, 2019 Expected volatility 45% 45% Risk-free interest rate 1.73% 1.73% - 2.61% Expected life in years 5.56 5.56 Expected dividend yield 0% 0% Stock -based compensation expense for stock options for the three months ended September 30, 2020 and 2019 was $24,227 and $272,074, respectively , and $ 302,510 789,106 the total estimated remaining stock-based compensation expense for unvested stock options is approximately $ On April 29, 2020, the Compensation Committee of the Board of Directors approved an exchange (the “Exchange”) of grants under the HyreCar Inc. 2018 Equity Incentive Plan (the “2018 Plan”) previously made to executive officers and directors of the Company (the “Grantees”). The Board of Directors, upon recommendation from the Committee, approved the Exchange on April 29, 2020. Pursuant to the Exchange, the Grantees agreed to the cancellation of options to purchase an aggregate of 1,487,500 shares of the Company’s common stock under the 2018 Plan in exchange for the issuance of an aggregate of 822,500 shares of fully-vested restricted stock under the 2018 Plan. The Exchange was a cancellation of stock options with a concurrent replacement award and was accounted for as a modification. For the three and six months ended June 30, 2020, the Company recognized additional compensation expense of $1,434,132 pertaining to this modification. As there was no future service or performance conditions associated with the replacement award, this compensation cost was fully recognized during the second quarter of 2020. Restricted Stock Units and Shares Issued for Services and Other During the nine months ended September 30, 2019, the Company granted 360,000 restricted stock units to employees of the Company that generally vest between one four Stock-based compensation related to restricted stock units for the three months ended September 30, 2020 and 2019 was $99,303 and $102,734, respectively. Stock-based compensation related to restricted stock units for the nine months ended September 30, 2020 and 2019 was $384,200 and $204,925, respectively. During the , the Company granted a contractor restricted stock units that vest upon achieving specified milestones and business objectives. None of these milestones or objectives have been achieved to date and none are expected to vest under current circumstances. During the nine months ended September 30, 2020, the Company granted shares of common stock in exchange for legal and consulting services and the Company recognized stock-based compensation of $ based on the closing price of the Company’s common stock on the date of grant. During the nine months ended September 30, 2020, the Company also issued shares of common stock as legal settlement to Nathaniel Farber, a founder of the Company pursuant to Case No. CGC- - pertaining to the buyback of the Claimant Founders’ stock at the time of the IPO. Stock-based compensation of $ was recognized during the nine months ended September 30, 2020 based on the closing price of the Company’s common stock on the date of issue. During the nine months ended September 30, 2019, the Company granted shares of common stock in exchange for legal and consulting services provided by service providers. The Company valued the grants at $ based on the closing price of the Company’s common stock on the grant date. During the nine months ended September 30, 2019, the Company granted 10,000 shares of common stock to one consultant for services based on agreement entered into in January 2019. The Company valued the shares based on the closing price of the Company’s common stock on the date of the agreement and recognized $27,500 in stock-based compensation. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS Insurance The president of the Company’s primary insurance broker through June 2020 is also a minority stockholder and holder of warrants. As of September 30, 2020 and December 31, 2019, the Company had outstanding balances to the insurer totaling $0 and $101,167 , included in accounts payable or accrued liabilities, respectively. During the nine months ended September 30, 2020 and 2019, the Company paid the insurer approximately $2,580,136 and $3,643,196, respectively. On June 15, 2020, the Company completed moving its primary and excess automobile insurance liability programs over to a new insurance provider and is no longer using the related party broker. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Management’s Plans | 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 prior public offerings and cash received on April 13, 2020 through a Paycheck Protection Plan Loan (“PPP Loan”). T he PPP Loan proceeds were used for payroll, covered rent and other covered payments and is expected to be forgiven based on current information available. Due to COVID-19, we have examined operational expenses appropriate for the situation. The PPP Loan, in addition to our existing capital and the ability to reduce expense levels further if necessary, depending on the duration of the COVID-19 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, and 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. Refer to Part I, Item 1A of the 2019 Form 10-K and Part II, Item 1A of this Form 10-Q, in each case under the heading “Risk Factors,” for more information. |
Basis of Presentation - Unaudited Interim Financial Information | Basis of Presentation – Unaudited Interim Financial Information The unaudited interim consolidated 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 consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary 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 nine-month periods are unaudited. Unaudited interim consolidated results are not necessarily indicative of the results for the full fiscal year. 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, 2019 and notes thereto that are included in the Company’s Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates The preparation of consolidated 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 and estimates for future contingent customer incentive obligations, calculating insurance reserves, and the measurement of the Company’s stock-based compensation. |
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 Level 1 Level 2 Level 3 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 September 30, 2020 and December 31, 2019. 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 | 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. |
Insurance Reserves | Insurance Reserve The Company records a loss reserve for physical damage and other liability coverage caused to owner vehicles up to the Company's insurance deductibles, which vary by state. 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 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. While certain liability insurance 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 and the results of related 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 Recognition | Revenue Recognition The Company generates the majority of its revenue from its ridesharing marketplace that connects vehicle owners and drivers and the related insurance issued for each rental. The Company also recognizes revenue from other sources such as referrals, motor vehicle record fees (application fees), late rental fees, dealership subscription fees, and other fees charged to drivers in specific situations. In applying the guidance of ASC 606, 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 companies 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. The Company defers revenue in all instances when the earnings process is not yet complete. The following is a breakout of revenue components by subcategory for the three and nine months ended September 30, 2020 and 2019. Three Months ended September 30, 2020 Three Months ended Nine Months ended Nine Months ended Insurance and administration fees $ 3,422,809 $ 1,848,524 $ 9,346,517 $ 5,390,289 Transaction fees 3,019,518 1,614,001 8,077,555 4,385,885 Other fees 428,886 382,361 1,055,444 1,640,232 Incentives and rebates (57,388 ) (134,614 ) (301,890 ) (394,317 ) Net revenue $ 6,813,825 $ 3,710,272 $ 18,177,626 $ 11,022,089 |
Principal Agent Considerations | 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 o n 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, motor vehicle records (application fees), and dealer subscription 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. |
Cost of Revenues | Cost of Revenues Cost of revenues 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. |
Advertising | Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising expense was $1,696,452 and $1,888,931 for the nine months ended September 30, 2020 |
Stock-Based Compensation | 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’s requisite vesting period and over the nonemployee’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 September 30, 2020 Three Months ended September 30, 2019 Nine months ended September 30, 2020 Nine months ended September 30, 2019 General and administrative $ 77,101 $ 479,308 $ 2,149,160 $ 1,155,482 Sales and marketing 27,605 71,233 287,680 241,346 Research and development $ 39,394 $ 24,092 $ 173,572 $ 88,353 |
Loss per Common Share | Loss per Common Share The Company presents basic loss per share (“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 nine months ended September 30, 2020 2,754,945 options or warrants excluded, 301,700 and 351,900 restricted stock units excluded, and 100,000 and 100,000 forfeitable restricted stock shares excluded, respectively. |
Concentration of Credit Risk | 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 | Other Concentrations The Company has historically relied on a two primary insurance brokers and underwriters to provide automobile insurance on vehicles in service. There are multiple brokers and carriers who issue this type of insurance coverage, and the Company is regularly making 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 underwriter would have a material effect on our operations. |
New Accounting Standards | New Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 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 several 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 the provisions of the new standard, but it is not expected to have a significant impact on the Company. 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, 2020, 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. In January 2020, the FASB issued ASU No. 2020-01, "Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815", which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This guidance is effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company. In August 2020, the FASB issued ASU No. 2020-06, “Debt - Debt In October 2020, the FASB issued ASU No. 2020-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Accounting for Premium Amortization on Purchased Callable Debt Securities", which clarifies amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess shall be amortized to the next call date. This new standard will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of breakout of revenue components by subcategory | Three Months ended September 30, 2020 Three Months ended Nine Months ended Nine Months ended Insurance and administration fees $ 3,422,809 $ 1,848,524 $ 9,346,517 $ 5,390,289 Transaction fees 3,019,518 1,614,001 8,077,555 4,385,885 Other fees 428,886 382,361 1,055,444 1,640,232 Incentives and rebates (57,388 ) (134,614 ) (301,890 ) (394,317 ) Net revenue $ 6,813,825 $ 3,710,272 $ 18,177,626 $ 11,022,089 |
Schedule of stock-based compensation | Three Months ended September 30, 2020 Three Months ended September 30, 2019 Nine months ended September 30, 2020 Nine months ended September 30, 2019 General and administrative $ 77,101 $ 479,308 $ 2,149,160 $ 1,155,482 Sales and marketing 27,605 71,233 287,680 241,346 Research and development $ 39,394 $ 24,092 $ 173,572 $ 88,353 |
Debt and Liabilities (Tables)
Debt and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of accrued liabilities | 2020 2019 Accrued payables $ 1,669,736 $ 394,896 Driver deposit 210,401 161,601 Deferred rent 67,591 98,000 Payroll liabilities — 161,113 Accrued interest expense 22,781 — Other accrued liabilities — 88,302 Accrued liabilities $ 1,970,509 $ 903,912 |
Stockholders_ Deficit (Tables)
Stockholders’ Deficit (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Black Scholes pricing model with range of inputs | Three Month Ended Nine Months Ended September 30, 2019 Expected volatility 45% 45% Risk-free interest rate 1.73% 1.73% - 2.61% Expected life in years 5.56 5.56 Expected dividend yield 0% 0% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Insurance and administration fees | $ 3,422,809 | $ 1,848,524 | $ 9,346,517 | $ 5,390,289 |
Transaction fees | 3,019,518 | 1,614,001 | 8,077,555 | 4,385,885 |
Other fees | 428,886 | 382,361 | 1,055,444 | 1,640,232 |
Incentives and rebates | (57,388) | (134,614) | (301,890) | (394,317) |
Net revenue | $ 6,813,825 | $ 3,710,272 | $ 18,177,626 | $ 11,022,089 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
General and administrative [Member] | ||||
Stock-based compensation | $ 77,101 | $ 479,308 | $ 2,149,160 | $ 1,155,482 |
Sales and marketing [Member] | ||||
Stock-based compensation | 27,605 | 71,233 | 287,680 | 241,346 |
Research and development [Member] | ||||
Stock-based compensation | $ 39,394 | $ 24,092 | $ 173,572 | $ 88,353 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Summary of Significant Accounting Policies (Textual) | ||
Stock options and warrants | 1,179,464 | 2,754,945 |
Restricted stock | 301,700 | 351,900 |
Advertising expense | $ 1,696,452 | $ 1,888,931 |
Insured by Federal Deposit Insurance Corporation | $ 250,000 | |
Forfeitable restricted stock shares | 100,000 | 100,000 |
Debt and Liabilities (Details)
Debt and Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Accrued payables | $ 1,669,736 | $ 394,896 |
Driver deposit | 210,401 | 161,601 |
Deferred rent | 67,591 | 98,000 |
Payroll liabilities | 161,113 | |
Accrued interest expense | 22,781 | |
Other accrued liabilities | 88,302 | |
Accrued liabilities | $ 1,970,509 | $ 903,912 |
Debt and Liabilities (Details T
Debt and Liabilities (Details Textual) - USD ($) | Apr. 13, 2020 | Sep. 30, 2020 |
Debt and Liabilities (Textual) | ||
Principal amount | $ 2,004,175 | |
Percentage of fixed rate | 1.00% | |
Note payable | $ 1,999,175 | |
Initial term | 2 years |
Stockholders_ Deficit (Details)
Stockholders’ Deficit (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 45.00% | 45.00% | |
Risk-free interest rate | 1.73% | ||
Expected life in years | 5 years 6 months 21 days | ||
Expected dividend yield | 0.00% | 0.00% | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.73% | ||
Expected life in years | 5 years 6 months 21 days | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.61% | ||
Expected life in years | 6 years 3 months |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Apr. 29, 2020shares | Sep. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($)consultant | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)consultant$ / sharesshares | Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2019$ / sharesshares | |
Common stock, shares authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Common stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||
Total forfeited | shares | 1,487,500 | |||||||||
Stock-based compensation | $ 213,332 | |||||||||
Option vested year | 4 years | |||||||||
Stock-based compensation | $ 24,227 | 2,610,412 | $ 1,485,181 | |||||||
Stock option expense | 24,277 | $ 272,074 | 302,510 | 789,106 | ||||||
Recognized stock-based compensation | $ 255,717 | |||||||||
Stock-based compensation expenses, description | Stock-based compensation related to restricted stock units for the nine months ended September 30, 2020 and 2019 was $384,200 and $204,925, respectively. </span>As of September 30, 2020, unrecognized compensation expense related to the unvested restricted stock units is $520,454 and is expected to be recognized over approximately 1.6 years." id="sjs-G11">Stock-based compensation related to restricted stock units for the three months ended September 30, 2020 and 2019 was $99,303 and $102,734, respectively. <span class="ng-scope" style="color: #000000; font-family: 'Times New Roman'; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 48px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important;">Stock-based compensation related to restricted stock units for the nine months ended September 30, 2020 and 2019 was $384,200 and $204,925, respectively. </span>As of September 30, 2020, unrecognized compensation expense related to the unvested restricted stock units is $520,454 and is expected to be recognized over approximately 1.6 years. | |||||||||
Unvested restricted stock expense | $ 99,303 | $ 102,734 | $ 384,200 | 204,925 | ||||||
Acquisition of stock, description | The 2018 Plan provides for the grant of equity awards to purchase shares of common stock. Up to 3,000,000 shares of common stock may be issued pursuant to awards granted under the 2018 Plan, subject to increases that occur starting in 2021. The 2018 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board. | 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. | ||||||||
Granted restricted stock units vest | shares | 100,000 | |||||||||
Granted restricted stock | shares | 360,000 | |||||||||
Granted common shares | shares | 78,431 | |||||||||
Warrants exercised for cash | 873,403 | |||||||||
Weighted average period | 6 months | |||||||||
Unvested stock options | $ 23,181 | |||||||||
Aggregate of shares of fully-vested restricted stock | shares | 822,500 | |||||||||
Additional compensation expenses | $ 1,434,132 | $ 1,434,132 | ||||||||
Legal and Consulting Services [Member] | ||||||||||
Fair value of options granted | $ 527,650 | |||||||||
Number of shares, Granted | shares | 314,535 | |||||||||
Granted common shares | shares | 105,000 | |||||||||
Number of service providers | consultant | 2 | 2 | ||||||||
Consulting Services [Member] | ||||||||||
Common stock shares issued | shares | 10,000 | |||||||||
Stock-based compensation | $ 27,500 | |||||||||
Number of consultant | consultant | 1 | 1 | ||||||||
Restricted Stock [Member] | ||||||||||
Restricted stock option vest year | 1 year | |||||||||
Common Stock [Member] | ||||||||||
Common stock, shares authorized | shares | 50,000,000 | 50,000,000 | ||||||||
Common stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||
Stock option expense | ||||||||||
Unvested restricted stock expense | ||||||||||
Warrants exercised for cash, shares | shares | 274,224 | |||||||||
Warrants exercised for cash | $ 3 | |||||||||
Stock Options [Member] | ||||||||||
Stock option expire term | 10 years | |||||||||
Option vested year | 2 years | |||||||||
Stock-based compensation | $ 272,074 | $ 302,510 | $ 789,106 | |||||||
Fair value of options granted | $ 2,077,801 | |||||||||
Number of shares, Granted | shares | 1,125,000 | |||||||||
Stock options exercise price upper maximum | $ / shares | $ 5.53 | |||||||||
Stock options exercise price lower minimum | $ / shares | $ 3.20 | |||||||||
Restricted stock option vest year | 4 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transactions (Textual) | |||
Outstanding liabilities to insurer | $ 0 | $ 101,167 | |
Payment to insurer | $ 2,580,136 | $ 3,643,196 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
Apr. 29, 2020shares | |
Subsequent Events (Textual) | |
Aggregate of shares of fully-vested restricted stock | 822,500 |