May 24, 2018
Ramy El-Batrawi
Chief Executive Officer
YayYo, Inc.
433 No. Camden Drive, Suite 600
Beverly Hills, California 90210
Re: YayYo, Inc.
Registration Statement on Form S-1
Filed April 30, 2018
File No. 333-224549
Dear Mr. El-Batrawi:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Form S-1 Filed April 30, 2018
Cover Page
1. Please disclose clearly on the cover page whether the offering is
contingent upon the
shares being listed on the Nasdaq Capital Market or quoted on the OTCQX.
Also, please
clarify the status of your Nasdaq listing application.
2. We note your disclosure that the selling securityholder will sell the
shares "at market
prices prevailing at the time of sale or at negotiated prices." Given
that there is no
existing public market for your common stock, please revise to disclose
the offering price
at which the selling securityholder will offer and sell the shares
registered for resale.
Refer to paragraph 16 of Securities Act, Schedule A, and Item 501(b)(3)
of Regulation
Ramy El-Batrawi
FirstName LastNameRamy El-Batrawi
YayYo, Inc.
Comapany NameYayYo, Inc.
May 24, 2018
May 24, 2018 Page 2
Page 2
FirstName LastName
S-K. We will not object if you disclose a fixed price at which the
selling securityholder
will sell, and indicate that the selling securityholder will sell at
that price until your shares
are listed on the Nasdaq Capital Market or quoted on the OTCQX, if
ever, and thereafter
at prevailing market prices or privately negotiated prices.
3. Please indicate on the cover page whether you have elected not to use
the extended
transition period for complying with any new or revised financial
accounting standards
provided pursuant to Section 7(a)(2)(B) of the Securities Act. Refer
to SEC Release No.
33-10332.
Market Data, page 5
4. Please move this section and the section entitled "Special Note
Regarding Forward-
Looking Statements" to a place after your risk factors section. Refer
to Rule 421(d) of
Regulation C.
Risk Factors, page 11
5. You disclose that you intend to apply to be listed on the Nasdaq
Capital Market. If your
application is approved, it appears you would be a "controlled
company" as defined by the
Nasdaq Capital Market, given that your CEO owns a majority of your
outstanding shares
of common stock. Please advise, and if applicable, provide appropriate
disclosure on the
prospectus cover page, prospectus summary, and risk factors.
"We do not presently have effective internal controls...", page 36
6. Please expand this risk factor to explain how your internal controls
are not effective. In an
appropriate place in the filing, please discuss your plans for
ensuring that your internal
controls become effective.
Capitalization Table, page 43
7. You refer to pro forma as adjusted information that gives effect to
the full exercise of
Selling Securityholder Warrants. Please tell us whether you have
formal agreements from
the warrant holders of their intent to exercise such warrants. If not,
tell us how you
determined that the sale of such warrants is factually supportable or
revise to remove this
adjustment from your Capitalization table. We refer you to Article 11
of Regulation
S-X.
Dilution, page 44
8. Please reconcile the 26,062,676 shares of common stock outstanding as
of April 10, 2018
to the 25,770,551 outstanding at December 31, 2017, as adjusted for
the common stock
issuances noted in your subsequent events footnote. To the extent
shares were issued after
the most recent balance sheet date included in the filing, ensure that
your subsequent
events footnote adequately addresses such issuances. Refer to ASC
855-10-50-2.
Ramy El-Batrawi
FirstName LastNameRamy El-Batrawi
YayYo, Inc.
Comapany NameYayYo, Inc.
May 24, 2018
May 24, 2018 Page 3
Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 48
9. Please revise to include a discussion of the factors that impacted the
significant increase in
revenue during fiscal 2017 and include any key performance indicators
that management
uses in managing the business. Similarly include a discussion of the
reasons for the
material changes in general and administrative and sales and marketing
expense. Also,
disclose what costs are included in your cost of goods sold. Refer to
Item 303(a) of
Regulation S-K and Section III.B of SEC Release No. 33-8350.
Liquidity, Capital Resources and Plan of Operations, page 49
10. You state that "if [you] are successful in raising capital through the
sale of shares offered
for sale in this Prospectus [you] believe that the Company will have
sufficient cash
resources to fund its plan of operations for the next twelve months."
Please explain this
disclosure considering the fact that you will not receive any proceeds
from this offering.
Also, tell us how this compares to your disclosures on page 14 where
you state you do not
believe that your cash flow from operations and existing capital
resources will be
sufficient to fund your operations and commitments for the next twelve
months. Further,
revise to disclose the minimum period of time that you will be able to
conduct your
planned operations using currently available cash resources without
regard to any
proceeds you may expect to receive from the exercise of warrants or
additional financing.
We refer you to FRC 501.03(a) and Section IV of SEC Release No.
33-8350.
Contractual Obligations, Commitments and Contingencies, page 51
11. We note your disclosure that you entered into a series of vehicle
leasing agreements with
ACME Auto Leasing with an average lease period of one month.
Disclosure on page 53
indicates, however, that the approximate lease term for vehicles
leased from ACME by
District Cars, LLC, is 36 months. Please reconcile or advise. To the
extent the lease
period has increased since December 31, 2017, revise to clarify.
Financings and Securities Offerings, page 52
12. We note that your outstanding debt is subject to certain restrictive
financial covenants. To
the extent future non-compliance of any debt covenant is reasonably
likely, please
disclose and discuss the specific terms of any such covenants, as well
as the terms of your
most significant and restrictive covenants. Also, disclose whether you
are in compliance
with your outstanding restrictive and affirmative covenants. Please
refer to Sections I.D
and IV.C of SEC Release No. 33-8350.
Ramy El-Batrawi
FirstName LastNameRamy El-Batrawi
YayYo, Inc.
Comapany NameYayYo, Inc.
May 24, 2018
May 24, 2018 Page 4
Page 4
FirstName LastName
Management, page 67
13. Please revise to clarify the business experience during the past five
years for each director
and executive officer. Refer to Item 401(e) of Regulation S-K.
Principal Stockholders, page 76
14. You indicate here that Ramy El-Batrawi, your Chief Executive Officer,
had 59.18%
beneficial ownership of the company as of April 10, 2018, and your
risk factor on page 20
indicates that he had beneficial ownership of 54.7% as of the date of
the prospectus.
Please revise to provide your beneficial ownership disclosure as of
the most recent
practicable date and ensure that this disclosure is consistent
throughout the filing. Refer to
Item 403(a) of Regulation S-K.
Certain Relationships and Related Party Transactions, page 78
15. Your current disclosure suggests that all of the transactions
discussed in this section are
with related persons, but it is unclear whether that is the case.
Please revise to include
here only your transactions with related persons, as such term is
defined in Item 404 of
Regulation S-K. For each such transaction, please ensure that you
disclose the name of
the related party and the basis on which such person is related, as
called for by Item
404(a). As one example only, it is unclear from the disclosure
provided whether, and if
so, why, your Regulation A offering is considered a related party
transaction.
Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Stock-Based Compensation, page F-8
16. You state here that there were 11,203,400 and 10,873,400 options
outstanding as of
December 31, 2017 and 2016, respectively; however the table on page
F-16 indicates that
750,000 and 450,000 options were outstanding at these dates. Please
revise or explain.
Note 6. Lease Obligations, page F-13
17. You state that the fair value of the 350,000 common shares granted to
ACME in exchange
for favorable terms with the Hyundai leased assets was recorded as a
discount on the lease
obligations, which you are amortizing to interest expense over the
term of the lease.
Please tell us your basis in accounting for these costs as a reduction
to the liability rather
than part of the right-of-use asset.
Exhibit Index, page 93
18. Please explain the reference to the consent of AJ Robins in Exhibit
23.1 and the amended
opinions in Exhibit 23.2 and 23.3 or revise to remove such references.
19. For any exhibits not filed with this registration statement, but
included as exhibits to a
Ramy El-Batrawi
YayYo, Inc.
May 24, 2018
Page 5
prior filing, identify the prior filing by form type, Commission file
number, and date of
filing. In addition, you should expressly indicate that such exhibits
are incorporated by
reference. See Securities Act Rule 411(c) and (d).
Exhibits
20. Please file your agreements with ACME Auto Leasing, LLC, Hyundai USA,
and Penske
Automotive as exhibits to the registration statement, or advise. Refer
to Item 601(b)(10)
of Regulation S-K.
21. We note that several of your material agreement exhibits are or will
be filed as "forms of"
instead of in executed version. For agreements that have been
executed, please file the
fully-executed versions instead, or advise. As one example only, we
refer to Exhibit
10.13, Form of Registration Rights Agreement. If this document is the
Registration
Rights Agreement with the selling securityholder dated March 8, 2018,
as disclosed on
page 84 of the prospectus, please file the executed version of the
agreement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Megan Akst, Senior Staff Accountant, at (202) 551-3407
or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Matthew Derby,
Staff
Attorney, at (202) 551-3334 or Katherine Wray, Attorney-Advisor, at (202)
551-3483 with any
other questions.
FirstName LastNameRamy El-Batrawi
Division of
Corporation Finance
Comapany NameYayYo, Inc.
Office of
Information Technologies
May 24, 2018 Page 5 and Services
FirstName LastName