0001493152-20-014780.txt : 20200806 0001493152-20-014780.hdr.sgml : 20200806 20200805213324 ACCESSION NUMBER: 0001493152-20-014780 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 60 CONFORMED PERIOD OF REPORT: 20200630 FILED AS OF DATE: 20200806 DATE AS OF CHANGE: 20200805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: YayYo, Inc. CENTRAL INDEX KEY: 0001691077 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 813028414 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39132 FILM NUMBER: 201079523 BUSINESS ADDRESS: STREET 1: 433 NORTH CAMDEN DRIVE STREET 2: SUITE 600 CITY: LOS ANGELES STATE: CA ZIP: 90210 BUSINESS PHONE: 310 926 2643 MAIL ADDRESS: STREET 1: 433 NORTH CAMDEN DRIVE STREET 2: SUITE 600 CITY: LOS ANGELES STATE: CA ZIP: 90210 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2020

or

 

[  ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _____ to _______

 

Commission File Number: 001-39132

 

 

YAYYO, INC.

(exact name of registrant as specified in its charter)

 

Delaware   95-3261426

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

433 N. Camden Drive, Suite 600

Beverly Hills, California

  90210
(Address of principal executive offices)   (Zip Code)

 

(310) 926-2643

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol   Name of each exchange on which registered
None   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [X] Smaller reporting company [X] Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

31,981,374 shares of common stock, $0.000001 par value, as of August 5, 2020

 

 

 

 
 

 

TABLE OF CONTENTS

 

PART I FINANCIAL INFORMATION:  
     
Item 1. Financial Statements 1
     
  Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 (unaudited) 1
     
  Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 (unaudited) 2
     
  Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2020 and 2019 (unaudited) 3
     
  Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (unaudited) 4
     
  Notes to Condensed Consolidated Financial Statements (unaudited) 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
     
Item 4. Controls and Procedures 19
     
PART II OTHER INFORMATION:  
     
Item 1. Legal Proceedings 20
     
Item 1A. Risk Factors 21
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
     
Item 3. Defaults Upon Senior Securities 21
     
Item 4. Mine Safety Disclosures 21
     
Item 5. Other Information 21
     
Item 6. Exhibits 21
     
  Signatures 22

 

 ii 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1.

 

YAYYO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2020 and December 31, 2019

 

 

   June 30,   December 31, 
   2020   2019 
   (unaudited)     
ASSETS          
Current Assets:          
Cash  $103,240   $1,256,429 
Accounts receivable   43,562    59,331 
Prepaid expenses   549,404    782,900 
Total current assets   696,206    2,098,660 
           
Equipment, net   2,651    3,395 
Rental vehicles, net   6,362,989    4,737,047 
Deposit on vehicles   -    164,080 
Other assets   200,000    200,000 
TOTAL ASSETS  $7,261,846   $7,203,182 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts payable (including $526,076 and $394,183 to related party)  $1,334,521   $545,254 
Accrued expenses (including $0 and $171,665 to related party)   365,793    405,977 
Notes payables, current (net of discount of $12,383 and $32,289)   500,059    287,378 
Finance lease obligations, current   1,640,899    1,416,446 
Total current liabilities   3,841,272    2,655,055 
           
Note payable, net of current portion   149,900    - 
Finance lease obligations, net of current portion   1,458,486    984,119 
           
TOTAL LIABILITIES   5,449,658    3,639,174 
           
Commitments and contingencies   -    - 
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; nil shares issued and outstanding   -    - 
Common stock, $0.000001 par value; 90,000,000 shares authorized; 31,981,374 and 29,427,803 shares issued and outstanding   32    29 
Additional paid-in capital   29,468,133    28,735,894 
Accumulated deficit   (27,655,977)   (25,171,915)
Total stockholders’ deficit   1,812,188    3,564,008 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $7,261,846   $7,203,182 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

1
 

 

YAYYO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2020 and 2019 (unaudited)

 

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2020   2019   2020   2019 
                 
Revenue  $1,580,555   $1,696,917   $3,328,197   $3,475,518 
                     
Cost of revenue   1,295,059    962,071    2,696,350    2,044,241 
                     
Gross profit   285,496    734,846    631,847    1,431,277 
                     
Operating expenses:                    
Selling and marketing expenses   79,133    20,868    210,642    102,606 
General and administrative expenses   861,410    675,628    2,757,616    1,460,811 
Loss on the settlement of debt   -    12,900    -    252,900 
Total operating expenses   940,543    709,396    2,968,258    1,816,317 
                     
Loss from operations   (655,047)   25,450    (2,336,411)   (385,040)
                     
Other income (expense):                    
Interest and financing costs   (67,795)   (442,902)   (147,651)   (611,875)
Total other income (expense)   (67,795)   (442,902)   (147,651)   (611,875)
                     
Net loss  $(722,842)  $(417,452)  $(2,484,062)  $(996,915)
                     
Weighted average shares outstanding :                    
Basic   31,064,184    26,798,865    30,245,994    26,760,318 
Diluted   31,064,184    26,798,865    30,245,994    26,760,318 
                     
Loss per share                    
Basic  $(0.02)  $(0.02)  $(0.08)  $(0.04)
Diluted  $(0.02)  $(0.02)  $(0.08)  $(0.04)

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

2
 

 

YAYYO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three and Six Months Ended June 30, 2020 and 2019 (unaudited)

 

 

           Additional       Total 
   Common Stock   Paid-in   Accumulated   Stockholders’ 
   Shares   Amount   Capital   Deficit   Equity (Deficit) 
Balance, December 31, 2019   29,427,803   $29   $28,735,894   $(25,171,915)  $3,564,008 
                          
Stock option expense             457,242         457,242 
Net loss                  (1,761,220)   (1,761,220)
                          
Balance, March 31, 2020   29,427,803    29    29,193,136    (26,933,135)   2,260,030 
                          
Issuance of common stock for cash   2,553,571    3    274,997         275,000 
Net loss                  (722,842)   (722,842)
                          
Balance, June 30, 2020   31,981,374   $32   $29,468,133   $(27,655,977)  $1,812,188 
                          
Balance, December 31, 2018   26,718,676   $27   $19,193,151   $(21,241,694)  $(2,048,516)
                          
Issuance of common stock for settlement of debt   80,000         640,000         640,000 
Net loss                  (579,463)   (579,463)
                          
Balance, March 31, 2019   26,798,676    27    19,833,151    (21,821,157)   (1,987,979)
                          
Issuance of common stock for settlement of debt   4,300         34,400         34,400 
Net loss                  (417,452)   (417,452)
                          
Balance, June 30, 2019   26,802,976   $27   $19,867,551   $(22,238,609)  $(2,371,031)

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

3
 

 

YAYYO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

 

   2019   2018 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(2,484,062)  $(996,915)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   669,367    514,402 
Stock option expense   457,242    - 
Common stock issued for services   -    - 
Amortization of debt discounts   19,906    19,797 
Loss on the settlement of debt   -    252,900 
Changes in operating assets and liabilities:          
Accounts receivable   15,769    (65,115)
Prepaid expenses   233,496    (36,697)
Accounts payable   789,267    (214,585)
Accrued expenses   (40,184)   465,843 
Net cash used in operating activities   (339,199)   (60,370)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from notes payable   342,675    1,051,300 
Proceeds from sale of common stock   275,000    - 
Proceeds from advance from related party   150,000    - 
Repayment of advance from related party   (150,000)   - 
Repayment of notes payable   -    (508,394)
Repayment of finance lease obligations   (1,431,665)   (725,599)
Net cash provided by (used in) financing activities   (813,990)   (182,693)
           
NET INCREASE (DECREASE) IN CASH   (1,153,189)   (243,063)
           
CASH, BEGINNING OF PERIOD   1,256,429    277,444 
           
CASH, END OF PERIOD  $103,240   $34,381 
           
CASH PAID FOR:          
Interest  $127,745   $564,961 
Income taxes  $-   $- 
           
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES          
Payment of accounts payable/accrued expenses with common stock  $-   $421,500 
Value of equity recorded as debt discounts  $-   $- 
Finance lease obligations  $2,246,285   $510,136 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

4
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

Note 1 - Organization and Basis of Presentation

 

Organization and Line of Business

 

YayYo, Inc. (“YayYo” or the “Company”) was incorporated on June 21, 2016 under the laws of the state of Delaware originally as a limited liability company and subsequently changed to a C corporation. The accompanying financial statements are retroactively restated to present the Company as a C corporation from June 21, 2016. The Company rents cars to Uber and Lyft drivers.

 

Basis of Presentation

 

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

 

Risk and Uncertainties

 

In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The governors of New York, California and several other states, as well as mayors on many cities, have ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have been recommended by the federal authorities and authorities in many other states and cities. Since the beginning of 2020 and the spread of COVID-19, rideshare companies have increasingly been negatively impacted. As Americans practice social distancing and self-isolation, Uber, Lyft, and other rideshare companies have seen a steep decline in ridership and revenue, as a result. Given that rideshare drivers are both at risk themselves and of risk to the public, and in addition to decreased demand overall, less people are even still driving. The Company has seen a decline in revenue during the first half of 2020 which is having a negative impact on the cash flows of the business, but saw a positive upward movement in revenue the latter part of the second quarter ended June 30, 2020. The Company has seen increased demand from drivers wanting to rent cars for ridesharing purposes and new drivers renting cars for both rideshare and delivery gig economy. With the recent increase in the number of positive COVID-19 cases, the Company is not able to predict the ultimate impact that COVID -19 will have on its business. If another lockdown were to occur, the Company could be forced to significantly scale back its business operations and its growth plans, and could ultimately have a significant negative impact on the Company. The Company cannot at this time estimate the long term effect of this unprecedented situation on the rideshare market or delivery gig economy in general or the Company in particular.

 

Interim financial statements

 

The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading.

 

These statements reflect all adjustment, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the six months ended June 30, 2019 and notes thereto. The Company follows the same accounting policies in the preparation of interim report. Results of operations for the interim period are not indicative of annual results.

 

Note 2 – Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars, LLC, RideShare Car Rentals, LLC, RideYayYo, LLC and Savy, LLC. All significant intercompany transactions and balances have been eliminated.

 

5
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.

 

Cash Equivalents

 

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

 

Equipment and Rental Vehicles

 

Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Computer equipment 5 years
Vehicles 5 years

 

Long-Lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at June 30, 2020, the Company determined that no impairment charge was necessary.

 

Revenue Recognition

 

The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 1,631,250 warrants and 716,000 options outstanding as of June 30, 2020.

 

6
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 2,347,250 potentially dilutive securities outstanding at June 30, 2020.

 

Advertising Costs

 

The Company expenses the cost of advertising as incurred. Advertising costs for the six months ended June 30, 2020 and 2019 were $210,642 and $102,606, respectively.

 

Fair Value Measurements

 

The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

 

At June 30, 2020 and December 31, 2019, the Company did not identify any liabilities that are required to be presented on the balance sheet at fair value.

 

Recent Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have an impact on its financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements and disclosures.

 

7
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures.

 

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

 

Note 3 – Equipment

 

At June 30, 2020 and December 31, 2019 equipment consisted of the following:

 

   June 30,   December 31, 
   2020   2019 
         
Computer equipment  $6,046   $6,046 
    6,046    6,046 
Less accumulated depreciation   (3,395)   (2,651)
Equipment, net  $2,651   $3,395 
           

 

Depreciation expense for equipment for the six months ended June 30, 2020 and 2019 was $744 and $158, respectively.

 

Note 4 – Rental Vehicles

 

At June 30, 2020 and December 31, 2019, all of the Company’s rental vehicles consisted of the following:

 

   June 30,   December 31, 
   2020   2019 
         
Rental vehicles  $8,468,168   $6,284,211 
    8,468,168    6,284,211 
Less accumulated depreciation   (2,105,179)   (1,547,164)
Rental vehicles, net  $6,362,989   $4,737,047 

 

The Company’s leased assets, consisting of vehicles, are depreciated over their estimated useful life of five years. Depreciation expense for leased assets for the six months ended June 30, 2020 and 2019 was $668,623 and $514,244, respectively. The lease terms are generally for 30 to 36 months and the Company has the right to purchase the leased assets at the end of the lease terms for generally a nominal amount.

 

8
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

Note 5 – Notes Payable

 

Notes payable at June 30, 2020 and December 31, 2019 consisted of the following:

 

   June 30,   December 31, 
   2020   2019 
Notes payable to individual investors; accrue interest at 8% per annum; principal payments equal to 1/12 of original balance plus interest due quarterly; due from dates ranging from August 9, 2020 to March 26, 2021; unsecured (A)  $319,667    319,667 
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $731 after 12 months from funding and is due 30 years from the date of issuance.   149,900    - 
 Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The Company expects some or all of this loan to be forgiven as provided for in the CARES Act.   192,775    - 
Total notes payable   662,342    319,667 
Unamortized debt discount   (12,383)   (32,289)
Notes payable, net discount   649,959    287,378 
Less current portion   (649,959)   (287,378)
Long-term portion  $-   $- 

 

(A) In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the six months ended June 30, 2020 and 2019, $19,906 and $19,797, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $12,383 at June 30, 2020.

 

A rollforward of notes payable from December 31, 2019 to June 30, 2020 is below:

 

Notes payable, December 31, 2019  $287,378 
Issued for cash   342,675 
Amortization of debt discounts   19,906 
Notes payable, June 30, 2020  $649,959 

 

Note 6 – Lease Obligations

 

Lease obligations at June 30, 2020 and December 31, 2019 consisted of the following:

 

   June 30,   December 31, 
   2020   2019 
         
Lease obligations  $3,099,385   $2,400,565 
Less current portion   (1,640,899)   (1,416,446)
Long-term portion  $1,458,486   $984,119 

 

9
 

 

YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

A rollforward of lease obligations from December 31, 2019 to June 30, 2020 is below:

 

Lease obligations, December 31, 2019  $2,400,565 
New lease obligations   2,246,285 
Disposal of leased vehicles   (115,800)
Payments on lease obligations   (1,431,665)
Lease obligations, June 30, 2020  $3,099,385 

 

Future payments under lease obligations are as follows:

 

Twelve months ending June 30,    
2021  $1,807,191 
2022   860,581 
2023   693,016 
Total payments   3,360,788 
Amount representing interest   (261,403)
Lease obligation, net  $3,099,385 

 

Note 7 – Stockholders’ Equity

 

The Company authorized 100,000,000 shares of capital stock with consists of 90,000,000 shares of common stock, $0.000001 par value per share and 10,000,000 shares of preferred stock, $0.000001 par value per share.

 

Stock Options

 

The following is a summary of stock option activity:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Options   Exercise   Contractual   Intrinsic 
   Outstanding   Price   Life   Value 
Outstanding, December 31, 2019   300,000   $8.00    1.00   $                 - 
Granted   1,500,000    4.00           
Forfeited   (1,084,000)   4.00           
Exercised   -                
Outstanding, June 30, 2020   716,000   $5.68    1.68   $- 
Exercisable, June 30, 2020   716,000   $5.68    1.68   $- 

 

The exercise price for options outstanding and exercisable at June 30, 2020:

 

Outstanding   Exercisable 
Number of   Exercise   Number of   Exercise 
Options   Price   Options   Price 
 416,000   $4.00    416,000   $4.00 
 300,000    8.00    300,000    8.00 
 716,000         716,000      

 

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YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

The following is a summary of warrant activity:

 

         Weighted   
      Weighted  Average   
      Average  Remaining  Aggregate
   Warrants  Exercise  Contractual  Intrinsic
   Outstanding  Price  Life  Value
Outstanding, December 31, 2019   1,631,250   $4.08    3.38   $- 
Granted   -                     
Forfeited   -                
Exercised   -                
Outstanding, June 30, 2020   1,631,250   $4.08    2.88   $- 
Exercisable, June 30, 2020   1,631,250   $4.08    2.88   $- 

 

The exercise price for warrants outstanding at June 30, 2020:

 

Outstanding and Exerciseable
Number of  Exercise
Warrants  Price
1,500,000   $4.00 
131,250    5.00 
1,631,250      

 

Note 8 – Related Party Transactions

 

During the six months ended June 30, 2020 and 2019, the Company paid management fees of $0 and $120,000, respectively, to a company that is owned by the Company’s Chief Executive Officer and director. Beginning on February 1, 2019, the Company entered into a consulting agreement with this individual and paid $167,000 under the consulting agreement. The consulting agreement was terminated effective September 1, 2019. Also during the six months ended June 30, 2020, the Company’s CEO and director advanced the Company $150,000 and the Company repaid the amount in full. At June 30, 2020, $0 was owed to the Company’s CEO and director related to this advance.

 

During the six months ended June 30, 2020 and 2019, the Company expensed $32,173 and $53,507, respectively, in advertising expenses from a company whose CEO was also a former director of the Company. At June 30, 2020 and December 31, 2019, $324,920 and $394,183, respectively, was owed to this company and is included in accounts payable in the accompanying consolidated balance sheets.

 

During the six months ended June 30, 2020 and 2019, the Company expensed $1,103,460 and $1,024,907, respectively, in insurance expense related to insuring the Company fleet of vehicles from an insurance brokerage firm whose owner is also a stockholder of the Company. At June 30, 2020 and December 31, 2019, $201,156 and $171,665, respectively, was owed to this insurance brokerage from and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

 

Note 9 - Contingencies

 

Legal Proceedings

 

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.

 

 

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YAYYO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2020 and 2019 (unaudited)

 

Social Reality Inc. v. YayYo, Inc.

 

This action was filed on February 11, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Social Reality Inc. is a media company that claims to have provided media services to the Company. Plaintiff has sued the Company for breach of contract and related causes of action, arising from its claims that the Company has failed to pay for past outstanding invoices for services rendered. The plaintiff has also filed a motion for prejudgment attachment which was heard on July 28, 2020. The Superior Court denied the writ of attachment on the merits. The parties have a case management conference scheduled for August 18, 2020. The Company believes that it has valid defenses to the lawsuit, and expects to file counterclaims that will offset or negate any monies owed to plaintiff; it will vigorously defend the lawsuit.

 

Anthony Davis v. YayYo, Inc., and Ramy El-Batrawi

 

This action was filed on March 5, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Anthony Davis was hired by the Company as its Chief Executive Officer in or about December 2016, although he worked there for only a matter of months. Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and director, and was involved, the complaint alleges, in Plaintiff’s hiring. As part of his compensation, Mr. Davis claims that he expected to receive stock options in the Company. He has alleged that “after several months of unsuccessfully attempting to persuade the Company’s founder to implement certain protocols and procedures” Davis resigned from his executive officer and director positions, and entered into a written settlement agreement with the Company as a consultant. Mr. Davis claims that the Company breached its agreement to award him certain stock options and includes a claim for wage and hour violations. The lawsuit also includes a request for declaratory and injunctive relief. Davis also included a claim under California Unfair Practices Act. The Company denies liability and asserts that it has paid Davis all amounts due to him under the contract, and that Davis failed to exercise his stock options before they expired on December 31, 2018. It intends to vigorously defend the lawsuit, and has agreed to pursue mediation pursuant to the contract with plaintiff.

 

Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876

 

This action was filed on July 22, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Ivan Rung claims to have purchased the Company’s stock and purports to bring a securities class action on behalf of all purchasers of YayYo’s stock pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 2019 initial public stock offering (IPO”). Mr. El-Batrawi is the founder and current CEO of the Company but at the time of the IPO was only a shareholder of the Company having stepped down as CEO, Director and a controlling shareholder of the Company. The complaint is vague about alleged misrepresentation and material omissions, detailing instead a supposed chronology of events leading to the Company’s voluntary decision to delist its stock from NASDAQ, a decision the Company announced in an 8K filed on February10, 2020. The Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts and occurrences in its Registration Statement, related public filings and other public statements, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. It intends to vigorously defend the lawsuit.

 

Michael Vanbecelaere v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV28066

 

This action was filed on July 23, 2020, in the Superior Court of the State of California for the County of Los Angeles, also as a purported class action. Plaintiff Michael Vanbecelaere claims to have purchased the Company’s stock “traceable to the IPO” and like Rung, brings a securities class action pursuant to Sections 11 & 15 of the Securities Act of 1933 on behalf of all purchasers of YayYo’s stock. The complaint like the preceding action, Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876 (“Rung”) alleges false statements and material omission pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 201 9 initial public stock offering (IPO). The defendants are identical to the defendants in the action filed the day before, on July 22, 2020. The two complaints are virtual cookie cutter versions of each other including a false allegation of fact about YayYo that appears in an identical paragraph 13: “On or about June 21, 2016, defendant EI-Batrawi incorporated YayYo in Delaware. The Company then rented cars to Uber and Lyft drivers.” (The business model of YayYo was different on June 21, 2016.) As with the Rung case, the Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts, events and occurrences in its Registration Statement and related public filings, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. The actions will be “low numbered” to the same Superior Court judge and consolidated. The Company intends to vigorously defend the lawsuit.

 

Note 10 – Subsequent Events

 

In July 2020, the Company issued a total of 2,505,000 stock options to officers, directors and employees. Included in the total options issued were: 1,000,000 to the CEO; 750,000 to the COO; 250,000 to the CFO and 5,000 each to four independent directors.

 

In July 2020, the Company entered into a new employment agreement with Laurie DiGiovanni, the Company’s COO for an annual salary of $200,000 plus 750,000 stock options that become fully vested over three years.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Cautionary Note Regarding Forward-Looking Statements

 

Certain statements made herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our future performance constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described in Part II, Item 1A, “Risk Factors” and elsewhere in this report and as also may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. There also may be other factors that we cannot anticipate or that are not described in this report, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations.

 

Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC.

 

Our Corporate History and Background

 

The Company was formed on June 21, 2016 under the name “YayYo, LLC,” which was converted into a Delaware corporation pursuant to the unanimous written consent of our former manager and members in a transaction intended to be tax-free under the Internal Revenue Code (the “Conversion”). All of YayYo, LLC’s liabilities and assets, including its intellectual property, were automatically transferred to the Company and the Company has assumed ownership of such assets and liabilities. The Company now operates as a “C” corporation formed under the laws of the State of Delaware.

 

The Company is a holding company operating through its wholly-owned subsidiaries, including Distinct Cars, LLC, a Delaware limited liability company (“Distinct Cars”) and Rideshare Car Rentals LLC, a Delaware limited liability company (“Rideshare”).

 

On August 12, 2017, we announced that we were shifting our primary corporate focus in the transportation/ridesharing industry away from the development of the Metasearch App.

 

The Company’s operating business divisions include (i) an online rideshare vehicle booking platform to service the ridesharing economy through the Company’s wholly-owned subsidiary Rideshare (the “Rideshare Platform”), and (ii) the maintenance of a fleet of standard passenger vehicles to be made commercially available for rent through the Company’s wholly-owned subsidiary Distinct Cars (“Fleet Management”). Through the Company’s wholly-owned subsidiaries Rideshare and Distinct Cars, the Company seeks to become the leading provider of a standard rental vehicles to drivers in the ridesharing economy.

 

On March 16, 2018, we closed our Regulation A+ offering under Regulation A of the Securities Act, which was qualified by the SEC on March 15, 2017. We sold a total of 365,306 shares of our common stock. We received cash proceeds of $1.8 million, net of commissions and other costs associated with the gross offering proceeds or payable by us.

 

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On November 15, 2019, the Company closed its initial public offering of 2,625,000 common shares at $4.00 per share, for gross proceeds, before underwriting discounts and commissions and expenses, of $10.5 million. and the shares became listed on the Nasdaq Capital Market under the symbol “YAYO”.

 

On February 10, 2020, the Company notified Nasdaq of its intent to voluntarily delist its Common Stock from Nasdaq. In connection therewith, the Company notified Nasdaq of the Company’s intention to file a Form 25 with the SEC on or about February 20, 2020. The Company elected to effect the voluntary delisting of its common stock after discussions with Nasdaq’s staff, and based on the determination of the Company’s board of directors that voluntarily delisting the Common Stock from Nasdaq was in the best interests of the Company and its stockholders. Following delisting from Nasdaq, the Company’s Common Stock now trades on the OTC Pink Market under the trading symbol, “YAYO.”

 

Impact of COVID-19 on our business

 

In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The governors of New York, California and several other states, as well as mayors on many cities, have ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have been recommended by the federal authorities and authorities in many other states and cities. Since the beginning of 2020 and the spread of COVID-19, rideshare companies have increasingly been negatively impacted. According to its recent investor update call, Uber’s gross bookings in Seattle are down by 60-70%, and Uber assumes similar declines in other big cities hit by COVID-19. As Americans practice social distancing and self-isolation, Uber, Lyft, and other rideshare companies have seen a steep decline in ridership and revenue, as a result. Given that rideshare drivers are both at risk themselves and of risk to the public, and in addition to decreased demand overall, less people are even still driving. The Company has seen a decline in revenue during the first half of 2020 which is having a negative impact on the cash flows of the business, but saw a positive upward movement in revenue the latter part of the second quarter ended June 30, 2020. The Company has seen increased demand from drivers wanting to rent cars for ridesharing purposes and new drivers renting cars for both rideshare and delivery gig economy. With the recent increase in the number of positive COVID-19 cases, the Company is not able to predict the ultimate impact that COVID -19 will have on its business. If another lockdown were to occur, the Company could be forced to significantly scale back its business operations and its growth plans, and could ultimately have a significant negative impact on the Company. The Company cannot at this time estimate the long term effect of this unprecedented situation on the rideshare market or delivery gig economy in general or the Company in particular.

 

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries Distinct Cars, LLC, a Delaware limited liability company (“Distinct Cars”), Savy LLC, a Delaware limited liability company (“Savy”), Rideyayyo LLC, a Delaware limited liability company (“Rideyayyo”) and Rideshare Car Rentals LLC, a Delaware limited liability company (“Rideshare”). Savy and Rideyayyo have not had operations to date.

 

Consolidated Results of OperationsThree Months Ended June 30, 2020, Compared to Three Months Ended June 30, 2019.

 

Total Revenues.

 

Revenue for the three months ended June 30, 2020 was $1,580,555, a decrease of $116,362 or 6.9% compared to revenue for the three months ended June 30, 2019 of $1,696,917. The decrease is due to us not being able to maintain our average weekly rental income levels due to the COVID-19 outbreak. During the three months ended June 30, 2020, the average weekly rental income per vehicle placed in service was $292 compared to $331 for the same period in 2019. Our revenues declined in March and April due to COVID -19 and began to recover in May and June 2020. Our revenue for the month of June was back to pre-COVID-19 levels, but there is no assurance that this trend will continue.

 

Cost of Revenues.

 

The principal components of costs of revenue are depreciation of the vehicles, vehicle insurance and maintenance.

 

Cost of revenues for the three months ended June 30, 2020 were $1,295,059, an increase of $332,988 or 34.6% compared to cost of revenues for the three months ended June 30, 2019 of $962,071. The increase is due to higher depreciation expense due to an increase in fleet size and higher repairs and maintenance due to the age of the fleet. For the three months ended June 30, 2020 and 2019 our cost of revenue was 81.9% and 56.7% of our revenue, respectively. The increase in the cost of revenue as a percentage of revenue is due to the decrease in average weekly rental income due to the COVID – 19 outbreak.

 

14
 

 

Selling and Marketing Expenses.

 

Selling and marketing expenses for the three months ended June 30, 2020 were $79,153, representing an increase of $58,265 or 279.2% over the three months ended June 30, 2019 of $20,868. The increase is due to an increase in advertising our rentals to Uber and Lyft drivers.

 

General and Administrative Expenses.

 

General and administrative expenses for the three months ended June 30, 2020 were $861,410, representing an increase of $185,782 or 27.5% over the three months ended June 30, 2019 of $675,628. The increase is principally due to higher payroll costs as we hired additional personnel for our expanding operations and higher management salaries; and higher occupancy costs.

 

Loss on the settlement of debt

 

Loss on the settlement of debt for the three months ended June 30, 2020 was $0 as compared to $12,900 for the same period in 2019. During the months ended June 30, 2019, we settled outstanding debt of $21,500 with 4,300 shares of common stock valued at $34,400.

.

Total Operating Expenses

 

Total operating expenses for the three months ended June 30, 2020 were $940,543, representing an increase of $231,147 or 32.6% compared to the three months ended June 30, 2019 of $709,396. The increase is due to the reasons described above.

 

Interest expense, net

 

Interest and financing expenses for the three months ended June 30, 2020 were $67,795 compared to $442,902 for the three months ended June 30, 2019. The decrease in interest and financing cost for the three months ended June 30, 2020 due to a decrease in high interest rate debt outstanding.

 

Net Loss

 

The net loss for the three months ended June 30, 2020 was $722,842, representing an increase of $305,390 or 73.2% compared to the three months ended June 30, 2019 of $417,452. The increase is due to the reasons described above.

 

Consolidated Results of OperationsSix Months Ended June 30, 2020, Compared to Six Months Ended June 30, 2019.

 

Total Revenues.

 

Revenue for the six months ended June 30, 2020 was $3,328,197, a decrease of $147,321 or 4.2% compared to revenue for the six months ended June 30, 2019 of $3,475,518. The decrease is due to us not being able to maintain our average weekly rental income levels due to the COVID-19 outbreak. During the six months ended June 30, 2020, the average weekly rental income per vehicle placed in service was $309 compared to $341 for the same period in 2019. Our revenues declined in March and April due to COVID -19 and began to recover in May and June 2020. Our revenue for the month of June was back to pre-COVID-19 levels, but there is no assurance that this trend will continue.

 

Cost of Revenues.

 

Cost of revenues for the six months ended June 30, 2020 were $2,696,350, an increase of $652,109 or 31.9% compared to cost of revenues for the six months ended June 30, 2019 of $2,044,241. The increase is due to higher depreciation expense due to an increase in fleet size and higher repairs and maintenance due to the age of the fleet. For the six months ended June 30, 2020 and 2019 our cost of revenue was 81.0% and 58.8% of our revenue, respectively. The increase in the cost of revenue as a percentage of revenue is due to the decrease in average weekly rental income due to the COVID – 19 outbreak.

 

15
 

 

Selling and Marketing Expenses.

 

Selling and marketing expenses for the six months ended June 30, 2020 were $210,642, representing an increase of $108,036 or 105.3% over the six months ended June 30, 2019 of $102,606. The increase is due to an increase in advertising our rentals to Uber and Lyft drivers.

 

General and Administrative Expenses.

 

General and administrative expenses for the six months ended June 30, 2020 were $2,757,616, representing an increase of $1,296,805 or 88.8% over the six months ended June 30, 2019 of $1,460,811. The increase is principally due to higher payroll costs (including stock option expense) as we hired additional personnel for our expanding operations and higher management salaries; and higher occupancy costs.

 

Loss on the settlement of debt

 

Loss on the settlement of debt for the six months ended June 30, 2020 was $0 as compared to $252,900 for the same period in 2019. During the months ended June 30, 2019, we settled outstanding debt of $421,500 with 84,300 shares of common stock valued at $674,400.

.

Total Operating Expenses

 

Total operating expenses for the six months ended June 30, 2020 were $2,968,258, representing an increase of $1,151,941 or 63.4% compared to the six months ended June 30, 2019 of $1,816,317. The increase is due to the reasons described above.

 

Interest expense, net

 

Interest and financing expenses for the six months ended June 30, 2020 were $147,651 compared to $611,875 for the six months ended June 30, 2019. The decrease in interest and financing cost for the six months ended June 30, 2020 due to a decrease in outstanding debt.

 

Net Loss

 

The net loss for the six months ended June 30, 2020 was $2,484,062, representing an increase of $1,487,147 or 149.2% compared to the six months ended June 30, 2019 of $996,915. The increase is due to the reasons described above.

 

Liquidity, Capital Resources and Plan of Operations

 

Current Assets, Liabilities and Working Capital

 

Initial Public Offering. On November 15, 2019, we closed our initial public offering of common stock registered on an S-1 Registration Statement under the Securities Act, which was declared effective on November 13, 2019. We sold a total of 2,625,000 common shares at a price of $4.00 per share. Total gross proceeds from the offering were $10,500,000, before deducting underwriting discounts and commissions and other offering expenses.

 

Current Assets, Liabilities and Working Capital. At June 30, 2020, the Company’s current assets totaled $696,206, current liabilities totaled $3,991,172, and working capital was a deficit of $3,294,966. At December 31, 2019, the Company’s current assets totaled $2,098,660, current liabilities totaled $2,655,055, and working capital was a deficit of $556,395.

 

Regarding current liabilities, the amounts categorized as accounts payable and accrued expenses totaled $1,700,314 and $951,231 as of June 30, 2020 and December 31, 2019, respectively, an increase of $749,083 or 78.7%.

 

Since inception, our principal sources of operating funds have been proceeds from equity financing including the sale of our common stock to initial investors known to management and principal shareholders of the Company. We do not expect that our current cash on hand will fund our existing operations and future business growth. We will need to raise additional capital in order execute our business plan and growth goals for at least the next twelve-month period thereafter. If the Company is unable to raise sufficient additional funds, it will have to execute a slower than planned growth path, reduce overhead and scale back its business plan until sufficient additional capital is raised to support further operational expansion and growth. As of June 30, 2020, the Company had $103,240 in cash. The Company used $339,199 of cash for operating activities for the six months ended June 30, 2020. The Company is seeking to raise additional capital. If the Company is not successful in raising additional capital it will be forced to significantly scale back its business operations and it growth plans. In addition, the COVID-19 virus and the related impact it is having on the U.S. economy is currently having a negative impact on the cash flows of our business. However, we were able to obtain two loans totaling $342,675 related to new legislation passed as a result of COVID-19.

 

16
 

 

Capital Expenditures

 

During the six months ended June 30, 2020, the Company had capital expenditures of $2,246,285 in leased vehicles. At June 30, 2020, most of the Company’s vehicles were finance with leases. At June 30, 2020 the Company had $8,468,168 of rental vehicles, net of accumulated depreciation in the amount of $2,105,179, totaling $6,362,989 in net rental vehicles. At December 31, 2019 the Company had $6,284,211 of rental vehicles, net of accumulated depreciation in the amount of $1,547,164, totaling $4,737,047 in net rental vehicles. The Company’s rental vehicles are depreciated over their estimated useful life of five years. The lease terms for those rental vehicles that are leased are generally for three years and the Company has the right to purchase the leased assets for $1 each at the end of the lease terms.

 

Statement of Cash Flows

 

Cash Flows from Operating Activities

 

Net cash used in operating activities for the six months ended June 30, 2020 totaled $339,199, which was an increase of $278,829 or 461.9% from the net cash used in operating activities of $60,370 for the same period in 2019. The increase is principally due to the increase in net loss.

 

Cash Flows from Financing Activities

 

Net cash used in financing activities for the six months ended June 30, 2020 totaled $813,990, which was a change of $631,297 from the net cash provided by financing activities of $182,693 for the same period in 2019. The change is principally due to the increase in payments on financing lease obligations in 2020 and proceeds of $1.051.300 from notes payable in 2019 compared to $342,675 in 2020. In addition, we sold $275,000 of common stock in 2020 compared to $0 in 2019.

 

Current Plan of Operations

 

Our plan of operations is currently focused on the development of our operating business segments: (i) our Rideshare Platform offered through the Company’s wholly-owned subsidiary Rideshare, and (ii) our Fleet Management business, made commercially available through the Company’s wholly-owned subsidiary Distinct Cars. We expect to incur substantial expenditures in the foreseeable future for the potential operations of our business segments and ongoing internal research and development. At this time, we cannot reliably estimate the nature, timing or aggregate amount of such costs. Our Rideshare Platform will require extensive technical evaluation, potential regulatory review and approval, significant marketing efforts and substantial investment before it or any successors could provide us with any revenue. Further, we intend to continue to build our corporate and operational infrastructure and to build interest in our product and service offerings.

 

As noted above, the continuation of our current plan of operations requires us to raise significant additional capital immediately. If we are successful in raising capital, we believe that the Company will have sufficient cash resources to fund its plan of operations. The cash flow from our current vehicle leasing business and capital resources are sufficient for us to continue our current operations, but for us to fully execute our business plan we will require significant additional capital.

 

We continually evaluate our plan of operations discussed above to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations. The inability to secure additional capital would have a material adverse effect on us, including the possibility that we would have to sell or forego a portion or all of our assets or cease operations. If we discontinue our operations, we will not have sufficient funds to pay any amounts to our stockholders.

 

Even if we raise additional capital in the near future, if our operating business segments fail to achieve anticipated financial results, our ability to raise additional capital in the future to fund our operating business segments would likely be seriously impaired. If in the future we are not able to demonstrate favorable financial results or projections from our operating business segments, we will not be able to raise the capital we need to continue our then current business operations and business activities, and we will likely not have sufficient liquidity or cash resources to continue operating.

 

Because our working capital requirements depend upon numerous factors there can be no assurance that our current cash resources will be sufficient to fund our operations. At present, we have no committed external sources of capital, and do not expect any significant product revenues for the foreseeable future. Thus, we will require immediate additional financing to fund future operations. There can be no assurance, however, that we will be able to obtain funds on acceptable terms, if at all.

 

17
 

 

Contractual Obligations, Commitments and Contingencies

 

During fiscal years 2017, 2018 and 2019, the Company entered into a series of monthly vehicle leasing agreements with ACME Auto Leasing, LMP Financial Services and United Mile Fleet, each with an approximate lease term of 12 to 36 months. As of June 30, 2020 and December 31, 2019, the Company had total lease obligations in the amount of $3,099,385 and $2,400,565, respectively. The Company owes monthly payments under each Lease Agreement ranging from approximately $342 per month to $621 per month. At the end of the term of the Lease Agreement, lessee has the right to purchase ownership and title of the subject vehicle for a nominal payment. In addition, the Lease Agreements are subject to and secured by a grant of a purchase money security interest on each leased vehicle.

 

We leased and maintained primary offices at 433 North Camden Drive, Suite 600, Beverly Hills, California 90210 and 6600 Sunset Blvd., Los Angeles, CA 90028, the latter being the location where the majority of our operations and staff conduct activities on a daily basis. We do not currently own any real property.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

Quantitative and Qualitative Disclosures about Market Risk

 

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

 

Critical Accounting Policies and Estimates

 

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. In many instances, we could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our judgments and estimates.

 

Revenue Recognition

 

The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers.

 

We consider a signed contract or other similar documentation reflecting the terms and conditions under which products will be provided to be persuasive evidence of an arrangement. Collectability is assessed based on a number of factors, including payment history and the creditworthiness of a customer. If it is determined that collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

 

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

 

18
 

 

Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not required under Regulation S-K for “smaller reporting companies.”

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain a set of disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the SEC.

 

In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), to assess the effectiveness of our disclosure controls and procedures as of June 30, 2020. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure due to a material weakness.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

 

To address this material weakness, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

 

Changes in Internal Controls over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

19
 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.

 

Social Reality Inc. v. YayYo, Inc.

 

This action was filed on February 11, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Social Reality Inc. is a media company that claims to have provided media services to the Company. Plaintiff has sued the Company for breach of contract and related causes of action, arising from its claims that the Company has failed to pay for past outstanding invoices for services rendered. The plaintiff has also filed a motion for prejudgment attachment which was heard on July 28, 2020. The Superior Court denied the writ of attachment on the merits. The parties have a case management conference scheduled for August 18, 2020. The Company believes that it has valid defenses to the lawsuit, and expects to file counterclaims that will offset or negate any monies owed to plaintiff; it will vigorously defend the lawsuit.

 

Anthony Davis v. YayYo, Inc., and Ramy El-Batrawi

 

This action was filed on March 5, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Anthony Davis was hired by the Company as its Chief Executive Officer in or about December 2016, although he worked there for only a matter of months. Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and director, and was involved, the complaint alleges, in Plaintiff’s hiring. As part of his compensation, Mr. Davis claims that he expected to receive stock options in the Company. He has alleged that “after several months of unsuccessfully attempting to persuade the Company’s founder to implement certain protocols and procedures” Davis resigned from his executive officer and director positions, and entered into a written settlement agreement with the Company as a consultant. Mr. Davis claims that the Company breached its agreement to award him certain stock options and includes a claim for wage and hour violations. The lawsuit also includes a request for declaratory and injunctive relief. Davis also included a claim under California Unfair Practices Act. The Company denies liability and asserts that it has paid Davis all amounts due to him under the contract, and that Davis failed to exercise his stock options before they expired on December 31, 2018. It intends to vigorously defend the lawsuit, and has agreed to pursue mediation pursuant to the contract with plaintiff.

 

Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876

 

This action was filed on July 22, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Ivan Rung claims to have purchased the Company’s stock and purports to bring a securities class action on behalf of all purchasers of YayYo’s stock pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 2019 initial public stock offering (IPO”). Mr. El-Batrawi is the founder and current CEO of the Company but at the time of the IPO was only a shareholder of the Company having stepped down as CEO, Director and a controlling shareholder of the Company. The complaint is vague about alleged misrepresentation and material omissions, detailing instead a supposed chronology of events leading to the Company’s voluntary decision to delist its stock from NASDAQ, a decision the Company announced in an 8K filed on February10, 2020. The Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts and occurrences in its Registration Statement, related public filings and other public statements, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. It intends to vigorously defend the lawsuit.

 

Michael Vanbecelaere v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV28066

 

This action was filed on July 23, 2020, in the Superior Court of the State of California for the County of Los Angeles, also as a purported class action. Plaintiff Michael Vanbecelaere claims to have purchased the Company’s stock “traceable to the IPO” and like Rung, brings a securities class action pursuant to Sections 11 & 15 of the Securities Act of 1933 on behalf of all purchasers of YayYo’s stock. The complaint like the preceding action, Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876 (“Rung”) alleges false statements and material omission pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 201 9 initial public stock offering (IPO). The defendants are identical to the defendants in the action filed the day before, on July 22, 2020. The two complaints are virtual cookie cutter versions of each other including a false allegation of fact about YayYo that appears in an identical paragraph 13: “On or about June 21, 2016, defendant EI-Batrawi incorporated YayYo in Delaware. The Company then rented cars to Uber and Lyft drivers.” (The business model of YayYo was different on June 21, 2016.) As with the Rung case, the Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts, events and occurrences in its Registration Statement and related public filings, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. The actions will be “low numbered” to the same Superior Court judge and consolidated. The Company intends to vigorously defend the lawsuit.

 

20
 

 

Item 1A. Risk Factors.

 

COVID-19 has had a negative impact on our business the first half of 2020

 

In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The governors of New York, California and several other states, as well as mayors on many cities, have ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have been recommended by the federal authorities and authorities in many other states and cities. Since the beginning of 2020 and the spread of COVID-19, rideshare companies have increasingly been negatively impacted. According to its recent investor update call, Uber’s gross bookings in Seattle are down by 60-70%, and Uber assumes similar declines in other big cities hit by COVID-19. As Americans practice social distancing and self-isolation, Uber, Lyft, and other rideshare companies have seen a steep decline in ridership and revenue, as a result. Given that rideshare drivers are both at risk themselves and of risk to the public, and in addition to decreased demand overall, less people are even still driving. The Company has seen a decline in revenue during the first half of 2020 which is having a negative impact on the cash flows of the business, but saw a positive upward movement in revenue the latter part of the second quarter ended June 30, 2020. The Company has seen increased demand from drivers wanting to rent cars for ridesharing purposes and new drivers renting cars for both rideshare and delivery gig economy. With the recent increase in the number of positive COVID-19 cases, the Company is not able to predict the ultimate impact that COVID -19 will have on its business. If another lockdown were to occur, the Company could be forced to significantly scale back its business operations and its growth plans, and could ultimately have a significant negative impact on the Company. The Company cannot at this time estimate the long term effect of this unprecedented situation on the rideshare market or delivery gig economy in general or the Company in particular.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

During the three months ended June 30, 2020, the Company sold an aggregate of 2,553,571 shares of common stock to three investors for cash proceeds of $25,000

 

The offer, sale and issuance of the above securities was made to accredited investors and the Company relied upon the exemptions contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder with regard to the sale. No advertising or general solicitation was employed in offering the securities. The offer and sales were made to accredited investors and transfer of the common stock will be restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits.

 

Exhibit   Description
31.1   Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)
31.2   Certification of the Chief Financial Officer and Secretary pursuant to Rule 13a-14(a)
32.1   Certification of the Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2   Certification of the Chief Financial Officer and Secretary furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

21
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

YAYYO, INC.

(Registrant)

     
  By: /s/ Ramy El-Batrawi
    Ramy El-Batrawi, Chief Executive Officer
     
    /s/ Ryan Saathoff
    Ryan Saathoff, Chief Financial Officer
     
  Date: August 5, 2020

 

22

EX-31.1 2 ex31-1.htm

 

EXHIBIT 31.1

 

YayYo, Inc.

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

AND RULE 13a-14 OF THE EXCHANGE ACT OF 1934

 

I, Ramy El-Batrawi, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of YayYo, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepting accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 5, 2020   /s/ Ramy El-Batrawi
    Ramy El-Batrawi
    Chief Executive Officer

 

 
EX-31.2 3 ex31-2.htm

 

EXHIBIT 31.2

 

YayYo, Inc.

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

AND RULE 13a-14 OF THE EXCHANGE ACT OF 1934

 

I, Ryan Saathoff, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of YayYo, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepting accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 5, 2020 By: /s/ Ryan Saathoff
    Ryan Saathoff
    Chief Financial Officer

 

 
EX-32.1 4 ex32-1.htm

 

EXHIBIT 32.1

 

YayYo, Inc.

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of YayYo, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof, I, Ramy El-Batrawi, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 5, 2020 By: /s/ Ramy El-Batrawi
    Ramy El-Batrawi
    Chief Executive Officer

 

 
EX-32.2 5 ex32-2.htm

 

EXHIBIT 32.2

 

YayYo, Inc.

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of YayYo, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof, I, Ryan Saathoff, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 5, 2020 By: /s/ Ryan Saathoff
    Ryan Saathoff
    Chief Financial Officer

 

 
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Employment Agreement [Member] Notes Payable One [Member] Notes Payable Two [Member] Notes Payable Three [Member] Cover [Abstract] Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Current Fiscal Year End Date Entity Current Reporting Status Entity Interactive Data Current Entity Filer Category Entity Small Business Flag Entity Emerging Growth Company Entity Ex Transition Period Entity Shell Company Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement of Financial Position [Abstract] ASSETS Current Assets: Cash Accounts receivable Prepaid expenses Total current assets Equipment, net Rental vehicles, net Deposit on vehicles Other assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable (including $526,076 and $394,183 to related party) Accrued expenses (including $0 and $171,665 to related party) Notes payables, current (net of discount of $12,383 and $32,289) Finance lease obligations, current Total current liabilities Note payable, net of current portion Finance lease obligations, net of current portion TOTAL LIABILITIES Commitments and contingencies STOCKHOLDERS' DEFICIT Preferred stock, $0.000001 par value; 10,000,000 shares authorized; nil shares issued and outstanding Common stock, $0.000001 par value; 90,000,000 shares authorized; 31,981,374 and 29,427,803 shares issued and outstanding Additional paid-in capital Accumulated deficit Total stockholders' deficit TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT Accounts payable related party Accrued expenses related party Net of debt discount, current Preferred stock, par value Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenue Cost of revenue Gross profit Operating expenses: Selling and marketing expenses General and administrative expenses Loss on the settlement of debt Total operating expenses Loss from operations Other income (expense): Interest and financing costs Total other income (expense) Net loss Weighted average shares outstanding : Basic Diluted Loss per share Basic Diluted Statement [Table] Statement [Line Items] Balance Balance, shares Stock option expense Issuance of common stock for cash Issuance of common stock for cash, shares Issuance of common stock for settlement of debt Issuance of common stock for settlement of debt, shares Net loss Balance Balance, shares Statement of Cash Flows [Abstract] CASH FLOWS FROM OPERATING ACTIVITIES: Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Stock option expense Common stock issued for services Amortization of debt discounts Changes in operating assets and liabilities: Accounts receivable Prepaid expenses Accounts payable Accrued 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CFI Notes [Member] Chase Financing, Inc. [Member] Chief Executive Officer and Director [Member] Common Stock [Member] Exercise Price Range [Member] Exercise Price Range Two [Member] Finance lease obligations. First CFI Note [Member] In Connection with Issuance of Notes Payable [Member] In Connection with Lease Obligations [Member] Insurance expenses paid. Majority Stockholder [Member] Notes Payable to Merchant Bank Six [Member] Notes Payable to Merchant Bank Five [Member] Notes Payable to Merchant Bank Four [Member] Notes Payable To Merchant Bank [Member] Notes Payable to Merchant Bank One [Member] Notes Payable to Merchant Bank Three [Member] Notes Payable to Merchant Bank Two [Member] Number of shares, warrants outstanding and exercisable. Options [Member] Owed insurance brokerage. Paid for consulting agreement amount. Payment of Accounts Payable [Member] Payment of accounts payable/accrued expenses with common stock. Regulation A Offering [Member] Rental Vehicles [Text block] Rental vehicles, net. Schedule of Estimated Lives of Equipment [Table Text Block] Schedule of Finance Leased Right-of-Use Assets [Table Text Block] Schedule of Lease Obligations [Table Text Block] Schedule of Outstanding Lease Obligations [Table Text Block] Schedule of Warrants Outstanding by Exercise Price Range [Table Text Block] Second CFI Note [Member] Secured Notes [Member] The number of shares into which fully or partially vestednon-option equity outstanding as of the balance sheet date can be currently converted under the non-option equity plan. The weighted-average price as of the balance sheet date at which grantees can acquire the shares reserved for issuance on vested portions of non-option equity outstanding and currently exercisable under the non-option equity plan. Weighted average price at which non-option equity holders acquired shares when converting their non-option equity into shares. Weighted average per share amount at which forfeited can acquire shares of common stock by exercise of non-option equity. Weighted average per share amount at which grantees can acquire shares of common stock by exercise of non-option equity. Weighted average remaining contractual term for vested portions of non-option equity outstanding and currently exercisable or convertible, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Weighted average price at which grantees can acquire the shares reserved for issuance under the stock non-option equity plan. Weighted average exercise price outstanding and exercisable. Weighted average remaining contractual term for non-option equity awards outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Weighted average remaining contractual term for non-option equity awards outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Sharebased compensation arrangement by sharebased payment award non options outstanding intrinsic value. Sharebased compensation arrangement by sharebased payment award non options exercisable intrinsic value. Stock Purchase Agreement [Member] Unsecured A Note Payable To Individual Investors [Member] Unsecured C Note Payable To Investors [Member] Unsecured Note Payable To Individual Investors [Member] Unsecured Note Payable to Investor [Member] Unsecured Note Payable to Investor [Member] Unsecured Note Payable to Investor [Member] Unsecured Notes One [Member] Unsecured Notes Three [Member] Unsecured Notes Two [Member] Value of equity recorded as debt discounts. Vendors [Member] Weighted Average Remaining Contractual Life In Years Outstanding Beginning. X, LLC [Member] Rental Vehicles assets, gross. Accumulated depreciation leased assets. Notes payable, gross. Shares issued during period as incentive for loans. Shares issued during period as incentive for loans, value recorded as discount. Additional finance lease obligations. Exercise Price Range One [Member] Proceeds from advance from related party. Note payable to the Small Business Administration [Member] Note Payable to the Small Business Administration Member Paycheck Protection Program Officers, Directors and Employees [Member] Four Independent Directors [Member] New Employment Agreement [Member] Notes Payable One [Member] Notes Payable Two [Member] Notes Payable Three [Member] Disposal of leased vehicles. NotePayabletheSmallBusinessAdministrationMember Assets, Current Assets Liabilities, Current Liabilities Stockholders' Equity Attributable to Parent Liabilities and Equity Gross Profit Gain (Loss) on Extinguishment of Debt Operating Expenses Operating Income (Loss) Interest and Debt Expense Nonoperating Income (Expense) Earnings Per Share, Basic Earnings Per Share, Diluted Shares, Outstanding Stock or Unit Option Plan Expense Increase (Decrease) in Accounts Receivable Increase (Decrease) in Prepaid Expense Net Cash Provided by (Used in) Operating Activities Repayments of Notes Payable Repayments of Debt and Lease Obligation Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations RentalVehiclesDisclosureTextBlock Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment AccumulatedDepreciationLeasedAssets Notes Payable [Default Label] DisposalOfLeasedVehicles Finance Lease, Principal Payments Finance Lease, Liability, Payment, Due Finance Lease, Liability, Undiscounted Excess Amount Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercisableNumber ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingWeightedAverageExercisePrice ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercisableWeightedAverageExercisePrice ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionsOutstandingIntrinsicValue SharebasedCompensationArrangementBySharebasedPaymentAwardNonOptionsExercisableIntrinsicValue1 EX-101.PRE 12 yayo-20200630_pre.xml XBRL PRESENTATION FILE XML 13 R1.htm IDEA: XBRL DOCUMENT v3.20.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Aug. 05, 2020
Cover [Abstract]    
Entity Registrant Name YayYo, Inc.  
Entity Central Index Key 0001691077  
Document Type 10-Q  
Document Period End Date Jun. 30, 2020  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   31,981,374
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2020  
XML 14 R2.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash $ 103,240 $ 1,256,429
Accounts receivable 43,562 59,331
Prepaid expenses 549,404 782,900
Total current assets 696,206 2,098,660
Equipment, net 2,651 3,395
Rental vehicles, net 6,362,989 4,737,047
Deposit on vehicles 164,080
Other assets 200,000 200,000
TOTAL ASSETS 7,261,846 7,203,182
Current Liabilities:    
Accounts payable (including $526,076 and $394,183 to related party) 1,334,521 545,254
Accrued expenses (including $0 and $171,665 to related party) 365,793 405,977
Notes payables, current (net of discount of $12,383 and $32,289) 500,059 287,378
Finance lease obligations, current 1,640,899 1,416,446
Total current liabilities 3,841,272 2,655,055
Note payable, net of current portion 149,900
Finance lease obligations, net of current portion 1,458,486 984,119
TOTAL LIABILITIES 5,449,658 3,639,174
Commitments and contingencies
STOCKHOLDERS' DEFICIT    
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; nil shares issued and outstanding
Common stock, $0.000001 par value; 90,000,000 shares authorized; 31,981,374 and 29,427,803 shares issued and outstanding 32 29
Additional paid-in capital 29,468,133 28,735,894
Accumulated deficit (27,655,977) (25,171,915)
Total stockholders' deficit 1,812,188 3,564,008
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 7,261,846 $ 7,203,182
XML 15 R3.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Accounts payable related party $ 526,076 $ 394,183
Accrued expenses related party 0 171,665
Net of debt discount, current $ 12,383 $ 32,289
Preferred stock, par value $ 0.000001 $ 0.000001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value $ 0.000001 $ 0.000001
Common stock, shares authorized 90,000,000 90,000,000
Common stock, shares issued 31,981,374 29,427,803
Common stock, shares outstanding 31,981,374 29,427,803
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Revenue $ 1,580,555 $ 1,696,917 $ 3,328,197 $ 3,475,518
Cost of revenue 1,295,059 962,071 2,696,350 2,044,241
Gross profit 285,496 734,846 631,847 1,431,277
Operating expenses:        
Selling and marketing expenses 79,133 20,868 210,642 102,606
General and administrative expenses 861,410 675,628 2,757,616 1,460,811
Loss on the settlement of debt 12,900 252,900
Total operating expenses 940,543 709,396 2,968,258 1,816,317
Loss from operations (655,047) 25,450 (2,336,411) (385,040)
Other income (expense):        
Interest and financing costs (67,795) (442,902) (147,651) (611,875)
Total other income (expense) (67,795) (442,902) (147,651) (611,875)
Net loss $ (722,842) $ (417,452) $ (2,484,062) $ (996,915)
Weighted average shares outstanding :        
Basic 31,064,184 26,798,865 30,245,994 26,760,318
Diluted 31,064,184 26,798,865 30,245,994 26,760,318
Loss per share        
Basic $ (0.02) $ (0.02) $ (0.08) $ (0.04)
Diluted $ (0.02) $ (0.02) $ (0.08) $ (0.04)
XML 17 R5.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2018 $ 27 $ 19,193,151 $ (21,241,694) $ (2,048,516)
Balance, shares at Dec. 31, 2018 26,718,676      
Issuance of common stock for settlement of debt   640,000   640,000
Issuance of common stock for settlement of debt, shares 80,000      
Net loss     (579,463) (579,463)
Balance at Mar. 31, 2019 $ 27 19,833,151 (21,821,157) (1,987,979)
Balance, shares at Mar. 31, 2019 26,798,676      
Balance at Dec. 31, 2018 $ 27 19,193,151 (21,241,694) (2,048,516)
Balance, shares at Dec. 31, 2018 26,718,676      
Net loss       (996,915)
Balance at Jun. 30, 2019 $ 27 19,867,551 (22,238,609) (2,371,031)
Balance, shares at Jun. 30, 2019 26,802,976      
Balance at Mar. 31, 2019 $ 27 19,833,151 (21,821,157) (1,987,979)
Balance, shares at Mar. 31, 2019 26,798,676      
Issuance of common stock for settlement of debt   34,400   34,400
Issuance of common stock for settlement of debt, shares 4,300      
Net loss     (417,452) (417,452)
Balance at Jun. 30, 2019 $ 27 19,867,551 (22,238,609) (2,371,031)
Balance, shares at Jun. 30, 2019 26,802,976      
Balance at Dec. 31, 2019 $ 29 28,735,894 (25,171,915) 3,564,008
Balance, shares at Dec. 31, 2019 29,427,803      
Stock option expense   457,242   457,242
Net loss     (1,761,220) (1,761,220)
Balance at Mar. 31, 2020 $ 29 29,193,136 (26,933,135) 2,260,030
Balance, shares at Mar. 31, 2020 29,427,803      
Balance at Dec. 31, 2019 $ 29 28,735,894 (25,171,915) 3,564,008
Balance, shares at Dec. 31, 2019 29,427,803      
Net loss       (2,484,062)
Balance at Jun. 30, 2020 $ 32 29,468,133 (27,655,977) 1,812,188
Balance, shares at Jun. 30, 2020 31,981,374      
Balance at Mar. 31, 2020 $ 29 29,193,136 (26,933,135) 2,260,030
Balance, shares at Mar. 31, 2020 29,427,803      
Issuance of common stock for cash $ 3 274,997   275,000
Issuance of common stock for cash, shares 2,553,571      
Net loss     (722,842) (722,842)
Balance at Jun. 30, 2020 $ 32 $ 29,468,133 $ (27,655,977) $ 1,812,188
Balance, shares at Jun. 30, 2020 31,981,374      
XML 18 R6.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (2,484,062) $ (996,915)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 669,367 514,402
Stock option expense 457,242
Common stock issued for services
Amortization of debt discounts 19,906 19,797
Loss on the settlement of debt 252,900
Changes in operating assets and liabilities:    
Accounts receivable 15,769 (65,115)
Prepaid expenses 233,496 (36,697)
Accounts payable 789,267 (214,585)
Accrued expenses (40,184) 465,843
Net cash used in operating activities (339,199) (60,370)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from notes payable 342,675 1,051,300
Proceeds from sale of common stock 275,000
Proceeds from advance from related party 150,000
Repayment of advance from related party (150,000)
Repayment of notes payable (508,394)
Repayment of finance lease obligations (1,431,665) (725,599)
Net cash provided by (used in) financing activities (813,990) (182,693)
NET INCREASE (DECREASE) IN CASH (1,153,189) (243,063)
CASH, BEGINNING OF PERIOD 1,256,429 277,444
CASH, END OF PERIOD 103,240 34,381
CASH PAID FOR:    
Interest 127,745 564,961
Income taxes
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES    
Payment of accounts payable/accrued expenses with common stock 421,500
Value of equity recorded as debt discounts
Finance lease obligations $ 2,246,285 $ 510,136
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Organization and Basis of Presentation
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation

Note 1 - Organization and Basis of Presentation

 

Organization and Line of Business

 

YayYo, Inc. (“YayYo” or the “Company”) was incorporated on June 21, 2016 under the laws of the state of Delaware originally as a limited liability company and subsequently changed to a C corporation. The accompanying financial statements are retroactively restated to present the Company as a C corporation from June 21, 2016. The Company rents cars to Uber and Lyft drivers.

 

Basis of Presentation

 

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

 

Risk and Uncertainties

 

In December 2019, a novel strain of coronavirus surfaced in China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The governors of New York, California and several other states, as well as mayors on many cities, have ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have been recommended by the federal authorities and authorities in many other states and cities. Since the beginning of 2020 and the spread of COVID-19, rideshare companies have increasingly been negatively impacted. As Americans practice social distancing and self-isolation, Uber, Lyft, and other rideshare companies have seen a steep decline in ridership and revenue, as a result. Given that rideshare drivers are both at risk themselves and of risk to the public, and in addition to decreased demand overall, less people are even still driving. The Company has seen a decline in revenue during the first half of 2020 which is having a negative impact on the cash flows of the business, but saw a positive upward movement in revenue the latter part of the second quarter ended June 30, 2020. The Company has seen increased demand from drivers wanting to rent cars for ridesharing purposes and new drivers renting cars for both rideshare and delivery gig economy. With the recent increase in the number of positive COVID-19 cases, the Company is not able to predict the ultimate impact that COVID -19 will have on its business. If another lockdown were to occur, the Company could be forced to significantly scale back its business operations and its growth plans, and could ultimately have a significant negative impact on the Company. The Company cannot at this time estimate the long term effect of this unprecedented situation on the rideshare market or delivery gig economy in general or the Company in particular.

 

Interim financial statements

 

The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading.

 

These statements reflect all adjustment, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the six months ended June 30, 2019 and notes thereto. The Company follows the same accounting policies in the preparation of interim report. Results of operations for the interim period are not indicative of annual results.

XML 20 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars, LLC, RideShare Car Rentals, LLC, RideYayYo, LLC and Savy, LLC. All significant intercompany transactions and balances have been eliminated. 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.

 

Cash Equivalents

 

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

 

Equipment and Rental Vehicles

 

Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Computer equipment 5 years
Vehicles 5 years

 

Long-Lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at June 30, 2020, the Company determined that no impairment charge was necessary.

 

Revenue Recognition

 

The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 1,631,250 warrants and 716,000 options outstanding as of June 30, 2020. 

 

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 2,347,250 potentially dilutive securities outstanding at June 30, 2020.

 

Advertising Costs

 

The Company expenses the cost of advertising as incurred. Advertising costs for the six months ended June 30, 2020 and 2019 were $210,642 and $102,606, respectively.

 

Fair Value Measurements

 

The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

 

At June 30, 2020 and December 31, 2019, the Company did not identify any liabilities that are required to be presented on the balance sheet at fair value.

 Recent Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have an impact on its financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements and disclosures.

 

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures.

 

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

XML 21 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Equipment
6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Equipment

Note 3 – Equipment

 

At June 30, 2020 and December 31, 2019 equipment consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Computer equipment   $ 6,046     $ 6,046  
      6,046       6,046  
Less accumulated depreciation     (3,395 )     (2,651 )
Equipment, net   $ 2,651     $ 3,395  
                 

 

Depreciation expense for equipment for the six months ended June 30, 2020 and 2019 was $744 and $158, respectively.

XML 22 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Rental Vehicles
6 Months Ended
Jun. 30, 2020
Rental Vehicles  
Rental Vehicles

Note 4 – Rental Vehicles

 

At June 30, 2020 and December 31, 2019, all of the Company’s rental vehicles consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Rental vehicles   $ 8,468,168     $ 6,284,211  
      8,468,168       6,284,211  
Less accumulated depreciation     (2,105,179 )     (1,547,164 )
Rental vehicles, net   $ 6,362,989     $ 4,737,047  

 

The Company’s leased assets, consisting of vehicles, are depreciated over their estimated useful life of five years. Depreciation expense for leased assets for the six months ended June 30, 2020 and 2019 was $668,623 and $514,244, respectively. The lease terms are generally for 30 to 36 months and the Company has the right to purchase the leased assets at the end of the lease terms for generally a nominal amount.

XML 23 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Notes Payable

Note 5 – Notes Payable

 

Notes payable at June 30, 2020 and December 31, 2019 consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
Notes payable to individual investors; accrue interest at 8% per annum; principal payments equal to 1/12 of original balance plus interest due quarterly; due from dates ranging from August 9, 2020 to March 26, 2021; unsecured (A)   $ 319,667       319,667  
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $731 after 12 months from funding and is due 30 years from the date of issuance.     149,900       -  
 Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The Company expects some or all of this loan to be forgiven as provided for in the CARES Act.     192,775       -  
Total notes payable     662,342       319,667  
Unamortized debt discount     (12,383 )     (32,289 )
Notes payable, net discount     649,959       287,378  
Less current portion     (649,959 )     (287,378 )
Long-term portion   $ -     $ -  

 

(A) In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the six months ended June 30, 2020 and 2019, $19,906 and $19,797, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $12,383 at June 30, 2020.

 

A rollforward of notes payable from December 31, 2019 to June 30, 2020 is below:

 

Notes payable, December 31, 2019   $ 287,378  
Issued for cash     342,675  
Amortization of debt discounts     19,906  
Notes payable, June 30, 2020   $ 649,959  
XML 24 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Lease Obligations
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Lease Obligations

Note 6 – Lease Obligations

 

Lease obligations at June 30, 2020 and December 31, 2019 consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Lease obligations   $ 3,099,385     $ 2,400,565  
Less current portion     (1,640,899 )     (1,416,446 )
Long-term portion   $ 1,458,486     $ 984,119  

 

A rollforward of lease obligations from December 31, 2019 to June 30, 2020 is below:

 

Lease obligations, December 31, 2019   $ 2,400,565  
New lease obligations     2,246,285  
Disposal of leased vehicles     (115,800 )
Payments on lease obligations     (1,431,665 )
Lease obligations, June 30, 2020   $ 3,099,385  

 

Future payments under lease obligations are as follows:

 

Twelve months ending June 30,      
2021   $ 1,807,191  
2022     860,581  
2023     693,016  
Total payments     3,360,788  
Amount representing interest     (261,403 )
Lease obligation, net   $ 3,099,385  
XML 25 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Stockholders' Equity

Note 7 – Stockholders’ Equity

 

The Company authorized 100,000,000 shares of capital stock with consists of 90,000,000 shares of common stock, $0.000001 par value per share and 10,000,000 shares of preferred stock, $0.000001 par value per share.

 

Stock Options

 

The following is a summary of stock option activity:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Options     Exercise     Contractual     Intrinsic  
    Outstanding     Price     Life     Value  
Outstanding, December 31, 2019     300,000     $ 8.00       1.00     $                  -  
Granted     1,500,000       4.00                  
Forfeited     (1,084,000 )     4.00                  
Exercised     -                          
Outstanding, June 30, 2020     716,000     $ 5.68       1.68     $ -  
Exercisable, June 30, 2020     716,000     $ 5.68       1.68     $ -  

 

The exercise price for options outstanding and exercisable at June 30, 2020:

 

Outstanding     Exercisable  
Number of     Exercise     Number of     Exercise  
Options     Price     Options     Price  
  416,000     $ 4.00       416,000     $ 4.00  
  300,000       8.00       300,000       8.00  
  716,000               716,000          

 

  10  

The following is a summary of warrant activity:

 

            Weighted    
        Weighted   Average    
        Average   Remaining   Aggregate
    Warrants   Exercise   Contractual   Intrinsic
    Outstanding   Price   Life   Value
Outstanding, December 31, 2019     1,631,250     $ 4.08       3.38     $ -  
Granted     -                          
Forfeited     -                          
Exercised     -                          
Outstanding, June 30, 2020     1,631,250     $ 4.08       2.88     $ -  
Exercisable, June 30, 2020     1,631,250     $ 4.08       2.88     $ -  

 

The exercise price for warrants outstanding at June 30, 2020:

 

Outstanding and Exerciseable
Number of   Exercise
Warrants   Price
1,500,000     $ 4.00  
131,250       5.00  
1,631,250          

XML 26 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

Note 8 – Related Party Transactions

 

During the six months ended June 30, 2020 and 2019, the Company paid management fees of $0 and $120,000, respectively, to a company that is owned by the Company’s Chief Executive Officer and director. Beginning on February 1, 2019, the Company entered into a consulting agreement with this individual and paid $167,000 under the consulting agreement. The consulting agreement was terminated effective September 1, 2019. Also during the six months ended June 30, 2020, the Company’s CEO and director advanced the Company $150,000 and the Company repaid the amount in full. At June 30, 2020, $0 was owed to the Company’s CEO and director related to this advance.

 

During the six months ended June 30, 2020 and 2019, the Company expensed $32,173 and $53,507, respectively, in advertising expenses from a company whose CEO was also a former director of the Company. At June 30, 2020 and December 31, 2019, $324,920 and $394,183, respectively, was owed to this company and is included in accounts payable in the accompanying consolidated balance sheets.

 

During the six months ended June 30, 2020 and 2019, the Company expensed $1,103,460 and $1,024,907, respectively, in insurance expense related to insuring the Company fleet of vehicles from an insurance brokerage firm whose owner is also a stockholder of the Company. At June 30, 2020 and December 31, 2019, $201,156 and $171,665, respectively, was owed to this insurance brokerage from and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

XML 27 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Contingencies
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

Note 9 - Contingencies

 

Legal Proceedings

 

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.

 

Social Reality Inc. v. YayYo, Inc.

 

This action was filed on February 11, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Social Reality Inc. is a media company that claims to have provided media services to the Company. Plaintiff has sued the Company for breach of contract and related causes of action, arising from its claims that the Company has failed to pay for past outstanding invoices for services rendered. The plaintiff has also filed a motion for prejudgment attachment which was heard on July 28, 2020. The Superior Court denied the writ of attachment on the merits. The parties have a case management conference scheduled for August 18, 2020. The Company believes that it has valid defenses to the lawsuit, and expects to file counterclaims that will offset or negate any monies owed to plaintiff; it will vigorously defend the lawsuit.

 

Anthony Davis v. YayYo, Inc., and Ramy El-Batrawi

 

This action was filed on March 5, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Anthony Davis was hired by the Company as its Chief Executive Officer in or about December 2016, although he worked there for only a matter of months. Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and director, and was involved, the complaint alleges, in Plaintiff’s hiring. As part of his compensation, Mr. Davis claims that he expected to receive stock options in the Company. He has alleged that “after several months of unsuccessfully attempting to persuade the Company’s founder to implement certain protocols and procedures” Davis resigned from his executive officer and director positions, and entered into a written settlement agreement with the Company as a consultant. Mr. Davis claims that the Company breached its agreement to award him certain stock options and includes a claim for wage and hour violations. The lawsuit also includes a request for declaratory and injunctive relief. Davis also included a claim under California Unfair Practices Act. The Company denies liability and asserts that it has paid Davis all amounts due to him under the contract, and that Davis failed to exercise his stock options before they expired on December 31, 2018. It intends to vigorously defend the lawsuit, and has agreed to pursue mediation pursuant to the contract with plaintiff.

 

Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876

 

This action was filed on July 22, 2020, in the Superior Court of the State of California for the County of Los Angeles. Plaintiff Ivan Rung claims to have purchased the Company’s stock and purports to bring a securities class action on behalf of all purchasers of YayYo’s stock pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 2019 initial public stock offering (IPO”). Mr. El-Batrawi is the founder and current CEO of the Company but at the time of the IPO was only a shareholder of the Company having stepped down as CEO, Director and a controlling shareholder of the Company. The complaint is vague about alleged misrepresentation and material omissions, detailing instead a supposed chronology of events leading to the Company’s voluntary decision to delist its stock from NASDAQ, a decision the Company announced in an 8K filed on February10, 2020. The Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts and occurrences in its Registration Statement, related public filings and other public statements, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. It intends to vigorously defend the lawsuit.

 

Michael Vanbecelaere v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV28066

 

This action was filed on July 23, 2020, in the Superior Court of the State of California for the County of Los Angeles, also as a purported class action. Plaintiff Michael Vanbecelaere claims to have purchased the Company’s stock “traceable to the IPO” and like Rung, brings a securities class action pursuant to Sections 11 & 15 of the Securities Act of 1933 on behalf of all purchasers of YayYo’s stock. The complaint like the preceding action, Ivan Rung v. YayYo, Inc., Ramy El-Batrawi, et al., 20STCV27876 (“Rung”) alleges false statements and material omission pursuant to the Registration Statement and Prospectus issued in connection with YayYo’s November 14, 201 9 initial public stock offering (IPO). The defendants are identical to the defendants in the action filed the day before, on July 22, 2020. The two complaints are virtual cookie cutter versions of each other including a false allegation of fact about YayYo that appears in an identical paragraph 13: “On or about June 21, 2016, defendant EI-Batrawi incorporated YayYo in Delaware. The Company then rented cars to Uber and Lyft drivers.” (The business model of YayYo was different on June 21, 2016.) As with the Rung case, the Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts, events and occurrences in its Registration Statement and related public filings, and the Complaint’s alleged violations of Sections 11 & 15 of the Securities Act of 1933 are baseless. The actions will be “low numbered” to the same Superior Court judge and consolidated. The Company intends to vigorously defend the lawsuit.

XML 28 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

Note 10 – Subsequent Events

 

In July 2020, the Company issued a total of 2,505,000 stock options to officers, directors and employees. Included in the total options issued were: 1,000,000 to the CEO; 750,000 to the COO; 250,000 to the CFO and 5,000 each to four independent directors.

 

In July 2020, the Company entered into a new employment agreement with Laurie DiGiovanni, the Company’s COO for an annual salary of $200,000 plus 750,000 stock options that become fully vested over three years.

XML 29 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Distinct Cars, LLC, RideShare Car Rentals, LLC, RideYayYo, LLC and Savy, LLC. All significant intercompany transactions and balances have been eliminated.

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.

Cash Equivalents

Cash Equivalents

 

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Equipment and Rental Vehicles

Equipment and Rental Vehicles

 

Equipment and Rental Vehicles are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Computer equipment 5 years
Vehicles 5 years

Long-Lived Assets

Long-Lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at June 30, 2020, the Company determined that no impairment charge was necessary.

Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue from renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the rental agreements which are generally on a weekly basis. The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers.

Income Taxes

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

Stock-Based Compensation

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 1,631,250 warrants and 716,000 options outstanding as of June 30, 2020.

Basic and Diluted Earnings Per Share

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 2,347,250 potentially dilutive securities outstanding at June 30, 2020.

Advertising Costs

Advertising Costs

 

The Company expenses the cost of advertising as incurred. Advertising costs for the six months ended June 30, 2020 and 2019 were $210,642 and $102,606, respectively.

Fair Value Measurements

Fair Value Measurements

 

The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

 

At June 30, 2020 and December 31, 2019, the Company did not identify any liabilities that are required to be presented on the balance sheet at fair value.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have an impact on its financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements and disclosures.

XML 30 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Schedule of Estimated Lives of Equipment

Depreciation of equipment and rental vehicles is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Computer equipment 5 years
Vehicles 5 years
XML 31 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Equipment (Tables)
6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Schedule of Equipment

At June 30, 2020 and December 31, 2019 equipment consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Computer equipment   $ 6,046     $ 6,046  
      6,046       6,046  
Less accumulated depreciation     (3,395 )     (2,651 )
Equipment, net   $ 2,651     $ 3,395  
                 
XML 32 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Rental Vehicles (Tables)
6 Months Ended
Jun. 30, 2020
Rental Vehicles  
Schedule of Rental Vehicles

At June 30, 2020 and December 31, 2019, all of the Company’s rental vehicles consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Rental vehicles   $ 8,468,168     $ 6,284,211  
      8,468,168       6,284,211  
Less accumulated depreciation     (2,105,179 )     (1,547,164 )
Rental vehicles, net   $ 6,362,989     $ 4,737,047  
XML 33 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable (Tables)
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Schedule of Notes Payable

Notes payable at June 30, 2020 and December 31, 2019 consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
Notes payable to individual investors; accrue interest at 8% per annum; principal payments equal to 1/12 of original balance plus interest due quarterly; due from dates ranging from August 9, 2020 to March 26, 2021; unsecured (A)   $ 319,667       319,667  
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $731 after 12 months from funding and is due 30 years from the date of issuance.     149,900       -  
 Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The Company expects some or all of this loan to be forgiven as provided for in the CARES Act.     192,775       -  
Total notes payable     662,342       319,667  
Unamortized debt discount     (12,383 )     (32,289 )
Notes payable, net discount     649,959       287,378  
Less current portion     (649,959 )     (287,378 )
Long-term portion   $ -     $ -  

 

(A) In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the six months ended June 30, 2020 and 2019, $19,906 and $19,797, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $12,383 at June 30, 2020.

Schedule of Outstanding Notes Payable

A rollforward of notes payable from December 31, 2019 to June 30, 2020 is below:

 

Notes payable, December 31, 2019   $ 287,378  
Issued for cash     342,675  
Amortization of debt discounts     19,906  
Notes payable, June 30, 2020   $ 649,959  
XML 34 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Lease Obligations (Tables)
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Schedule of Lease Obligations

Lease obligations at June 30, 2020 and December 31, 2019 consisted of the following:

 

    June 30,     December 31,  
    2020     2019  
             
Lease obligations   $ 3,099,385     $ 2,400,565  
Less current portion     (1,640,899 )     (1,416,446 )
Long-term portion   $ 1,458,486     $ 984,119  
Schedule of Outstanding Lease Obligations

A rollforward of lease obligations from December 31, 2019 to June 30, 2020 is below:

 

Lease obligations, December 31, 2019   $ 2,400,565  
New lease obligations     2,246,285  
Disposal of leased vehicles     (115,800 )
Payments on lease obligations     (1,431,665 )
Lease obligations, June 30, 2020   $ 3,099,385  
Schedule of Future Lease Obligations

Future payments under lease obligations are as follows:

 

Twelve months ending June 30,      
2021   $ 1,807,191  
2022     860,581  
2023     693,016  
Total payments     3,360,788  
Amount representing interest     (261,403 )
Lease obligation, net   $ 3,099,385  
XML 35 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity (Tables)
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Summary of Stock Option Activity

The following is a summary of stock option activity:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Options     Exercise     Contractual     Intrinsic  
    Outstanding     Price     Life     Value  
Outstanding, December 31, 2019     300,000     $ 8.00       1.00     $                  -  
Granted     1,500,000       4.00                  
Forfeited     (1,084,000 )     4.00                  
Exercised     -                          
Outstanding, June 30, 2020     716,000     $ 5.68       1.68     $ -  
Exercisable, June 30, 2020     716,000     $ 5.68       1.68     $ -  

 

Schedule of Options Outstanding by Exercise Price Range

The exercise price for options outstanding and exercisable at June 30, 2020:

 

Outstanding     Exercisable  
Number of     Exercise     Number of     Exercise  
Options     Price     Options     Price  
  416,000     $ 4.00       416,000     $ 4.00  
  300,000       8.00       300,000       8.00  
  716,000               716,000          

Summary of Warrant Activity

The following is a summary of warrant activity:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Warrants     Exercise     Contractual     Intrinsic  
    Outstanding     Price     Life     Value  
Outstanding, December 31, 2019     1,631,250     $ 4.08       3.38     $ -  
Granted     -                          
Forfeited     -                          
Exercised     -                          
Outstanding, June 30, 2020     1,631,250     $ 4.08       2.88     $ -  
Exercisable, June 30, 2020     1,631,250     $ 4.08       2.88     $ -  
Schedule of Warrants Outstanding by Exercise Price Range

The exercise price for warrants outstanding at June 30, 2020:

 

Outstanding and Exerciseable  
Number of     Exercise  
Warrants     Price  
  1,500,000     $ 4.00  
  131,250       5.00  
  1,631,250          
XML 36 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Basis of Presentation (Details Narrative)
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Date of incorporation Jun. 21, 2016
Place of incorporation DE
XML 37 R25.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Number of stock options shares outstanding 716,000   300,000
Potentially dilutive securities outstanding 2,347,250    
Advertising costs $ 210,642 $ 102,606  
Warrant [Member]      
Number of stock options shares outstanding 1,631,250    
Options [Member]      
Number of stock options shares outstanding 716,000    
XML 38 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies - Schedule of Estimated Lives of Equipment (Details)
6 Months Ended
Jun. 30, 2020
Computer Equipment [Member]  
Estimated lives 5 years
Rental Vehicles [Member]  
Estimated lives 5 years
XML 39 R27.htm IDEA: XBRL DOCUMENT v3.20.2
Equipment (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Depreciation expense $ 668,623 $ 514,244
Equipment [Member]    
Depreciation expense $ 744 $ 158
XML 40 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Equipment - Schedule of Equipment (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Equipment, gross $ 6,046 $ 6,046
Less accumulated depreciation (3,395) (2,651)
Equipment, net 2,651 3,395
Computer Equipment [Member]    
Equipment, gross $ 6,046 $ 6,046
XML 41 R29.htm IDEA: XBRL DOCUMENT v3.20.2
Rental Vehicles (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Depreciation expense for leased assets $ 668,623 $ 514,244
Minimum [Member]    
Finance lease term 30 months  
Maximum [Member]    
Finance lease term 36 months  
Rental Vehicles [Member]    
Estimated useful life 5 years  
XML 42 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Rental Vehicles - Schedule of Rental Vehicles (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Rental Vehicles, gross $ 8,468,168 $ 6,284,211
Less accumulated depreciation (2,105,179) (1,547,164)
Rental Vehicles, net 6,362,989 4,737,047
Rental Vehicles [Member]    
Rental Vehicles, gross $ 8,468,168 $ 6,284,211
XML 43 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable - Schedule of Notes Payable (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Total notes payable $ 662,342 $ 662,342
Unamortized debt discount (12,383) (32,289)
Notes payable, net discount 649,959 287,378
Less current portion (500,059) (287,378)
Long-term portion 149,900
Notes Payable One [Member]    
Total notes payable [1] 319,667 319,667
Notes Payable Two [Member]    
Total notes payable 149,900
Notes Payable Three [Member]    
Total notes payable $ 192,775
[1] In connection with the issuance of these notes payable in 2018 and 2017, the Company also issued an aggregate of 24,050 shares of its common stock to these note holders as additional incentive to make the loans. The aggregate relative fair value of these shares of common stock was $119,875 and was recorded as a discount on the note payable and as additional paid in capital. The discount of $119,875 is being amortized over the term of the notes payable. During the six months ended June 30, 2020 and 2019, $19,906 and $19,797, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $12,383 at June 30, 2020.
XML 44 R32.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Amortization of debt discounts $ 19,906 $ 19,797      
Unsecured Note Payable To Individual Investors [Member]          
Debt instrument interest rate 8.00%   8.00%    
Debt instrument payment terms Principal payments equal to 1/12 of original balance plus interest due quarterly   Principal payments equal to 1/12 of original balance plus interest due quarterly.    
Debt instrument maturity date, description Due from dates ranging from August 9, 2020 to March 26, 2021   Due from dates ranging from August 9, 2020 to March 26, 2021.    
Shares issued during period as incentive for loans       24,050 24,050
Shares issued during period as incentive for loans, value recorded as discount       $ 119,875 $ 119,875
Amortization of debt discounts       $ 119,875 $ 119,875
Interest expense $ 19,906 $ 19,797      
Unamortized debt discount $ 12,383        
Unsecured Note Payable To Individual Investors [Member] | Minimum [Member]          
Debt instrument maturity date Aug. 09, 2020   Aug. 09, 2020    
Unsecured Note Payable To Individual Investors [Member] | Maximum [Member]          
Debt instrument maturity date Mar. 26, 2021   Mar. 26, 2021    
Note payable to the Small Business Administration [Member]          
Debt instrument interest rate 3.75%        
Paycheck Protection Program [Member]          
Debt instrument interest rate 1.00%        
Debt instrument payment terms The loan has terms of 24 months        
Debt instrument maturity date, description The Company expects some or all of this loan to be forgiven as provided for in the CARES Act.        
Note payable to the Small Business Administration [Member]          
Debt instrument payment terms Requires monthly payments of $731 after 12 months from funding   Requires monthly payments of $731 after 12 months from funding    
Debt instrument maturity date, description Due 30 years from the date of issuance.   Due 30 years from the date of issuance.    
XML 45 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable - Schedule of Outstanding Notes Payable (Details) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Debt Disclosure [Abstract]    
Notes payable, beginning of the period $ 287,378  
Issued for cash 342,675 $ 1,051,300
Amortization of debt discounts 19,906 $ 19,797
Notes payable, end of the period $ 649,959  
XML 46 R34.htm IDEA: XBRL DOCUMENT v3.20.2
Lease Obligations - Schedule of Lease Obligations (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
Lease obligations $ 3,099,385 $ 2,400,565
Less current portion (1,640,899) (1,416,446)
Long-term portion $ 1,458,486 $ 984,119
XML 47 R35.htm IDEA: XBRL DOCUMENT v3.20.2
Lease Obligations - Schedule of Outstanding Lease Obligations (Details)
6 Months Ended
Jun. 30, 2020
USD ($)
Leases [Abstract]  
Lease obligations, beginning balance $ 2,400,565
New lease obligations 2,246,285
Disposal of leased vehicles (115,800)
Payments on lease obligations (1,431,665)
Lease obligations, ending balance $ 3,099,385
XML 48 R36.htm IDEA: XBRL DOCUMENT v3.20.2
Lease Obligations - Schedule of Future Lease Obligations (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
2021 $ 1,807,191  
2022 860,581  
2023 693,016  
Total payments 3,360,788  
(261403) (261,403)  
Lease obligation, net $ 3,099,385 $ 2,400,565
XML 49 R37.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity (Details Narrative) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Equity [Abstract]    
Capital stock shares authorized 100,000,000  
Common stock shares authorized 90,000,000 90,000,000
Common stock par value $ 0.000001 $ 0.000001
Preferred stock shares authorized 10,000,000 10,000,000
Preferred stock par value $ 0.000001 $ 0.000001
XML 50 R38.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Summary of Stock Option Activity (Details)
6 Months Ended
Jun. 30, 2020
USD ($)
$ / shares
shares
Equity [Abstract]  
Number of Shares Options Outstanding, Beginning Balance | shares 300,000
Number of Options, Granted | shares 1,500,000
Number of Options, Forfeited | shares (1,084,000)
Number of Options, Exercised | shares
Number of Shares Options Outstanding, Ending Balance | shares 716,000
Number of Shares Options, Exercisable | shares 716,000
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares $ 8.00
Weighted Average Exercise Price, Granted | $ / shares 4.00
Weighted Average Exercise Price, Forfeited | $ / shares 4.00
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares 5.68
Weighted Average Exercise Price, Exercisable Ending Balance | $ / shares $ 5.68
Weighted Average Remaining Contractual Life Outstanding, Beginning 1 year
Weighted Average Remaining Contractual Life Outstanding, Ending 1 year 8 months 5 days
Weighted Average Remaining Contractual Life, Exercisable 1 year 8 months 5 days
Aggregate Intrinsic Value Outstanding, Beginning Balance | $
Aggregate Intrinsic Value Outstanding, Ending Balance | $
Aggregate Intrinsic Value Outstanding, Exercisable Ending | $
XML 51 R39.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Schedule of Options Outstanding by Exercise Price Range (Details)
Jun. 30, 2020
$ / shares
shares
Number of Options Outstanding 716,000
Number of Options Exercisable 716,000
Exercise Price Range One [Member]  
Number of Options Outstanding 416,000
Exercise Price Outstanding | $ / shares $ 4.00
Number of Options Exercisable 416,000
Exercise Price Exercisable | $ / shares $ 4.00
Exercise Price Range Two [Member]  
Number of Options Outstanding 300,000
Exercise Price Outstanding | $ / shares $ 8.00
Number of Options Exercisable 300,000
Exercise Price Exercisable | $ / shares $ 8.00
XML 52 R40.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Summary of Warrant Activity (Details)
6 Months Ended
Jun. 30, 2020
USD ($)
$ / shares
shares
Equity [Abstract]  
Number of Shares, Warrants Outstanding Beginning | shares 1,631,250
Number of Shares, Warrants Granted | shares
Number of Shares, Warrants Forfeited | shares
Number of Shares, Warrants Exercised | shares
Number of Shares, Warrants Outstanding Ending | shares 1,631,250
Number of Shares, Warrants Exercisable Ending | shares 1,631,250
Weighted Average Exercise Price, Warrants Outstanding Beginning | $ / shares $ 4.08
Weighted Average Exercise Price, Warrants Granted | $ / shares
Weighted Average Exercise Price, Warrants Forfeited | $ / shares
Weighted Average Exercise Price, Warrants Exercised | $ / shares
Weighted Average Exercise Price, Warrants Outstanding Ending | $ / shares 4.08
Weighted Average Exercise Price, Per Share Exercisable | $ / shares $ 4.08
Weighted Average Remaining Contractual Life, Warrants Outstanding Beginning 3 years 4 months 17 days
Weighted Average Remaining Contractual Life, Warrants Outstanding Ending 2 years 10 months 17 days
Weighted Average Remaining Contractual Life, Warrants Exercisable 2 years 10 months 17 days
Aggregate Intrinsic Value, Warrants Outstanding Beginning | $
Aggregate Intrinsic Value, Warrants Outstanding Ending | $
Aggregate Intrinsic Value, Exercisable | $
XML 53 R41.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Schedule of Warrants Outstanding by Exercise Price Range (Details)
Jun. 30, 2020
$ / shares
shares
Number of Warrants Outstanding and Exercisable 1,631,250
Exercise Price Range One [Member]  
Number of Warrants Outstanding and Exercisable 1,500,000
Exercise Price Outstanding and Exercisable | $ / shares $ 4.00
Exercise Price Range Two [Member]  
Number of Warrants Outstanding and Exercisable 131,250
Exercise Price Outstanding and Exercisable | $ / shares $ 5.00
XML 54 R42.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Repayment from related party $ 150,000  
Advertising expenses 210,642 102,606  
Accounts payable to related party 324,920   $ 394,183
Owed insurance brokerage 201,156   $ 171,665
Chief Executive Officer and Director [Member]      
Paid management fees 0 120,000  
Paid for consulting agreement amount 167,000    
Repayment from related party 150,000    
Due to related party 0    
Advertising expenses 32,173 53,507  
Insurance expenses paid during period $ 1,103,460 $ 1,024,907  
XML 55 R43.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events (Details Narrative) - Subsequent Event [Member]
Jul. 31, 2020
USD ($)
shares
Officers, Directors and Employees [Member]  
Number of common stock issued, shares 2,505,000
Chief Executive Officer [Member]  
Number of common stock issued, shares 1,000,000
Chief Operating Officer [Member]  
Number of common stock issued, shares 750,000
Chief Operating Officer [Member] | New Employment Agreement [Member]  
Annual salary | $ $ 200,000
Stock option fully vested 750,000
Vesting period 3 years
Chief Financial Officer [Member]  
Number of common stock issued, shares 250,000
Four Independent Directors [Member]  
Number of common stock issued, shares 5,000
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