Stockholders' Deficit

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 5 – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company is authorized to issue 15,000,000 shares of preferred stock, $0.00001 par value per share. Of these, the Company designated 4,471,489 shares as Series Seed 1 Convertible Preferred Stock (“Series Seed 1”). Each share of Series Seed 1 shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series Seed 1 held are convertible as of the record date. Series Seed 1 and common stock vote together as a single class, except as provided by law or by other provisions of the certificate of incorporation.

As described in Note 1, on June 29, 2018, at the closing of the IPO, 2,429,638 shares of outstanding Series Seed 1 Convertible Preferred Stock automatically converted into 2,429,638 shares of common stock.

Common Stock

The Company is authorized to issue 50,000,000 shares of common stock, $0.00001 par value per share.

Stock Options

In 2016, the Board of Directors adopted the HyreCar Inc. 2016 Incentive Plan (the “2016 Plan”). The 2016 Plan provides for the grant of equity awards to highly qualified personnel, including stock options, restricted stock, stock appreciation rights, and restricted stock units to purchase shares of common stock. Up to 2,227,777 shares of common stock may be issued pursuant to awards granted under the 2016 Plan. The 2016 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board.

In 2018, the Board of Directors adopted the HyreCar Inc. 2018 Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the grant of equity awards to purchase shares of common stock. Up to 3,000,000 shares of common stock may be issued pursuant to awards granted under the 2018 Plan, subject to increases that occur starting in 2021. The 2018 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board.

During the three months ended March 31, 2019 and 2018, the board of directors approved the grant of 975,000 and 0 stock options to various contractors and employees, respectively. The 2019 granted options had an exercise prices ranging from $3.20, expire in ten years, and vest over four years. The total grant date fair value of these options was approximately $1,762,180 for the three months ended March 31, 2019. The Company used the Black-Scholes option mode to value stock option awards with inputs noted below.

Stock-based compensation expense for stock options for the three months ended March 31, 2019 and 2018 was and $219,170 and $48,917, respectively.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The range of input assumptions used by the Company, including those used to reevaluate contractor options during the three months ended March 31, 2018, were as follows:

	Three Months Ended
	March  31, 2019	March 31, 2018
Expected volatility	45%	45%
Risk-free interest rate	2.61%	2.56%
Expected life in years	6.25	5.25 – 6.00
Expected dividend yield	0%	0%

Shares Issued for Services, Restricted Shares and Restricted Stock Units

During the three months ended March 31, 2019, the Company granted 10,000 shares of common stock to one consultant for services based on agreement entered into in January 2019. The Company valued the shares based on the closing price of the Company’s common stock on the date of the agreement and recognized $27,500 in stock-based compensation. Included in the agreement were 400,000 forfeitable restricted stock shares that vest upon achieving specific performance and strategic milestones. Currently, it is not probable the performance and strategic targets will be achieved.

During the three months ended March 31, 2019, the company granted 140,000 restricted stock units to employees of the Company that generally vest between one and four years.

Stock-based compensation related to restricted shares and restricted stock units was of $34,511 and $161,458 during the three months ended March 31, 2019 and 2018, respectively. Unrecognized compensation expense related to the unvested restricted stock units described above is approximately $532,000 as of March 31, 2019 and is expected to be recognized over approximately 2.9 years. During the three months ended March 31, 2019, 1,200 restricted stock units were forfeited.

Warrants

During March 2019 several of warrant holders exercised 274,224 warrants received with the 2018 Convertible Notes (Note 4). Total proceeds from the exercise of warrants was $873,403.

During the three months ended March 31, 2019 several of warrant holders exercised 461,294 warrants in cashless exercises, which resulted in the issuance of 169,243 shares of common stock.