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Commitments and Contingencies
3 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 3 – COMMITMENTS AND CONTINGENCIES

 

Settlement and Legal

 

In September 2015, two former founders (the “Claimant Founders”) made an arbitration claim against the Company for alleged violations of an agreement among the founders of the Company (the “Founders’ Agreement”).  The Claimant Founders and the Company arbitrated the dispute but, prior to the arbitrator rendering a decision, the Company and the Claimant Founders settled the dispute without any party admitting liability or fault.  Under the terms of the April 25, 2016 settlement (the “Settlement Agreement”), each of the Claimant Founders would maintain 190,177 shares of their common stock restricted per the Founders’ Agreement and with certain additional restrictions. Additionally, the Claimant Founders agreed to remit the remaining balance of stock previously held by them back to the Company.  The Settlement Agreement provided that the Claimant Founders’ stock ownership would be diluted upon subsequent money raises, stock option offerings, and stock option vesting, however, any dilution would remain consistent and proportional to the remaining founders’ dilution ratios.  The claimants also received a total of $110,000 paid out over eighteen (18) months starting on November 1, 2016.  The remaining balance of $24,444 owed as of December 31, 2017 to the Claimant Founders under the Settlement Agreement was paid in 2018 and no additional monies are now due under the Settlement Agreement.

 

Thereafter, on November 13, 2018, the same two Claimant Founders, initiated two lawsuits in the Superior Court of California, County of San Francisco, entitled Nathaniel Farber v. HyreCar Inc., Case No. CGC-18-571257 and Josiah Larkin v. HyreCar Inc., Case No. CGC-18-571258.  The complaints for the lawsuits, which were largely duplicative, allege that the Company breached the Settlement Agreement by not allowing the Claimant Founders to sell stock in the initial public offering (“IPO”) of the Company, failing to offer to buyback Claimant Founders’ stock at the time of the IPO, allowing the issuance of certain stock without proportionately increasing the stock ownership of Claimant Founders, and not providing certain required information to the Claimant Founders.   The Company strongly disagrees with all of the allegations and intends to vigorously contest both lawsuits.  The Company believes that, at all times, its actions have been consistent with the terms, conditions, and context of the Settlement Agreement, as well as applicable law.  At this time, the lawsuits are in their early stages and the Company is unable to estimate potential damage exposures, if there are any, related to the lawsuits. 

 

The Company is involved in claims and litigation from time to time in the normal course of business. At March 31, 2019, the Company believes there are no pending matters, except as noted above, that could be expected to have a material adverse effect on the business of the Company, its financial condition, results of operations or cash flows.

 

Other

 

In November 2017, the Company entered into a lease in Los Angeles, California commencing April 1, 2018, with the ability to occupy the facility in January 2018. The lease term is 39 months from the commencement date. Annual base rent is as follows: 2019 - $342,480, 2020 - $356,145, 2021 - $183,489, respectively. The lease required a deposit of $90,000. Per the lease agreement, the monthly rate will range from $27,708 to $31,167 a month.