Stockholders' Deficit

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 5 – STOCKHOLDERS’ DEFICIT

Common Stock

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

Stock Options

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

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

No stock options were granted during the six months ended June 30, 2020. During the six months ended June 30, 2019, the Board of Directors approved the grant of 1,050,000 stock options to various contractors and employees. The 2019 granted options had exercise prices ranging from $3.20 to $5.53, expire in ten years, and generally vest over four years. The total grant date fair value of these options was $1,946,281. The Company used the Black-Scholes option pricing model to value of stock option awards using the following input assumptions for the three and six months ended June 30, 2019. 

	Three Month Ended June 30, 2019	Six Months Ended June 30, 2019
Expected volatility	45%		45%
Risk-free interest rate	2.39%		2.51%
Expected life in years	5.56		5.56 - 6.25
Expected dividend yield	0%		0%

Stock -based compensation expense for stock options for the three months ended June 30, 2020 and 2019 was $26,161 and $297,862, respectively, and $278,233 and $517,032 for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the total estimated remaining stock-based compensation expense for unvested stock options is approximately $44,720 which is expected to be recognized over a weighted average period of 0.7 years.

             On April 29, 2020, the Compensation Committee of the Board of Directors approved an exchange (the “Exchange”) of grants under the HyreCar Inc. 2018 Equity Incentive Plan (the “2018 Plan”) previously made to executive officers and directors of the Company (the “Grantees”). The Board of Directors, upon recommendation from the Committee, approved the Exchange on April 29, 2020. Pursuant to the Exchange, the Grantees agreed to the cancellation of options to purchase an aggregate of 1,487,500 shares of the Company’s common stock under the 2018 Plan in exchange for the issuance of an aggregate of 822,500 shares of fully-vested restricted stock under the 2018 Plan.

The Exchange was a cancellation of stock options with a concurrent replacement award and was accounted for as a modification. For the three and six months ended June 30, 2020, the Company recognized additional compensation expense of $1,434,132 pertaining to this modification. As there was no future service or performance conditions associated with the replacement award, this compensation cost was fully recognized during the second quarter of 2020.

Restricted Stock Units and Shares Issued for Services and Other

During the six months ended June 30, 2020, the Company granted a contractor 100,000 restricted stock units that vest upon achieving specified milestones and business objectives. None of these milestones or objectives have been achieved to date and none are expected to vest under current circumstances.

Stock-based compensation related to restricted stock units for the three and six months ended June 30, 2020 was $121,797 and $284,897, respectively. As of June 30, 2020, unrecognized compensation expense related to the unvested restricted stock units is $620,821 and is expected to be recognized over approximately 1.9 years.

During the six months ended June 30, 2020, the Company granted 314,535 shares of common stock in exchange for legal, and consulting services. The Company recognized stock-based compensation of $255,717 and settled accounts payables and accrued liabilities totaling $457,096 based on the closing price of the Company’s common stock on the date of grant. The Company also issued 78,431 shares of common stock as legal settlement to Nathaniel Farber, a founder of the Company pursuant to Case No. CGC-18-571257 pertaining to the buyback of the Claimant Founders’ stock at the time of the IPO. Stock-based compensation of $213,332 was recognized during the six months ended June 30, 2020 based on the closing price of the Company’s common stock on the date of issue.

During the six months ended June 30, 2019, the Company granted 165,000 restricted stock units, respectively, to employees of the Company that generally vest between one and four years. Stock-based compensation related to restricted stock units for the three and six months ended June 30, 2019 was $67,680 and $102,191, respectively.

During the six months ended June 30, 2019, the Company granted 105,000 shares of common stock in exchange for legal and consulting services provided by two service providers. The Company valued the grants at $527,650 based on the closing price of the Company’s common stock on the grant date. Of this amount $263,825 was recognized as a prepaid as a retainer for legal services as of June 30, 2019 and the remaining portion was recognized as stock-based compensation.

During the six months ended June 30, 2019, the Company granted 10,000 shares of common stock to one consultant for services based on agreement entered into in January 2019. The Company valued the shares based on the closing price of the Company’s common stock on the date of the agreement and recognized $27,500 in stock-based compensation. Included in the agreement were 400,000 forfeitable restricted stock shares that vest upon achieving specific performance and strategic milestones. As none of the milestones were achieved, all 400,000 restricted stock shares were forfeited in 2019.