10-Q

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 September 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

RIDESHARE RENTAL, INC.

(exact name of registrant as specified in its charter)

YAYYO, INC.

(former 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 November 10, 2020

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION:
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2020 and 2019 (unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Nine months Ended September 30, 2020 and 2019 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 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	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II OTHER INFORMATION:
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
	Signatures	24

ii

PART I – FINANCIAL INFORMATION

Item 1.

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2020 and December 31, 2019

	September 30,			December 31,
	2020			2019
	(unaudited)
ASSETS
Current Assets:
Cash	$	84,732		$	1,256,429
Accounts receivable		53,338			59,331
Prepaid expenses		431,973			782,900
Total current assets		570,043			2,098,660
Equipment, net		2,280			3,395
Rental vehicles, net		7,140,289			4,737,047
Deposit on vehicles		-			164,080
Other assets		200,000			200,000
TOTAL ASSETS	$	7,912,612		$	7,203,182
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable (including $692,386 and $394,183 to related party)	$	1,453,305		$	545,254
Accrued expenses (including $0 and $171,665 to related party)		432,815			405,977
Notes payables, current (net of discount of $4,570 and $32,289)		497,872			287,378
Advance from related party		50,000			-
Finance lease obligations, current		1,689,534			1,416,446
Total current liabilities		4,123,526			2,655,055
Note payable, net of current portion		149,900			-
Finance lease obligations, net of current portion		1,978,238			984,119
TOTAL LIABILITIES		6,251,664			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		29,708,377			28,735,894
Accumulated deficit		(28,047,461	)		(25,171,915	)
Total stockholders’ deficit		1,660,948			3,564,008
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	7,912,612		$	7,203,182

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

1

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	2,070,821		$	1,718,439		$	5,399,018		$	5,193,957
Cost of revenue		1,194,957			1,067,373			3,891,307			3,111,614
Gross profit		875,864			651,066			1,507,711			2,082,343
Operating expenses:
Selling and marketing expenses		113,904			80,039			324,546			182,645
General and administrative expenses		1,088,152			761,151			3,845,768			2,221,962
Loss on the settlement of debt		-			-			-			252,900
Total operating expenses		1,202,056			841,190			4,170,314			2,657,507
Loss from operations		(326,192	)		(190,124	)		(2,662,603	)		(575,164	)
Other income (expense):
Interest and financing costs		(65,292	)		(180,531	)		(212,943	)		(792,406	)
Total other income (expense)		(65,292	)		(180,531	)		(212,943	)		(792,406	)
Net loss	$	(391,484	)	$	(370,655	)	$	(2,875,546	)	$	(1,367,570	)
Weighted average shares outstanding :
Basic		31,981,374			26,802,803			30,828,676			26,774,636
Diluted		31,981,374			26,802,803			30,828,676			26,774,636
Loss per share
Basic	$	(0.01	)	$	(0.01	)	$	(0.09	)	$	(0.05	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.09	)	$	(0.05	)

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

2

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three and Nine Months Ended September 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
Stock option expense							240,244					240,244
Net loss									(391,484	)		(391,484	)
Balance, September 30, 2020		31,981,374		$	32	$	29,708,377	$	(28,047,461	)	$	1,660,948
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	)
Correction to outstanding shares		(173	)
Net loss									(370,655	)		(370,655	)
Balance, September 30, 2019		26,802,803		$	27	$	19,867,551	$	(22,609,264	)	$	(2,741,686	)

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

3

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,875,546	)	$	(1,367,570	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,047,075			730,610
Stock option expense		697,486			-
Common stock issued for services		-			-
Amortization of debt discounts		27,719			29,860
Loss on the settlement of debt		-			252,900
Changes in operating assets and liabilities:
Accounts receivable		5,993			(78,643	)
Prepaid expenses		350,927			1,394
Accounts payable		908,051			(419,958	)
Accrued expenses		26,838			697,518
Net cash used in operating activities		188,543			(153,889	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		342,675			1,951,300
Proceeds from sale of common stock		275,000			-
Proceeds from advance from related party		200,000			-
Repayment of advance from related party		(150,000	)		-
Repayment of notes payable		(10,000	)		(967,652	)
Repayment of finance lease obligations		(2,017,915	)		(1,025,863	)
Net cash provided by (used in) financing activities		(1,360,240	)		(42,215	)
NET INCREASE (DECREASE) IN CASH		(1,171,697	)		(196,104	)
CASH, BEGINNING OF PERIOD		1,256,429			277,444
CASH, END OF PERIOD	$	84,732		$	81,340
CASH PAID FOR:
Interest	$	185,224		$	715,250
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	$	3,400,922		$	510,136

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

4

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

Note 1 - Organization and Basis of Presentation

Organization and Line of Business

Rideshare Rental, Inc. (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. On September 11, 2020, the Company changed its name from YayYo, Inc. to Rideshare Rental, Inc. The accompanying financial statements are retroactively restated to present the Company as a C corporation from June 21, 2016. The Company’s operations at present consist entirely of the rental of 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

We have identified the impact of the COVID-19 pandemic as a risk and uncertainty that has had a material impact on our operating results throughout the nine months ended September 30, 2020, and that we expect to have a potentially material effect on our future. For further information on how COVID-19 has affected our operating results and the ongoing risk it presents, we refer you to both Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 2 of this Part I of this quarterly report on Form 10-Q, and to the risk factor included in Item 1A of Part II.

Interim financial statements

The unaudited condensed consolidated financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America were omitted pursuant to such rules and regulations. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results expected for the year ending December 31, 2020.

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 operating subsidiaries, Distinct Cars, LLC and RideShare Car Rentals, LLC along with two other wholly-owned subsidiaries that have not had operations to date. All significant intercompany transactions and balances have been eliminated.

5

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 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 September 30, 2020, the Company determined that no impairment charge was necessary.

Revenue Recognition

The Company recognizes revenue from fees generated through renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the terms of our rental agreements, which are generally entered into 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 3,221,000 options outstanding as of September 30, 2020.

6

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 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 4,852,250 potentially dilutive securities outstanding at September 30, 2020. Basic and diluted earnings per share is the same for all periods presented since the potentially dilutive securities are anti-dilutive due to the net losses incurred.

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising costs for the nine months ended September 30, 2020 and 2019 were $324,546 and $182,645, 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 September 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.

7

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

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

	September 30,			December 31,
	2020			2019
Computer equipment	$	6,046		$	6,046
		6,046			6,046
Less accumulated depreciation		(3,766	)		(2,651	)
Equipment, net	$	2,280		$	3,395

Depreciation expense for equipment for the nine months ended September 30, 2020 and 2019 was $1,115 and $211, respectively.

Note 4 – Rental Vehicles

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

	September 30,			December 31,
	2020			2019
Rental vehicles	$	9,622,805		$	6,284,211
		9,622,805			6,284,211
Less accumulated depreciation		(2,482,516	)		(1,547,164	)
Rental vehicles, net	$	7,140,289		$	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 nine months ended September 30, 2020 and 2019 was $1,045,960 and $730,399, 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

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

Note 5 – Notes Payable

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

	September 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)	$	309,667			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		652,342			319,667
Unamortized debt discount		(4,570	)		(32,289	)
Notes payable, net discount		647,772			287,378
Less current portion		(497,872	)		(287,378	)
Long-term portion	$	149,900		$	0

(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 nine months ended September 30, 2020 and 2019, $27,719 and $29,860, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $4,570 at September 30, 2020.

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

Notes payable, December 31, 2019	$	287,378
Issued for cash		342,675
Repayments		(10,000	)
Amortization of debt discounts		27,719
Notes payable, September 30, 2020	$	647,772

Note 6 – Lease Obligations

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

	September 30,			December 31,
	2020			2019
Lease obligations	$	3,667,772		$	2,400,565
Less current portion		(1,689,534	)		(1,416,446	)
Long-term portion	$	1,978,238		$	984,119

9

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

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

Lease obligations, December 31, 2019	$	2,400,565
New lease obligations		3,705,417
Disposal of leased vehicles		(420,295	)
Payments on lease obligations		(2,017,915	)
Lease obligations, September 30, 2020	$	3,667,772

Future payments under lease obligations are as follows:

Twelve months ending September 30,
2021	$	1,844,204
2022		1,126,489
2023		472,290
2024		488,362
Total payments		3,931,345
Amount representing interest		(263,573	)
Lease obligation, net	$	3,667,772

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.

Common Stock

During the nine months ended September 30, 2020, the Company sold an aggregate of 2,553,571 shares of common stock to three investors for cash proceeds of $275,000, of which 125,000 shares and $25,000 was to a member of the Company’s board of directors.

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		4,005,000			1.63
Forfeited		(1,084,000	)		4.00
Exercised		-
Outstanding, September 30, 2020		3,221,000		$	1.43		4.03	$	-
Exercisable, September 30, 2020		1,853,458		$	2.32		3.48	$	-

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

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	2,505,000	$	0.22		1,137,458	$	0.22
	416,000		4.00		416,000		4.00
	300,000		8.00		300,000		8.00
	3,221,000				1,853,458

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RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 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, September 30, 2020		1,631,250	$	4.08		2.63	$	-
Exercisable, September 30, 2020		1,631,250	$	4.08		2.63	$	-

The exercise price for warrants outstanding at September 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

Beginning on February 1, 2019, the Company entered into a consulting agreement with the individual who currently serves as its Chief Executive Officer and director, paid him $167,000 pursuant to this consulting agreement, and terminated it effective September 1, 2019. Also during the nine months ended September 30, 2020, the Company’s CEO and director advanced the Company $200,000 and the Company repaid $150,000. At September 30, 2020, $50,000 was owed to the Company’s CEO and director related to this advance.

During the nine months ended September 30, 2020 and 2019, the Company expensed $32,173 and $138,747, respectively, in advertising expenses from a company whose CEO was also a former director of the Company. At September 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 nine months ended September 30, 2020 and 2019, the Company expensed $1,715,237 and $1,569,919, 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 September 30, 2020 and December 31, 2019, $367,466 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. Other than what is disclosed herein, 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.

11

RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 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 the Company had contracted with to provide certain specified services. Plaintiff has sued the Company for breach of contract and related causes of action, arising from claims that the Company has failed to pay for outstanding invoices for services rendered, which the Company disputes. The plaintiff 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 had a case management conference in October 2020. The Company believes that it has both valid defenses and counterclaims to the lawsuit, and will vigorously defend against it.

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 acted as the Company’s Chief Executive Officer from approximately December 2016 through April 2017 Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and one of our directors, and was involved, the complaint alleges, in Plaintiff’s hiring and termination. As part of his severance compensation, Mr. Davis was granted stock options in the Company. 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 seeks declaratory and injunctive relief. Mr. Davis also included a claim under California Unfair Practices Act. The Company denies all liability, asserts that it has paid Davis all amounts due to him under his separation agreement with the Company, and intends to vigorously defend against this lawsuit.

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 claimed to have purchased the Company’s stock and purported to bring a securities class action on behalf of all purchasers of the Company’s stock, pursuant to the Registration Statement and Prospectus filed with the SEC in connection with the Company’s November 13, 2019 initial public stock offering (“IPO”). The complaint alleged misrepresentations and material omissions in its IPO-related disclosure. In its answer, the Company denied liability and asserted that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its Registration Statement, related public filings and other public statements, and further asserted that the Complaint’s alleged violations of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), are baseless. Plaintiff’s counsel voluntarily dismissed this action on August 31, 2020, after admitting that Mr. Rung was not a suitable class representative. Instead plaintiff’s counsel are pursuing the highly similar case brought by Michael Vanbecelaere, as described below.

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 brings a securities class action pursuant to Sections 11 and 15 of the Securities Act on behalf of all purchasers of the Company’s stock. The complaint alleges that there were materially false statements and material omissions in the Registration Statement and Prospectus filed with the SEC and provided to prospective investors in connection with the Company’s IPO on November 13, 2019. The Company denies liability and asserts that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its IPO-related registration statement and related public filings, and that the Complaint’s alleged violations of Sections 11 and 15 of the Securities Act are baseless. The Company intends to vigorously defend the lawsuit.

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RIDESHARE RENTAL, INC. (FORMERLY YAYYO, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (unaudited)

Jason Hamlin v. YayYo, Inc., Ramy El-Batrawi, et al., 20-cv-8235 (SVW) and William Koch v. YayYo, Inc., Ramy El-Batrawi, et al, 20-cv-8591 (SVW)

These two actions were filed on September 9, 2020 and September18, 2020, respectively, in the United States District Court for the Central District of California, both cases as purported class actions. Plaintiffs Jason Hamlin and William Koch each claim to have purchased the Company’s stock “traceable to the IPO” and likein the pending state court action described immediately above, bring this securities class action pursuant to Sections 11 and 15 of the Securities Act on behalf of all purchasers of the Company’s stock. The complaint alleges that there were materially false statements and material omissions in the registration statement and prospectus filed with the SEC and provided to prospective investors in connection with the Company’s IPO on November 13, 2019 The defendants include directors of the company and the underwriters of the IPO, Westpark Capital and Aegis Capital Corp. The federal court has now consolidated the two matters for all purposes, and an initial status conference has been scheduled and held. As with the state court case described above, the Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts, events and occurrences in its IPO-related registration statement and related public filings, and that the complaint’s alleged violations of Sections 11 and 15 of the Securities Act of 1933 are baseless. The Company intends to vigorously defend these lawsuits in federal court.

Note 10 – Subsequent Events

Subsequent to September 30, 2020, the Company has received an advance from a related party, its current Chief Executive Officer, for $25,000.

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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 as a limited liability company 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 assumed by the Company, which now operates as a “C” corporation formed under the laws of the State of Delaware. On September 11, 2020, YayYo, Inc. changed its name to Rideshare Rental, Inc. 

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”).

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

Please refer to the risk factor included in Item 1A of Part II of this quarterly report on Form 10-Q.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Distinct Cars and Rideshare, as well as two other wholly-owned subsidiaries that have not had operations to date.

Consolidated Results of Operations—Three Months Ended September 30, 2020, Compared to Three Months Ended September 30, 2019.

Total Revenues.

Revenue for the three months ended September 30, 2020 was $2,070,821, an increase of $352,382 or 20.5% compared to revenue for the three months ended September 30, 2019 of $1,718,439. The increase is principally due to an increase in our rental fleet. During the three months ended September 30, 2020, the average weekly rental income per vehicle placed in service was $339 compared to $336 for the same period in 2019. Our revenue for the third quarter of 2020 was back to pre-COVID-19 levels, but there is no assurance that this trend will continue.

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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 September 30, 2020 were $1,194,957, an increase of $127,584 or 12.0% compared to cost of revenues for the three months ended September 30, 2019 of $1,067,373. The increase is due to higher depreciation expense due to an increase in fleet size offset by lower repairs and maintenance costs in 2020. For the three months ended September 30, 2020 and 2019 our cost of revenue was 57.7% and 62.1% 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.

Selling and Marketing Expenses.

Selling and marketing expenses for the three months ended September 30, 2020 were $113,904, representing an increase of $33,865 or 42.3% over the three months ended September 30, 2019 of $80,039. 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 September 30, 2020 were $1,088,152, representing an increase of $327,001 or 43.0% over the three months ended September 30, 2019 of $761,151. The increase is principally due to higher payroll costs as we hired additional personnel for our expanding operations, higher occupancy costs and stock-based compensation expense of $240,244 during the three months ended September 30, 2020.

Total Operating Expenses

Total operating expenses for the three months ended September 30, 2020 were $1,202,056, representing an increase of $360,866 or 42.9% compared to the three months ended September 30, 2019 of $841,190. The increase is due to the reasons described above.

Interest expense, net

Interest and financing expenses for the three months ended September 30, 2020 were $65,292 compared to $180,531 for the three months ended September 30, 2019. The decrease in interest and financing cost for the three months ended September 30, 2020 is due to a decrease in high interest rate debt outstanding.

Net Loss

The net loss for the three months ended September 30, 2020 was $391,484, representing an increase of $20,829 or 5.6% compared to the three months ended September 30, 2019 of $370,655. The increase is due to the reasons described above.

Consolidated Results of Operations—Nine months Ended September 30, 2020, Compared to Nine months Ended September 30, 2019.

Total Revenues.

Revenue for the nine months ended September 30, 2020 was $5,399,018, an increase of $205,061 or 3.9% compared to revenue for the nine months ended September 30, 2019 of $5,193,957. The increase is principally due to an increase in our rental fleet offset by a decrease in our average weekly rental income levels throughout the nine months ended September 30, 2020 due to the COVID-19 outbreak. During the nine months ended September 30, 2020, the average weekly rental income per vehicle placed in service was $298 compared to $338 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 since June are back to pre-COVID-19 levels, but there is no assurance that this trend will continue.

Cost of Revenues.

Cost of revenues for the nine months ended September 30, 2020 were $3,891,307, an increase of $779,693 or 25.1% compared to cost of revenues for the nine months ended September 30, 2019 of $3,111,614. 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 nine months ended September 30, 2020 and 2019 our cost of revenue was 72.1% and 59.9% 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.

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Selling and Marketing Expenses.

Selling and marketing expenses for the nine months ended September 30, 2020 were $324,546, representing an increase of $141,901 or 77.7% over the nine months ended September 30, 2019 of $182,645. 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 nine months ended September 30, 2020 were $3,845,768, representing an increase of $1,623,806 or 73.1% over the nine months ended September 30, 2019 of $2,221,962. The increase is principally due to higher payroll costs (including stock option expense of $697,486) 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 nine months ended September 30, 2020 was $0 as compared to $252,900 for the same period in 2019. During the months ended September 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 nine months ended September 30, 2020 were $4,170,314, representing an increase of $1,512,807 or 56.9% compared to the nine months ended September 30, 2019 of $2,657,507. The increase is due to the reasons described above.

Interest expense, net

Interest and financing expenses for the nine months ended September 30, 2020 were $212,943 compared to $792,406 for the nine months ended September 30, 2019. The decrease in interest and financing cost for the nine months ended September 30, 2020 due to a decrease in outstanding debt.

Net Loss

The net loss for the nine months ended September 30, 2020 was $2,875,546, representing an increase of $1,507,976 or 110.3% compared to the nine months ended September 30, 2019 of $1,367,570. 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 13, 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 September 30, 2020, the Company’s current assets totaled $570,043, current liabilities totaled $4,123,526, and working capital was a deficit of $3,553,483. 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 $1,886,120 and $951,231 as of September 30, 2020 and December 31, 2019, respectively, an increase of $934,889 or 98.3%.

Since inception, our principal sources of operating funds have been proceeds from equity financings, 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. 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 September 30, 2020, the Company had $84,732 in cash. The Company generated $188,543 of cash for operating activities for the nine months ended September 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. During the nine months ended September 30, 2020, the Company’s principal executive officer advanced the Company $200,000, of which the Company has repaid $150,000, leaving $50,000 outstanding.

17

Capital Expenditures

During the nine months ended September 30, 2020, the Company had capital expenditures of $3,705,417 in leased vehicles. At September 30, 2020, most of the Company’s vehicles were finance with leases. At September 30, 2020 the Company had $9,622,805 of rental vehicles, net of accumulated depreciation in the amount of $2,482,516, totaling $7,140,289 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 provided by operating activities for the nine months ended September 30, 2020 totaled $188,543, which was an increase of $342,432 or 223% from the net cash used in operating activities of $153,889 for the same period in 2019. The increase is principally due to the change in accounts payable and accrued expenses, and non-cash expense items.

Cash Flows from Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2020 totaled $1,360,240, which was a change of $1,318,025 from the net cash used in financing activities of $42,215 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 $1,951,300 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.

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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.

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 September 30, 2020 and December 31, 2019, the Company had total lease obligations in the amount of $3,667,772 and $2,400,565, respectively. The Company owes monthly payments under each Lease Agreement ranging from approximately $285 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.

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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 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 September 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 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.

20

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Please refer to Note 9 of our Condensed Consolidated Financial Statements for a discussion of all material pending legal proceedings.

21

Item 1A. Risk Factors.

COVID-19 has had a negative impact on our business the first half of 2020 and continues to present a material risk to our operations

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 of 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.

As a result, 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 during the third quarter ended September 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 any of the rideshare market, or the delivery gig economy in general, or the Company in particular.

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

None.

Item 3. Defaults Upon Senior Securities

None.

22

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

23

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.

RIDESHARE RENTAL, INC.
By:	/s/ Ramy El-Batrawi
	Ramy El-Batrawi, Chief Executive Officer
	/s/ Ryan Saathoff
	Ryan Saathoff, Chief Financial Officer
Date:	November 12, 2020

24

EX-31.1

EXHIBIT 31.1

Rideshare Rental, 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 Rideshare Rental, 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: November 12, 2020	/s/ Ramy El-Batrawi
	Ramy El-Batrawi
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Rideshare Rental, 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 Rideshare Rental, 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: November 12, 2020	By:	/s/ Ryan Saathoff
		Ryan Saathoff
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Rideshare Rental, 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 Rideshare Rental, Inc. (the “Company”) on Form 10-Q for the period ended September 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: November 12, 2020	By:	/s/ Ramy El-Batrawi
		Ramy El-Batrawi
		Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Rideshare Rental, 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 Rideshare Rental, Inc. (the “Company”) on Form 10-Q for the period ended September 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: November 12, 2020	By:	/s/ Ryan Saathoff
		Ryan Saathoff
		Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 10, 2020
Cover [Abstract]
Entity Registrant Name	Rideshare Rental, Inc.
Entity Central Index Key	0001691077
Document Type	10-Q
Document Period End Date	Sep. 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	Q3
Document Fiscal Year Focus	2020

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash	$ 84,732	$ 1,256,429
Accounts receivable	53,338	59,331
Prepaid expenses	431,973	782,900
Total current assets	570,043	2,098,660
Equipment, net	2,280	3,395
Rental vehicles, net	7,140,289	4,737,047
Deposit on vehicles		164,080
Other assets	200,000	200,000
TOTAL ASSETS	7,912,612	7,203,182
Current Liabilities:
Accounts payable (including $692,386 and $394,183 to related party)	1,453,305	545,254
Accrued expenses (including $0 and $171,665 to related party)	432,815	405,977
Notes payables, current (net of discount of $4,570 and $32,289)	497,872	287,378
Advance from related party	50,000
Finance lease obligations, current	1,689,534	1,416,446
Total current liabilities	4,123,526	2,655,055
Note payable, net of current portion	149,900
Finance lease obligations, net of current portion	1,978,238	984,119
TOTAL LIABILITIES	6,251,664	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	29,708,377	28,735,894
Accumulated deficit	(28,047,461)	(25,171,915)
Total stockholders' deficit	1,660,948	3,564,008
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 7,912,612	$ 7,203,182

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Accounts payable related party	$ 692,386	$ 394,183
Accrued expenses related party	0	171,665
Net of debt discount, current	$ 4,570	$ 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

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue	$ 2,070,821	$ 1,718,439	$ 5,399,018	$ 5,193,957
Cost of revenue	1,194,957	1,067,373	3,891,307	3,111,614
Gross profit	875,864	651,066	1,507,711	2,082,343
Operating expenses:
Selling and marketing expenses	113,904	80,039	324,546	182,645
General and administrative expenses	1,088,152	761,151	3,845,768	2,221,962
Loss on the settlement of debt				252,900
Total operating expenses	1,202,056	841,190	4,170,314	2,657,507
Loss from operations	(326,192)	(190,124)	(2,662,603)	(575,164)
Other income (expense):
Interest and financing costs	(65,292)	(180,531)	(212,943)	(792,406)
Total other income (expense)	(65,292)	(180,531)	(212,943)	(792,406)
Net loss	$ (391,484)	$ (370,655)	$ (2,875,546)	$ (1,367,570)
Weighted average shares outstanding :
Basic	31,981,374	26,802,803	30,828,676	26,774,636
Diluted	31,981,374	26,802,803	30,828,676	26,774,636
Loss per share
Basic	$ (.01)	$ (.01)	$ (0.09)	$ (0.05)
Diluted	$ (.01)	$ (.01)	$ (0.09)	$ (0.05)

XML

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				(1,367,570)
Balance at Sep. 30, 2019	$ 27	19,867,551	(22,609,264)	(2,741,686)
Balance, shares at Sep. 30, 2019	26,802,803
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
Correction to outstanding shares	(173)
Net loss			(370,655)	(370,655)
Balance at Sep. 30, 2019	$ 27	19,867,551	(22,609,264)	(2,741,686)
Balance, shares at Sep. 30, 2019	26,802,803
Balance at Dec. 31, 2019	$ 29	28,735,894	(25,171,915)	3,564,008
Balance, shares at Dec. 31, 2019	29,427,803
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
Issuance of common stock for cash, shares				2,553,571
Net loss				$ (2,875,546)
Balance at Sep. 30, 2020	$ 32	29,708,377	(28,047,461)	1,660,948
Balance, shares at Sep. 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
Stock option expense		240,244		240,244
Net loss			(391,484)	(391,484)
Balance at Sep. 30, 2020	$ 32	$ 29,708,377	$ (28,047,461)	$ 1,660,948
Balance, shares at Sep. 30, 2020	31,981,374

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,875,546)	$ (1,367,570)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,047,075	730,610
Stock option expense	697,486
Common stock issued for services
Amortization of debt discounts	27,719	29,860
Loss on the settlement of debt		252,900
Changes in operating assets and liabilities:
Accounts receivable	5,993	(78,643)
Prepaid expenses	350,927	1,394
Accounts payable	908,051	(419,958)
Accrued expenses	26,838	697,518
Net cash used in operating activities	188,543	(153,889)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable	342,675	1,951,300
Proceeds from sale of common stock	275,000
Proceeds from advance from related party	200,000
Repayment of advance from related party	(150,000)
Repayment of notes payable	(10,000)	(967,652)
Repayment of finance lease obligations	(2,017,915)	(1,025,863)
Net cash provided by (used in) financing activities	(1,360,240)	(42,215)
NET INCREASE (DECREASE) IN CASH	(1,171,697)	(196,104)
CASH, BEGINNING OF PERIOD	1,256,429	277,444
CASH, END OF PERIOD	84,732	81,340
CASH PAID FOR:
Interest	185,224	715,250
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	$ 3,400,922	$ 510,136

XML

Organization and Basis of Presentation

9 Months Ended

Sep. 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

Rideshare Rental, Inc. (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. On September 11, 2020, the Company changed its name from YayYo, Inc. to Rideshare Rental, Inc. The accompanying financial statements are retroactively restated to present the Company as a C corporation from June 21, 2016. The Company’s operations at present consist entirely of the rental of 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

We have identified the impact of the COVID-19 pandemic as a risk and uncertainty that has had a material impact on our operating results throughout the nine months ended September 30, 2020, and that we expect to have a potentially material effect on our future. For further information on how COVID-19 has affected our operating results and the ongoing risk it presents, we refer you to both Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 2 of this Part I of this quarterly report on Form 10-Q, and to the risk factor included in Item 1A of Part II.

Interim financial statements

The unaudited condensed consolidated financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America were omitted pursuant to such rules and regulations. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results expected for the year ending December 31, 2020.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 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 operating subsidiaries, Distinct Cars, LLC and RideShare Car Rentals, LLC along with two other wholly-owned subsidiaries that have not had operations to date. 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 September 30, 2020, the Company determined that no impairment charge was necessary.

Revenue Recognition

The Company recognizes revenue from fees generated through renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the terms of our rental agreements, which are generally entered into 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 3,221,000 options outstanding as of September 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 4,852,250 potentially dilutive securities outstanding at September 30, 2020. Basic and diluted earnings per share is the same for all periods presented since the potentially dilutive securities are anti-dilutive due to the net losses incurred.

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising costs for the nine months ended September 30, 2020 and 2019 were $324,546 and $182,645, 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 September 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.

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Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Equipment

Note 3 – Equipment

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

	September 30,			December 31,
	2020			2019
Computer equipment	$	6,046		$	6,046
		6,046			6,046
Less accumulated depreciation		(3,766	)		(2,651	)
Equipment, net	$	2,280		$	3,395

Depreciation expense for equipment for the nine months ended September 30, 2020 and 2019 was $1,115 and $211, respectively.

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Rental Vehicles

9 Months Ended

Sep. 30, 2020

Rental Vehicles

Rental Vehicles

Note 4 – Rental Vehicles

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

	September 30,			December 31,
	2020			2019
Rental vehicles	$	9,622,805		$	6,284,211
		9,622,805			6,284,211
Less accumulated depreciation		(2,482,516	)		(1,547,164	)
Rental vehicles, net	$	7,140,289		$	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 nine months ended September 30, 2020 and 2019 was $1,045,960 and $730,399, 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.

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Notes Payable

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Notes Payable

Note 5 – Notes Payable

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

	September 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)	$	309,667			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		652,342			319,667
Unamortized debt discount		(4,570	)		(32,289	)
Notes payable, net discount		647,772			287,378
Less current portion		(497,872	)		(287,378	)
Long-term portion	$	149,900		$	0

(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 nine months ended September 30, 2020 and 2019, $27,719 and $29,860, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $4,570 at September 30, 2020.

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

Notes payable, December 31, 2019	$	287,378
Issued for cash		342,675
Repayments		(10,000	)
Amortization of debt discounts		27,719
Notes payable, September 30, 2020	$	647,772

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Lease Obligations

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lease Obligations

Note 6 – Lease Obligations

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

	September 30,			December 31,
	2020			2019
Lease obligations	$	3,667,772		$	2,400,565
Less current portion		(1,689,534	)		(1,416,446	)
Long-term portion	$	1,978,238		$	984,119

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

Lease obligations, December 31, 2019	$	2,400,565
New lease obligations		3,705,417
Disposal of leased vehicles		(420,295	)
Payments on lease obligations		(2,017,915	)
Lease obligations, September 30, 2020	$	3,667,772

Future payments under lease obligations are as follows:

Twelve months ending September 30,
2021	$	1,844,204
2022		1,126,489
2023		472,290
2024		488,362
Total payments		3,931,345
Amount representing interest		(263,573	)
Lease obligation, net	$	3,667,772

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Stockholders' Equity

9 Months Ended

Sep. 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.

Common Stock

During the nine months ended September 30, 2020, the Company sold an aggregate of 2,553,571 shares of common stock to three investors for cash proceeds of $275,000, of which 125,000 shares and $25,000 was to a member of the Company’s board of directors.

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		4,005,000			1.63
Forfeited		(1,084,000	)		4.00
Exercised		-
Outstanding, September 30, 2020		3,221,000		$	1.43		4.03	$	-
Exercisable, September 30, 2020		1,853,458		$	2.32		3.48	$	-

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

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	2,505,000	$	0.22		1,137,458	$	0.22
	416,000		4.00		416,000		4.00
	300,000		8.00		300,000		8.00
	3,221,000				1,853,458

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, September 30, 2020		1,631,250	$	4.08		2.63	$	-
Exercisable, September 30, 2020		1,631,250	$	4.08		2.63	$	-

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

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

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Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Note 8 – Related Party Transactions

Beginning on February 1, 2019, the Company entered into a consulting agreement with the individual who currently serves as its Chief Executive Officer and director, paid him $167,000 pursuant to this consulting agreement, and terminated it effective September 1, 2019. Also during the nine months ended September 30, 2020, the Company’s CEO and director advanced the Company $200,000 and the Company repaid $150,000. At September 30, 2020, $50,000 was owed to the Company’s CEO and director related to this advance.

During the nine months ended September 30, 2020 and 2019, the Company expensed $32,173 and $138,747, respectively, in advertising expenses from a company whose CEO was also a former director of the Company. At September 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 nine months ended September 30, 2020 and 2019, the Company expensed $1,715,237 and $1,569,919, 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 September 30, 2020 and December 31, 2019, $367,466 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.

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Contingencies

9 Months Ended

Sep. 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. Other than what is disclosed herein, 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 the Company had contracted with to provide certain specified services. Plaintiff has sued the Company for breach of contract and related causes of action, arising from claims that the Company has failed to pay for outstanding invoices for services rendered, which the Company disputes. The plaintiff 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 had a case management conference in October 2020. The Company believes that it has both valid defenses and counterclaims to the lawsuit, and will vigorously defend against it.

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 acted as the Company’s Chief Executive Officer from approximately December 2016 through April 2017 Mr. El-Batrawi is the founder of the Company and our current Chief Executive Officer and one of our directors, and was involved, the complaint alleges, in Plaintiff’s hiring and termination. As part of his severance compensation, Mr. Davis was granted stock options in the Company. 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 seeks declaratory and injunctive relief. Mr. Davis also included a claim under California Unfair Practices Act. The Company denies all liability, asserts that it has paid Davis all amounts due to him under his separation agreement with the Company, and intends to vigorously defend against this lawsuit.

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 claimed to have purchased the Company’s stock and purported to bring a securities class action on behalf of all purchasers of the Company’s stock, pursuant to the Registration Statement and Prospectus filed with the SEC in connection with the Company’s November 13, 2019 initial public stock offering (“IPO”). The complaint alleged misrepresentations and material omissions in its IPO-related disclosure. In its answer, the Company denied liability and asserted that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its Registration Statement, related public filings and other public statements, and further asserted that the Complaint’s alleged violations of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), are baseless. Plaintiff’s counsel voluntarily dismissed this action on August 31, 2020, after admitting that Mr. Rung was not a suitable class representative. Instead plaintiff’s counsel are pursuing the highly similar case brought by Michael Vanbecelaere, as described below.

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 brings a securities class action pursuant to Sections 11 and 15 of the Securities Act on behalf of all purchasers of the Company’s stock. The complaint alleges that there were materially false statements and material omissions in the Registration Statement and Prospectus filed with the SEC and provided to prospective investors in connection with the Company’s IPO on November 13, 2019. The Company denies liability and asserts that it accurately and completely disclosed all material facts and occurrences, including adverse ones, in its IPO-related registration statement and related public filings, and that the Complaint’s alleged violations of Sections 11 and 15 of the Securities Act are baseless. The Company intends to vigorously defend the lawsuit.

Jason Hamlin v. YayYo, Inc., Ramy El-Batrawi, et al., 20-cv-8235 (SVW) and William Koch v. YayYo, Inc., Ramy El-Batrawi, et al, 20-cv-8591 (SVW)

These two actions were filed on September 9, 2020 and September18, 2020, respectively, in the United States District Court for the Central District of California, both cases as purported class actions. Plaintiffs Jason Hamlin and William Koch each claim to have purchased the Company’s stock “traceable to the IPO” and likein the pending state court action described immediately above, bring this securities class action pursuant to Sections 11 and 15 of the Securities Act on behalf of all purchasers of the Company’s stock. The complaint alleges that there were materially false statements and material omissions in the registration statement and prospectus filed with the SEC and provided to prospective investors in connection with the Company’s IPO on November 13, 2019 The defendants include directors of the company and the underwriters of the IPO, Westpark Capital and Aegis Capital Corp. The federal court has now consolidated the two matters for all purposes, and an initial status conference has been scheduled and held. As with the state court case described above, the Company denies liability and asserts that it accurately and completely disclosed all materially adverse facts, events and occurrences in its IPO-related registration statement and related public filings, and that the complaint’s alleged violations of Sections 11 and 15 of the Securities Act of 1933 are baseless. The Company intends to vigorously defend these lawsuits in federal court.

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

Note 10 – Subsequent Events

Subsequent to September 30, 2020, the Company has received an advance from a related party, its current Chief Executive Officer, for $25,000.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 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 operating subsidiaries, Distinct Cars, LLC and RideShare Car Rentals, LLC along with two other wholly-owned subsidiaries that have not had operations to date. 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 September 30, 2020, the Company determined that no impairment charge was necessary.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue from fees generated through renting its fleet of cars to Uber and Lyft drivers. Revenue is recognized based on the terms of our rental agreements, which are generally entered into 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 3,221,000 options outstanding as of September 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 4,852,250 potentially dilutive securities outstanding at September 30, 2020. Basic and diluted earnings per share is the same for all periods presented since the potentially dilutive securities are anti-dilutive due to the net losses incurred.

Advertising Costs

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising costs for the nine months ended September 30, 2020 and 2019 were $324,546 and $182,645, 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 September 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.

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.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 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

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Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Equipment

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

	September 30,			December 31,
	2020			2019
Computer equipment	$	6,046		$	6,046
		6,046			6,046
Less accumulated depreciation		(3,766	)		(2,651	)
Equipment, net	$	2,280		$	3,395

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Rental Vehicles (Tables)

9 Months Ended

Sep. 30, 2020

Rental Vehicles

Schedule of Rental Vehicles

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

	September 30,			December 31,
	2020			2019
Rental vehicles	$	9,622,805		$	6,284,211
		9,622,805			6,284,211
Less accumulated depreciation		(2,482,516	)		(1,547,164	)
Rental vehicles, net	$	7,140,289		$	4,737,047

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Notes Payable

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

	September 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)	$	309,667			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		652,342			319,667
Unamortized debt discount		(4,570	)		(32,289	)
Notes payable, net discount		647,772			287,378
Less current portion		(497,872	)		(287,378	)
Long-term portion	$	149,900		$	0

(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 nine months ended September 30, 2020 and 2019, $27,719 and $29,860, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $4,570 at September 30, 2020.

Schedule of Outstanding Notes Payable

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

Notes payable, December 31, 2019	$	287,378
Issued for cash		342,675
Repayments		(10,000	)
Amortization of debt discounts		27,719
Notes payable, September 30, 2020	$	647,772

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Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Lease Obligations

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

	September 30,			December 31,
	2020			2019
Lease obligations	$	3,667,772		$	2,400,565
Less current portion		(1,689,534	)		(1,416,446	)
Long-term portion	$	1,978,238		$	984,119

Schedule of Outstanding Lease Obligations

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

Lease obligations, December 31, 2019	$	2,400,565
New lease obligations		3,705,417
Disposal of leased vehicles		(420,295	)
Payments on lease obligations		(2,017,915	)
Lease obligations, September 30, 2020	$	3,667,772

Schedule of Future Lease Obligations

Future payments under lease obligations are as follows:

Twelve months ending September 30,
2021	$	1,844,204
2022		1,126,489
2023		472,290
2024		488,362
Total payments		3,931,345
Amount representing interest		(263,573	)
Lease obligation, net	$	3,667,772

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 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		4,005,000			1.63
Forfeited		(1,084,000	)		4.00
Exercised		-
Outstanding, September 30, 2020		3,221,000		$	1.43		4.03	$	-
Exercisable, September 30, 2020		1,853,458		$	2.32		3.48	$	-

Schedule of Options Outstanding by Exercise Price Range

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

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	2,505,000	$	0.22		1,137,458	$	0.22
	416,000		4.00		416,000		4.00
	300,000		8.00		300,000		8.00
	3,221,000				1,853,458

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, September 30, 2020		1,631,250	$	4.08		2.63	$	-
Exercisable, September 30, 2020		1,631,250	$	4.08		2.63	$	-

Schedule of Warrants Outstanding by Exercise Price Range

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

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

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Organization and Basis of Presentation (Details Narrative)	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Date of incorporation	Jun. 21, 2016
Place of incorporation	DE

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Number of stock options shares outstanding	3,221,000		300,000
Potentially dilutive securities outstanding	4,852,250
Advertising costs	$ 324,546	$ 182,645
Warrants [Member]
Number of stock options shares outstanding	1,631,250
Options [Member]
Number of stock options shares outstanding	3,221,000

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Summary of Significant Accounting Policies - Schedule of Estimated Lives of Equipment (Details)	9 Months Ended
	Sep. 30, 2020
Computer Equipment [Member]
Estimated lives	5 years
Rental Vehicles [Member]
Estimated lives	5 years

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Equipment (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Depreciation expense	$ 1,045,960	$ 730,399
Equipment [Member]
Depreciation expense	$ 1,115	$ 211

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Equipment - Schedule of Equipment (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Equipment, gross	$ 6,046	$ 6,046
Less accumulated depreciation	(3,766)	(2,651)
Equipment, net	2,280	3,395
Computer Equipment [Member]
Equipment, gross	$ 6,046	$ 6,046

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Rental Vehicles (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Depreciation expense for leased assets	$ 1,045,960	$ 730,399
Minimum [Member]
Finance lease term	30 months
Maximum [Member]
Finance lease term	36 months
Rental Vehicles [Member]
Estimated useful life	5 years

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Rental Vehicles - Schedule of Rental Vehicles (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Rental Vehicles, gross	$ 9,622,805	$ 6,284,211
Less accumulated depreciation	(2,482,516)	(1,547,164)
Rental Vehicles, net	7,140,289	4,737,047
Rental Vehicles [Member]
Rental Vehicles, gross	$ 9,622,805	$ 6,284,211

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Notes Payable - Schedule of Notes Payable (Details) - USD ($)		Sep. 30, 2020	Dec. 31, 2019
Total notes payable		$ 652,342	$ 319,667
Unamortized debt discount		(4,570)	(32,289)
Notes payable, net discount		647,772	287,378
Less current portion		(497,872)	(287,378)
Long-term portion		149,900
Notes Payable One [Member]
Total notes payable	[1]	309,667	319,667
Notes Payable Two [Member]
Total notes payable		149,900
Notes Payable Three [Member]
Total notes payable			$ 192,775

[1] (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 nine months ended September 30, 2020 and 2019, $27,719 and $29,860, respectively, was charged to interest expense as amortization of the discounts, with an unamortized balance of $4,570 at September 30, 2020.

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Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amortization of debt discount	$ 27,719	$ 29,860
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 discount				$ 119,875	$ 119,875
Interest expense	$ 27,719	$ 29,860
Unamortized debt discount	$ 4,570
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
Debt instrument maturity date, description	Due 30 years from the date of issuance.

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Notes Payable - Schedule of Outstanding Notes Payable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Debt Disclosure [Abstract]
Notes payable, beginning of the period	$ 287,378
Issued for cash	342,675	$ 1,951,300
Repayments	(10,000)	(967,652)
Amortization of debt discounts	27,719	$ 29,860
Notes payable, end of the period	$ 647,772

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Lease Obligations - Schedule of Lease Obligations (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Lease obligations	$ 3,667,772	$ 2,400,565
Less current portion	(1,689,534)	(1,416,446)
Long-term portion	$ 1,978,238	$ 984,119

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Lease Obligations - Schedule of Outstanding Lease Obligations (Details)	9 Months Ended
	Sep. 30, 2020 USD ($)
Leases [Abstract]
Lease obligations, beginning balance	$ 2,400,565
New lease obligations	3,705,417
Disposal of leased vehicles	(420,295)
Payments on lease obligations	(2,017,915)
Lease obligations, ending balance	$ 3,667,772

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Lease Obligations - Schedule of Future Lease Obligations (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
2021	$ 1,844,204
2022	1,126,489
2023	472,290
2024	488,362
Total payments	3,931,345
Amount representing interest	(263,573)
Lease obligation, net	$ 3,667,772	$ 2,400,565

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Stockholders' Equity (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
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
Common stock sold	2,553,571
Proceeds from Common stock sold	$ 275,000
Company Board of Director [Member]
Common stock sold	125,000
Proceeds from Common stock sold	$ 25,000

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Stockholders' Equity - Summary of Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Equity [Abstract]
Number of Shares Options Outstanding, Beginning Balance | shares	300,000
Number of Options, Granted | shares	4,005,000
Number of Options, Forfeited | shares	(1,084,000)
Number of Options, Exercised | shares
Number of Shares Options Outstanding, Ending Balance | shares	3,221,000
Number of Shares Options, Exercisable | shares	1,853,458
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares	$ 8.00
Weighted Average Exercise Price, Granted | $ / shares	1.63
Weighted Average Exercise Price, Forfeited | $ / shares	4.00
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares	1.43
Weighted Average Exercise Price, Exercisable Ending Balance | $ / shares	$ 2.32
Weighted Average Remaining Contractual Life Outstanding, Beginning	1 year
Weighted Average Remaining Contractual Life Outstanding, Ending	4 years 11 days
Weighted Average Remaining Contractual Life, Exercisable	3 years 5 months 23 days
Aggregate Intrinsic Value Outstanding, Beginning Balance | $
Aggregate Intrinsic Value Outstanding, Ending Balance | $
Aggregate Intrinsic Value Outstanding, Exercisable Ending | $

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Stockholders' Equity - Schedule of Options Outstanding by Exercise Price Range (Details)	Sep. 30, 2020 $ / shares shares
Number of Options Outstanding	3,221,000
Number of Options Exercisable	1,853,458
Exercise Price Range One [Member]
Number of Options Outstanding	2,505,000
Exercise Price Outstanding | $ / shares	$ 0.22
Number of Options Exercisable	1,137,458
Exercise Price Exercisable | $ / shares	$ 0.22
Exercise Price Range Two [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 Three [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

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Stockholders' Equity - Summary of Warrant Activity (Details)	9 Months Ended
	Sep. 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 7 months 17 days
Weighted Average Remaining Contractual Life, Warrants Exercisable	2 years 7 months 17 days
Aggregate Intrinsic Value, Warrants Outstanding Beginning | $
Aggregate Intrinsic Value, Warrants Outstanding Ending | $
Aggregate Intrinsic Value, Exercisable | $

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Stockholders' Equity - Schedule of Warrants Outstanding by Exercise Price Range (Details)	Sep. 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

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Related Party Transactions (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Proceeds from related party debt	$ 200,000
Repayments of related Party Debt	150,000
Advertising expenses	324,546	182,645
Accounts payable to related party	324,920		$ 394,183
Owed insurance brokerage	367,466		$ 171,665
Chief Executive Officer and Director [Member]
Paid for consulting agreement amount	167,000
Proceeds from related party debt	200,000
Repayments of related Party Debt	150,000
Advance from related party	50,000
Advertising expenses	32,173	138,747
Insurance expenses paid during period	$ 1,715,237	$ 1,569,919

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Subsequent Events (Details Narrative) - USD ($)		9 Months Ended
	Nov. 12, 2020	Sep. 30, 2020	Sep. 30, 2019
Advance from a related party		$ 200,000
Subsequent Event [Member] | Chief Executive Officer [Member]
Advance from a related party	$ 25,000