NEXTNRG, INC. 10-Q

Item 1. Financial Statements EzFill Holdings, Inc. Condensed Consolidated Balance Sheets (Unaudited) September 30, 2021 December 31, 2020 Assets Current Assets: Cash $ 20,650,989 $ 882,870 Accounts receivable, net of allowance for doubtful accounts of $ 4,980 and $ 0 , respectively 132,481 193,640 Prepaid expenses and deferred offering costs 142,484 160,078 Inventory 35,262 41,055 Total Current Assets 20,961,216 1,277,643 Fixed assets, net of accumulated depreciation of $ 238,528 and $ 143,818 , respectively 1,147,140 428,567 Goodwill 109,983 109,983 Intangible assets, net of accumulated amortization of $ 967,897 and $ 472,944 , respectively 3,445,606 990,559 Total Assets $ 25,663,945 $ 2,806,752 Liabilities and Stockholders’ Equity (Deficit) Current Liabilities: Accounts payable and accrued liabilities $ 655,335 $ 488,405 Accounts payable and accrued liabilities, related parties 700,000 2,250,000 Notes payable, net of discount of $ 0 and $ 75,000 , respectively 92,431 958,422 Notes payable - related party - 40,645 Total Current Liabilities 1,447,766 3,737,472 Notes payable - net of current portion 73,488 321,024 Notes payable - net of current portion - related party - 230,000 Total Liabilities 1,521,254 4,288,496 Commitments and Contingencies (Note 10) - - Stockholders’ Equity (Deficit) Preferred stock, $ .0001 par value; 50,000,000 shares authorized; - 0 - shares issued and outstanding - - Common stock, $ .0001 par value; 500,000,000 shares authorized; 25,926,923 and 17,199,912 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 2,592 1,720 Additional paid in capital 37,825,792 6,472,536 Accumulated deficit ( 13,685,693 ) ( 7,956,000 ) Total Stockholders’ Equity (Deficit) 24,142,691 ( 1,481,744 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 25,663,945 $ 2,806,752 The accompanying notes are an integral part of the consolidated financial statements. 3 EzFill Holdings, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 REVENUES Revenues $ 1,863,599 $ 1,121,133 $ 5,236,016 $ 2,460,174 TOTAL REVENUES 1,863,599 1,121,133 5,236,016 2,460,174 COSTS & EXPENSES Cost of sales 1,825,739 1,064,362 5,057,628 2,417,456 Operating expenses 1,794,575 641,945 4,705,108 2,719,394 Depreciation and amortization 237,788 127,298 589,662 324,234 TOTAL COSTS AND EXPENSES 3,858,102 1,833,605 10,352,398 5,461,084 OPERATING LOSS ( 1,944,504 ) ( 712,472 ) ( 5,116,382 ) ( 3,000,910 ) OTHER INCOME AND EXPENSES Other income 154,673 - 154,673 - Interest expense ( 533,773 ) ( 11,712 ) ( 767,984 ) ( 70,931 ) LOSS BEFORE INCOME TAXES ( 2,373,603 ) ( 724,184 ) ( 5,729,693 ) ( 3,071,841 ) PROVISION FOR INCOME TAXES - - - - NET LOSS $ ( 2,373,603 ) $ ( 724,184 ) $ ( 5,729,693 ) $ ( 3,071,841 ) NET LOSS PER SHARE Basic and diluted $ ( 0.13 ) $ ( 0.08 ) $ ( 0.33 ) $ ( 0.33 ) Basic and diluted weighted average number of common shares outstanding 18,555,343 9,640,704 17,586,747 9,262,691 The accompanying notes are an integral part of the consolidated financial statements. 4 EzFill Holdings, Inc. Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) Total Preferred stock Common stock Additional Paid-in Accumulated Stockholder’s Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance December 31, 2019 - $ - 8,361,237 $ 836 $ 1,138,620 $ ( 701,994 ) $ 437,462 Shares issued (net of subscription receivable) - - 910,662 91 334,909 - 335,000 Initial public offering, net of expenses Initial public offering, net of expenses, shares Stock based compensation Stock based compensation, shares Options granted Sale of shares Sale of shares, shares Debt discount Debt discount, shares Issuance of acquisition shares Issuance of acquisition shares, shares Issuance of shares for technology Issuance of shares for technology, shares Issuance of bonus shares Issuance of bonus shares, shares Issuance of bonus and settlement shares Issuance of bonus and settlement shares, shares Warrants and shares to lender Warrants and shares to lender, shares Net loss - - - - - ( 382,886 ) ( 382,886 ) Balance March 31, 2020 - $ - 9,271,899 $ 927 $ 1,473,529 $ ( 1,084,880 ) $ 389,576 Stock based compensation - - 93,005 9 349,991 - 350,000 Options granted - - 148,292 148,292 Sale of shares - - 239,155 24 899,976 - 900,000 Net loss - - - - - ( 1,964,771 ) ( 1,964,771 ) Balance June 30, 2020 - $ - 9,604,059 $ 960 $ 2,871,788 $ ( 3,049,651 ) $ ( 176,903 ) Stock based compensation - - 71,281 7 268,242 - 268,249 Options granted - - 70,455 70,455 Net loss - - - - - ( 724,184 ) ( 724,184 ) Balance September 30, 2020 - $ - 9,675,340 $ 967 $ 3,210,485 $ ( 3,773,835 ) $ ( 562,383 ) Balance December 31, 2020 - $ - 17,199,912 $ 1,720 $ 6,472,536 $ ( 7,956,000 ) ( 1,481,744 ) Stock based compensation - - 97,854 9 368,240 - 368,249 Options granted - - 49,213 - 49,213 Debt discount - - 7,972 1 29,999 - 30,000 Issuance of acquisition shares - - 159,437 16 599,984 - 600,000 Net loss - - - - - ( 1,348,155 ) ( 1,348,155 ) Balance March 31, 2021 - $ - 17,465,175 $ 1,746 $ 7,519,972 $ ( 9,304,155 ) $ ( 1,782,437 ) Stock based compensation - - 95,197 10 396,281 - 396,291 Options granted - - 12,760 - 12,760 Sale of shares - - 30,559 3 114,997 - 115,000 Issuance of shares for technology - - 597,889 60 2,249,940 - 2,250,000 Issuance of bonus shares - - 99,648 10 374,990 - 375,000 Net loss - - - - - ( 2,007,935 ) ( 2,007,935 ) Balance June 30, 2021 - $ - 18,288,468 $ 1,829 $ 10,668,940 $ ( 11,312,090 ) $ ( 641,321 ) Initial public offering, net of expenses 7,187,500 719 25,248,855 - 25,249,574 Stock based compensation - - 193,919 19 372,251 - 372,270 Options granted - - - - 12,760 - 12,760 Issuance of acquisition shares - - 93,750 9 374,991 - 375,000 Issuance of bonus and settlement shares - - 150,000 15 899,985 - 900,000 Warrants and shares to lender - - 13,286 1 248,010 - 248,011 Net loss - - - - - ( 2,373,603 ) ( 2,373,603 ) Balance September 30, 2021 - $ - 25,926,923 $ 2,592 $ 37,825,792 $ ( 13,685,693 ) $ 24,142,691 The accompanying notes are an integral part of the consolidated financial statements. 5 EzFill Holding, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 5,729,693 ) $ ( 3,071,841 ) Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: Stock based compensation 1,211,543 1,471,508 Warrants and shares to lender 248,011 - Change in fair market value - 38,094 Loss on settlement - 300,000 Depreciation and amortization 589,663 324,235 Amortization of debt discount 170,910 870 Bad debt expense 16,959 - PPP loan forgiveness ( 154,673 ) - Changes in operating assets and liabilities: Accounts receivable 44,200 ( 73,756 ) Inventory 5,793 28,768 Prepaid expenses and deferred offering costs 17,594 ( 2,350 ) Accounts payable and accrued expenses ( 161,130 ) 123,296 Accounts payable and accrued expenses - related party 328,060 45,119 Net cash used in operating activities ( 3,412,763 ) ( 816,057 )   Cash flows from investing activities: Acquisition of fixed assets ( 813,283 ) ( 87,661 ) Net cash used in investing activities ( 813,283 ) ( 87,661 )   Cash flows from financing activities: Proceeds from Initial Public Offering 28,750,000 - Initial Public Offering expenses ( 3,500,426 ) - Proceeds from issuance of common stock 115,000 1,307,209 Proceeds from issuance of debt 1,100,000 154,673 Proceeds from issuance of related party debt 1,550,000 20,000 Repayment of debt ( 2,172,010 ) ( 8,015 ) Repayment of related party debt ( 1,848,399 ) ( 213,055 ) Net cash provided by financing activities 23,994,165 1,260,812   Net change in cash and cash equivalents 19,768,119 357,094   Cash and cash equivalents at beginning of period 882,870 32,092   Cash and cash equivalents cash at end of period $ 20,650,989 $ 389,186   Noncash investing and financing activity: Debt discount $ 170,910 $ - Acquisition of Neighborhood Fuel $ - $ 700,000 Issuance of acquisition, bonus and settlement shares $ 2,250,000 $ - Vehicles acquired with notes $ - $ 198,087 Shares issued for technology $ 2,950,000 $ - Supplemental disclosure of cash flow information: Cash paid for interest $ 448,071 $ 11,398 Cash paid for taxes $ - $ - The accompanying notes are an integral part of the consolidated financial statements. 6 EzFill Holdings, Inc. Notes to Consolidated Financial Statements For the nine months ended September 30, 2021 and 2020 (unaudited) (1) Nature of Organization and Summary of Significant Accounting Policies Nature of Organization EzFill Holdings, Inc. (the Company) was incorporated on March 28, 2019, in the State of Delaware and operates in South Florida providing an on-demand mobile gas delivery service. Its wholly-owned subsidiary Neighborhood Fuel Holdings, LLC is inactive. Initial Public Offering In September 2021, the Company issued 7,187,500 shares in its initial public offering (“IPO”) at a price of $ 4.00 per share, for net proceeds of approximately $ 25,250,000 after deducting underwriting discounts and commissions of $ 2,406,250 and expenses of $ 1,093,750 . Immediately prior to the IPO, all shares of stock then outstanding converted into an aggregate of 18,750,000 shares of common stock following a one for 3.763243 reverse stock split approved by the Company’s board of directors and its shareholders. Unaudited Interim Financial Statements The Company has prepared these financial statements in accordance with GAAP for interim financial statements. Accordingly, these statements do not include all information and footnote disclosures required for annual statements. While management believes the disclosures presented are adequate for interim reporting, these interim financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto as of and for the year ended December 31, 2020 included in the Company’s final prospectus dated September 14, 2021, filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to the Company’s Registration Statement on Form S-1 (File No. 333-256691), filed with the SEC. In the opinion of management, all adjustments and eliminations, consisting of normal recurring adjustments, necessary for a fair representation of the Company’s financial statements for the interim period reported, have been included. The results for the three and nine months ended September 30, 2021, are not necessarily indicative of results to be expected for the year ending December 31, 2021, or for any other interim period or for any future year. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions made by management include allowance for doubtful accounts, valuation allowance for deferred tax assets, depreciation lives of property and equipment, recoverability of long-lived assets, fair value of equity instruments and the assumptions used in Black-Scholes valuation models related to stock options and warrants. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At September 30, 2021 and December 31, 2020, the Company had $ 20,650,989 and $ 882,870 in cash and cash equivalents, respectively, of which $ 250,000 was federally insured. Accounts Receivable The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Accounts are written off against the allowance after all attempts to collect a receivable have failed. At September 30, 2021 and December 31, 2020, the allowance was $ 4,980 and $ 0 respectively in the consolidated financial statements. 7 Inventory Inventory is valued at the lower of the inventory’s cost or market using the first-in, first-out method. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory consists solely of fuel. At September 30, 2021 and December 31, 2020, the allowance was $ 0 in the consolidated financial statements. Cost of sales includes the cost of fuel sold and wages paid to drivers. Concentrations Major Customers For the nine months ended September 30, 2021 and 2020, the Company had one customer that made up approximately 58 % and 31 % of revenue, respectively. For the three months ended September 30, 2021 and 2020, the Company had one customer that made up approximately 60 % and 49 % of revenue, respectively. The Company had one customer that made up 39 % of accounts receivable as of September 30, 2021, and 68 % accounts receivable as of December 31, 2020. Major Vendors The Company purchases substantially all of its fuel from one vendor. Deferred Offering Costs The Company includes offering costs directly associated with its IPO in prepaid expenses and deferred offering costs in the consolidated balance sheet. Deferred offering costs were offset against additional paid in capital upon completion of the offering. As of September 30, 2021 and December 31, 2020, the Company recorded $ 0 and $ 153,597 respectively, to deferred offering costs. Advertising Costs Advertising costs are expensed as incurred. The Company incurred advertising costs for the nine months ended September 30, 2021 and 2020 of approximately $ 86,775 and $ 24,136 , respectively. The Company incurred advertising costs for the three months ended September 30, 2021 and 2020 of approximately $ 10,694 and $ 7,079 , respectively. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes , (“ASC 740”) which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Net loss per share Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. FASB ASC 260, Earnings per Share , requires a dual presentation of basic and diluted earnings per share. Any instruments that would have an anti-dilutive effect have been excluded from the computation of earnings per share. The number of such shares excluded from the computations of diluted loss per share are as follows: Schedule of Shares Excluded from the Computations of Diluted Loss Per Share Three months ended September 30, Nine months ended September 30, Description 2021 2020 2021 2020 Stock options under treasury stock method 95,019 68,290 93,849 55,982 Acquisition and bonus shares issuable - 187,500 - 187,500 Shares Excluded from the Computations of Diluted Loss Per Share Reclassifications Certain reclassifications of prior year amounts have been made to be consistent with the current year presentation. 8 (2) Going concern The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has sustained a net loss since inception and does not have sufficient revenues and income to fully fund the operations. As a result, the Company has relied on loans from stockholders and others as well as stock sales to fund its activities to date. For the nine months ended September 30, 2021, the Company had a net loss of $ 5,729,693 . At September 30, 2021, the Company had an accumulated deficit of $ 13,685,695 and a working capital surplus of $ 19,513,448 . The Company anticipates that it will continue to incur losses in future periods until the Company is successful in significantly increasing its revenues, if ever. However, the Company has mitigated the previously reported going concern issue by raising approximately $ 25,250,000 in net proceeds from its Initial Public Offering. (3) Related Party Transactions During the nine months ended September 30, 2021 and 2020, Company issued 26,573 and 106,291 shares of common stock to executives as a signing bonus, respectively, and recorded related stock-based compensation expense of $ 100,000 and $ 400,000 , respectively. The Company entered into a consulting agreement, dated November 18, 2020, with Balance Labs, Inc. Pursuant to the Consulting Agreement, Balance Labs will provide consulting services including assisting with the Company’s IPO and assisting with introductions to, and assistance with, negotiating and entering agreements with potential fleet, residential, marine and corporate customers that Balance Labs has relationships with. Balance Labs will also assist with the Company’s expansion efforts. Under the Consulting Agreement, in payment of services that Balance Labs had already provided, the Company issued Balance Labs 265,728 shares of its common stock in November 2020. Upon the completion of the Company’s IPO, the Company made a one-time payment of $ 200,000 to Balance Labs. During the first year of the term of the Consulting Agreement, the Company will pay Balance Labs $ 25,000 per month. In the second year of the agreement, the payment will decrease to $ 22,500 per month. On each anniversary of the initial term and the renewal terms the Company will issue Balance Labs 132,905 shares of its common stock. The term of the Consulting Agreement is for two years. The President, CEO, CFO and Chairman of the Board of Balance Labs is also the former president of the Company and beneficially owns approximately 26 % of the Company’s common stock as of September 30, 2021. The Company is party to a technology license agreement with Fuel Butler LLC, which is owned 20% by an executive of the Company. See Note 5. All related party debt was repaid in September 2021. (4) Fixed Assets Fixed assets consisted of the following: Schedule of Fixed Assets Description Estimated Useful Lives September 30, 2021 December 31, 2020 Fixed assets: Equipment 5 years $ 167,038 $ 42,643 Leasehold improvements Lease term 16,265 - Vehicles 5 years 538,562 529,742 Deposits on trucks 663,803 - Total fixed assets 1,385,668 572,385 Accumulated depreciation ( 238,528 ) ( 143,818 ) Fixed assets, net $ 1,147,140 $ 428,567 Depreciation expense totaled $ 94,710 and $ 77,076 for the nine months ended September 30, 2021 and 2020, respectively. Depreciation expense totaled $ 35,504 and $ 37,314 for the three months ended September 30, 2021 and 2020, respectively. 9 (5) Intangible Assets Intangible assets consisted of the following: Schedule of Intangible Assets Description September 30, 2021 December 31, 2020 Indefinite lived intangible assets: Goodwill $ 109,983 $ 109,983 Total indefinite lived intangible assets $ 109,983 $ 109,983 Other intangible assets: Trademarks $ 103,258 $ 103,258 Software 504,314 504,314 Customer list 855,073 855,073 Non-compete 858 858 Technology license 2,950,000 - Total other intangible assets $ 4,413,503 $ 1,463,503 Accumulated amortization ( 967,897 ) ( 472,944 ) Total other intangible assets, net $ 3,445,606 $ 990,559 On April 7, 2021, the Company entered into a Technology License Agreement, under which the Company licensed certain proprietary technology. Under the terms of the license, the Company issued 265,728 shares of its common stock to the licensor upon signing. The Company also issued 332,160 shares to the licensor in May 2021 upon the filing of a patent application related to the licensed technology. Upon completion of the Company’s IPO, 186,010 shares were due to the licensor and the related amount of $ 700,000 is included in accounts payable and accrued liabilities – related parties. The Company will issue up to 730,752 additional shares to the licensor upon the achievement of certain milestones. In addition, the Company has granted stock options for 531,456 shares at an exercise price of $ 3.76 per share that will become exercisable for three years after the end of the fiscal year in which certain sales levels are achieved using the licensed technology. The Company has the option for four years after the achievement of certain milestones to either acquire the technology or acquire the licensor for the purchase price of 1,062,913 of its common shares. Until the Company exercise one of these options, it will share with the licensor 50% of pre-revenue costs and 50% of the net revenue, as defined, from the use of the technology. Amortization expense on intangible assets totaled $ 494,953 and $ 247,159 for the nine months ended September 30, 2021 and 2020, respectively. Amortization expense on intangible assets totaled $ 202,484 and $ 89,984 for the three months ended September 30, 2021 and 2020, respectively. Future amortization schedule for intangible assets as of September 30, 2021 is as follows: Schedule of Amortization for Intangible Assets 2021 (October-December) $ 237,484 2022 888,207 2023 792,937 2024 706,706 2025 601,975 2026 218,297 TOTAL $ 3,445,606 (6) Accounts Payable and Accrued Liabilities The Company had accounts payable and accrued liabilities as follows: Schedule of Accounts Payable and Accrued Liabilities September 30, 2021 December 31, 2020 Accounts Payable and Accrued Liabilities: Accounts payable $ 344,733 $ 215,599 Accrued payroll 304,488 160,417 Accrued expenses 6,114 68,290 Accrued interest - 44,099 Total Accounts Payable and Accrued Liabilities $ 655,335 $ 488,405 Accounts Payable and Accrued Liabilities – Related Parties: Settlement payable $ - $ 300,000 Acquisition consideration payable in shares - 750,000 Shares payable to technology licensor 700,000 - Signing and performance bonus payable in shares - 1,200,000 Total Accounts Payable and Accrued Liabilities, Related Parties $ 700,000 $ 2,250,000 10 (7) Notes Payable On November 24, 2020, the Company issued a note payable in the amount of $ 1,000,000 ; the loan bore interest at a rate of 1 % per month; the maturity date on the loan was April 21, 2021 ; the Company had the option to extend the maturity date for seven one-month terms. As part of the terms of the loan, the note holder was issued 100,000 shares of common stock. The Company exercised the option to extend the loan from April 21, 2021, to August 21, 2021, and issued 10,000 shares to the note holder for each monthly extension. On March 10, 2021, the Company borrowed a total of $ 300,000 and issued promissory notes for $ 100,000 to each of three related parties. The notes bore interest at a rate of 1 % per month. The principal and interest thereon were payable on March 10, 2022 , or upon completion of the Company’s initial public offering if earlier. In connection with these loans, each lender was issued 10,000 shares of the Company’s common stock for a total of 30,000 shares. On April 16, 2021, the Company issued a promissory note to a lender for $ 1,166,000 , including $ 66,000 of interest at the rate of 8 % per annum. The loan maturity was the earlier of January 16, 2022 or two weeks after the Company’s initial public offering. In the event the loan matured earlier than January 16, 2022 , the full amount of interest for the nine-month term was due. As additional consideration for the loan, the Company granted the lender 400,000 shares in stock warrants, each of which may be exchanged for one share common stock of the stock offered to the public in the Company’s initial public offering, at a price of 125 % of the offering price of such initial public offering. Such warrants may, be need not, be exercised by the lender for a period of three years from their issuance. On June 25, 2021, the Company issued promissory notes to two related parties for $ 265,958 each, including an original issue discount of $ 15,958 . The notes each bore interest at 1 % per month on the unpaid principal balance. The notes matured on the earlier of December 25, 2021 , or the consummation of the Company’s initial public offering. On July 26, 2021, the company issued promissory notes to two related parties for $ 132,979 each, including an original issue discount of $ 7,979 . The notes bore interest at 1 % per month on the unpaid principal balance. The notes matured on the earlier of January 26, 2022 , or the consummation of the Company’s initial public offering. On August 18, 2021, the Company issued a promissory note to a related party in the amount of $ 265,000 , including an original issue discount of $ 15,000 . The note bore interest at 12 % per year and all interest accrued until the Maturity date. The maturity date of the note was August 18, 2022 , however if the Company completed a capital raise of at least $7,000,000 the entire outstanding principal and interest through August 18, 2022, was immediately due and payable within two business days of such occurrence. On August 19, 2021, the Company issued a promissory note to a lender in the amount of $ 265,000 , including an original issue discount of $ 15,000 . The note bore interest at 12 % per year and all interest accrued until the Maturity date. The maturity date of the note was August 19, 2022 , however if the Company completed a capital raise of at least $7,000,000 the entire outstanding principal and interest through August 19, 2022, was immediately due and payable within two business days of such occurrence. All debt except for vehicle loans was repaid in September 2021 after the consummation of the Company’s IPO. Amounts remaining in debt discount were included in interest expense. Maturities of debt as of September 30, 2021 are as follows: Schedule of Maturities of Long-Term Debt 2021 (September to December) $ 63,530 2022 38,711 2023 37,132 2024 14,820 2025 11,726 Total $ 165,919 (8) SBA PPP Loan On April 20, 2020, the Company received loan proceeds in the amount of $ 154,673 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks provided the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. On September 17, 2021, 100 % of the PPP loan in the amount of $ 154,673 and accrued interest was forgiven by the SBA, and no repayment is required. 11 (9) Shareholders Equity Authorized shares include 500 million common shares and 50 million preferred shares. Immediately prior to the Company’s IPO in September 2021, all shares of common stock then outstanding converted into an aggregate of 18,750,000 shares of common stock following a one for 3.763243 reverse stock split approved by the Company’s board of directors and its shareholders. On August 1, 2020, the Company’s board of directors approved the EzFill Holdings, Inc. 2020 Equity Incentive Plan (Plan), which plan has also been approved by the Company’s shareholders. The Company has reserved 1,913,243 of its outstanding shares of common stock for issuance under the Plan. Participation in the Plan will continue until the benefits to which the participants are entitled have been paid in full. Common stock During the nine months ended September 30, 2021, 30,559 shares of common stock were sold for cash proceeds of $ 115,000 . During the nine months ended September 30, 2021 and 2020, Company issued 26,573 and 106,291 shares of common stock to executives as a signing bonus, respectively, and recorded related stock-based compensation expense of $ 100,000 and $ 400,000 , respectively. During the nine months ended September 30, 2021 and 2020, the Company recorded stock-based compensation expense of $ 345,000 and $ 582,000 , respectively related to shares granted for sponsorships and $ 310,000 and $ 0 , respectively related to shares granted to Board members and consultants. On April 11, 2019, the Company entered into an employment agreement with a former owner of a business sold to the Company. Stock compensation of $ 57,063 was recognized for the nine months ended September 30, 2021 and 2020, respectively, based on the fair value of shares at April 11, 2019. During the nine months ended September 30, 2021, the Company issued 502,835 shares related to accrued bonuses, acquisitions and settlements that had previously been accrued in 2020. Stock Options and Warrants The following table represents option activity during the nine months ended September 30, 2021: Schedule of Option Activity Number of Weighted Average Weighted Average Remaining Contractual Term Options Exercise Price (years) Vested and Exercisable at December 31, 2020 148,145 $ 1.69 3.9 Options granted 27,239 2.26 4.5 Vested and Exercisable at September 30, 2021 175,384 $ 1.77 3.6 Pursuant to certain sponsorship agreements, during the nine months ended September 30, 2021, 27,239 stock options were granted. As of September 30, 2021, there was a total of 175,384 stock options outstanding, all vested, of which 74,404 were granted to founders in connection with promissory notes issued by the Company and 100,980 granted in connection with sponsorship agreements. The options are exercisable for five years from the dates of grant, which were from July 2019 to September 2021. The options all vested immediately upon grant and have exercise prices ranging from $ 0.64 to $ 2.26 . The options with sponsors could terminate earlier than five years if certain conditions occur. One of the sponsorship agreements was terminated effective February 2021. The remaining sponsor received 1,550 options per month until the Company completed its IPO, after which the sponsor will be granted fully vested shares for $ 3,500 per month based on the closing share price on the date of each grant. The fair value of the stock options granted during the nine months ended September 30, 2021, of $ 74,733 was determined using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of approximately 2 %, ii) expected life of 5 years, iii) dividend yield of 0 %, iv) expected volatility of approximately 79 %. The intrinsic value of options outstanding at September 30, 2021 and December 31, 2020 was approximately $ 350,000 and $ 307,000 , respectively. The underwriter’s representatives for the Company’s IPO received warrants to purchase up to 359,375 shares. The warrants are exercisable from March 14, 2022 until September 14, 2026 at an exercise price of $ 5.00 per share. The amount of approximately $ 198,000 was included in interest expense for the third quarter of 2021 for 106,291 warrants issued to a lender that became exercisable upon the Company’s IPO. The warrants are exercisable until September 14, 2024 , at $ 5.00 per share. 12 (10) Commitments and Contingencies Litigation The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries. As of September 30, 2021, and December 31, 2020, the Company is not aware of any litigation, pending litigation, or other transactions that would require accrual or disclosure under GAAP. Lease Commitment The Company is renting office space on a short-term arrangement and the related lease commitment is not material to the consolidated financial statements. (11) Income Taxes Book income before taxes was negative for the nine months ended September 30, 2021. Tax expense for the nine months ended September 30, 2021 and 2020 was $ 0 . The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. The tax years subject to examination include the years 2019 and forward. There are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company incurs an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. (12) Subsequent Events The Company evaluates subsequent events that occur after the balance sheet date through the date the financial statements were issued. Upon completion of the Company’s IPO, 186,010 shares were due to the licensor of technology to the Company. The shares were issued on October 15, 2021. 13