NEXTNRG, INC. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Registration Statement on Form S-1 filed with the Securities and Exchange Commission, or SEC, on June 1, 2021, as amended, and declared effective on September 14, 2021. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Ezfill Holdings, Inc. Forward-Looking Statements The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. Overview We were incorporated under the laws of Delaware in March 2019. We are in the business of operating mobile fueling trucks and are headquartered in Miami, Florida. EzFill provides its customers the ability to have fuel delivered to their vehicles (cars, boats, trucks) without leaving their home or office and to construction sites, generators and reserve tanks. Our mobile fueling solution gives our fleet, consumer and other customers the ability to fuel their vehicles with the touch of an app or regularly scheduled service, and without the inconvenience of going to the gas station. Our consumer business was impacted significantly in 2020 by the COVID-19 pandemic and has largely returned in 2021 for residential fueling but is still in the process of recovering at office parks to pre-pandemic levels as employees gradually return to the office. Results of Operations The following table sets forth our results of operations for the three months ended March 30, 2022 and 2021: Three Months Ended March 31, 2022 2021 Revenues $ 2,340,068 $ 1,521,819 Cost of sales 2,324,160 1,394,396 Operating expenses 2,948,001 1,244,490 Depreciation and amortization 337,664 118,744 Operating loss (3,269,757 ) (1,235,811 ) Other income (expense) 3,247 (112,344 ) Net loss $ (3,266,510 ) $ (1,348,155 ) 17 Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure which we use in our financial performance analyses. This measure should not be considered a substitute for GAAP-basis measures, nor should it be viewed as a substitute for operating results determined in accordance with GAAP. We believe that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation, amortization, and stock compensation expense, provides useful supplemental information that is essential to a proper understanding of our financial results. Non-GAAP measures are not formally defined by GAAP, and other entities may use calculation methods that differ from ours for the purposes of calculating Adjusted EBITDA. As a complement to GAAP financial measures, we believe that Adjusted EBITDA assists investors who follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability. The following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Net loss $ (3,266,510 ) $ (1,348,155 ) Other income (expense) (3,247 ) 112,344 Depreciation and amortization 337,664 118,744 Stock compensation 470,685 417,462 Adjusted EBITDA $ (2,461,408 ) $ (699,605 ) Gallons delivered 591,505 543,062 Average fuel margin per gallon $ 0.47 $ 0.36 Three Months ended March 31, 2022 compared to the Three Months ended March 31, 2021 Revenues and Cost of Sales We generated revenues of $2,324,068 for the three months ended March 31, 2022, compared to $1,521,819 for the three months ended March 31, 2021, an increase of 818,249 or 54%. This increase is due to a 9% increase in gallons delivered as well as an increase in the average price per gallon. Cost of sales was $2,324,160 for the three months ended March 31, 2022, compared to $1,394,396 for the prior year. The $928,432 or 67% increase in cost of sales is due to the increase in sales as well as hiring of additional drivers. Operating Expenses We incurred operating expenses of $2,948,000 during the three months ended March 31, 2022, as compared to $1,244,490 during the prior year, an increase of $1,703,510 or 137%. This net increase was primarily due to increases in payroll, marketing, insurance, technology and public company expenses. 18 Depreciation and Amortization Amortization increased in the current year as a result of the acquisition of a technology license. Depreciation increased in the current year as a result of purchases of vehicles and delivery equipment. Other Income (Expense) Other income in the current year resulted from interest income on investments. Interest expense decreased due to the repayment of pre-IPO debt. Net Losses We sustained a net loss of $3,266,510 for the three months ended March 31, 2022, as compared to $1,348,155 for the prior year, an increase of $1,918,355 or 142% as a result of the above. Liquidity and Capital Resources Cash Flow Activities As of March 31, 2022, we had $13,874,666 in cash as compared to December 31, 2021, when we had $16,924,146 in cash and investments. Operating Activities Net cash used in operating activities was $2,329,978 for the three months ended March 31, 2022, which was made up primarily by the net loss and offset by non-cash adjustments for a net amount of $936,532. Net cash used in operating activities was $905,579 during the prior year, which was made up primarily by the net loss and partially offset by non-cash adjustments for a net amount of $442,576. Investing Activities During the three months ended March 31, 2022 and 2021, we used $1,271,548 and $23,841, respectively, for the acquisition of fixed assets, primarily trucks used for delivery of fuel to our customers. During the three months ended March 31, 2022, we acquired the mobile fueling assets of Full Service Fueling. Financing Activities We generated $933,283 of cash flows from financing activities during the three months ended March 31, 2022, including $152,500 borrowings under our bank line of credit and $893,928 in new loans for truck purchases, less principal repayments of $113,145. We generated $227,376 of cash flows from financing activities during the three months ended March 31, 2021, including $300,000 in related party loans, less principal repayments of $22,624. Sources of Capital From inception to March 31, 2022, we have funded our activities through capital contributions from issuances of notes payable and the sale of securities either pursuant to the exemption provided by Regulation D, by sale of securities to accredited investors or pursuant to a registration statement filed with the Securities and Exchange Commission. 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 quarter ended March 31, 2022, the Company had a net loss of $3,266,510. At March 31, 2022, the Company had an accumulated deficit of $20,605,906 and a working capital surplus of $12,747,827. The Company anticipates that it will continue to generate operating losses and use cash in operations through the foreseeable future. 19 In September 2021, the Company completed its Initial Public Offering and raised $25,250,000 in net proceeds after deducting the underwriting discount and offering expenses. The Company expects that its cash on hand will fund its operations for approximately 12-14 months after the issuance date of these financial statements. However, since inception, the Company’s operations have primarily been funded through proceeds received in equity and debt financings. The Company anticipates that it will need to raise additional capital in order to fund its operations. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully expand to new markets, competition, and the need to enter into collaborations with other companies or acquire other companies to enhance or complement its product and service offerings. There can be no assurances that, in the event that we require additional financing, such financing will be available on terms which are favorable to us, or at all. If we are unable to raise additional funding to meet our working capital needs in the future, we will be forced to delay, reduce or cease our operations. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4). Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.