What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-20 compared with 2022-03-09 · 89 added, 69 removed, 84 unchanged (65% of the section changed)

36 unchanged sentences

regularly scheduled service, and without the inconvenience of going to the gas station.

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.

Accounting Policies and Estimates

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following table sets forth our results of operations for the year ended December 31, 2022, and 2021:

Ended December 31,

and amortization

income (expense)

Year Ended December 31,

Cost of sales

Operating expenses

Impairment of goodwill, other intangibles and fixed assets

Depreciation and amortization

Operating loss

(17,486,279 )

Other income (expense)

$ (17,505,765 )

$ (9,383,397 )

Financial Measures

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.

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.

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

We believe that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest

expense, taxes, depreciation, amortization, impairment of goodwill, other intangibles and fixed assets, and stock compensation

expense, provides useful supplemental information that is essential to a proper understanding of our financial results.

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.

following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the year ended December

31, 2022, and 2021:

Ended December 31,

Year Ended December 31,

$ (17,505,765 )

$ (9,383,397 )

and amortization

Interest expense, net

Depreciation and amortization

Impairment of goodwill, other intangibles and fixed assets

Stock compensation

Adjusted EBITDA

$ (11,409,859 )

$ (5,845,504 )

Gallons delivered

ended December 31, 2022 compared to the Year ended December 31, 2021

generated revenues of $7,233,957 for the year ended December 31, 2021, compared to $3,586,244 for the year ended December 31, 2020, an

increase of 3,647,713 or 102%.

This increase is due to a 53% increase in gallons delivered as well as an increase in the average price

of sales was $7,027,274 for the year ended December 31, 2021, resulting in a gross profit of $206,683, compared to $42,172 for the prior

The $3,483,202 or 98% increase in cost of sales is due to the increase in sales.

incurred operating expenses of $8,102,934 during the year ended December 31, 2021, as compared to $6,523,307 during the prior year, an

increase of $1,579,627 or 24%.

generated revenues of $15,044,721 for the year ended December 31, 2022, compared to $7,233,957 for the year ended December 31, 2021,

an increase of $7,810,764 or 108%.

This increase is due to a 57% increase in gallons delivered as well as an increase in the average

price per gallon.

of sales was $15,218,234 for the year ended December 31, 2022, resulting in a gross profit of $(173,513), compared to $206,683 for the

The $8,190,960 or 117% increase in cost of sales is due to the increase in sales and an increase in labor costs primarily

related to the expansion to new markets.

incurred operating expenses of $12,648,629 during the year ended December 31, 2022, as compared to $8,102,934 during the prior year,

an increase of $4,545,695 or 56%.

This net increase consisted of a decrease of $483,791 in stock compensation expense and an increase

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and 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.

increased in the current year as a result of the acquisition of a fueling business.

Depreciation increased in the current year as a result

of purchases of vehicles and delivery equipment.

of Goodwill, Other Intangibles and Fixed Assets

the year ended December 31, 2022, the Company recorded an impairment loss of $1,987,500 related to a license of technology for which

the Company has proposed termination of the agreement and which is not expected to generate any revenue in 2023.

The Company recorded

impairment of $258,114 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the expected

realizable value.

Goodwill is considered impaired, and the Company recognized an impairment loss of $166,838, or the remaining balance

of goodwill, during the year ended December 31, 2022.

This loss was primarily due to the fall in the Company’s stock price and

the decrease of the Company’s market capitalization as well as past operating performance.

As a consequence, management forecasts

were revised, and additional risk factors were applied.

The fair value of the intangibles was estimated using a combination of market

comparables (level 1 inputs) and expected present value of future cash flows (level 3 inputs) and as a result impairment was recorded

for a total of $482,064.

Income (Expense)

income in the current year resulted from the forgiveness of a loan under the Paycheck Protection Program.

Interest expense increased

due to warrants and shares issued in connection with new debt as well as the early repayment of debt and the resulting write-off of unamortized

debt discounts.

sustained a net loss of $9,383,397 for the year ended December 31, 2021, as compared to $7,254,006 for the prior year, an increase of

$2,129,391 or 29% as a result of the above.

expense decreased in the current year due to the early repayment in September 2021 of pre-IPO debt.

sustained a net loss of $17,505,765 for the year ended December 31, 2022,

as compared to $9,383,397 for the prior year, an increase of $8,122,368 or 87% as a result of the above.

and Capital Resources

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As of December 31, 2022, we

had $16,924,146 in cash and investments, as compared to December 31, 2020, when we had $882,870 in cash.

had $4,186,875 in cash and investments, as compared to December 31, 2021, when we had $16,924,146 in cash and investments.

cash used in operating activities was $(11,599,581) for the year ended December 31, 2022, which was made up primarily by the net loss

and partially offset by an increase in stock-based compensation of $1,896,074, warrants and shares to lenders of $248,011, and depreciation

and amortization of $872,834.

Net cash used in operating activities was $(1,607,669) during the prior year, which was made up primarily

by the net loss and partially offset by depreciation and amortization of $451,533, stock-based compensation of $4,624,708, and loss on

settlement of $300,000.

and partially offset by stock compensation of $1,412,283 and depreciation and amortization of $1,769,621 and impairment loss of $2,894,516.

Net cash used in operating activities was $(6,306,761) during the prior year , which was

made up primarily by the net loss and partially offset by an increase in stock-based compensation of $1,896,074, warrants and shares

to lenders of $248,011, and depreciation and amortization of $872,834.

the year ended December 31, 2022, and 2021, we used $3,258,417 and $1,998,151, respectively, for the acquisition of fixed assets,

$3,367,953 in debt securities in 2021.

We also used a total of $1,998,151 in 2021 for trucks delivered in 2021 as

well as those being built for delivery in 2022.

generated $24,370,464 of cash flows from financing activities during the year ended December 31, 2021, including $28,750,000 less

related expense of $(3,500,426) from the Initial Public Offering, $2,990,572 from new debt borrowings and $115,000 from issuance of

stock, less $3,984,682 for the repayment of debt.

primarily delivery trucks.

Investments matured during 2022 for total proceeds of $1,151,186.

We used $321,250 for the acquisition of

a fueling business in 2022.

We invested $3,367,953 in debt securities in 2021.

generated $2,533,589 of cash flows from financing activities during the year ended December 31, 2022, including $3,191,308 from new debt

borrowings, less $657,719 for the repayment of debt.

All of the pre-acquisition debt was repaid following our IPO.

Approximately

$317,000 of new debt in 2021 was incurred post-IPO for the purchase of trucks and other vehicles.

During the same period of the

prior year, we generated $2,482,523 from financing activities, $1,174,673 from new debt and $1,550,000 from the sale of shares, less

$242,150 for the repayment of debt.

In 2021, we generated

$24,370,464 of cash flows from financing activities, including $28,750,000 less related expense of $(3,500,426) from the Initial Public

Offering, $2,990,572 from new debt borrowings and $115,000 from sale of shares, less $3,984,682 for the repayment of debt.

pre-acquisition debt was repaid following our IPO.

and Sources of Capital

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We have also financed truck purchases from manufacturer loans and from our bank line of credit.

Although our financial statements for the year ended December 31, 2022

were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered

public accounting firm that accompanies our financial statements for the year ended December 31, 2022 contains a going concern qualification

in which said firm expressed substantial doubt about our ability to continue as a going concern, based on the financial statements at

Company has sustained a net loss since inception and does not have sufficient revenues and income to fully fund the operations.

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At December 31, 2022, the Company had an accumulated deficit of $34,845,161.

and a working capital surplus of $16,436,296.

We anticipate that we will continue to generate operating losses and use cash in

operations through the foreseeable future.

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 at least 12 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

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.

We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable future.

inception, the Company’s operations have primarily been funded through proceeds received in equity and debt financings.

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 anticipates that it will need to raise additional capital by March 31, 2023, in order to continue 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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis