What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-20 compared with 2022-03-09 · 491 added, 368 removed, 394 unchanged (69% of the section changed)

2 unchanged sentences

Balance Sheets

and cash equivalents

in debt securities

receivable, net of allowance for doubtful accounts of $ 5,665 and $ 0 , respectively

expenses and deferred offering costs

Current Assets:

assets, net of accumulated depreciation of $ 284,216 and $ 143,818 , respectively

and other indefinite lived intangibles

intangible assets, net of accumulated amortization of $ 1,205,379 and $ 472,944 , respectively

and Stockholders’ Equity (Deficit)

payable and accrued liabilities

payable and accrued liabilities, related parties

payable, net of discount of $ 0 and $ 75,000 , respectively

payable - related party

Cash and cash equivalents

Investment in debt securities

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 5,665 , respectively

Prepaid expenses and other

Total Current Assets

Fixed assets, net of accumulated depreciation of $ 1,134,680 and $ 284,216 , respectively

Goodwill and other indefinite lived intangibles

Other intangible assets, net of accumulated amortization of $ 0 and $ 1,205,379 , respectively

Operating lease right of use asset

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities:

payable - net of current portion

payable - net of current portion - related party

Accounts payable and accrued liabilities

Loans payable - current

Borrowings under revolving line of credit

Operating lease liabilities

Total Current Liabilities

Loans payable - net of current portion

Operating lease liabilities, net of current portion

Total Liabilities

Commitments and Contingencies

Stockholders’

Equity (Deficit)

stock, $ .0001 par value;

50,000,000 shares authorized;

- 0 - shares issued and outstanding

stock, $ .0001 par value;

500,000,000 shares authorized;

26,243,474 and 17,199,912 shares issued and outstanding at December 31, 2021

and December 31, 2020, respectively

paid in capital

( 17,339,396 )

( 7,956,000 )

other comprehensive loss

Stockholders’ Equity (Deficit)

Preferred stock, $ .0001 and $ .0001 par value;

50,000,000 and 50,000,000 shares authorized;

- 0 - and - 0 - shares issued and outstanding

Common stock, $ .0001 and $ .0001 par value;

500,000,000 and 500,000,000 shares authorized;

26,685,392 and 26,243,474 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

Additional paid in capital

Accumulated deficit

( 34,845,161 )

Liabilities and Stockholders’ Equity (Deficit)

( 17,339,396 )

Accumulated other comprehensive loss

Total Stockholders’ Equity (Deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

accompanying notes are an integral part of the consolidated financial statements.

Holdings, Inc.

Consolidated Statements Of Operations

ended December 31,

and amortization

COSTS AND EXPENSES

Statements Of Operations and Comprehensive Loss

Year ended December 31,

TOTAL REVENUES

COSTS & EXPENSES

Cost of sales

Operating expenses

Impairment of goodwill and intangible assets

Impairment of fixed assets

Depreciation and amortization

TOTAL COSTS AND EXPENSES

OPERATING LOSS

( 17,486,279 )

( 8,769,085 )

INCOME AND EXPENSES

BEFORE INCOME TAXES

OTHER INCOME AND EXPENSES

Interest income

Interest expense

LOSS BEFORE INCOME TAXES

( 17,505,765 )

( 9,383,397 )

FOR INCOME TAXES

PROVISION FOR INCOME TAXES

$ ( 17,505,765 )

$ ( 9,383,397 )

LOSS PER SHARE

and diluted weighted average number of common shares outstanding

accompanying notes are an integral part of the consolidated financial statements.

Holdings, Inc.

Statements of Comprehensive Loss

ended December 31,

NET LOSS PER SHARE

Basic and diluted

Basic and diluted weighted average number of common shares outstanding

Comprehensive Loss:

$ ( 17,505,765 )

$ ( 9,383,397 )

comprehensive loss:

in fair value of debt securities

comprehensive loss

Other comprehensive loss:

Change in fair value of debt securities

Total comprehensive loss

$ ( 17,545,282 )

2 unchanged sentences

Holdings, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

Statements of Stockholders’ Equity (Deficit)

Preferred stock

3 unchanged sentences

$ ( 7,956,000 )

Beneficial issuance feature of shares on debt instrument

$ ( 1,481,744 )

Initial public offering, net of expenses

Initial public offering, net of expenses, Shares

Stock based compensation

Stock based compensation – related party

Stock based compensation – other

Options granted

Conversion of debt to equity, related parties

Debt discount, related parties

Debt discount, related parties, shares

Issuance of acquisition shares

Issuance of acquisition 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

Issuance of shares for technology

Issuance of shares for technology, Shares

Sale of shares

4 unchanged sentences

$ ( 17,339,396 )

$ ( 1,481,744 )

Initial public offering, net of expenses

Stock based compensation

Options granted

Debt discount, related parties

Issuance of acquisition shares

Issuance of bonus and settlement shares

Warrants and shares to lender

Issuance of shares for technology

Sale of shares

Stock based compensation – related party

Stock based compensation - other

Consideration for acquisition

Other comprehensive loss

5 unchanged sentences

Holding, Inc.

Consolidated Statements of Cash Flows

ended December 31,

flows from operating activities:

Statements of Cash Flows

Year ended December 31,

Cash flows from operating activities:

$ ( 17,505,765 )

$ ( 9,383,397 )

to reconcile net loss to net cash provided by/(used in) operating activities:

based compensation

and shares to lender

in fair market value

on settlement

and amortization

of debt discount, related party

loan forgiveness

in operating assets and liabilities:

expenses and other

payable and accrued expenses

payable and accrued expenses - related party

cash used in operating activities

Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:

Stock based compensation

Warrants and shares to lender

Depreciation and amortization

Impairment of goodwill and other intangible assets

Impairment of fixed assets

Amortization of bond premium and realized loss on investments

Amortization of debt discount, related party

Bad debt expense

PPP loan forgiveness

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other

Operating lease assets and liabilities

Accounts payable and accrued expenses

Accounts payable and accrued expenses - related party

Net cash used in operating activities

( 11,599,581 )

( 6,306,761 )

flows from investing activities:

of fixed assets

Cash flows from investing activities:

Maturity of debt securities

Acquisition of business

Acquisition of fixed assets

( 3,258,417 )

of intangible assets

of debt securities

( 1,998,151 )

cash used in investing activities

Acquisition of intangible assets

Purchase of debt securities

( 3,367,953 )

flows from financing activities:

from Initial Public Offering

Public Offering expenses

Net cash used in investing activities

( 2,428,481 )

from issuance of common stock

from issuance of debt

from issuance of related party debt

( 5,385,308 )

of related party debt

Cash flows from financing activities:

Proceeds from Initial Public Offering

Initial Public Offering expenses

( 3,500,426 )

cash provided by financing activities

change in cash and cash equivalents

and cash equivalents at beginning of period

and cash equivalents cash at end of period

investing and financing activities:

of Neighborhood Fuel

of acquisition, bonus, and settlement shares

acquired with notes

issued for technology

disclosure of cash flow information:

paid for interest

paid for taxes

Borrowings under line of credit

Proceeds from issuance of common stock

Proceeds from issuance of debt and loans

Proceeds from issuance of related party debt

Repayment of debt

( 2,136,283 )

Repayment of related party debt

( 1,848,399 )

Net cash provided by financing activities

Net change in cash and cash equivalents

( 11,494,473 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents cash at end of period

Noncash investing and financing activities:

Debt discount

Issuance of acquisition, bonus, and settlement shares

Shares issued for technology

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for taxes

accompanying notes are an integral part of the consolidated financial statements.

8 unchanged sentences

Its wholly-owned subsidiary Neighborhood Fuel Holdings, LLC is inactive.

Basis of Presentation

The Company’s financial statements are presented on the accrual basis of accounting principles generally

accepted in the United States of America (“GAAP”) and include the years ended December 31, 2021 and 2020.

of Presentation

Company’s financial statements are presented on the accrual basis of accounting principles generally accepted in the United States

of America (“GAAP”) and include the years ended December 31, 2022 and 2021.

Public Offering

21 unchanged sentences

net income, with related purchase costs based on the first-in, first-out method.

The Company evaluates its available-for-sale-investments

for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s

fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and

intent to hold the investment for sufficient time for its market value to recover.

For impairments that are other-than-temporary, an

impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance

sheet date of the reporting period for which the assessment is made.

The fair value of the investment then becomes the new amortized

cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value.

following is a summary of the unrealized gains, losses, and fair value by investment type as of December 31, 2021:

of Unrealized Gains, Losses, and Fair Value

Premiums or discounts on debt are amortized straight

line over the term.

The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing

factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis,

the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its

market value to recover.

For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference

between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is

The fair value of the investment then becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent

recoveries in fair value.

following is a summary of the unrealized gains, losses, and fair value by investment type:

Schedule of Unrealized Gains, Losses, and Fair Value

Amortized Cost

Gross Unrealized

Gross Unrealized Losses

Gross Unrealized

Corporate bonds

Amortized Cost

Gross Unrealized

Corporate bonds

losses on bonds during the years ended December 31, 2022 and 2021 were $ 5,255 and $ 0 , respectively.

During the year ended December 31, 2022 corporate bonds totaling $ 1,151,186

The corporate bonds remaining at December 31,

2022 mature during 2023.

Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad

6 unchanged sentences

Concentrations

the years ended December 31, 2021 and 2020, the Company had one customer that made up approximately 58 % and 38 % of revenue, respectively.

Company had two customers that made up 37 %

of accounts receivable as of December 31, 2021, and 68 %

of accounts receivable as of December 31, 2020.

Company purchases substantially all of its fuel from one vendor.

the year ended December 31, 2022, the Company had two customers that made up approximately 32 % and 11 % of revenue.

For the year ended

December 31, 2021, the Company had one customer that made up approximately 58 % of revenue.

Company had two customers that made up 47 % and 8 % of accounts receivable as of December 31, 2022, and 37 % and 23 % of accounts receivable

as of December 31, 2021.

Company purchases substantially all of its fuel from three vendors.

is valued at the lower of the inventory’s cost or market using the first-in, first-out method.

2 unchanged sentences

consists solely of fuel.

At December 31, 2021 and 2020, the allowance was $ 0 in the consolidated financial statements.

Cost of sales

includes the cost of fuel sold and wages paid to drivers.

At December 31, 2022 and 2021, the allowance was $ 0 and $ 0 in the consolidated financial statements.

sales includes the cost of fuel sold and wages paid to drivers.

Offering Costs

Company includes offering costs directly associated with its IPO in prepaid expenses and deferred offering costs in the consolidated

balance sheet.

Company includes offering costs directly associated with its IPO and anticipated share offerings in prepaid expenses and other costs

in the consolidated balance sheet.

Deferred offering costs were offset against additional paid in capital upon completion of the offering.

As of December

31, 2021 and 2020, the Company recorded $ 0 and $ 153,597 respectively, to deferred offering costs.

As of December 31, 2022, and 2021, the Company recorded $ 129,635 and $ 0 respectively, to deferred offering costs.

Equipment and Depreciation

4 unchanged sentences

gain or loss is recorded in the year of disposal.

of Property and Equipment Useful Life

and Equipment

and automobiles

and Intangible Assets

18 unchanged sentences

ultimately selected is based on the characteristics of the asset and the availability of information.

Company amortizes finite lived intangible assets over their estimated useful lives, which range between two and five years as follows:

of Amortization Finite Lived Intangible Assets Useful Life

Company amortizes finite lived intangible assets over their estimated useful lives, which range between two and five years.

Schedule of Amortization Finite Lived Intangible Assets Useful Life

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts

28 unchanged sentences

The Company measures its available for sale securities on a recurring basis based on level 1 prices.

Company generates its revenue from mobile gas sales, either as a one-time purchase, or through a monthly membership.

Company generates its revenue from mobile fuel sales, either as a one-time purchase, or through a monthly membership.

Revenue is recognized

12 unchanged sentences

in exchange for such products or services.

Company determines if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”)

assets and operating lease liabilities in our consolidated balance sheets.

assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease

payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present

value of lease payments over the lease term.

The Company uses an incremental borrowing rate based on the estimated rate of interest for

collateralized borrowing over a similar term of the lease payments at commencement date.

The lease payments used to determine the Company’s

operating lease asset may include lease incentives and stated rent increases.

Our lease term may include the option to extend or terminate

the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments is recognized on

a straight-line basis over the lease term.

costs are expensed as incurred.

6 unchanged sentences

disclosure, and transition.

Stock-based compensation

The Company accounts for employee

stock awards for services based on the grant date fair value of the instrument issued and those issued to non-employees are recorded

based on the grant date fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably

Company accounts for employee stock awards for services based on the grant date fair value of the instrument issued and those issued

to non-employees are recorded based on the grant date fair value of the consideration received or the fair value of the equity instrument,

whichever is more reliably measurable.

Compensation expense from stock awards is expensed over the service period.

Forfeitures are recognized as they occur.

Forfeitures are recognized

as they occur.

loss per share

6 unchanged sentences

of such shares excluded from the computations of diluted loss per share are as follows:

of Shares Excluded from the Computations of Diluted Loss Per Share

options under treasury stock method

Schedule of Shares Excluded from Computations of Diluted Loss Per Share

Stock options under treasury stock method

accounting pronouncements

8 unchanged sentences

It also requires additional disclosures about leasing arrangements.

Topic 842 was effective January 1, 2020.

The Company’s office

lease effective January 1, 2022 will be recorded in the first quarter of 2022.

Topic 842 was effective January 1, 2020, and was adopted with the

Company’s office lease that began on January 1, 2022.

June 2016, the FASB issued ASU No.

6 unchanged sentences

other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

Reclassifications

reclassifications of prior year amounts have been made to be consistent with the current year presentation.

Going Concern

Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States

5 unchanged sentences

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

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

The Company anticipates that it 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.

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 or reduce, limit or cease our operations.

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 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 financing will be available on terms which are favorable, or at all.

If the Company is unable to raise

additional funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations.

The Company’s management has concluded that there is substantial

doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that may

result from the outcome of this uncertainty.

Related Party Transactions

the year ended December 31, 2021 and 2020, Company issued 26,572 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 year ended December 31, 2021, the Company issued 26,573 shares to an executive as a signing bonus.

The Company also issued 53,144

signing shares and 104,093 restricted shares to directors.

the year ended December 31, 2022, the Company issued 182,540 shares of restricted stock and 522,462 stock options to executives.

in these amounts are 75,893 shares of stock and 125,951 stock options granted to two former executives for which vesting was accelerated

upon their termination.

The Company also granted a total of 776,761 restricted shares to directors during the year ended December 31,

The aforementioned grants were made pursuant to the Company’s 2020 Incentive Compensation Plan.

Company entered into a consulting agreement, dated November 18, 2020, with Balance Labs, Inc.

Pursuant to the Consulting Agreement, Balance

Labs provides consulting services including assisting with the Company’s IPO and assisting with introductions to, and assistance

Labs provided 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

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.

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 paid Balance Labs $ 25,000 per month.

In the second year of the agreement, the payment will

decrease to $ 22,500 per month.

On November 18, 2021 and 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 28 % of the Company’s

common stock as of December 31, 2021.

Company is party to a technology license agreement with Fuel Butler LLC, which is owned 20 % by an executive of the Company.

During the twelve

months ending December 31, 2020, related parties converted principal to equity for $ 254,566 ,

including accrued unpaid interest.

The Company issued 6,752,034

for conversion of related party convertible notes from debt to equity, during the twelve months ended December 31, 2020.

including accrued unpaid interest at time of conversion.

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.

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 .

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 .

18, 2021, the Company issued a promissory note to a related party in the amount of $ 265,000 , including an original issue discount of

During the twelve months ended

December 31, 2020, the Company issued notes payable to related parties totaling $ 20,000 , net of debt discount of $ 5,526 , along with 56,000

stock options.

of December 31 , 2020, the Company had accounts payable and accrued liabilities due to related

parties of $ 2,250,000 .

These liabilities are due to purchases of fuel, accrued interest on related party notes, and accrued executive

related party debt was repaid in September 2021.

Balance Labs also assisted 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 paid Balance Labs $ 25,000 per month.

In the second year of the agreement, the payment decreased to

$ 22,500 per month.

On November 18, 2021, and 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 and expired on November 18, 2022, without

being renewed.

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 December 31, 2022.

Company is party to a technology license agreement with Fuel Butler LLC, which is owned 20 % by a former executive of the Company.

assets consisted of the following:

of Fixed Assets

construction in process

Schedule of Fixed Assets

Estimated Useful Lives

December 31, 2022

December 31, 2021

Fixed assets:

Leasehold improvements

Office furniture

Office equipment

Vehicle construction in process

Total fixed assets

Accumulated depreciation

( 1,134,680 )

Fixed assets, net

expense totaled $ 850,464 and $ 140,398 for the years ended December 31, 2022, and 2021, respectively.

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

of vehicle construction in progress to the expected realizable value.

Intangible Assets

assets consisted of the following:

of Intangible Assets

lived intangible assets:

Schedule of Intangible Assets

December 31, 2022

December 31, 2021

Indefinite lived intangible assets:

intangible assets:

Total indefinite lived intangible assets

Other intangible assets:

Customer list

Loading rack license

Technology license

Total other intangible assets

Accumulated amortization

( 1,205,379 )

other intangible assets, net

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 those shares were issued in October 2021.

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.

Total other intangible assets, net

April 7, 2021, the Company entered into a Technology License Agreement with Fuel Butler LLC (“Licensor”), 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 issued to the Licensor.

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

3 unchanged sentences

of the net revenue, as defined, from the use of the technology.

expense on intangible assets totaled $ 732,436 and $ 337,141 for the year ended December 31, 2021 and 2020, respectively.

amortization schedule for intangible assets as of December 31, 2021 is as follows:

of Future Amortization Expense for Intangible Assets

the Technology Agreement, the Company licensed proprietary technology that it believed would enable the Company to expand its services

to provide its fuel service in high density areas.

Fuel Butler has delivered a purported notice of termination of the Technology Agreement

based on certain alleged breaches arising from our failure to issue equity securities to Fuel Butler.

The Company has been in communications

with Fuel Butler regarding the termination of the Technology Agreement and continues to believe that the Company is in compliance with

the Technology Agreement and that the Technology Agreement continues to be in force.

While the Company contests Fuel Butler’s claims

of breach and contends that in fact Fuel Butler is in breach, the Company has communicated to Fuel Butler that it wishes to terminate

the Technology Agreement.

The Company has sent a proposal to Fuel Butler whereby it would cease utilizing the Technology and Fuel Butler

would return any shares it received under the Technology Agreement.

Accordingly, the Company considers the license to be fully impaired

and has fully amortized the license as of December 31, 2022.

The impairment loss of $ 1,987,500 is included in Accumulated Amortization

as of December 31, 2022.

Note 13 for details of intangibles from an acquisition during the year ended December 31, 2022.

expense on intangible assets totaled $ 919,158 and $ 732,436 for the years ended December 31, 2022, and 2021, respectively.

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 .

Accounts Payable and Accrued Liabilities

Company had accounts payable and accrued liabilities as follows:

of Accounts Payable and Accrued Liabilities

Schedule of Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities:

4 unchanged sentences

Total Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities – Related Parties:

Settlement payable

Acquisition consideration payable in shares

Shares payable to technology licensor

Signing and performance bonus payable in shares

Total Accounts Payable and Accrued Liabilities, Related Parties

Notes Payable

During the twelve months ending

December 31, 2020, related parties converted principal to equity for $ 254,566 , including accrued unpaid interest.

The Company issued

6,752,034 for conversion of related party convertible notes from debt to equity, during the twelve months ended December 31, 2020.

Line of Credit

December 10, 2021, the Company entered into a Securities-Based Line of Credit, Promissory Note, Security, Pledge and Guaranty Agreement

(the “Line of Credit”) with City National Bank of Florida.

Pursuant to the revolving Line of Credit, the Company may borrow

up to the Credit Limit, determined from time to time in the sole discretion of the Bank.

The Credit Limit was approximately $ 3.0 million

and $ 16.2 million at December 31, 2022, and December 31, 2021, respectively.

Outstanding borrowings were $ 1.0 million and $ 0 as of December

31, 2022, and December 31, 2021, respectively.

To secure the repayment of the Credit Limit, the Bank will have a first priority lien

and continuing security interest in the securities held in the Company’s investment portfolio with the Bank.

The amount outstanding

under the Line of Credit shall bear interest equal to the Reference Rate plus the Spread (as defined in the Line of Credit) in effect

Interest is due and payable monthly in arrears.

The interest rate on the Line of Credit was 5.75 % at December 31, 2022, and

1.50 % at December 31, 2021.

The Bank may, at any time, without notice, and at its sole discretion, demand the repayment of the outstanding

Company has entered into various loans for the purchase of vehicles in the ordinary course of business.

Each loan is secured by the vehicle

that is financed.

One of the lenders has provided a commercial line of credit of $ 4.0 million, under which approximately $ 2.4 million

remained available as of December 31, 2022, for the financing of vehicles under retail installment contracts through May 31, 2023.

vehicle loans under the commercial line of credit and from other sources have interest rates that range from 3.5 % to 9.0 % (primarily

November 24, 2020, the Company issued a note payable in the amount of $ 1,000,000 ;

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Shareholders Equity

shares include 500 million common shares and 50 million preferred shares.

Immediately prior to the Company’s IPO in December 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 .

shares include 500

million common shares and 50

million preferred shares.

Immediately prior to the Company’s IPO in December 2022, 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.

August 1, 2020, the Company’s board of directors approved the EzFill Holdings, Inc.

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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.

the years ended December 31, 2021 and 2020, 30,559 and 1,216,250 shares of common stock were sold for cash proceeds of $ 115,000 and 1,550,000 ,

respectively.

the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense of $ 406,667 and $ 500,000 , respectively

for shares granted to executives and other employees.

the year ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense of $ 378,947 and $ 658,498 , respectively

related to shares granted for sponsorships and $ 959,643 and $ 2,000,000 , respectively related to shares granted to Board members and consultants.

the year ended December 31, 2021, the Company issued a total of 783,899 shares to a company that licensed certain proprietary technology.

April 11, 2019, the Company entered into an employment agreement with a former owner of a business sold to the Company.

Stock compensation

of $ 76,084 and $ 89,100 was recognized for the year ended December 31, 2021 and 2020, respectively, based on the fair value of shares

at April 11, 2019.

the year ended December 31, 2021, the Company issued a total of 577,835 shares related to accrued bonuses, acquisitions and settlements

On June 3, 2022, the Company’s board of directors approved the EzFill Holdings, Inc.

2022 Equity Incentive

Plan (2022 Plan), which plan has also been approved by the Company’s shareholders.

The Company has reserved 2,600,000 of its outstanding

shares of common stock for issuance under the 2022 Plan.

Participation in the Plans will continue until the benefits to which the participants

are entitled have been paid in full.

the year ended December 31, 2021, 30,559 shares of common stock were sold for cash proceeds of $ 115,000 .

the year ended December 31, 2021, the Company issued 26,573 shares to an executive as a signing bonus and recorded related stock compensation

expense of $ 100,000 and issued 53,144 signing shares to directors and recorded related stock compensation expense of $ 200,000 .

the year ended December 31, 2021, the Company recorded stock-based compensation expense of $ 345,000 related to shares granted for sponsorships

and $ 110,000 related to shares granted to consultants.

the year ended December 31, 2021, the Company issued 600,000 shares related to accrued bonuses, and 375,000 shares related to an acquisition

that had previously been accrued in 2020.

In November 2020, the Company

issued 6,752,033 shares of common stock upon conversion of previously issued convertible notes with related parties, including accrued

total of 317,586

shares of restricted

stock were issued to employees, board members and consultants during the year ended December 31, 2021.

The restricted shares vest over

periods from one to three years and are being recognized as expense on a straight-line basis over the vesting period of the awards.

total expense of $ 177,510 was

recorded for the year ended December 31, 2021.

of the restricted stock activity is presented as follows:

the year ended December 31, 2022, the Company issued 20,000 shares to a consultant for services rendered and recorded stock compensation

of $ 68,500 .

the year ended December 31, 2022, the Company issued 40,323 shares to the sellers of the assets of Full Service Fueling.

the year ended December 31, 2022, the Company issued 182,540 shares of restricted stock and 522,462 stock options to executives.

stock compensation expense of $ 587,500 is being recorded over the vesting period.

Included in these amounts are 75,893 shares of stock

and 125,951 stock options granted to two former executives for which vesting was accelerated upon their termination.

The Company also

granted a total of 776,761 restricted shares to directors during the year ended December 31, 2022, for which stock compensation expense

of $ 365,000 is being recorded over the vesting period.

The aforementioned grants were made pursuant to the Company’s 2020 Incentive

Compensation Plan.

total of 966,801 shares of restricted stock were issued to employees, board members and consultants during the year ended December 31,

The restricted shares vest over periods from one to three years and are being recognized as expense on a straight-line basis over

the vesting period of the awards.

A total expense of $ 1,195,053 and 177,510 was recorded for the years ended December 31, 2022, and 2021,

respectively.

summary of the restricted stock activity is presented as follows:

Schedule of Restricted Stock Activity

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The reduction of stock compensation

expense related to the forfeitures was $ 0

for the year ended December 31, 2021.

stock compensation expense was approximately $ 861,000

as of December

expense related to the forfeitures was $ 2,365 and $ 0 for the years ended December 31, 2022, and 2021, respectively.

stock compensation expense related to restricted stock was approximately $ 206,000 as of December

31, 2022, which will be recognized over a weighted-average period of 0.7 years.

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following table represents option activity during the year ended December 31, 2022:

of Option Activity

Weighted Average

of Stock Option Activity

Exercise Price

Weighted Average

Remaining Contractual

Vested and Exercisable at December 31, 2020

Outstanding at December 31, 2021

Options granted

Vested and Exercisable at December 31, 2021

to certain sponsorship agreements, during the year ended December 31, 2021, 27,239 stock options were granted.

As of December 31, 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.

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 is being granted fully vested shares for $ 3,500 per month based on the closing share

price on the date of each grant.

fair value of the stock options granted during the year ended December 31, 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 %.

intrinsic value of options outstanding at December 31, 2021 and 2020 was $ 0 and approximately $ 307,000 ,

respectively.

The intrinsic value of warrants outstanding at December 31, 2021 and 2020 was $ 0

respectively.

Outstanding at December 31, 2022

Exercisable at December 31, 2022

fair value of the stock options granted in 2022 was determined using the Black-Scholes option pricing model with the following assumptions:

Schedule of Fair Value Assumptions

Valuation assumptions:

Risk-free rate

Expected volatility

Expected term (years)

Dividend yield

stock compensation expense related to stock options was approximately $ 131,000 as of December

31, 2022, which will be recognized over a weighted-average period of 2.0 years.

underwriter’s representatives for the Company’s IPO received warrants to purchase up to 359,375 shares.

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exercisable from March 14, 2022, until September 14, 2026, at an exercise price of $ 5.00 per share.

amount of approximately $ 198,000

was included in interest expense in 2021

warrants issued to a lender that became exercisable

upon the Company’s IPO.

The warrants are exercisable until September

14, 2024 , at $ 5.00

The lender also received 13,286

shares during 2021 that were valued at $ 50,000 .

April 2021, the Company issued 106,291 warrants to a lender in connection with a loan that has been repaid.

The warrants are exercisable

until September 14, 2024 , at $ 5.00 per share.

intrinsic value of options and warrants outstanding at December 31, 2022, and December 31, 2021 was $ 0 and $ 0 , respectively.

Commitments and Contingencies

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December 3, 2021, the Company signed a lease for 5778 square feet of office space, for occupancy effective January 1, 2022.

term is 39 months and the total monthly payment is $ 21,773 , including base rent, operating expenses and sales tax.

The base rent of $ 14,743

including sales tax was abated for months 1, 13 and 25 of the lease.

term is 39 months, and the total monthly payment is $ 21,773 , including base rent, estimated operating expenses and sales tax.

rent of $ 14,743 including sales tax was abated for months 1, 13 and 25 of the lease, and is subject to a 3% annual increase.

Right of Use (“ROU”) asset of $ 735,197 was recognized as a non-cash asset addition with the adoption of the lease accounting

Cash paid for amounts included in the present value of operating lease liabilities was $ 246,538 for the year ended December

31, 2022, and is included in cash flows from operating activities in the accompanying consolidated statement of cash flows.

The operating

lease expense for this lease was $ 245,777 for the year ended December 31, 2022, and is included in operating expenses in the consolidated

statements of operations.

minimum payments under non-cancellable leases as of December

31, 2022, were as follows:

Schedule of Future Minimum Payments Under Non-Cancellable Leases

Future Minimum Payments

Total undiscounted operating leases payments

Imputed interest

Present Value of Operating Lease Liabilities

Other Information

Weighted-average remaining lease term

Weighted-average discount rate

a practical expedient, short-term leases with an initial term of 12 months or less are excluded from the consolidated balance sheets

and charges from these leases are expensed as incurred.

Company has offices at several of its operating locations under leases that are cancellable upon short notice.

Total rent expense for

these leases (including the prior headquarters office) was approximately $ 121,415 and $ 89,935 for the year ended December 31, 2022, and

2021, respectively.

components of the deferred tax assets at December 31, 2022 and 2021 were as follows:

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Stock-based compensation

Amortization of debt discount

Loss on settlement and change in fair value

Change in fair value

Net operating loss

Lease liabilities

Capitalized research expenditures

Total gross deferred tax asset

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Prepaid assets

Right of use asset

Valuation allowances

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Total income tax provision

net operating loss carryforwards at December 31, 2021 and December 31, 2020 totaled approximately $ 17.5

million and $ 5.4

million, respectively, for tax purposes, which

will be available to offset

80% of future taxable income indefinitely .

net operating loss carryforwards at December 31, 2022 and December 31, 2021 totaled approximately $ 32.9 million and $ 17.5 million, respectively,

for tax purposes, which will be available to offset 80 % of future taxable income indefinitely.

Company reviews its filing positions for all open tax years in all U.S.

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The Credit Limit was approximately $ 3.4 million at December 31, 2022.

To secure the repayment of the Credit Limit,

the Bank will have a first priority lien and continuing security interest in the securities held in the Company’s investment portfolio

with the Bank.

To secure the repayment of the Credit Limit, the Bank

will have a first priority lien and continuing security interest in the securities held in the Company’s investment portfolio with

amount outstanding under the Line of Credit shall bear interest equal to the Reference Rate plus the Spread (as defined in the Line of

Credit) in effect each day.

The Interest is due and payable monthly in arrears.

Interest is due and payable monthly in arrears.

The interest rate on the Line of Credit was 5.75 % at December

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thereon, be immediately repaid in full, and the Bank may terminate the Line of Credit.

Outstanding balances under the Line of Credit were $ 1,000,000 and $ 0 at December 31, 2022, and 2021, respectively.

Business Combination

February 19, 2020, the Company entered into an Asset Purchase Agreement with Neighborhood Fuel, Inc.

This acquisition was considered

an acquisition of a business under ASC 805.

per the agreement, the Company purchased certain mobile fueling assets from Neighborhood Fuel, Inc.

and assumed certain vehicle financing

The Company purchased the assets with shares of the Company’s common stock equal to a purchase price of $ 750,000 ,

to be paid on the earlier of the completion of the Company’s IPO or March 1, 2022.

The shares were issued to Neighborhood Fuel

in September 2021 after the completion of its IPO.

March 11, 2022, the Company acquired substantially all of the assets of Full Service Fueling (“Seller”), a mobile fueling

service provider, for (a) a net amount of $ 321,250 cash after a credit of $ 3,750 , and (b) 40,323 common shares, with a value of $ 50,000

based upon the Company’s closing stock price on the Nasdaq on the date immediately preceding the Closing Date.

Further, the Purchase

Agreement includes provisions wherein the Company agrees to utilize Seller’s affiliate Palmdale Oil Company, Inc.

as one if its main fuel suppliers throughout the state of Florida.

Palmdale will also provide the Company with access to vehicle parking

at their locations throughout the state in order to support the expansion of the Company’s mobile fueling business.

This acquisition

was considered an acquisition of a business under ASC 805.

summary of the purchase price allocation at fair value is below.

of Purchase Price Allocation Fair Value

Purchase Allocation

Schedule of Purchase Price Allocation at Fair Value

Customer list

Loading rack license

Other identifiable intangibles

Purchase Allocation

purchase price was paid as follows:

of Business Acquisitions by Acquisition Issued or Issuable

Common stock issuable

Vehicle obligations

Total Purchase

costs related to the acquisitions were not material.

Purchase Allocation

vehicles and the identifiable intangibles will be depreciated and amortized over their estimated useful lives.

Transaction costs related

to the acquisition were not material.

results of operations for the year ended December 31, 2022, include approximately $ 113,000 of revenue and $ 4,000 net loss related to

the acquired business since the March 11, 2022 , acquisition date.

accompanying unaudited pro forma combined statement of operations presents the accounts of EzFill Holdings, Inc.

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for the year ended December 31, 2021, assuming the acquisition occurred on January 1, 2021.

Business Acquisition, Pro Forma Information

December 31, 2020 Summary Statement of Operations

of Unaudited Pro Forma Combined Statement of Operations

Year ended December 31, 2021

Summary Statement of Operations

EzFill Holdings

Neighborhood Fuel

$ ( 9,383,397 )

$ ( 122,507 )

$ ( 9,505,904 )

Net Loss per common share – basic and diluted

2 unchanged sentences

Company evaluates subsequent events that occur after the balance sheet date through the date the financial statements were issued.

January 17, 2022, the Company executed a Separation Agreement and Release with an executive, pursuant to which it paid the executive

a separation payment of $ 118,125 and issued 22,321 shares and 125,951 options that immediately vested.

February 22, 2022, the Company issued 10,000 vested shares to a consultant for services rendered over the preceding three months.

March 2, 2022, the Company and Full Service Fueling, Inc.

(“Seller”), entered into an Asset Purchase and Fuel Supply Agreement

(the “Purchase Agreement”) wherein the Company agreed to purchase substantially all of the assets of Seller for (a) $ 325,000

cash, and (b) such number of shares of

common stock par value $ 0.0001 ,

of the Company that is valued at $ 50,000

based upon the Company’s closing

stock price on the NASDAQ on the date immediately preceding the Closing Date.

Further, the Purchase Agreement includes provisions

wherein the Company agrees to utilize Palmdale Oil Company, Inc.

(“Palmdale”) as one if its main fuel suppliers throughout

the state of Florida, with preferred pricing on all fuel purchases.

Palmdale will also provide EzFill with access to vehicle parking

at their locations throughout the state.

The Company issued a press release announcing its entry into the Purchase Agreement on March

The Purchase Agreement provides that the transaction will close on the business date after all of the conditions to closing

are either satisfied or waived, or upon a mutually agreed upon time.

The consummation of the transactions contemplated by the Purchase

Agreement are subject to various customary closing conditions.

In connection with the closing of the transaction contemplated by the

Purchase Agreement, the Company and the Palmdale will enter into certain other agreements, including a Loading Rack License Agreement

(the “License Agreement”) and a Mutual Non-Solicitation and Non Interference Agreement relating to the agreement to purchase

fuel, coordinate customer deliveries and truck parking, as described in the Purchase Agreement and the exhibits thereto.

January 23, 2023, the Company entered into an agreement (the “Consulting Agreement”) with Lunar Project LLC (the “Consultant”).

For a term of two years unless terminated sooner as provided in the Consulting Agreement (the “Term”), the Consultant has

agreed to provide the Company with certain services including, but not limited to, increasing the Company’s customer base through

assembly of a contract sales team, assisting the Company in reducing its current operating expenses and assisting the Company with franchising

its business.

In exchange for its services, the Consultant will receive options to purchase 1,600,000 restricted shares of the Company’s

common stock (the “Options”).

The Options’ exercise prices, vesting requirements, and expiration dates will be set

forth in an option agreement between the Consultant and the Company.

At the end of the Term, unless extended by the parties in writing,

all unvested Options will immediately expire.

In conjunction with the Consulting Agreement, the Consultant entered into several Non-Qualified

Stock Option Agreements (“Option Agreements”) with the Company.

The first Option Agreement is for 500,000 option shares that

have an exercise price of $ 0.60 per share and an expiration date five years from the vesting date.

The second Option Agreement is for

400,000 option shares that have an exercise price of $ 1.00 per share and an expiration date five years from the vesting date.

Option Agreement is for 400,000 option shares that have an exercise price of $ 1.25 per share and an expiration date five years from the

vesting date.

The fourth Option Agreement is for 300,000 option shares that have an exercise price of $ 1.75 per share and an expiration

date five years from the vesting date.

Within each of the aforementioned Option Agreements, there are performance conditions and vesting

dates with specific percentages of shares to vest.

To exercise the Option, the Consultant (or in the case of exercise after the Consultant’s

death or incapacity, the Consultant’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company

a written notice of exercise per the Consulting Agreement.

February 10, 2023, the Board of Directors appointed Mr.

Daniel Arbour as a non-independent director.

Arbour’s term will continue

until its expiration or renewal at the Company’s next annual meeting of shareholders or until his earlier resignation or removal.

Arbour will not serve on any of the Board’s committees.

Arbour will receive a Board equivalent stock fee of $ 130,000 .

compensation will be based on a specific dollar amount translated into a specific number of shares of stock.

Stock grant equivalent shares

will be granted annually at the Company’s annual meeting date and will fully vest in 12 months or one day before the following

yearʼs annual meeting whichever is sooner.

Grants will be based on the closing price of the Company on the effective date of the

grant, or the Company’s annual shareholder meeting date.

On February 15, 2023, the Company entered into a consulting agreement

(the “Consulting Agreement”) with Mountain Views Strategy Ltd (“Mountain Views”).

Daniel Arbour is the principal

and founder of Mountain Views.

Pursuant to the Consulting Agreement, Mountain Views agrees to provide services as an outsourced chief

revenue officer The Company will pay Mountain Views $ 13,000 USD per month and cover other certain expenses.

The term of the Consulting

Agreement is for twelve months from the effective date however, either party may terminate the Consulting Agreement on two weeks written

notice to the other party.

February 17, 2023, the Company entered into a Sales Agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales

Agent”), pursuant to which the Company may offer and sell, from time to time through the Sales Agent, shares (the “Shares”)

of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price

of up to $ 2,096,000 , subject to the terms and conditions of the Sales Agreement.

The Company filed a prospectus supplement to its registration

statement on Form S-3 (File No.

333-268960) offering the Shares.

Under the Sales Agreement, the Sales Agent may sell the Shares in sales

deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended

(the “Securities Act”), including sales made directly on or through The NASDAQ Capital Market or any other existing trading

market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such

prevailing market prices, and/or any other method permitted by law.

The Company may instruct the Sales Agent not to sell the Shares if

the sales cannot be affected at or above the price designated by the Company from time to time.

The Company is not obligated to make

any sales of the Shares under the Sales Agreement.

The offering pursuant to the Sales Agreement will terminate upon the earlier of (i)

the sale of all of the Shares subject to the Sales Agreement and (ii) termination of the Sales Agreement as permitted therein.

will pay the Sales Agent a fixed commission rate of 3.0 % of the aggregate gross proceeds from the sale of the Shares pursuant to the

Sales Agreement and has agreed to provide the Sales Agent with customary indemnification and contribution rights.

The Company also agreed

to reimburse the Sales Agent the fees and expenses of the Sales Agent including but not limited to the fees and expenses of the counsel

to the Sales Agent, payable upon the execution of the Sales Agreement, in an amount not to exceed $ 50,000 .

In addition, the Company will

reimburse the Sales Agent upon request for such costs, fees and expenses incurred in connection with the Sales Agreement in an amount

not to exceed $ 7,500 on a quarterly basis for the first three quarters of each year and $ 10,000 for the fourth quarter of each year.

As of March 10, 2023, a total of 67,141 shares had been sold under the ATM for gross proceeds of $ 26,601 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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 8. Financial Statements and Supplementary Data