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, 2022 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 Aventura, 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. On April 27, 2023, the Company executed a 1-for-8 reverse stock split and decreased the number of shares of its authorized common stock from 500,000,000 shares to 50,000,000 and its preferred stock from 50,000,000 to 5,000,000. Refer to Note 11 to the financial statements for details of the reverse stock split. As a result, all share activity has been restated as if the reverse stock split had been consummated as of the beginning of the respective period. Results of Operations The following table sets forth our results of operations for the three months ended March 31, 2023, and 2022: Three Months Ended March 31, 2023 2022 Revenues $ 5,231,334 $ 2,340,068 Cost of sales 5,068,783 2,324,160 Operating expenses 2,196,646 2,948,001 Depreciation and amortization 273,087 337,664 Operating loss (2,307,182 ) (3,269,757 ) Other income (expense) (41,589 ) 3,247 Net loss $ (2,348,771 ) $ (3,266,510 ) 19 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, 2023, and 2022: Three Months Ended March 31, 2023 2022 Net loss $ (2,348,771 ) $ (3,266,510 ) Interest and other income (expense), net 41,589 (3,247 ) Depreciation and amortization 273,087 337,664 Stock compensation 192,061 470,685 Adjusted EBITDA $ (1,842,034 ) $ (2,461,408 ) Gallons delivered 1,315,226 591,505 Three months ended March 31, 2023, compared to the three months ended March 31, 2022 Revenues We generated revenues of $5,231,334 for the three months ended March 31, 2023, compared to $2,340,068 for the prior year, an increase of $2,891,266 or 124%. This increase is primarily due to a 122% increase in gallons delivered and an increase in fees. The additional gallons were in existing as well as new markets. Cost of sales was $5,068,783 for the three months ended March 31, 2023, compared to $2,324,160 for the prior year. The $2,744,623 or 118% increase in cost of sales is due to the increase in sales as well as the hiring of additional drivers, primarily in new markets. Our gross profit improved year over year due to higher fuel revenue as well as increased delivery fees and driver efficiency. Operating Expenses We incurred operating expenses of $2,196,646 during the three months ended March 31, 2023, compared to $2,948,000 during the prior year, a decrease of $751,354 or 25%. This decrease was primarily due to decreases in payroll, stock compensation, marketing, and public company expenses. Depreciation and Amortization Depreciation increased in the current year as a result of the increase in the fleet of delivery vehicles. Amortization decreased in the current year as a result of the impairment of goodwill and other intangible assets recorded in the fourth quarter of 2022. 20 Other Income (Expense) Interest expense increased in the current year due to increased borrowing for truck purchases during 2022. Liquidity and Capital Resources Cash Flow Activities As of March 31, 2023, we had $1,483,060 million in cash and investments compared to approximately $4,186,875 at December 31, 2022. Operating Activities Net cash used in operating activities was $2,513,424 for the three months ended March 31, 2023, which was made up primarily by the net loss of $2,348,771 and offset by non-cash adjustments as well as changes in operating assets and liabilities for a net amount of $164,653. 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. Investing Activities During the three months ended March 31, 2023, and 2022, we used $0 and $1,271,548, respectively, for the acquisition of fixed assets, primarily trucks used for delivery of fuel to our customers. During the three months ended March 31, 2023, cash provided by investing activities $1,150,928 was the result of maturity and sale of debt securities. Financing Activities During the three months ended March 31, 2023, we made loan principal repayments of $199,723and received proceeds from the issuance of common stock from the ATM of $25,308 and recorded related expenses of $25,301. 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. Sources of Capital The Company has sustained net losses since inception and does not have sufficient revenues and income to fully fund the operations. As a result, the Company has relied on equity and debt financings to fund its activities to date. For the quarter ended March 31, 2023, the Company had a net loss of $2,348,771. At March 31, 2023, the Company had an accumulated deficit of $37,193,932. The Company anticipates that it will continue to generate operating losses and use cash in operations through the foreseeable future. The Company anticipates that it will need to raise additional capital in the next 1-2 months 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 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). 21 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.