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Item 7. Management’s Discussion and Analysis

2024-04-01 compared with 2023-03-20 · 158 added, 126 removed, 47 unchanged (86% of the section changed)

5 unchanged sentences

related notes included in this Annual Report on Form 10-K 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 Annual Report

on Form 10-K to “we,” “us,” and “our” refer to Ezfill Holdings, Inc.

ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operation.

the context requires otherwise, references in this Annual Report on Form 10-K to “we,” “us,” and “our”

refer to Ezfill Holdings, Inc.

Forward-Looking

17 unchanged sentences

made, and we do not assume any obligation to update any forward-looking statements.

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.

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.

Accounting Policies and Estimates

discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared

in accordance with generally accepted accounting principles in the U.S., or GAAP.

We have identified certain accounting policies as critical

to understanding our financial condition and results of our operations.

For a detailed discussion on the application of these and other

accounting policies, see the notes to our financial statements included in this Annual Report on Form 10-K.

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.

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.

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.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of

operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting

principles in the U.S., or GAAP.

We have identified certain accounting policies as critical to understanding our financial condition

and results of our operations.

For a detailed discussion on the application of these and other accounting policies, see the notes to

our financial statements included in this Annual Report on

of Operations

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

The following table sets forth our results of operations

for the year ended December 31, 2023, and 2022:

Year Ended December 31,

1 unchanged sentence

Operating expenses

Impairment of goodwill, other intangibles and fixed assets

Depreciation and amortization

4 unchanged sentences

$ (17,505,765 )

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

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:

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, 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.

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 year ended December 31, 2023, and 2022:

Year Ended December 31,

9 unchanged sentences

Gallons delivered

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

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

of $5,029,486 in other operating expenses.

The increase was primarily due to increases in payroll, sales and marketing, insurance, technology,

and public company expenses.

and Amortization

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

Average fuel margin per gallon

Year ended December 31, 2023 compared to the Year

ended December 31, 2022

We generated revenues of $23,216,423 for the year

ended December 31, 2023, compared to $15,044,721 for the year ended December 31, 2022, an increase of $8,171,702 or 54%.

This increase

is due to a 39% increase in gallons delivered as well as an increase in the average price per gallon.

The additional gallons were in existing

as well as new markets.

Cost of sales was $21,845,574 for the year ended December

31, 2023, resulting in a gross profit of 1,370,849, compared to $(173,513) for the prior year.

The $6,627,340 or 44% increase in cost

of sales is due to the increase in sales and an increase in labor costs primarily related to the expansion into new markets.

profit improved year over year due to higher fuel revenues as well as increased delivery fees and driver efficiency.

Operating Expenses

We incurred operating expenses of $9,087,223

during the year ended December 31, 2023, as compared to $15,543,145 during the prior year, a decrease of $6,455,922 or 42%.

decrease was primarily due to decreases in payroll, sales and marketing, insurance, technology, and public company expenses offset

by an increase in stock based compensation.

Depreciation and Amortization

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)

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

Flow Activities

of December 31, 2022, we had an accumulated deficit of $(34,845,161).

We have incurred net losses since inception and have funded operations

primarily through sales of our common stock and issuance of notes payable, including to related parties.

As of December 31, 2022, we

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 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,

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.

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

inception to December 31, 2022, we have funded our activities through capital contributions from issuances of notes payable and the sale

of securities pursuant to the exemption provided by Regulation D, by sale of securities to accredited investors and a public offering.

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.

result, the Company has relied on loans from stockholders and others as well as stock sales to fund its activities to date.

ended December 31, 2022, the Company had a net loss of $17,505,765.

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

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

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.

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.

Impairment of Goodwill, Fixed Assets and Other

During the year ended December 31, 2023, the Company

recorded impairment of $105,506 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the

expected realizable value.

During 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 was not expected to generate any revenue

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

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.

Also, the Company recorded an impairment

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

Other Income (Expense)

Interest expense increased in the current year due

to increased borrowing for truck purchases.

We sustained a net loss of $10,471,889 for the year

ended December 31, 2023, as compared to $17,505,765 for the prior year, a decrease of $7,033,876 or 40% as a result of the above.

Liquidity and Capital Resources

Cash Flow Activities

As of December 31, 2023, we had an accumulated deficit

of $(43,317,050).

We have incurred net losses since inception and have funded operations primarily through sales of our common stock and

issuance of notes payable, including to related parties.

As of December 31, 2023, we had $226,985 in cash and investments, as compared

to December 31, 2022 when we had $4,186,875 in cash and investments.

Operating Activities

Net cash used in operating activities was $(6,643,397)

during year ended December 31, 2023, which was made up primarily by the net loss and partially offset by stock compensation of $1,525,146

and depreciation and amortization of $1,108,186 and impairment loss of $105,506 and loss on debt extinguishment – related party

of $291,000 and amortization of debt discount of $1,403,244.

Net cash used in operating activities was $(11,599,581) for the prior year

ended December 31, 2022, which was made up primarily by the net loss and partially offset by stock compensation of $1,412,283 and depreciation

and amortization of $1,769,621 and impairment losses of $2,894,516.

Investing Activities

During the year ended December 31, 2023, we provided

cash of $2,170,732, during the year ended December 31, 2022 we used cash of $(3,258,417).

Investments matured during 2023 of $2,130,116.

Also in 2023 we had refunds on prior purchases of fixed assets, primarily delivery trucks of $40,616.

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 used $3,258,417 for the acquisition

of fixed assets, primarily delivery trucks

Financing Activities

We generated $2,632,857 of cash flows from financing

activities during the year ended December 31, 2023 including $4,590,600 in new loans for truck purchases, $250,000 loan from a related

party, less principal repayments of $3,732,889 and received proceeds from the issuance of common stock from the ATM of $25,308 and recorded

related expenses of $25,308.We 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.

Liquidity and Sources of Capital

From inception to December 31, 2023, we have funded

our activities through capital contributions from issuances of notes payable and the sale of securities pursuant to the exemption provided

by Regulation D, by sale of securities to accredited investors and a public offering.

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, 2023 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, 2023 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 that time.

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

For the year ended December 31, 2023, the Company had a net loss of $10,471,889.

At December 31, 2023, the Company had an accumulated

deficit of 45,317,050.

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

Since inception, the Company’s operations have

primarily been funded through proceeds received in equity and debt financings.

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 anticipates

that it will need to raise additional capital, 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 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.

Quantitative and Qualitative Disclosures About Market Risk

reporting companies are not required to provide the information required by this item.

PART I - FINANCIAL

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