What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-14 · 66 added, 188 removed, 128 unchanged (66% of the section changed)

30 unchanged sentences

of Operations

following table sets forth our results of operations for the three months ended March 31, 2024 and 2023:

following table sets forth our results of operations for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

Cost of sales

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$ (2,468,811 )

$ (5,260,355 )

$ (4,817,582 )

Financial Measures

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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 three months ended

March 31, 2024 and 2023:

following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the three and six months

ended June 30, 2024 and 2023:

Three Months Ended

Six Months Ended

$ (3,361,233 )

$ (2,468,811 )

$ (5,260,355 )

$ (4,817,582 )

Interest expense

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$ (1,839,535 )

$ (1,906,568 )

$ (3,702,817 )

Gallons delivered

Average fuel margin per gallon

months ended March 31, 2024, compared to the three months ended March 31, 2023

generated revenues of $6,597,119 for the three months ended March 31, 2024, compared to $5,231,334 for the prior year, an increase

of $1,365,785 or 26%.

months ended June 30, 2024, compared to the three months ended June 30, 2023

generated revenues of $7,398,278 for the three months ended June 30, 2024, compared to $6,130,661 for the prior year, an increase of

$1,267,617 or 21%.

This increase is primarily due to a 16% increase in gallons delivered and an increase in related fees.

additional gallons were in existing as well as newly developed markets.

of sales was $6,135,335 for the three months ended March 31, 2024, compared to $5,068,783 for the prior year.

The $1,066,552 or 21%

increase in cost of sales is due to the increase in fuel sales as well as the hiring of additional drivers, primarily in new

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

incurred operating expenses of $1,489,031 during the three months ended March 31, 2024, compared to $2,196,646 during the prior year,

The additional

gallons were in existing as well as newly developed markets.

of sales was $6,847,450 for the three months ended June 30, 2024, compared to $5,646,291 for the prior year.

The $1,201,159 or 21% increase

in cost of sales is due to the increase in fuel sales as well as the hiring of additional drivers, primarily in new markets.

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

incurred operating expenses of $1,805,734 during the three months ended June 30, 2024, compared to $2,369,026 during the prior year,

a decrease of $563,292 or 24%.

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and Amortization

increased from $273,087 to $276,522 ($3,435), in the current three months ended March 31, 2024 as compared to March 31, 2023, as a result of the increase in the fleet of delivery

decreased from $277,608 to $264,368, ($13,240), in the current three months ended June 30, 2024 as compared to June 30, 2023.

Income (Expense)

expense increased from $49,749 to $659,153 ($609,404) in the current three months ended March 31, 2024 as compared to March 31, 2023

in the current year due to increased borrowing from related parties during the three months ending March 31, 2024.

expense increased from $12,819 to $1,902,409 ($1,889,590) in the current three months ended June 30, 2024 as compared to June 30, 2024

due to increased borrowing from related parties during the three months ending June 30, 2024.

months ended June 30, 2024 compared to the six months ended June 30, 2023

generated revenues of $13,995,397 for the six months ended June 30, 2024, compared to $11,361,995 for the prior year, an increase of

2,633,402 or 23%.

This increase is primarily due to a 21% increase in gallons delivered and an increase in related fees.

The additional

gallons were in existing as well as newly developed markets.

of sales was $12,982,785 for the six months ended June 30, 2024, compared to $10,715,074 for the prior year.

The $2,267,711 or 21% increase

in cost of sales is mainly due to the increase in fuel sales as well as the hiring of additional drivers, primarily in new markets.

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

incurred operating expenses of $3,294,764 during the six months ended June 30, 2024, as compared to $4,565,672 during the prior year,

a decrease of $1,270,908 or 25%.

This decrease was primarily due to decreases in payroll, stock based compensation, marketing and public

company expenses.

and Amortization

decreased from $550,695 to $540,891, ($9,804), in the current six months ended June 30, 2024 as compared to June 30, 2023.

Income (Expense)

expense increased from $27,160 to $2,561,562 ($2,534,402) in the current six months ended June 30, 2024 as compared to June 30, 2023

due to increased borrowing from related parties during the six months ending June 30, 2024.

and Capital Resources

Flow Activities

of March 31, 2024, we had approximately $48,613 in cash compared to approximately $504,581 at March 31, 2023.

cash used in operating activities was $1,140,148 for the three months ended March 31, 2024, which was made up primarily by the net loss

of June 30, 2024, we had approximately $306,811 in cash compared to approximately $226,985 at December 31, 2023.

cash used in operating activities was $2,095,470 for the six months ended June 30, 2024, which was made up primarily by the net loss

of $5,260,355 and offset by non-cash adjustments for a net amount of $3,164,885.

Net cash used in operating activities was $2,513,417 during

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 for a net amount of $164,646.

the three months ended March 31, 2024 net cash used by investing activities was $11,667.

The cash used was to purchase equipment.

Net cash provided by investing activities during the prior year was $1,150,928 resulting from the proceeds as part of

the sale of marketable debt securities.

generated $973,443 of cash flows from financing activities during the three months ended March 31, 2024, including a $1,250,000 loan

from a related party (an approximate 20% shareholder of the Company), less principal repayments of $276,557.

We used $199,723 of

cash flows from financing activities during the three months ended March 31, 2023, primarily for the repayments of notes payable of $199,723,

we also received $25,308 of proceeds for the issuance of stock from the ATM and recorded related expenses of $25,308.

Net cash used in operating activities was $3,898,772

during the six months ended June 30, 2023, which was made up primarily by the net loss of $4,817,582 and offset by non-cash adjustments

for a net amount of $918,810.

the six months ended June 30, 2024 net cash used by investing activities was $28,817.

The cash used was to purchase equipment of $11,667

and advances to related party of $17,150.

Net cash provided by investing activities during the prior year was $2,130,116 resulting from

the proceeds as part of the sale of marketable debt securities, net of $19,498 in purchases of equipment.

generated $2,204,113 of cash flows from financing activities during the six months ended June 30, 2024, including a $2,550,000 loan

from a related party (an approximate 20% shareholder of the Company), proceeds from notes payable of $250,000 less principal

repayments of $595,887.

We generated $1,041,698 of cash flows from financing activities during the six months ended June 30, 2023,

including a $1,710,000 loan from a related party (an approximate 20% shareholder of the Company), net of the repayments of loans

payable from a related party of $405,802 and repayments of notes payable of $262,500, we also received $25,308 of proceeds for the

issuance of stock from the ATM and recorded related expenses of $25,308.

Company has sustained net losses since inception and does not have sufficient revenues and income to fully fund its operations.

result, the Company has relied on equity and debt financings to fund its activities to date.

For the three months ended March 31, 2024,

For the six months ended June 30, 2024,

the Company had a net loss of $5,260,355.

At March 31, 2024, the Company had an accumulated deficit of $47,216,172.

At June 30, 2024, the Company had an accumulated deficit of $50,577,405.

The Company anticipates

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be forced to delay, reduce, or cease our operations.

reflected in the accompanying consolidated financial statements, for the three months ended March 31, 2024, the Company had:

reflected in the accompanying consolidated financial statements, for the six months ended June 30, 2024, the Company had:

loss of $5,260,355;

1 unchanged sentence

Additionally,

at March 31, 2024, the Company had:

at June 30, 2024, the Company had:

deficit of $50,577,405

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The Company had cash on hand

of $48,613 at March 31, 2024.

of $306,811 at June 30, 2024.

Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues

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our financial position, our cash flows and cash usage forecasts for the twelve months

ended March 31, 2025, and our current capital structure including equity-based instruments and our obligations and debts.

ended June 30, 2025, and our current capital structure including equity-based instruments and our obligations and debts.

factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent

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and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Accounting Policies and Estimates

discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements,

which were prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”).

The preparation of these

consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities,

revenue, and expenses.

Our estimates are based on our historical experience and on various other factors that we believe are

reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and

liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different

assumptions or conditions, and those differences may be material.

our significant accounting policies are more fully described in Note 2 — Summary of Significant Accounting Policies

of the Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data of this Annual

Report on Form 10-K, we believe the following discussion addresses our most critical accounting policies, which are those that are most

important to our financial condition and results of operations and which require our most difficult, subjective and complex judgments.

of Estimates and Assumptions

financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues

and expenses during the reported period.

Actual results could differ from those estimates, and those estimates may be material.

in estimates are recorded in the period in which they become known.

The Company bases its estimates on historical experience and other

assumptions, which include both quantitative and qualitative assessments that it believes to be reasonable under the circumstances.

estimates include, allowance for doubtful accounts and other receivables,

inventory reserves and classifications, valuation of loss contingencies, valuation of stock-based compensation, estimated useful lives

related to property and equipment, impairment of intangible assets, implicit interest rate in right-of-use operating leases, uncertain

tax positions, and the valuation allowance on deferred tax assets.

receivable are stated at the amount management expects to collect from outstanding customer balances.

Credit is extended to customers

based on an evaluation of their financial condition and other factors.

Interest is not accrued on overdue accounts receivable.

does not require collateral.

periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible

The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical

collection information and existing economic conditions.

Accounts determined to be uncollectible are charged to operations when that

determination is made.

consists solely of fuel.

Inventory is stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”)

method of inventory valuation.

Management assesses the recoverability of its inventory and establishes reserves on a quarterly basis.

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

Revenue is recognized

at the time of delivery and includes a delivery fee for each delivery or a subscription fee on a monthly basis for memberships.

Accounting Standards Update (“ASU”) No.

2014-09 (Topic 606) “Revenue from Contracts with Customers”, revenue

from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales

incentives, discounts, rebates, and amounts collected on behalf of third parties.

performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account under

The Company’s contracts with its customers do not include multiple performance obligations.

The Company recognizes revenue

when a performance obligation is satisfied by transferring control over a product or service to a customer.

The amount of revenue recognized

reflects the consideration the Company expects to be entitled to in exchange for such products or services.

following represents the analysis management has considered in determining its revenue recognition policy:

the contract with a customer

contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s

rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial

substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable

based on the customer’s intent and ability to pay the promised consideration.

The Company applies judgment in determining the customer’s

ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or,

in the case of a new customer, published credit and financial information pertaining to the customer.

the performance obligations in the contract

obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable

of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily

available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services

is separately identifiable from other promises in the contract.

To the extent a contract includes multiple promised services, the Company

must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract.

If these criteria are not met the promised services are accounted for as a combined performance obligation.

the transaction price

transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services

to the customer.

To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration

that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending

on the nature of the variable consideration.

Variable consideration is included in the transaction price if, in the Company’s judgment,

it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

of the Company’s contracts contain a significant financing component.

the transaction price to performance obligations in the contract

the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract

with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a

specific part of the contract.

For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised

in a series of distinct services that forms part of a single performance obligation.

Contracts that contain multiple performance obligations

require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless

the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service

that forms part of a single performance obligation.

The Company determines standalone selling price based on the price at which the performance

obligation is sold separately.

the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into

account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

Company’s contracts have a distinct single performance obligation and there are no contracts with variable consideration.

revenue when or as the Company satisfies a performance obligation

is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer.

following reflects additional discussion regarding our revenue recognition policies for each of our material revenue streams.

revenue stream we do not offer any returns, refunds or warranties, and no arrangements are cancellable.

Additionally, all contract consideration

is fixed and determinable at the initiation of the contract.

the Company only has two separate and distinct single performance obligations in its contractual arrangements.

the Company generally recognizes membership revenues at the end of each month after services have been rendered.

There are no prepaid

membership revenues.

the Company recognizes fuel sales each month after delivery has occurred.

Liabilities (Deferred Revenue)

liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue.

Upon completion

of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer

deposit is relieved and revenue is recognized.

Accounting Standards

to accounting principles are established by the FASB in the form of Accounting Standards Updates (“ASU’s”) to the FASB’s

Codification.

We consider the applicability and impact of all ASU’s on our consolidated financial position, results of operations,

stockholders’ equity, cash flows, or presentation thereof.

Management has evaluated all recent accounting pronouncements issued

through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not

yet effective accounting pronouncements, when adopted, will have a material impact on the consolidated financial statements of the Company.

March 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-02, Financial Instruments – Credit

Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting

guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310, Receivables (Topic 310), and requires entities

to provide disclosures about current period gross write-offs by year of origination.

Also, ASU 2022-02 updates the requirements related

to accounting for credit losses under ASC 326, Financial Instruments – Credit Losses (Topic 326), and adds enhanced disclosures

for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

guidance was adopted on January 1, 2023.

The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated

financial statements.

November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07 - Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU improves reportable segment disclosure requirements, primarily through enhanced

disclosures about significant segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is evaluating the impact this

will have on the Company’s consolidated financial statements and disclosures.

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU

ASU 2023-09 includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation

of rate reconciliation categories and income taxes paid by jurisdiction.

ASU 2023-09 is effective for annual periods beginning after

December 15, 2024, on either a prospective or retrospective basis.

Early adoption is permitted.

The Company is evaluating the impact

of ASU 2023-09 on its consolidated financial statements and related disclosures.

are various other updates recently issued, most of which represented technical corrections to the accounting literature or application

to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations

or cash flows.

Sheet Arrangements

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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-Q

Item 2. Management’s Discussion and Analysis