EzFill (EZFL) - 2021 Q4 - Annual Report

PART I Business EzFill Holdings, Inc. offers app-based mobile fuel delivery in South Florida across consumer, commercial, and specialty vehicle segments, aiming to disrupt traditional fueling - EzFill operates an on-demand mobile fuel delivery service in South Florida through an app-based platform, combining on-demand fills and subscription services[18] - The company's business is structured into three main verticals to target high-demand use cases: Consumers (at home/work), Commercial (fleets), and Specialty (boats, construction sites)[19][21][22][23] - The business model aims to solve key pain points of traditional gas stations, including inconvenience, fleet driver expenses and fraud, high real estate costs, and safety/security concerns[24][26][27][29] - EzFill's growth strategy involves expanding its geographic footprint, targeting new markets along the east coast both organically and through acquisitions, and forming strategic partnerships with major oil companies and businesses across various industries[59][60][61][62] - The company entered into a Technology License Agreement with Fuel Butler LLC in April 2021 to license proprietary technology expected to enable expansion into high-density areas and parking structures[63][64] - As of February 28, 2022, the company had 42 full-time employees and a fleet of 24 Mobile Fueling Trucks[35][80] Risk Factors The company faces significant business and stock ownership risks, including operational hazards, a history of net losses, customer concentration, and potential stock price volatility - The COVID-19 pandemic has adversely impacted operations by reducing driving habits and the need for gasoline, particularly affecting car fills at office parks, though this was partially offset by increased sales to large delivery fleets at lower margins[85] - The company has a history of net losses, reporting a net loss of $9.4 million for 2021 and an accumulated deficit of $17.3 million; it anticipates continued operating losses and will need to raise additional capital in the future[93][94] - EzFill is highly dependent on one large customer, which accounted for 57% of its revenue for the year ended December 31, 2021; the loss of this customer would materially impact future revenues[112][113] - The company currently purchases almost all of its fuel from a single supplier, MacMillan Oil Company, LLC, without a written agreement, posing a risk of supply interruption[110] - Competition in the fuel delivery industry is a risk, as there are low barriers to entry; the company also competes with alternative energy sources like electricity for vehicles[104] - Two beneficial owners control approximately 50% of the company's outstanding common stock as of February 28, 2022, which may limit the influence of other shareholders[118] Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - None[133] Properties EzFill leases its primary office space in Aventura, Florida, for approximately $21,800 per month, and utilizes additional space at its fuel supplier's location - The company leases office space at 2999 NE 191 Street, Aventura, FL 33180, for approximately $21,800 per month[134] - Additional office space and truck parking are available at its fuel supplier's location in Hialeah, FL, and at various Palmdale Oil Company locations in Florida following a transaction announced in March 2022[134] Legal Proceedings The company states that it is not aware of any material, existing, or pending legal proceedings against it - The company reports no material existing or pending legal proceedings[135] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[136] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities EzFill's common stock began trading on Nasdaq in September 2021, and the company has never paid dividends, intending to retain future earnings for business development, having raised approximately $25.25 million net from its IPO - The company's common stock trades on the Nasdaq Capital Markets under the symbol "EZFL", commencing on September 15, 2021[139] - The company has a policy of retaining earnings for operations and does not anticipate paying dividends in the foreseeable future[140] - The company's IPO in September 2021 generated aggregate gross proceeds of approximately $28.75 million, with net proceeds of about $25.25 million after expenses[141] - As of December 31, 2021, approximately $8.3 million of the net proceeds from the IPO had been used[142] Selected Financial Data As a "Smaller Reporting Company," EzFill is not required to provide this information - Disclosure for this item is not required as the company qualifies as a "Smaller Reporting Company"[147] Management's Discussion and Analysis of Financial Condition and Results of Operations For 2021, revenues increased by 102% to $7.2 million, but net loss widened to $9.4 million due to a 24% rise in operating expenses, while liquidity significantly improved to $16.9 million post-IPO Results of Operations (2021 vs. 2020) | Metric | Year Ended 2021 | Year Ended 2020 | | :--- | :--- | :--- | | Revenues | $7,233,957 | $3,586,244 | | Cost of sales | $7,027,274 | $3,544,072 | | Operating loss | ($8,769,085) | ($6,932,668) | | Net loss | ($9,383,397) | ($7,254,006) | - Revenues for 2021 increased by $3.6 million (102%) compared to 2020, attributed to a 53% increase in gallons delivered and a higher average price per gallon[158] - Operating expenses increased by $1.6 million (24%) in 2021, primarily due to increases in payroll, sales and marketing, insurance, technology, and public company expenses, although this was partially offset by a decrease in stock compensation expense[161] - Net loss increased by $2.1 million (29%) to $9.4 million in 2021 from $7.3 million in 2020[164] - As of December 31, 2021, the company had $16.9 million in cash and investments, a significant increase from $0.9 million at the end of 2020, primarily due to the IPO proceeds[165] - The company expects its cash on hand to fund operations for at least 12 months following the issuance of the financial statements but anticipates needing to raise additional capital in the future[172] Quantitative and Qualitative Disclosures About Market Risk As a "Smaller Reporting Company," EzFill is not required to provide this information - Disclosure for this item is not required as the company qualifies as a "Smaller Reporting Company"[173] Financial Statements and Supplementary Data This section presents the audited consolidated financial statements for 2021 and 2020, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, cash flows, and detailed notes Consolidated Financial Statements The consolidated financial statements show total assets grew from $2.8 million to $22.9 million, liabilities decreased to $1.1 million, and equity shifted to $21.9 million, with revenue growth of 102% but increased net loss and significant cash from financing activities Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $13,561,266 | $882,870 | | Total Current Assets | $17,257,032 | $1,277,643 | | Total Assets | $22,924,118 | $2,806,752 | | Liabilities & Equity | | | | Total Current Liabilities | $758,236 | $3,737,472 | | Total Liabilities | $1,055,672 | $4,288,496 | | Total Stockholders' Equity (Deficit) | $21,868,446 | ($1,481,744) | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Revenues | $7,233,957 | $3,586,244 | | Operating Loss | ($8,769,085) | ($6,932,668) | | Net Loss | ($9,383,397) | ($7,254,006) | | Net Loss Per Share | ($0.46) | ($0.72) | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,306,759) | ($1,607,669) | | Net cash used in investing activities | ($5,385,308) | ($24,075) | | Net cash provided by financing activities | $24,370,464 | $2,482,523 | Notes to Consolidated Financial Statements The notes detail accounting policies, the $25.25 million net IPO proceeds, significant customer concentration (58% of 2021 revenue), a technology license agreement, post-IPO debt repayment, and equity incentive plan details - The company completed its IPO in September 2021, issuing 7,187,500 shares for net proceeds of approximately $25,250,000[202] - The company has a significant customer concentration, with one customer representing 58% of revenue in 2021 and 38% in 2020[208] - A Technology License Agreement was entered into on April 7, 2021, for which the company issued shares and granted options; the company will share 50% of net revenue from the technology with the licensor until it exercises an acquisition option[242] - All company debt, except for vehicle loans, was repaid in September 2021 following the IPO[255] - The company's 2020 Equity Incentive Plan has 1,913,243 shares of common stock reserved for issuance[261] - In February 2020, the company acquired certain assets from Neighborhood Fuel, Inc. for a purchase price of $750,000 in common stock and the assumption of vehicle financing obligations[283][284] Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants on accounting principles, financial disclosure, or auditing scope during the last two fiscal years - There were no disagreements with accountants on accounting and financial disclosure during the two most recent fiscal years[293] Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[295] - Management assessed the effectiveness of internal control over financial reporting using the COSO 2013 framework and concluded that it was effective as of December 31, 2021[296] - No changes in internal controls over financial reporting occurred during the year ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, these controls[299] Other Information There is no other information to report for this item - None[300] PART III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the 2022 Proxy Statement[302] Executive Compensation Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the 2022 Proxy Statement[303] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the 2022 Proxy Statement[304] Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the 2022 Proxy Statement[305] Principal Accounting Fees and Services Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the 2022 Proxy Statement[306] PART IV Exhibits, Financial Statement Schedules This section lists financial statements filed under Item 8 and provides a comprehensive list of all exhibits filed with the Form 10-K, including key agreements and corporate documents - This section references the financial statements listed under Item 8 and provides a list of exhibits filed with the report[309][310]