EzFill (EZFL) - 2023 Q2 - Quarterly Report

Part I - Financial Information Financial Statements The company reported increased sales but a wider net loss, a weakened balance sheet, and significant going concern doubts for the six months ended June 30, 2023 Condensed Consolidated Balance Sheets As of June 30, 2023, total assets decreased to $7.2 million, liabilities increased to $5.4 million, and stockholders' equity significantly declined to $1.8 million Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,359,333 | $2,066,793 | | Total Current Assets | $2,757,344 | $5,434,166 | | Total Assets | $7,215,688 | $10,597,844 | | Liabilities & Equity | | | | Total Current Liabilities | $4,151,494 | $3,298,009 | | Total Liabilities | $5,416,323 | $4,812,397 | | Accumulated Deficit | $(39,662,743) | $(34,845,161) | | Total Stockholders' Equity | $1,799,365 | $5,785,447 | Condensed Consolidated Statements of Operations Sales increased significantly for both the three and six months ended June 30, 2023, yet the company continued to report substantial net losses Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Sales - net | $6,130,661 | $3,754,431 | $11,361,995 | $6,094,499 | | Cost of sales | $5,646,291 | $3,755,861 | $10,715,074 | $6,080,021 | | Loss from operations | $(2,162,264) | $(3,866,503) | $(4,469,446) | $(7,136,260) | | Net loss | $(2,468,811) | $(3,872,670) | $(4,817,582) | $(7,139,180) | | Loss per share | $(0.71) | $(1.18) | $(1.41) | $(2.17) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2023, operating activities used $3.9 million in cash, partially offset by investing and financing activities, resulting in a net cash decrease Cash Flow Summary (Unaudited) | Metric | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,898,769) | $(6,028,287) | | Net cash provided by (used in) investing activities | $2,149,614 | $(2,840,239) | | Net cash provided by financing activities | $1,041,695 | $2,702,152 | | Net decrease in cash | $(707,460) | $(6,166,374) | | Cash - end of period | $1,359,333 | $7,394,892 | Notes to Condensed Consolidated Financial Statements Notes detail the company's dire financial state, including a working capital deficit and going concern doubts, and disclose a reverse stock split and a strategic acquisition - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern due to historical losses and negative cash flows. The company needs to raise additional capital immediately to continue operations[25][26][31] Key Financial Distress Indicators (as of June 30, 2023) | Indicator | Value | | :--- | :--- | | Net loss (Six Months Ended) | $4,817,582 | | Net cash used in operations (Six Months Ended) | $3,898,769 | | Accumulated deficit | $39,662,743 | | Working capital deficit | $1,394,150 | - On April 27, 2023, the Company executed a 1-for-8 reverse stock split. All share and per-share amounts in the financial statements have been retroactively restated[140] - Subsequent to the quarter end, on August 10, 2023, the company entered into an agreement to acquire 100% of Next Charging LLC, a renewable energy company focused on wireless electric vehicle charging technology. This represents a significant strategic pivot[265][266] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes revenue growth to increased volume and market expansion, but the company continues to incur significant net losses and negative operating cash flow, raising going concern doubts Results of Operations Comparison (Six Months Ended June 30) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $11,361,995 | $6,094,499 | +86% | | Cost of sales | $10,715,074 | $6,080,021 | +76% | | Operating expenses | $4,565,672 | $6,354,262 | -28% | | Operating loss | $(4,469,446) | $(7,136,260) | -37% | | Net loss | $(4,817,582) | $(7,139,180) | -33% | Non-GAAP Adjusted EBITDA Reconciliation (Six Months Ended June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net loss | $(4,817,582) | $(7,139,180) | | Adjusted EBITDA | $(3,387,841) | $(5,497,038) | - The company has sustained net losses since inception and had an accumulated deficit of $39,662,743 as of June 30, 2023. It anticipates continued operating losses and is relying on a related party to fund its operations[294][295] Quantitative and Qualitative Disclosures About Market Risk This section is not required for smaller reporting companies, thus no disclosure is provided - Disclosure about market risk is not required for smaller reporting companies[297] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[299] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[300] Part II - Other Information Legal Proceedings The company has no legal proceedings to report for the period - The company has no legal proceedings to report[302] Risk Factors This section is not required for smaller reporting companies, thus no disclosure is provided - Disclosure of risk factors is not required for smaller reporting companies in a Form 10-Q[303] Unregistered Sales of Equity Securities and Use of Proceeds The company reports that the entire $25.3 million net proceeds from its September 2021 IPO have been fully utilized as of June 30, 2023 - The company's September 2021 IPO generated approximately $25.3 million in net proceeds after deducting underwriting discounts and offering costs[304] - As of June 30, 2023, the company has used the entire amount of net proceeds from the IPO[305] Exhibits This section lists exhibits filed with the Form 10-Q, including incorporation documents, various notes, security agreements, and officer certifications - The report includes numerous exhibits, notably several promissory notes and security agreements with AJB Capital Investments, LLC and Next Charging, LLC, indicating recent financing activities and strategic agreements[312]