Business context and reporting period
The supplied filing is EzFill Holdings, Inc.’s unaudited Form 10-Q for the quarter ended September 30, 2021, covering the three and nine months then ended. EzFill operates mobile fuel-delivery services, primarily in South Florida. The request identifies NEXTNRG, Inc.; that does not match the registrant named in the filing (EzFill Holdings, Inc., ticker EZFL), so confirm the filing is for the intended company.
Financial performance and position
| Metric | Q3 2021 | Nine months 2021 | Comparable 2020 |
|---|---|---|---|
| Revenue | $1.864 million | $5.236 million | $1.121 million and $2.460 million |
| Gross profit / margin | About $37,860 / 2.0% | $178,388 / 3.4% | $56,771 / 5.1% and $42,718 / 1.7% |
| Net loss | $2.374 million | $5.730 million | $724,184 and $3.072 million |
| Adjusted EBITDA (non-GAAP) | $(1.217) million | $(3.161) million | $(316,225) and $(1.205) million |
| Operating cash flow | Not separately provided for the quarter | $(3.413) million | $(816,057) for nine months |
Revenue increased 66% in Q3 and 113% for the nine months year over year. Gallons delivered rose 21% and 68%, respectively, and management also cited higher average fuel prices. Operating expenses rose 180% in Q3 and 73% year to date, attributed mainly to payroll, technology, insurance, truck maintenance and marketing. Management reported Q3 gross profit of $37,859; the displayed revenue and cost-of-sales figures imply $37,860.
At September 30, cash was $20.651 million, current assets $20.961 million, current liabilities $1.448 million, total liabilities $1.521 million, and stockholders’ equity $24.143 million. Working capital was approximately $19.5 million. Remaining notes payable totaled $165,919, largely vehicle-related; the company said other debt, including related-party debt, was repaid after its IPO. Nine-month investing cash use was $813,283, including deposits on 33 fuel trucks.
Material changes, outlook and risks
- The September 2021 IPO issued 7,187,500 shares at $4 each, generating $28.75 million gross and approximately $25.25 million net proceeds. The company reported using approximately $5.1 million of proceeds by September 30. Common shares outstanding were 25,926,923 at quarter-end and 26,112,933 as of November 8.
- The IPO materially strengthened liquidity and, according to management, mitigated the previously reported going-concern issue. The company nevertheless reported recurring losses, said it expects losses to continue until revenue increases significantly, if ever, and provided no quantified financial guidance.
- The SBA forgave the $154,673 PPP loan and accrued interest in September; this was recorded as other income. Higher interest expense included debt-related warrants and the write-off of unamortized discounts upon early debt repayment. A new technology license increased amortization expense and involved potential milestone shares, options and revenue-sharing obligations.
- Customer and supplier concentration are notable: one customer represented approximately 60% of Q3 revenue and 58% of nine-month revenue; substantially all fuel purchases came from one vendor. Only $250,000 of reported cash was federally insured.
- Management said residential demand had largely recovered from COVID-19 impacts, while office-park demand was still recovering as employees returned. No litigation requiring accrual or disclosure was reported; the short-term office lease commitment was described as immaterial. Disclosure controls were assessed as effective at the reasonable-assurance level.
- Related-party arrangements include a consulting agreement requiring monthly payments and anniversary share issuances, and a technology license involving a company executive’s 20%-owned entity.
Important facts for investors to verify
- Confirm the registrant identity: this filing is for EzFill Holdings, Inc., not NEXTNRG, Inc.
- Resolve the filing’s inconsistent Q3 operating-loss figures: the statements show $(1,944,504), while the MD&A table shows $(1,994,504); the reported revenue and expenses imply approximately $(1,994,503).
- Reconcile small disclosure differences in accumulated deficit and working capital: balance-sheet/note figures differ by $2.
- Assess the sustainability of very thin gross margins, rising operating costs and continued cash burn, alongside the company’s customer and fuel-vendor concentration.
- Review IPO-proceeds deployment, remaining vehicle debt, dilution from shares and warrants, and the economic terms and milestones of related-party agreements and the technology license.