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Shareholders Equity
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Shareholders Equity

(9) Shareholders Equity

 

Authorized shares include 500 million common shares and 50 million preferred shares. Immediately prior to the Company’s IPO in December 2022, all shares of common stock then outstanding converted into an aggregate of 18,750,000 shares of common stock following a one for 3.763243 reverse stock split approved by the Company’s board of directors and its shareholders.

 

On August 1, 2020, the Company’s board of directors approved the EzFill Holdings, Inc. 2020 Equity Incentive Plan (Plan), which plan has also been approved by the Company’s shareholders. The Company has reserved 1,913,243 of its outstanding shares of common stock for issuance under the Plan. On June 3, 2022, the Company’s board of directors approved the EzFill Holdings, Inc. 2022 Equity Incentive Plan (2022 Plan), which plan has also been approved by the Company’s shareholders. The Company has reserved 2,600,000 of its outstanding shares of common stock for issuance under the 2022 Plan. Participation in the Plans will continue until the benefits to which the participants are entitled have been paid in full.

 

 

Common stock

 

During the year ended December 31, 2021, 30,559 shares of common stock were sold for cash proceeds of $115,000.

 

During the year ended December 31, 2021, the Company issued 26,573 shares to an executive as a signing bonus and recorded related stock compensation expense of $100,000 and issued 53,144 signing shares to directors and recorded related stock compensation expense of $200,000.

 

During the year ended December 31, 2021, the Company recorded stock-based compensation expense of $345,000 related to shares granted for sponsorships and $110,000 related to shares granted to consultants.

 

During the year ended December 31, 2021, the Company issued 600,000 shares related to accrued bonuses, and 375,000 shares related to an acquisition that had previously been accrued in 2020.

 

During the year ended December 31, 2022, the Company issued 20,000 shares to a consultant for services rendered and recorded stock compensation of $68,500.

 

During the year ended December 31, 2022, the Company issued 40,323 shares to the sellers of the assets of Full Service Fueling. See note 13.

 

During the year ended December 31, 2022, the Company issued 182,540 shares of restricted stock and 522,462 stock options to executives. Total stock compensation expense of $587,500 is being recorded over the vesting period. Included in these amounts are 75,893 shares of stock and 125,951 stock options granted to two former executives for which vesting was accelerated upon their termination. The Company also granted a total of 776,761 restricted shares to directors during the year ended December 31, 2022, for which stock compensation expense of $365,000 is being recorded over the vesting period. The aforementioned grants were made pursuant to the Company’s 2020 Incentive Compensation Plan.

 

A total of 966,801 shares of restricted stock were issued to employees, board members and consultants during the year ended December 31, 2022. The restricted shares vest over periods from one to three years and are being recognized as expense on a straight-line basis over the vesting period of the awards. A total expense of $1,195,053 and 177,510 was recorded for the years ended December 31, 2022, and 2021, respectively.

 

A summary of the restricted stock activity is presented as follows:

 

       Weighted Average 
       Grant Date 
   Shares   Fair Value 
         
Outstanding at          
December 31, 2021   317,586   $3.27 
Granted   966,801    0.63 
Vested   (405,542)   2.69 
Forfeited   (35,000)   2.00 
December 31, 2022   843,845   $0.56 

 

The Company recognizes forfeitures of restricted shares as they occur rather than estimating a forfeiture rate. The reduction of stock compensation expense related to the forfeitures was $2,365 and $0 for the years ended December 31, 2022, and 2021, respectively.

 

Unrecognized stock compensation expense related to restricted stock was approximately $206,000 as of December 31, 2022, which will be recognized over a weighted-average period of 0.7 years.

 

 

Stock Options and Warrants

 

The following table represents option activity during the year ended December 31, 2022:

 

   Number of   Weighted
Average		   Weighted
Average
Remaining
Contractual
Term		 
   Options   Exercise Price   (years) 
Outstanding at December 31, 2021   175,384   $1.78    3.3 
Options granted    572,462    1.26    7.0 
Outstanding at December 31, 2022   747,846   $1.36    4.2 
Exercisable at December 31, 2022   428,962   $1.46    3.4 

 

The fair value of the stock options granted in 2022 was determined using the Black-Scholes option pricing model with the following assumptions:

 

   Year Ended
December 31,
2022		 
Valuation assumptions:     
Risk-free rate   1.64%
Expected volatility   62%
Expected term (years)   5 
Dividend yield   0 

 

Unrecognized stock compensation expense related to stock options was approximately $131,000 as of December 31, 2022, which will be recognized over a weighted-average period of 2.0 years.

 

The underwriter’s representatives for the Company’s IPO received warrants to purchase up to 359,375 shares. The warrants are exercisable from March 14, 2022, until September 14, 2026, at an exercise price of $5.00 per share.

 

In April 2021, the Company issued 106,291 warrants to a lender in connection with a loan that has been repaid. The warrants are exercisable until September 14, 2024, at $5.00 per share.

 

The intrinsic value of options and warrants outstanding at December 31, 2022, and December 31, 2021 was $0 and $0, respectively.