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Stockholders’ Equity (Deficit) | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Stockholders’ Equity (Deficit) | Note 8 – Stockholders’ Equity (Deficit) Change in Authorized Shares On June 14, 2024, the Company’s Board of Directors authorized an increase to its common stock from 50,000,000 shares to 500,000,000 shares. At September 30, 2024 the Company had four (4) classes of stock: Preferred Stock
| - | 5,000,000 shares authorized (see Series A and B shares of preferred stock which have been designated below)
| - | None issued and outstanding
| - | Par value - $0.0001
| - | Voting – none
| - | Ranks senior to any other class of preferred stock
| - | Dividends - none
| - | Liquidation preference – none
| - | Rights of redemption - none
| - | Conversion – none
Convertible Preferred Stock – Series A
| - | 513,000 and no shares designated at September 30, 2024 and December 31, 2023, respectively
| - | 363,000 and no shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.
| - | Par value - $0.0001
| - | Stated value of $10/share
| - | Conversion – stated value of $10/share, divided by 80% of the minimum price at the issuance date, which is $2.21/share, to be converted into common stock, for the issuance of these 363,000 shares, this amount is a fixed conversion amount of 4.53 shares of common stock for each share of Series A, preferred stock held, there are no other provisions that could result in a variable number of shares required for settlement. Equivalent shares at September 30, 2024 are 1,644,022. (see Note 5 for calculation).
| - | Dividends – 10% per year (2.5% per quarter), will be accrued based on the stated value per share of $10/share, on a quarterly basis. These dividends are due in the form of common stock. The amount of dividend shares are calculated by taking the shares issued, multiplied by the stated value per share, that amount is then multiplied by the dividend percentage. The result was then multiplied by 80% of the quoted closing price at the date of issuance, which is $2.21/share. This amount is a fixed conversion price, there are no other provisions that could result in a variable number of shares required for settlement in the future
| - | Voting – equivalent to the number of shares common stock into which this series is convertible
| - | Liquidation preference – none
| - | Rights of redemption – none
| - | Derivative liability – the Company has considered relevant accounting guidance, and has determined that there are no provisions of this class of stock that would require derivative liability treatment
EZFILL HOLDINGS, INC. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024 Convertible Preferred Stock – Series B
| - | 150,000 and no shares designated at September 30, 2024 and December 31, 2023, respectively
| - | 140,000 and no shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
| - | Par value - $0.0001
| - | Stated value of $10/share
| - | Conversion – stated value of $10/share, divided by 70% of the minimum price at the issuance date, which is $1.93/share, to be converted into common stock, for the issuance of these 140,000 shares, this amount is a fixed conversion amount of 5.18 shares of common stock for each share of Series B, preferred stock held, there are no other provisions that could result in a variable number of shares required for settlement. Equivalent shares at September 30, 2024 are 724,638.
| - | Dividends – 12% per year (3% per quarter), will be accrued based on the stated value per share of $10/share, on a quarterly basis. These dividends are due in the form of common stock. The amount of dividend shares are calculated by taking the shares issued, multiplied by the stated value per share, that amount is then multiplied by the dividend percentage. The result was then multiplied by 70% of the quoted closing price at the date of issuance, which is $1.93/share. This amount is a fixed conversion price. There are no other provisions that could result in a variable number of shares required for settlement in the future
| - | Voting – equivalent to the number of shares common stock into which this series is convertible
| - | Liquidation preference – none
| - | Rights of redemption – none
| - | Derivative liability – the Company has considered relevant accounting guidance, and has determined that there are no provisions of this class of stock that would require derivative liability treatment
Common Stock
| - | 500,000,000 shares authorized
| - | 6,208,073 and 1,806,612 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
| - | Par value - $0.0001
| - | Voting at 1 vote per share
Securities and Incentive Plans See Schedule 14A Information Statements filed with the US Securities and Exchange Commission for complete details of the Company’s Stock Incentive Plans. All issuances under these Plans has been noted below for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. Equity Transactions for the Nine Months Ended September 30, 2024 Stock Issued for Debt Issuance Costs – Related Party The Company issued 425,978 shares of common stock in connection with the issuance of several notes payable (See Note 5), having a fair value of $2,020,387 ($2.81 - $7.10/share), based upon the quoted closing trading price. This lender (an entity controlled by the Company’s Chief Executive Officer) holds a greater than 20% ownership of the Company. Vesting of Employee Shares The Company issued 88,336 shares of common stock ($9) in connection with the vesting of shares previously granted in 2023. The effect of issuing these shares had no net effect of stockholder’s deficit as the share issuance was reflected at par value. Total share based payments were $268,658. Stock Issued for Services The Company issued 53,777 shares of common stock to consultants for services rendered, having a fair value of $187,968 ($0.0001 - $3.52/share), based upon the quoted closing trading price. Series B, Preferred Stock Issued for Cash – Related party The Company issued 140,000 shares of Series B, preferred stock to a related party for $1,400,000 ($10/stated value per share). The related party holds a greater than 20% ownership of the Company. Common Stock Issued in Debt Conversion – Related party The Company converted all outstanding principal ($6,215,000) and accrued interest ($316,130) into 3,525,341 shares of common stock. At the time of conversion, the lender executed a 150% penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $3,265,565 for a total of $9,796,696 of debt that was converted. As a result of this debt conversion, the balance due to this lender was $0. The fair value of the common stock at the conversion date was $2.76/share. Accordingly, since this was a related party transaction, no gain on debt extinguishment was recorded. The related party holds a greater than 20% ownership of the Company. See Note 5. EZFILL HOLDINGS, INC. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024 Series A, Preferred Stock Issued in Debt Conversion – Related party On August 16, 2024, the Company converted all outstanding principal ($2,420,000) and accrued interest ($0) into 363,000 share of Series A, Preferred Stock, $10/share stated value. At the time of conversion, the lender executed a 150% penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $1,210,000 for a total of $3,630,000 of debt that was converted. As a result of this debt conversion, the balance due to this related party lender was $0. The related party holds a greater than 5% ownership of the Company. See Note 5 regarding debt conversion and related loss on debt extinguishment. Series A and B – Preferred Stock Dividends Payable in Common Stock – Related Parties In accordance with the terms of the Company’s Series A and B, Preferred stock, the Company is required to accrue dividends on a quarterly basis. Similar to the Series A and B, convertible preferred stock, dividends are accrued using a fixed conversion price. There are no other provisions that could result in a variable number of shares required for settlement in the future. Additionally, the Company has considered relevant accounting guidance, and has determined that there are no provisions related to its dividends that would require derivative liability treatment The Company has calculated its dividends payable as follows: Schedule of Dividends Payable
|  | Series A - Convertible Preferred Stock |  |  | Series B - Convertible Preferred Stock |  |  | Total Dividends Payable |
Shares issued and outstanding |  |  | 363,000 |  |  |  | 140,000 |  |  |  |  |
Stated value per share |  | $ | 10 |  |  | $ | 10 |  |  |  |  |
Dividend rate (10%/12%) |  |  | 10 | % |  |  | 12 | % |  |  |  |
Dividend shares due per year |  |  | 363,000 |  |  |  | 168,000 |  |  |  |  |
Market price - at issuance date |  |  | 2.76 |  |  |  | 2.76 |  |  |  |  |
Minimum price - 70%/80% discount to market price |  |  | 80 | % |  |  | 70 | % |  |  |  |
Conversion price |  |  | 2.21 |  |  |  | 1.93 |  |  |  |  |
Dividend shares due per quarter |  |  | 41,101 |  |  |  | 21,739 |  |  |  |  |
Allocation for days outstanding this period end |  |  | 48.91 | % |  |  | 48.91 | % |  |  |  |
Total dividend shares due |  |  | 20,104 |  |  |  | 10,633 |  |  |  | 30,737 |
Market price - reporting period end date |  |  | 2.76 |  |  |  | 2.76 |  |  |  |  |
Fair value of dividends payable |  | $ | 55,486 |  |  | $ | 29,348 |  |  | $ | 84,834 |
Equity Transactions for the Year Ended December 31, 2023 Stock Issued for Cash The Company sold 3,357 shares of common stock for $25,308 ($7.65 – $8.83/share) through at the market (“ATM”) sales via a sales agent who was eligible for commissions of 3% for any sales of common stock made. The Company also paid $25,308 in related expenses as direct offering costs in connection with the sale of these shares. Stock Issued for Services – Related Parties The Company issued an aggregate 268,986 shares of common stock to a Company officer as well various board members for services rendered, having a fair value of $1,215,365 ($4.38 – $8.78/share), based upon the quoted closing trading price. The issuance of these shares was pursuant to vesting. Stock Issued for Services The Company issued 40,000 shares of common stock to consultants for services rendered, having a fair value of $272,750 ($4.80 - $11.98/share), based upon the quoted closing trading price. Stock Issued for Debt Issuance Costs – Related Party (Common Stock Issuable) The Company issued 264,000 shares of common stock in connection with the issuance notes payable (See Note 5), having a fair value of $919,500 ($5.18 - $6.78/share), based upon the quoted closing trading price. Of the total 264,000 shares issued, 104,000 shares remain unissued (common stock issuable) since the issuance of these shares would give this lender greater than 9.99% ownership of the Company, which is prohibited by agreement. See Note 5. This lender holds a greater than 5% controlling interest in the Company and a significant lender. EZFILL HOLDINGS, INC. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024 Restricted Stock and Related Vesting A summary of the Company’s nonvested shares (due to service based restrictions) as of September 30, 2024 and December 31, 2023, is presented below: Schedule of Company Nonvested Shares
|  |  |  |  | Weighted Average |
|  | Number of |  |  | Gant Date |
Non-Vested Shares |  | Shares |  |  | Fair Value |
Balance - December 31, 2022 |  |  | 42,192 |  |  | $ | 1.40 |
Granted |  |  | 330,554 |  |  |  | 5.77 |
Vested |  |  | (104,699 | ) |  |  | 6.72 |
Cancelled/Forfeited |  |  | (153,711 | ) |  |  | 5.53 |
Balance - December 31, 2023 |  |  | 114,336 |  |  |  | 6.40 |
Granted |  |  | - |  |  |  | - |
Vested |  |  | (88,336 | ) |  |  | 5.15 |
Cancelled/Forfeited |  |  | - |  |  |  | - |
Balance - September 30, 2024 |  |  | 26,000 |  |  | $ | 6.40 |
The Company has issued various equity grants to board directors, officers, consultants and employees. These grants typically contain a vesting period of one to three years and require services to be performed in order to vest in the shares granted. The Company determines the fair value of the equity grant on the issuance date based upon the quoted closing trading price. These amounts are then recognized as compensation expense over the requisite service period and are recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations. The Company recognizes forfeitures of restricted shares as they occur rather than estimating a forfeiture rate. Any unvested share based compensation is reversed on the date of forfeiture, which is typically due to service termination. At September 30, 2024, unrecognized stock compensation expense related to restricted stock was $62,400, which will be recognized over a weighted-average period of 1.29 years During the three months ended September 30, 2024 and 2023, the Company recognized compensation expense of $17,333 and $114,834, related to the vesting of these shares. During the nine months ended September 30, 2024 and 2023, the Company recognized compensation expense of $268,667 and $143,001, related to the vesting of these shares. Stock Options Stock option transactions for the year ended December 31, 2023 is summarized as follows: Schedule of Stock Option Activity
|  |  |  |  |  |  |  | Weighted Average |  |  |  |  |  | Weighted |
|  |  |  |  | Weighted |  |  | Remaining |  |  |  |  |  | Average |
|  |  |  |  | Average |  |  | Contractual |  |  | Aggregate |  |  | Grant |
|  | Number of |  |  | Exercise |  |  | Term |  |  | Intrinsic |  |  | Date |
Stock Options |  | Options |  |  | Price |  |  | (Years) |  |  | Value |  |  | Fair Value |
Outstanding - December 31, 2022 |  |  | 37,392 |  |  | $ | 19.05 |  |  |  | 3.68 |  |  | $ | - |  |  | $ | - |
Vested and Exercisable - December 31, 2022 |  |  | 34,526 |  |  | $ | 19.44 |  |  |  | 3.47 |  |  | $ | - |  |  | $ | - |
Unvested and non-exercisable - December 31, 2022 |  |  | 2,866 |  |  | $ | 14.36 |  |  |  | 4.16 |  |  | $ | - |  |  | $ | - |
Granted |  |  | 101,930 |  |  | $ | 17.41 |  |  |  |  |  |  |  |  |  |  | $ | 0.73 |
Exercised |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (139,322 | ) |  | $ | 17.85 |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding - December 31, 2023 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | - |
Vested and Exercisable - December 31, 2023 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | - |
Unvested and non-exercisable - December 31, 2023 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | - |
Year Ended December 31, 2023 The Company granted 101,930 stock options, having a fair value of $73,920. Of the total, 21,930 were granted to our former Chief Executive Officer in lieu of accrued salary totaling $50,000. These options were fully vested on the grant date. The remaining 80,000 options were granted to consultants for a project that was cancelled in 2023. As a result, the Company recorded a grant date fair value of $23,920. All previously recorded stock based compensation ($7,973) was reversed in 2023. There was a net effect of $0 on the consolidated statements of operations for this grant. The fair value of the stock options granted in 2023 were determined using the Black-Scholes Option pricing model with the following assumptions: Schedule of Fair Value Assumptions
Expected term (years) |  |  | 5.00 |
Expected volatility |  |  | 59% - 62 | %
Expected dividends |  |  | 0 | %
Risk free interest rate |  |  | 4.00 | %
EZFILL HOLDINGS, INC. AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024 In, 2023, the Company determined that all outstanding options previously granted were held by former officers, directors and employees. None of these individuals had timely exercised their options post termination in an allowable time period, resulting in the cancellation and forfeiture of any issued and outstanding amounts held. Warrants Warrant activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 are summarized as follows: Schedule of Stock Warrant Activity
|  |  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  |  |  |  | Average |  |  |  |
|  |  |  |  | Weighted |  |  | Remaining |  |  | Aggregate |
|  | Number of |  |  | Average |  |  | Contractual |  |  | Intrinsic |
Warrants |  | Warrants |  |  | Exercise Price |  |  | Term (Years) |  |  | Value |
Outstanding - December 31, 2022 |  |  | 81,452 |  |  | $ | 10.36 |  |  |  | 2.22 |  |  | $ | 82,756 |
Vested and Exercisable - December 31, 2022 |  |  | 81,452 |  |  | $ | 10.36 |  |  |  | 2.22 |  |  | $ | 82,756 |
Unvested - December 31, 2022 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Granted |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding - December 31, 2023 |  |  | 81,452 |  |  | $ | 10.36 |  |  |  | 1.22 |  |  | $ | 36,030 |
Vested and Exercisable - December 31, 2023 |  |  | 81,452 |  |  | $ | 10.36 |  |  |  | 1.22 |  |  | $ | 36,030 |
Unvested and non-exercisable - December 31, 2023 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Granted |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (29,155 | ) |  | $ | 20.31 |  |  |  |  |  |  |  |  |
Outstanding - September 30, 2024 |  |  | 52,297 |  |  | $ | 4.82 |  |  |  | 0.82 |  |  | $ | 12,913 |
Vested and Exercisable - September 30, 2024 |  |  | 52,297 |  |  | $ | 4.82 |  |  |  | 0.82 |  |  | $ | 12,913 |
Unvested and non-exercisable - September 30, 2024 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |

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