Quarterly report pursuant to Section 13 or 15(d)

Shareholders Equity

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Shareholders Equity
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
Shareholders Equity

(8) Shareholders Equity

 

Authorized shares include 500 million common shares and 50 million preferred shares. Immediately prior to the Company’s IPO in September 2021, 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.

 

Common stock

 

During the three months ended March 31, 2021, the Company issued 54,474 shares of common stock to executives and other employees as a signing bonus. The Company recorded stock-based compensation expense of $205,000.

 

During the three months ended March 31, 2021, the Company issued 16,807 and 26,573 shares of common stock for sponsorship and consulting services, respectively. The Company recorded stock-based compensation expense of $163,249.

 

During the three months ended March 31, 2021, the Company issued 159,437 shares related to an acquisition that had previously been accrued in 2020.

 

During the three months ended March 31, 2022, the Company issued 10,000 shares to a consultant for services rendered over the preceding three months.

  

During the three months ended March 31, 2022, the Company issued 40,323 shares to the sellers of the assets of Full Service Fueling. See note 11.

 

 

A total of 237,500 shares of restricted stock were granted to employees during the three months ended March 31, 2022. The restricted shares vest over periods from two 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 $368,162 was recorded for the three months ended March 31, 2022 related to restricted shares. 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     182,539       1.30  
Vested     (32,321 )     1.72  
Forfeited     (7,500 )     2.93  
March 31, 2022     460,304       3.36  

 

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 $1,221 for the three months ended March 31, 2022.

 

Unrecognized stock compensation expense related to restricted stock was approximately $709,000 as of March 31, 2021, which will be recognized over a weighted-average period of 0.74 years.

 

Stock Options and Warrants

 

The following table represents stock option activity during the three months ended March 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     522,462       1.26       7.8  
Outstanding at March 31, 2022     697,846     $ 1.39       6.6  
Exercisable at March 31, 2022     301,335       1.56       5.1  

 

During the three months ended March 31, 2022, the Company granted a total of 522,462 stock options to executives with an exercise price of $1.26 and a term of 8 years. The options vest 1/3 per year after each of the first three years. The fair value of the stock options of $350,000 was determined using the Black-Scholes option pricing model with the following assumptions:

 

    Three Months Ended
March 31, 2022		  
Valuation assumptions:        
Risk-free rate     1.64 %
Expected volatility     62 %
Expected term (years)     5  
Dividend yield     —  

 

Unrecognized stock compensation expense related to stock options was approximately $243,000 as of March 31, 2021, which will be recognized over a weighted-average period of 2.75 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 March 31, 2022 and December 31, 2021 was $0 and $0, respectively.