Good afternoon, everyone. Welcome to today's Conference Call to review the First Quarter ending March 31, 2022, for EZFill Holdings, Inc. At this all participants are in a listen-only mode. A brief question-and-answer session will follow management's remarks. I will provide instructions at that time. As a reminder, this conference call is being recorded.

I would now like to turn the conference call over to your host, Kathleen Heaney from KCSA Strategic Communications. Please go ahead..

Thank you, Hector. Good afternoon, everyone, and thank you for joining us today for EzFill's First Quarter 2022 Financial Results Conference Call. Presenting today is Mike McConnell, CEO and Arthur Levine, CFO. After management's prepared remarks, we will open the call for questions.

Before we begin, listeners are reminded that certain matters discussed during today's conference call or answers that may be provided given to the questions may constitute forward-looking statements from EZFill's management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended.

Words such as may, should, project, expect, intend, plan, believe, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements.

These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's annual report on Form 10-K filed with the SEC. Copies of these documents are available on the SEC's website as well as on the company's website.

Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law. I would now like to introduce Mike McConnell, CEO. Please go ahead, Mike..

Thank you, Kathleen, and good afternoon, everyone. Thank you for joining us today to review our first quarter 2022 results. We began the year well positioned to advance our growth strategy to build upon our position as one of the fastest-growing on-demand mobile fuel providers.

Our service offering is rapidly being adopted and recognized by many of South Florida's large fleet businesses.

Additionally, we are beginning to see a key shift in the way that general public fuelled their vehicles, as they increasingly recognize the safety, efficiencies and convenience of mobile fueling, which gives us confidence to expand into new target markets over time.

Before Arthur reviews our financial results for the quarter, I'd like to highlight a few key developments that have elevated our position and opened the door for EZFill to achieve increasing revenue as the year progresses. First, we have locked in several new commercial fleet fueling agreements with existing customers.

Our ability to be further integrated and support our long-standing customers' businesses is a testament to the value of customers place on our unique service platform.

Companies that we have established partnerships with such as SERVPRO, a cleanup restoration and construction franchise company and Easyscripts, a retail pharmacy with home delivery service throughout Miami Dade, Broward and Palm Beach counties, rapidly enter new markets and have come to rely on our mobile fueling services to support their expansion.

For example, we first started working with SERVPRO at North Miami in November of 2021. The success of this partnership opened the door for additional opportunities to serve the franchise. In March 2022, we expanded our relationship by entering into an agreement with SERVPRO of Brickell to serve another one of the company's fleets.

With Easyscripts, we began servicing their fleet in the Miami-Dade County and now support their fleets in Broward County.

Other existing customers that are expanding into other markets, which will allow us to increase the number of fleets we service for them include national franchisor 1-800 JUNK and Alto, a leader in ride-hailing and private transportation that operates an increasing number of small and medium-sized fleets.

We've also signed on a number of new accounts that present similar strong growth opportunities they operate with multiple locations throughout Florida. We are now planning our expansion across Florida and these new accounts present opportunities for us to strategically enter these new markets.

We began partnering with Cool Air USA in the Miami area, which specializes in air-conditioning repair and installation and services customers across Florida, most notably in the Palm Beach County, where our near-term growth is focused on.

We also signed new fleet fueling agreements this quarter with 9/11 restoration of Miami, which is part of a nationwide franchise, providing water and fire damage restoration and other services; and Chef Nissen Catering and active participant in the Summer BreakSpot Program, which provides free meals to kids and teens across Florida.

These business partnerships are not only complementary to our growth as we gain greater opportunities to fuel larger commercial fleets and enter new markets alongside our business customers, but are also supplementing the growth of these businesses by streamlining their operations as they expand.

We are becoming an essential component of these companies' growth strategies as demonstrated by our ability to eliminate driver downtime and reduce operating costs for them.

Once again, I want to emphasize that we believe we will continue to build on these relationships for long-term commercial partnerships to drive increased revenue for EZFill and expand our geographic footprint into other key Florida markets.

Additionally, we signed a number of new commercial fleet customers in the first quarter that have expanded our reach to a new - a number of new industries and have begun to have a positive impact on our revenue. We're excited about these opportunities and we seeing increased demand for our services amongst a diverse group of businesses.

For example, in the past quarter, we entered the health care sector, specifically the medical and research industry through a signed agreement with Floridian Clinical Research in Miami Lakes to regularly service their fleet of delivery and transport vehicles.

We also began serving educational facilities through an agreement with Monsignor, Edward Pace High School in Miami Gardens to regularly service their school buses and other fueling for teachers and administrators during school hours.

Our new fleet business drives our growth as it allows us to achieve higher utilization of our trucks and delivers a recurring revenue stream for our business. We are successfully scaling this business, bringing on new commercial fleet accounts at record pace.

We are now serving over 40 fleets and are beginning to see the positive effect of this increased business and is not driving not only revenue but higher overall fuel margins. We are excited to leverage these successful relationships and growing demand for mobile fueling to support our entry into other high-growth markets.

Our on-demand consumer and specialty business combined currently contribute approximately 20% of our revenue.

We're addressing the opportunity to serve consumers through our on-demand app and additionally, an attractive method for growth in our Consumer business segment has been and continues to be supplying fuel to employees of large corporations as an employee benefit.

These types of organizations include office parks, schools, hospitals and other permanent job locations. Another key growth avenue for building our consumer business segment is by servicing market-specific personnel and commercial vehicles, such as boat owners, either at their home or as they dock at busy Marinas.

In February, we announced exclusive agreement with Brickell Place Marina in Miami to regularly service the Marinas more than 200 customers through the EZFill app. On March 14, we closed our first acquisition since our IPO.

As we have previously discussed, we acquired the assets of the mobile fuel company service, full service fueling an affiliate of Palmdale Oil Company located in West Palm Beach.

A key component of this acquisition was the operating and supply agreement with Palmdale, one of the largest wholesale fuel providers in Florida, where by Palmdale will serve as one of the main fuel suppliers for EZFill throughout Florida. Palmdale is also providing EZFill with access to vehicle parking at locations throughout the state.

While this acquisition was relatively small, we now have the resources and infrastructure in place to enter our previously stated target markets effectively and efficiently throughout Florida. Today, we have a fleet of almost 30 fueling trucks and enhanced logistical capabilities to drive our expansion.

In the fourth quarter, we announced our commitment to purchase 33 new fuel trucks more than tripling the size of our delivery fleet. These new trucks have been arriving on a rolling basis, and we expect to complete delivery of all 33 trucks before the end of the year.

Each new truck has the capacity to carry 1,200 gallons of fuel, which collectively will add over 350,000 gallons of delivery capacity per week when all 33 trucks are operating at full capacity utilization. With these trucks, as well as the trucks we acquired from Palmdale and other sources, our fleet is expected to be almost 50 trucks by year-end.

Summing up our presentation. During Q1, we secured 11 new fleet accounts and completed our first acquisition that will support our ability to scale and deliver fuel to Florida's largest cities. As I just mentioned, we are more than tripling the size of our fueling truck fleet to service our customers to meet demand.

The demand for our services is there. And in fact, we have seen an acceleration in new fleet customers in April and May, as well as larger fleet sizes with these customers as compared with earlier contracts.

We now have the capability to serve a much more expansive network of commercial customers, as well as demonstrate the value of our on-demand fueling service to a more extensive consumer audience to where a substantial opportunity exists for our growth. I would like to turn the call over to Arthur Levine to review our financial results.

Arthur, please go ahead..

Thank you, Mike. Thank you all for joining us today. Overall, our financial results for the quarter continue to reflect the investment in infrastructure we are putting in place to support demand as our revenue ramps and new fleet and other customers continue to onboard in existing and new markets.

Revenue for the first quarter of 2022 increased 54% year-over-year to $2.3 million. The increase is due to a 9% increase in gallons delivered, as well as an increase in the average price per gallon. Total gallons delivered in the first quarter of 2022 was $591,505.

Cost of sales was $2.3 million for the first quarter compared to $1.2 million in the prior year period. The 67% increase is due to the increase in sales, as well as the hiring of additional drivers in the quarter in order to support our growth.

We incurred operating expenses of $2.9 million during the first quarter of 2022 as compared to $1.2 million during the prior year. The increase was primarily due to increases in payroll, marketing, insurance, technology and public company expenses. A key metric that bodes well for reducing our cash burn is our average fuel margin per gallon.

In the first quarter of 2022, we realized a 31% increase in average margin per gallon to $0.47 compared to $0.36 in the first quarter of 2021, which was primarily due to the addition of new fleet customers at significantly higher margins.

We expect as we continue to sign on an increasing number of commercial fleet accounts and add more consumers, our average fuel margin per gallon will continue to remain strong. Our higher depreciation and amortization expense reflects the acquisition of a technology license and the purchase of vehicles to support the growing business.

Adjusted EBITDA loss for the first quarter of 2022 was $2.5 million compared to an adjusted EBITDA loss of $0.7 million in the first quarter of 2021. The increased loss in the first quarter of 2022 reflects significant spending on infrastructure to grow our business.

Interest expense decreased year-over-year in the quarter due to decreased year-over-year due to the early repayment in September 2021 of pre-IPO debt, while other income reflects interest income on fixed income investments. Our cash position at quarter end was $13.9 million, including investments compared with $16.9 million at year-end 2021.

We have no long-term debt other than truck loans of $1.3 million at March 31. We have been financing substantially all of the new trucks with low interest rate loans. As of March 31, we had 153,000 in outstanding borrowings under our line of credit, which was primarily used to fund new truck purchases that were not eligible for manufacturer financing.

The demand remains strong in our home market of Miami and is rapidly increasing in our recently entered and targeted markets throughout Florida. Over the coming quarters, we expect to see strong top line growth, reflecting the new fleet contracts we signed throughout Florida in Q1 and which has accelerated in April and May.

As we continue to service more and more businesses and consumers in each market and effectively scale our business, we will increase utilization of our truck fleet that as Mike mentioned, we expect we'll be close to 50 by the end of the year based on current commitments.

As the year progresses, we will monitor developments in truck availability and evaluate when it will be necessary to make commitments to invest in more trucks. In the meantime, we have more than enough capacity to grow our business as planned.

Going forward, we will continue to spend as needed to support our expansion into new markets with a focus on hiring additional drivers and sales reps, as well as marketing to support our consumer business. We will be careful about other spending as we have already built out our core infrastructure to support our growth. This ends our prepared remarks.

I will now ask the operator to open the lines to questions..

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Your first question comes from Tate Sullivan with Maxim Group. Please proceed with your question..

Hi, thank you. Good afternoon. I thought I'd start with the fleet customers and you've been releasing and you gave details on additional fleet agreements. But Mike, can you talk about what it is the alternative for many of these fleet customers to your service.

Were they using a competitor before signing a contract with you? Is this the first time they are using on-demand fueling? What are the fundamental drivers of signing up new fleet customers, please?.

Sure. Good question, Tate. It's probably a combination of all three that you're talking about. Typically, if they use fleet cards or fuel cards, we can convert those pretty easily because the business case is just so strong, converting to easy fuel services.

In some cases, they may have a previous provider, and they're dissatisfied with the service or they want to make a change.

I think also, some of our features of feedback we're getting, utilizing our fleet portal and the technology that we use is a significant change than what they've had with some of their previous providers, which gives them a lot more insight to their fueling activity and how their businesses run.

So it's probably a combination of all of those things as far as what's driving business to us. And I think also - with the higher gas prices and everything else businesses are looking for any way they can to be more efficient.

Having a fleet fuel delivery driver or a company like us, as well as providing the technologies from the billing and the utilization of their fleet is seen as a real value add than what they were currently using..

You mentioned fleet cards, Mike. What was that? What is that....

Sorry, fuel cards, fuel cards. They have a gas car, fuel cards. I misspoke..

Oh, fuel cards. Fuel cards. So they would be going out on their own....

Correct..

Okay. Thank you. And then on the marketing and Arthur, I think you mentioned it too, on the future marketing efforts.

Is most of the future marketing you'll do to consumers, whereas the sales reps will be directly to fleet customers? Or is the marketing for both consumers and fleet accounts?.

We're going to do some marketing related to fleets, but the vast majority of the spending will be consumer-related..

Okay. And primarily social media and related types of marketing..

Okay. And then on the Marinas, you mentioned specialty and you previously released signing up the Marina deal. Marinas that do not currently use your service, do they have on-site gasoline supply? Or are these getting phased out? Or how meaningful is the Marina opportunity for you….

Yeah. We think the Marina opportunity is significant. We've just hired some more people as what we consider to be inside sales as far as working directly on some more opportunities. Marina is one of those.

The Marina business, they can use different methods from us, one or tanks where they can do the service themselves, which we have those existing relationships than individual orders for consumers.

But we're going to get more dedicated and more specific as far as the Marina opportunity, especially here in South Florida and also Tampa looks like a very robust opportunity for us as well..

Okay. Great. Thank you for that additional detail. I'll get back in queue..

Thanks, Tate..

[Operator Instructions] Your next question comes from Sean Oppen [ph] with - Private Investor. Please proceed with your question..

Hi. Just referring back to the question that you previously had regarding marketing. In terms of consumer marketing or even for fleet marketing as well, the only thing I've seen so far in print marketing is a 13B trucks driving around Golf Cart wrap in EZFill.

Do you have any plans for any alternative plans or marketing? Or are there even a billboard on 95? And the reason I ask is because most people don't even know of the service that exists. You see it on a random street, you should have every house getting filled up with EZFill as opposed to just one house Tier 1 house there.

I think if more people were aware of it, so obviously, more people would use the service in such a great service..

We agree. We think the awareness needs to be enhanced, and we're investing in that. We've got a campaign that we're in the process in launching on the consumer side. It's going to be very robust. It's not just going to be the one vehicle driver around town. So we're looking at outdoor, all the mains [ph] there. Arthur touched on social media.

You probably recently saw the announcement where the branding with Victor Oladipo that we're doing from the social media side there. He's also an early investor and shareholder of the company and a customer. So we'll continue to use people that have large influencers in the Miami area and the areas that we're expanding in.

But we will be this - it will show up in the second quarter, of course, but significantly enhancing our consumer presence. You'll see a noticeable difference..

Thank you..

Your next question is a follow-up from Tate Sullivan with Maxim Group. Please proceed with your question..

Thank you for taking my call Mike, you previously mentioned in some of your [indiscernible] the prior earnings call, some comments on New York, I believe.

Are you still waiting for regulatory approval for your tank, your refueling tanks? Or are you still planning on entry New York potentially by the end of this year? Can you give an update there?.

Yeah, yeah. We're still planning on it. There are some unknowns from a specific point of view, Kate, but the situation that we're in now from what our fuel better teammates are telling this. Right now, there's an interim fire commissioner that's been, I think, started in about mid-February.

With the new mayor, they're supposed to appoint a permanent fire commissioner. So we're pausing until that transaction happens and they name a more permanent commissioner, which is supposed to be any day. It's probably a lengthier process than it was originally thought to be.

So until that happens, which I can't tell you exactly when that's going to happen. We intend to aggressively pick up right where we left off and feel confident still with the opportunity in the project that we have with the New York pilot..

Thank you. And one more quick from me.

Can you review your comments about if it's the right term, onboarding additional trucks with the 33 that you previously announced, is there before they are out in the field? Is there a certain retrofit process or any training process? Or what's the time line? And how many can you take a month or through the end of the year, can you go over the timing, please?.

Okay. Sure. Yeah. We've been taking anywhere from about 3 to 5 a month Kate, and we're planning to - as Mike said in his remarks, we're going to end up the year close to 50%. So just to summarize for you, we ended Q1 with 26 trucks in service. Since then, we've added 4 to service. As of today, we have 30.

And between Q2 to the rest of Q2 to Q4, we're going to roll out around another close to 20 more, which will bring us almost 50. So that's been the cadence. There's - it's not a very long process once the upfitter finishes a new truck until we get it into service. There's some checking that has to be done, but it doesn't take that long..

Okay. Great. With the 26, did you get most of those delivered at the end of the first quarter towards the end of the first quarter? Just trying to figure out the back in the….

It was really throughout the quarter. And that's the way we've been doing it. We've been doing about 4 to 8 a month, okay, in that range, anywhere from about 4 to 8 months is what we've been taking since we started in the end of Q4..

Perfect. Okay. Thank you all. Have a good rest of the day..

Your next question is a follow-up from Sean Oppen with Private Investor. Please proceed with your question..

Yeah. Hi, sorry about that.

Hello?.

Yes, sure….

I have a follow-up. No problem. I actually had no follow-up. I appreciate it, thank you..

Sure..

[Operator Instructions] Your next question comes from Greg Rosen, Private Investor. Please proceed with your question..

Sure. Thank you very much. Appreciate it. On the 10-Q and the 10-K, I see in 2020 stock-based compensation was like 4,624, 000 million. And NIC in '21, it was $1.896 I missed part of the call, of course, they didn't - they disconnected my call.

I didn't quite hear if you discussed that or you could give me some extrapolation of that number, what it relates to?.

Well, the reason why it was so much higher in 2020 is the majority of that was - a very large part of that was to consultants. And we're not giving away that level of stock to consultants anymore. In fact, it's very - we're giving almost no stock to consultants at this point.

But pre-IPO, when the company had much less cash, it was remunerating consultants to a much larger extent in stock. Okay, so that explains it. Most of the stock compensation now is either to directors and officers and occasionally to consultants..

That seems like quite a large proportion to what you raised that seems out of the ordinary from, I don't know the justification, but I guess is what it is. So your stock has lost as an investor after the IPO when the prices were much higher, not correlating to the market conditions today, the stock has dissipated about 80% to 85%.

And it's a little bit concerning based upon the amount of increase in the G&A.

So I have a concern, when do you think that you'll be cash flow positive here?.

I mean it's going to take a while. Keep in mind that we're a low-margin business, and this business model works well at scale. And by scale, I mean well over $100 million.

That's where our business model is really going to work well, and that's why we're expanding rapidly and buying the number of trucks that we're buying and entering new markets all the time. So it's going to take us a little while to get to breakeven and then to cash flow positive. We're a high growth company model..

Right. But based upon your burn rate, I see that you've increased the G&A dramatically. And from what I'm reading, if I'm accurate, 95% of your revenue comes from like three customers.

Is that accurate? Or am I that an accurate statement?.

No, it's much less. There's one customer that's over 50%, but that percentage is declining as we sign up many new fleets. So that number - that percentage has been going down..

But you increased the G&A....

Regarding the G&A, most of the increase in the G&A is because of public company expenses, which includes D&O insurance and Board of Directors and Investor Relations, which are expenses that any public company is going to incur. So it's not unusual at all that G&A increases after a company goes public..

Ladies and gentlemen, there are no further questions in the queue, and I'd like to turn the call back to Mr. Mike McConnell for closing remarks..

Thank you. Our top priority is to invest and grow our business, and we plan to accelerate our geographic expansion efforts. We're optimistic about the growth opportunities ahead for us, and we look forward to updating the investment community on the next earnings call. Thank you..