NEXTNRG, INC. (NXXT)

Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition,
liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our consolidated financial statements and
related notes included in this Annual Report on Form 10-K and the audited financial statements and notes thereto as of and for the year
ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operation. Unless
the context requires otherwise, references in this Annual Report on Form 10-K to “we,” “us,” and “our”
refer to NextNRG, Inc.

Overview

We
were incorporated under the laws of Delaware in March 2019. We are in the business of operating mobile fueling trucks and are headquartered
in Miami, Florida. NextNRG provides its customers with the ability to have fuel delivered to their vehicles (cars, boats, trucks) without
leaving their home or office and to construction sites, generators and reserve tanks.

Our
mobile fueling solution gives our fleet, consumer and other customers the ability to fuel their vehicles with the touch of an app or
regularly scheduled service, and without the inconvenience of going to the gas station.

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Critical
Accounting Policies and Estimates

Management’s
discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which
were prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these consolidated
financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, and expenses.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions, and those differences may
be material.

While
our significant accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies of
the Notes to Consolidated Financial Statements included in this annual report, we believe the following discussion addresses our most critical
accounting policies, which are those that are most important to our financial condition and results of operations and which require our
most difficult, subjective and complex judgments.

Principles
of Consolidation

The
consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly
owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”.

In
accordance with ASC 810-10, consolidation applies to:

All
intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45. The Company continuously evaluates its investments
and relationships to assess consolidation requirements.

Business
Combinations, Asset Acquisitions, and Reverse Acquisitions

The
Company accounts for acquisitions in accordance with ASC 805, “Business Combinations,” and applicable SEC reporting requirements
under Regulation S-X, Rule 3-05 and Regulation S-K, Items 101 and 303. Transactions qualifying as business combinations are accounted
for under the acquisition method, while those classified as asset acquisitions follow the guidance in ASC 805-50. Additionally, the Company
evaluates whether a transaction qualifies as a reverse acquisition under ASC 805-40 and applies the appropriate accounting and disclosure
requirements.

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Business
Combinations

For
transactions classified as business combinations, the Company:

Significant
judgments in fair value determinations include:

For
SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant.
The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests.

Asset
Acquisitions

For
transactions classified as asset acquisitions under ASC 805-50, the Company:

The
classification between business combinations and asset acquisitions requires significant judgment, particularly when applying the screen
test. Incorrect classification can materially impact:

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Reverse
Acquisitions

A
reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the accounting acquiree, and
the entity whose equity interests are acquired (the legal acquiree) is identified as the accounting acquirer under ASC 805-40, “Reverse
Acquisitions.”

Accounting
for Reverse Acquisitions

Disclosure
Requirements for Reverse Acquisitions

Under
SEC Regulation S-X, Rule 3-05, and Regulation S-K, Items 101 and 303, the Company must disclose:

For
SEC registrants, a reverse merger with a public shell company may also trigger “Super 8-K” reporting requirements under SEC
Form 8-K, Item 2.01, requiring disclosure within four business days of the transaction closing.

Regulatory
and Financial Reporting Considerations

For
SEC registrants, acquisitions may trigger additional disclosure and reporting requirements:

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The
Company continuously evaluates acquisitions, including reverse acquisitions, to ensure proper classification and compliance with ASC
805, SEC reporting requirements, and regulatory guidance.

Use
of Estimates and Assumptions

The
preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the recognition of revenues and expenses during the reporting period. Actual results may
differ from these estimates, and such differences could be material.

In
accordance with ASC 250-10-50-4, changes in estimates are recorded in the period in which they become known and are accounted for prospectively.
The Company bases its estimates on historical experience, industry trends, and other relevant factors, incorporating both quantitative
and qualitative assessments that it believes are reasonable under the circumstances.

Significant
estimates for the years ended December 31, 2024, and 2023, respectively, include:

Risks
and Uncertainties

The
Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic
fluctuations. The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential
business disruptions, supply chain constraints, and liquidity challenges.

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In
accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect
its financial condition, results of operations, and business outlook. Key factors contributing to variability in sales and earnings include:

Given
these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting
liquidity, business continuity, and long-term strategic growth. The Company continuously assesses these risks and implements measures
to mitigate their potential impact.

Accounts
Receivable

The
Company accounts for accounts receivable in accordance with FASB ASC 310, Receivables. Receivables are recorded at their net realizable
value, which represents the amount management expects to collect from outstanding customer balances (ASC 310-10-35-7).

The
Company extends credit to customers based on an evaluation of their financial condition and other factors. The Company does not require
collateral, and interest is not accrued on overdue accounts receivable (ASC 310-10-45-4).

Allowance
for Doubtful Accounts

Management
periodically assesses the collectability of accounts receivable and establishes an allowance for doubtful accounts as needed. The allowance
is determined based on:

Accounts
deemed uncollectible are written off against the allowance when determined to be uncollectible (ASC 310-10-35-10).

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Inventory

The
Company accounts for inventory in accordance with FASB ASC 330, Inventory. Inventory consists solely of fuel and is stated at the lower
of cost or net realizable value (“LCNRV”) using the first-in, first-out (FIFO) method, as required by ASC 330-10-35-1.

Inventory
Valuation and Reserve Assessment

Management
assesses the recoverability of inventory each reporting period and establishes reserves for potential inventory write-downs when necessary.
The Company evaluates factors such as:

Right
of Use Assets and Lease Obligations

The
Company accounts for right-of-use (ROU) assets and lease liabilities in accordance with FASB ASC 842, Leases. These amounts reflect the
present value of the Company’s estimated future minimum lease payments over the lease term, including any reasonably certain renewal
options, discounted using a collateralized incremental borrowing rate (ASC 842-20-30-1).

The
Company classifies its leases as either operating or finance leases based on the criteria outlined in ASC 842-10-25-2. The Company’s
leases primarily consist of operating leases, which are included as Right-of-Use Assets and Operating Lease Liabilities on the consolidated
balance sheet.

Short-Term
Leases

The
Company has elected the short-term lease exemption allowed under ASC 842-20-25-2, whereby leases with a term of 12 months or less are
not recorded on the balance sheet. Instead, lease payments are expensed on a straight-line basis over the lease term.

Lease
Term and Renewal Options

In
determining the lease term, the Company evaluates whether renewal options are reasonably certain to be exercised, as required by ASC
842-10-30-1. Factors considered include:

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If
a renewal option is deemed reasonably certain to be exercised, the ROU asset and lease liability reflect those additional future lease
payments. The Company’s operating leases contain renewal options with no residual value guarantees. Currently, management does
not expect to exercise any renewal options, which are therefore excluded in the measurement of lease obligations.

Discount
Rate and Lease Liability Measurement

Since
the implicit rate in the leases is not readily determinable, the Company applies an incremental borrowing rate that represents the rate
it would incur to borrow on a collateralized basis over a similar term and currency environment (ASC 842-20-30-3).

Lease
Impairment

In
accordance with ASC 360-10-35, the Company evaluates ROU assets for impairment indicators whenever events or changes in circumstances
suggest the carrying amount may not be recoverable. No impairments of ROU assets were recognized for the years ended December 31, 2024,
and 2023.

See
Note 7 for details on third-party and related-party operating leases.

The
Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by Accounting Standards
Update (ASU) 2014-09. Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer
in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The
Company generates revenue from mobile fuel sales, which can be purchased as a one-time transaction or through a monthly membership. Revenue
from fuel sales is recognized at the time of delivery, and membership revenue is recognized at the end of each month, reflecting the
satisfaction of the performance obligation over time within a one-month membership cycle.

The
Company follows the five-step revenue recognition model outlined in ASC 606-10-05-4:

A
contract exists when the following criteria are met, per ASC 606-10-25-1:

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Contracts
for mobile fuel sales and memberships meet these criteria. Collectability is assessed based on historical customer payment trends and
credit risk in accordance with ASC 606-10-25-5.

A
performance obligation is a distinct good or service promised in the contract that is both capable of being distinct and distinct in
the context of the contract, per ASC 606-10-25-19.

The
Company has determined that its contracts, based on sales type, contain two distinct performance obligations:

These
performance obligations are not bundled or combined, as each service is separately identifiable, in accordance with ASC 606-10-25-22.

The
transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the
customer, per ASC 606-10-32-2.

The
Company’s transaction price considerations include:

For
contracts with a single performance obligation, the entire transaction price is allocated to that obligation, per ASC 606-10-32-40.

If
a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices
(“SSP”) as required by ASC 606-10-32-28. The standalone selling price is determined based on observable sales data.

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The
Company’s fuel sales and memberships each have a distinct standalone selling price, eliminating the need for allocation adjustments.

Revenue
is recognized at the point in time when control over a product or service is transferred to the customer, in accordance with ASC 606-10-25-30.

The
Company does not recognize revenue based on customer invoicing dates; instead, it ensures revenue recognition aligns with the actual
satisfaction of performance obligations per ASC 606-10-25-31.

Principal
vs. Agent Considerations

In
evaluating whether the Company acts as a principal or an agent in its fuel sales transactions, the Company applies the guidance in ASC
606-10-55-36 through 55-40. The Company has determined that it is the principal in these transactions based on the following factors:

Based
on these factors, the Company recognizes revenue on a gross basis, as it is the principal in fuel sales transactions in accordance with
ASC 606-10-55-37A.

Summary
of Compliance with ASC 606 and ASU Updates

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Contract
Liabilities (Deferred Revenue)

Contract
liabilities represent amounts received from customers before the satisfaction of performance obligations, which are subsequently recognized
as revenue upon fulfillment.

Under
ASC 606-10-45-2, the Company discloses contract balances related to deferred revenue when applicable. Any prepayments received for fuel
deliveries or memberships are classified as contract liabilities until revenue recognition criteria are met.

Income
Taxes

The
Company accounts for income taxes using the asset and liability method prescribed by FASB ASC 740, Income Taxes. Under this method, deferred
tax assets and liabilities are recognized for the future tax consequences of differences between the financial reporting and tax bases
of assets and liabilities. These amounts are measured using enacted tax rates expected to apply in the periods when temporary differences
reverse (ASC 740-10-30-8).

The
effect of a change in tax rates on deferred tax balances is recognized as income or expense in the period that includes the enactment
date (ASC 740-10-45-4).

Uncertain
Tax Positions

The
Company evaluates uncertain tax positions in accordance with ASC 740-10-25, which requires that a tax position be recognized in the financial
statements only if it is more likely than not (greater than 50% likelihood) to be sustained upon examination by tax authorities.

As
of December 31, 2024 and 2023, respectively, the Company had no uncertain tax positions that qualified for recognition or disclosure
in the financial statements (ASC 740-10-50-15).

The
Company also recognizes interest and penalties related to uncertain tax positions in other expense in the consolidated statement of operations
(ASC 740-10-45-25). No interest and penalties were recorded for the years ended December 31, 2024 and 2023.

Valuation
of Deferred Tax Assets

The
Company’s deferred tax assets include certain future tax benefits, such as net operating losses (NOLs), tax credits, and deductible
temporary differences. Under ASC 740-10-30-5, a valuation allowance is required if it is more likely than not that some portion, or all,
of the deferred tax assets will not be realized.

The
Company reviews the realizability of deferred tax assets on a quarterly basis, or more frequently if circumstances warrant, considering
both positive and negative evidence (ASC 740-10-30-16).

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Factors
Considered in Valuation Allowance Assessment

The
Company evaluates multiple factors in determining whether a valuation allowance is necessary, including:

While
cumulative three-year losses are a strong indicator that a valuation allowance may be needed, ASC 740-10-30-23 states that a valuation
allowance determination is not solely based on past losses—all available positive and negative evidence must be considered.

Valuation
Allowance Determination

At
December 31, 2024 and 2023, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting
in a net carrying amount of $0. This determination was based on cumulative losses in recent years and the lack of sufficient positive
evidence to support the realization of deferred tax assets in the near term (ASC 740-10-30-24).

The
Company will continue to evaluate its valuation allowance each reporting period and will recognize deferred tax assets in the future
if sufficient positive evidence emerges to support their realization.

Stock-Based
Compensation

The
Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using
the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award
and is recognized over the requisite service period, typically the vesting period.

ASC
718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. It also
applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may
be settled using equity instruments.

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In
compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees,
aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined
as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting
period in accordance with ASC 718.

The
Company determines the fair value of stock options using the Black-Scholes option pricing model, considering the following key assumptions:

Additionally,
the Company follows the guidance under ASU 2016-09, which introduced amendments to simplify certain accounting aspects of share-based
compensation, including:

The
Company continues to evaluate and apply the latest Accounting Standards Updates (ASUs) and interpretive releases related to stock-based
compensation to ensure compliance with evolving financial reporting requirements.

Basic
and Diluted Earnings (Loss) per Share and Reverse Stock Split

The
Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share.” The calculation
of basic EPS follows the two-class method and is determined by dividing net earnings available to common shareholders by the weighted
average number of common shares outstanding, including certain other shares committed to be issued.

Basic
Earnings Per Share (EPS)

Basic
EPS is calculated using the two-class method, as prescribed by ASC 260-10-45-60, and is computed as follows:

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Diluted
Earnings Per Share (EPS)

Diluted
EPS is calculated under both the two-class method and the treasury stock method, and the more dilutive result is reported, as required
by ASC 260-10-45-45.

Net
Loss Per Share Considerations

In
computing net loss per share, unvested shares of common stock are excluded from the denominator, as required by ASC 260-10-45-48.

Participating
Securities & Share-Based Compensation

Restricted
stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively.
Therefore:

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Related
Parties

The
Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k).
Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled
by, or are under common control with the Company.

Related
parties include, but are not limited to:

A
party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company
in a manner that could prevent either party from fully pursuing its own separate economic interests.

The
Company discloses all material related party transactions, including:

Disclosures
are made in accordance with ASC 850-10-50-1 through 50-6 and SEC Regulation S-X, Rule 4-08(k), which requires registrants to disclose
material related party transactions and their effects on the financial position and results of operations.

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Recent
Accounting Standards

ASU
2022-02 – Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

In
March 2022, the FASB issued ASU 2022-02, which:

The
Company adopted ASU 2022-02 on January 1, 2023. The adoption did not have a material impact on the Company’s consolidated financial
statements.

ASU
2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In
November 2023, the FASB issued ASU 2023-07, which enhances disclosure requirements for reportable segments by:

The
Company adopted ASU 2023-07 on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial
statements.

Recently
Issued Accounting Standards Not Yet Adopted

ASU
2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In
December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements by:

This
ASU is effective for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. Early
adoption is permitted.

The
Company is currently assessing the impact of ASU 2023-09 on its income tax disclosures and reporting requirements.

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Other
Accounting Standards Updates

The
FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s
consolidated financial position, results of operations, or cash flows.

Results
of Operations

General

The
Company operates an on-demand mobile fueling service that allows customers—ranging from individual consumers to commercial fleets—to
schedule fuel deliveries directly to their vehicles or equipment via a proprietary technology platform. The Company’s revenue is
generated primarily from the sale and delivery of fuel. Cost of sales includes the cost of fuel, direct labor, and other delivery-related
expenses. Operating expenses consist of selling, general and administrative expenses, technology development, and other unallocated overhead.

The
following table sets forth our results of operations for the year ended December 31, 2024 and 2023:

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Revenues

Revenues
for the year ended December 31, 2024, increased significantly compared to the prior year December 31, 2023. This growth was primarily
attributable to a rise in gallons delivered as well as an uptick in the average price per gallon. Several factors contributed to this
performance:

The
Company successfully grew its presence in existing markets while entering new regions, resulting in a higher total volume of fuel delivered.
This expansion was supported by focused sales efforts and brand-building initiatives that attracted both new commercial and residential
customers.

Strategic
partnerships with commercial fleet operators continued to drive fueling volumes. These partnerships often involve recurring, contracted
deliveries that provide a stable, predictable revenue stream. As more fleet operators adopt on-demand fueling to reduce downtime and
optimize logistics, EzFill benefits from increased, repeat business.

Ongoing
enhancements to the EzFill mobile application—including user interface improvements and expanded scheduling features—improved
the customer experience and streamlined order placement. Coupled with targeted marketing campaigns, these tech and branding initiatives
boosted visibility and encouraged higher consumer adoption rates, further lifting revenues.

Cost
of Sales

Cost
of sales rose year over year, in line with the higher sales volumes and expanded market coverage. Despite the increase in absolute costs,
gross profit improved, reflecting disciplined pricing, higher-margin sales, and operational efficiencies. Key factors influencing cost
of sales include:

As
overall demand increased, the Company purchased and delivered a greater volume of fuel. Although this drove up the total cost of sales,
it remained proportionate to revenue growth, preserving gross margins.

Commodity
price swings can significantly affect fuel costs. However, the Company’s dynamic pricing strategies and supplier relationships
helped ensure that these fluctuations did not adversely impact overall profitability.

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Expansion
into new geographic areas required additional delivery routes and staffing. While these investments raised labor and transportation costs,
they were essential for meeting growing customer demand. Improved driver efficiency and delivery scheduling helped partially offset the
impact of these higher costs, contributing to the year-over-year improvement in gross profit.

Operating
Expenses

Operating
expenses decreased compared to the prior year, primarily due to effective cost-management initiatives across multiple categories:

Notably,
these savings were partially offset by a small increase in stock-based compensation, underscoring the Company’s commitment to attracting
and retaining top talent through equity incentives.

Depreciation
and Amortization

Depreciation
and amortization declined marginally year over year. The primary driver of this decrease was an impairment of certain equipment totaling
$13,422. This reduction was partially offset by new asset additions of approximately $38,554, reflecting the Company’s ongoing
investments in delivery vehicles, fueling technology, and other capital expenditures necessary to support continued growth and maintain
operational efficiency.

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Other
Income (Expense)

Other
income and (expense) consisted of the following

The
Company’s other income (expense), net, deteriorated significantly for the year ended December 31, 2024, compared to the prior year.
The primary drivers were the increase in interest expense—particularly from default penalty interest—and the loss on debt
extinguishment associated with related-party debt transactions. Below is a detailed breakdown of the major components.

Interest
Income

Interest
income dropped to zero in 2024, reflecting a shift in the Company’s cash management strategy. In 2023, the Company had short-term
investments or interest-bearing accounts that generated interest, which did not recur in 2024.

Other
income

Other
income rose significantly, driven by one-time gains, settlements, or other ancillary revenue sources. The Company’s expansion and
increased commercial activities may have contributed to additional non-operating income streams.

Interest
Expense (including amortization of debt discount)

Interest
expense surged in 2024, primarily due to:

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Loss
on Sale of Marketable Debt Securities - Net

The
Company had no activity related to marketable securities in 2024. In 2023, there was an insignificant loss of $27,160.

Loss
on Debt Extinguishment – Related Party

The
Company recorded a loss on debt extinguishment of $907,500 in 2024 in connection with the conversion of related-party debt to Series
A Preferred Stock. By contrast, in 2023, the Company recorded a $291,000 loss tied to extending the maturity date on the same related-party
debt.

Net
Loss

Our
net loss was the result of the categories discussed above. Overall, the increase in revenues, driven by both volume and pricing, showcases
the Company’s successful market expansion and deepening fleet partnerships. While costs naturally rose with higher delivery volumes,
disciplined operational execution and strategic pricing helped improve gross profit. Ongoing cost-optimization initiatives further reduced
operating expenses, though the Company continues to invest in talent and technology to fuel long-term growth.

Non-GAAP
Financial Measures

Adjusted
EBITDA is a non-GAAP financial measure which we use in our financial performance analyses. This measure should not be considered a substitute
for GAAP-basis measures, nor should it be viewed as a substitute for operating results determined in accordance with GAAP. We believe
that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation,
amortization, impairment of goodwill, other intangibles and fixed assets, and stock compensation expense, provides useful supplemental
information that is essential to a proper understanding of our financial results. Non-GAAP measures are not formally defined by GAAP,
and other entities may use calculation methods that differ from ours for the purposes of calculating Adjusted EBITDA. As a complement
to GAAP financial measures, we believe that Adjusted EBITDA assists investors who follow the practice of some investment analysts who
adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability.

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The
following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the year ended December
31, 2024 and 2023:

Liquidity
and Capital Resources

Cash
Flow Activities

Our
cash balances at December 31, 2024 and 2023, were as follows:

Cash
and cash equivalents increased increase year over year. The primary drivers of this increase were:

The
Company secured additional financing toward the end of the fiscal year, boosting its cash position. This infusion of funds was a key
component in supporting ongoing operational needs and future growth initiatives.

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Certain
operating expenses were either deferred or settled after year-end, resulting in higher cash on hand as of December 31, 2024. This timing
variance can create short-term fluctuations in the Company’s reported cash balances.

Overall,
the Company’s stronger cash position provides added liquidity to support daily operations, manage working capital requirements,
and pursue strategic opportunities.

Management
continues to monitor cash flows carefully to ensure that the Company maintains sufficient funding for near-term obligations and future
expansion.

The
following reflects our inflows (outflows) from our various operating, investing and financing activities:

Year
Ended December 31, 2024 as compared to the Year Ended December 31, 2023

Operating
Activities

Net
cash used in operating activities decreased by approximately $2.1 million year over year.

This
improvement primarily reflects stronger operational performance, including higher revenues and improved working capital management, which
reduced the Company’s cash burn.

In
addition, more efficient cost controls and timing differences in payables/receivables contributed to a lower net outflow compared to
the prior year.

Investing
Activities

Cash
used in investing activities increased substantially, driven by higher capital expenditures (vehicles purchased, not yet placed in service
as well as a deposit paid on future asset purchase), offset by no proceeds in the current year from the sales of marketable securities.

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While
this resulted in a larger net outflow, these investments are expected to enhance operational capacity and future growth potential.

Financing
Activities

Net
cash provided by financing activities rose significantly, reflecting successful capital-raising efforts. This increase could be attributable
to:

Net
Change in Cash and Cash Equivalents

Overall,
the Company’s cash position improved by approximately $2.1 million, transitioning from a net outflow in the prior year to a net
inflow in 2024. This positive swing is primarily the result of substantial financing proceeds received late in the year, alongside more
favorable operating cash flows. The timing of major expenses and capital projects also influenced the Company’s cash balance at
year-end.

Cash
Flow Summary

Overall,
the Company’s cash flow trends reflect a deliberate effort to fund growth initiatives while managing day-to-day operational needs.
Management believes that recent financing activities, coupled with ongoing improvements in operational efficiency, will position the
Company for future stability and expansion.

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In
connection with our prior discussion, the following provides a line by line detail of the items affecting our changes in cash flow activities
in the tables below:

Operating
Activities

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Conclusion

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By
maintaining a disciplined approach to both spending and financing, EzFill aims to strengthen its balance sheet and sustain the growth
momentum of its on-demand fueling business.

Liquidity
and Sources of Capital

At
this time, we believe our existing funding sources may not be sufficient to meet our operational requirements and service our debt obligations
over the next 12 months from the issuance date of these consolidated financial statements. This assessment is based on our historical
operating performance, ongoing capital needs, and our current reliance on external financing.

Historical
Operating Performance and Financing

Since
inception, the Company has incurred net losses and has not generated sufficient revenues or positive operating income to independently
fund our operations. Consequently, we have depended on equity and debt financings—including those from related parties—to
finance our activities and support our growth initiatives. This reliance on external funding has been critical for maintaining day-to-day
operations, expanding our service capacity, and investing in technology and assets. However, it has also introduced risks related to
interest expense, equity dilution, and dependency on the availability of future financing.

Current
Liquidity Position

Our
liquidity position primarily reflects a combination of cash on hand and available debt arrangements.

Despite
recent improvements in cash balances due to targeted financing activities, we continue to face challenges in achieving sustainable cash
flow from operations. The timing of expenditures and capital outlays, coupled with the inherent volatility in revenue generation in our
industry, adds to the uncertainty of our liquidity profile.

Debt
Obligations and Capital Expenditures

A
significant portion of our near-term cash outflows is attributable to scheduled debt repayments and interest expense, including higher
financing costs incurred from default penalty interest and increased debt discount amortization. Additionally, as we invest in capital
expenditures—such as the purchase of new delivery vehicles and technology enhancements—to support expansion into new markets,
our cash requirements remain elevated. These commitments, while essential for long-term growth, further strain our liquidity in the short
term.

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Reliance
on External Financing

Given
the current financial dynamics, we have continually relied on external sources of capital. Our funding strategies have included:

Going
Concern Considerations

Our

Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition,
liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and
related notes included in this Annual Report on Form 10-K and the audited financial statements and notes thereto as of and for the year
ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operation. Unless
the context requires otherwise, references in this Annual Report on Form 10-K to “we,” “us,” and “our”
refer to Ezfill Holdings, Inc.

Forward-Looking
Statements

The
information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited
to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and
plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “may,” “plans,” “projects,” “will,” “would” and similar
expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying
words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should
not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties
that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation,
the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are
made, and we do not assume any obligation to update any forward-looking statements.

Overview

We were incorporated under the laws
of Delaware in March 2019. We are in the business of operating mobile fueling trucks and are headquartered in Miami, Florida. EzFill provides
its customers the ability to have fuel delivered to their vehicles (cars, boats, trucks) without leaving their home or office and to construction
sites, generators and reserve tanks.

Our mobile fueling solution gives
our fleet, consumer and other customers the ability to fuel their vehicles with the touch of an app or regularly scheduled service, and
without the inconvenience of going to the gas station.

On April 27, 2023, the Company executed
a 1-for-8 reverse stock split and decreased the number of shares of its authorized common stock from 500,000,000 shares to 50,000,000
and its preferred stock from 50,000,000 to 5,000,000. As a result, all share activity has been restated as if the reverse stock split
had been consummated as of the beginning of the respective period.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of
operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting
principles in the U.S., or GAAP. We have identified certain accounting policies as critical to understanding our financial condition
and results of our operations. For a detailed discussion on the application of these and other accounting policies, see the notes to
our financial statements included in this Annual Report on
Form 10-K.

30

Results
of Operations

The following table sets forth our results of operations
for the year ended December 31, 2023, and 2022:

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure which
we use in our financial performance analyses. This measure should not be considered a substitute for GAAP-basis measures, nor should it
be viewed as a substitute for operating results determined in accordance with GAAP. We believe that the presentation of Adjusted EBITDA,
a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation, amortization, impairment of goodwill,
other intangibles and fixed assets, and stock compensation expense, provides useful supplemental information that is essential to a proper
understanding of our financial results. Non-GAAP measures are not formally defined by GAAP, and other entities may use calculation methods
that differ from ours for the purposes of calculating Adjusted EBITDA. As a complement to GAAP financial measures, we believe that Adjusted
EBITDA assists investors who follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that
may obscure underlying performance and distort comparability.

The following is a reconciliation of net loss to the
non-GAAP financial measure referred to as Adjusted EBITDA for the year ended December 31, 2023, and 2022:

Year ended December 31, 2023 compared to the Year
ended December 31, 2022

Revenues

We generated revenues of $23,216,423 for the year
ended December 31, 2023, compared to $15,044,721 for the year ended December 31, 2022, an increase of $8,171,702 or 54%. This increase
is due to a 39% increase in gallons delivered as well as an increase in the average price per gallon. The additional gallons were in existing
as well as new markets.

Cost of sales was $21,845,574 for the year ended December
31, 2023, resulting in a gross profit of 1,370,849, compared to $(173,513) for the prior year. The $6,627,340 or 44% increase in cost
of sales is due to the increase in sales and an increase in labor costs primarily related to the expansion into new markets. Our gross
profit improved year over year due to higher fuel revenues as well as increased delivery fees and driver efficiency.

31

Operating Expenses

We incurred operating expenses of $9,087,223
during the year ended December 31, 2023, as compared to $15,543,145 during the prior year, a decrease of $6,455,922 or 42%. The
decrease was primarily due to decreases in payroll, sales and marketing, insurance, technology, and public company expenses offset
by an increase in stock based compensation.

Depreciation and Amortization

Depreciation increased in the current year as a result
of the increase in the fleet of delivery vehicles. Amortization decreased in the current year as a result of the impairment of goodwill
and other intangible assets recorded in the fourth quarter of 2022.

Impairment of Goodwill, Fixed Assets and Other
Intangibles

During the year ended December 31, 2023, the Company
recorded impairment of $105,506 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the
expected realizable value. During the year ended December 31, 2022, the Company recorded an impairment loss of $1,987,500 related to a
license of technology for which the Company has proposed termination of the agreement and which was not expected to generate any revenue
in 2023. Goodwill was considered impaired, and the Company recognized an impairment loss of $166,838, or the remaining balance of goodwill.
This loss was primarily due to the fall in the Company’s stock price and the decrease of the Company’s market capitalization
as well as past operating performance. As a consequence, management forecasts were revised, and additional risk factors were applied.
The fair value of the intangibles was estimated using a combination of market comparables (level 1 inputs) and expected present value
of future cash flows (level 3 inputs) and as a result impairment was recorded for a total of $482,064. Also, the Company recorded an impairment
of $258,114 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the expected realizable
value

Other Income (Expense)

Interest expense increased in the current year due
to increased borrowing for truck purchases.

Net Losses

We sustained a net loss of $10,471,889 for the year
ended December 31, 2023, as compared to $17,505,765 for the prior year, a decrease of $7,033,876 or 40% as a result of the above.

Liquidity and Capital Resources

Cash Flow Activities

As of December 31, 2023, we had an accumulated deficit
of $(43,317,050). We have incurred net losses since inception and have funded operations primarily through sales of our common stock and
issuance of notes payable, including to related parties. As of December 31, 2023, we had $226,985 in cash and investments, as compared
to December 31, 2022 when we had $4,186,875 in cash and investments.

Operating Activities

Net cash used in operating activities was $(6,643,397)
during year ended December 31, 2023, which was made up primarily by the net loss and partially offset by stock compensation of $1,525,146
and depreciation and amortization of $1,108,186 and impairment loss of $105,506 and loss on debt extinguishment – related party
of $291,000 and amortization of debt discount of $1,403,244. Net cash used in operating activities was $(11,599,581) for the prior year
ended December 31, 2022, which was made up primarily by the net loss and partially offset by stock compensation of $1,412,283 and depreciation
and amortization of $1,769,621 and impairment losses of $2,894,516.

Investing Activities

During the year ended December 31, 2023, we provided
cash of $2,170,732, during the year ended December 31, 2022 we used cash of $(3,258,417). Investments matured during 2023 of $2,130,116.
Also in 2023 we had refunds on prior purchases of fixed assets, primarily delivery trucks of $40,616. Investments matured during 2022
for total proceeds of $1,151,186. We used $321,250 for the acquisition of a fueling business in 2022. We used $3,258,417 for the acquisition
of fixed assets, primarily delivery trucks

32

Financing Activities

We generated $2,632,857 of cash flows from financing
activities during the year ended December 31, 2023 including $4,590,600 in new loans for truck purchases, $250,000 loan from a related
party, less principal repayments of $3,732,889 and received proceeds from the issuance of common stock from the ATM of $25,308 and recorded
related expenses of $25,308.We generated $2,533,589 of cash flows from financing activities during the year ended December 31, 2022, including
$3,191,308 from new debt borrowings, less $657,719 for the repayment of debt.

Liquidity and Sources of Capital

From inception to December 31, 2023, we have funded
our activities through capital contributions from issuances of notes payable and the sale of securities pursuant to the exemption provided
by Regulation D, by sale of securities to accredited investors and a public offering. We have also financed truck purchases from manufacturer
loans and from our bank line of credit.

Although our financial statements for the year ended
December 31, 2023 were prepared under the assumption that we would continue our operations as a going concern, the report of our independent
registered public accounting firm that accompanies our financial statements for the year ended December 31, 2023 contains a going concern
qualification in which said firm expressed substantial doubt about our ability to continue as a going concern, based on the financial
statements at that time. The Company has sustained a net loss since inception and does not have sufficient revenues and income to fully
fund the operations. As a result, the Company has relied on loans from stockholders and others as well as stock sales to fund its activities
to date. For the year ended December 31, 2023, the Company had a net loss of $10,471,889. At December 31, 2023, the Company had an accumulated
deficit of 45,317,050. We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable
future.

Since inception, the Company’s operations have
primarily been funded through proceeds received in equity and debt financings. In September 2021, the Company completed its Initial Public
Offering and raised $25,250,000 in net proceeds after deducting the underwriting discount and offering expenses. The Company anticipates
that it will need to raise additional capital, in order to continue to fund its operations. There is no assurance that the Company will
be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might
raise will enable the Company to complete its initiatives or attain profitable operations. The Company’s operating needs include
the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s
future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability
to successfully expand to new markets, competition, and the need to enter into collaborations with other companies or acquire other companies
to enhance or complement its product and service offerings. There can be no assurances that, in the event that we require additional financing,
such financing will be available on terms which are favorable to us, or at all. If we are unable to raise additional funding to meet our
working capital needs in the future, we will be forced to delay or reduce, limit or cease our operations.

Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition,
liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and
related notes included in this Annual Report on Form 10-K and the audited financial statements and notes thereto as of and for the year
ended December 31, 2022 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations,
both of which are contained in our Registration Statement on Form S-1 filed with the Securities and Exchange Commission, or SEC, on June
1, 2021, as amended, and declared effective on September 14, 2021. Unless the context requires otherwise, references in this Annual Report
on Form 10-K to “we,” “us,” and “our” refer to Ezfill Holdings, Inc.

20

Forward-Looking
Statements

The
information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited
to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and
plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “may,” “plans,” “projects,” “will,” “would” and similar
expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying
words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should
not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties
that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation,
the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are
made, and we do not assume any obligation to update any forward-looking statements.

Overview

We
were incorporated under the laws of Delaware in March 2019. We are in the business of operating mobile fueling trucks and are headquartered
in Miami, Florida. EzFill provides its customers the ability to have fuel delivered to their vehicles (cars, boats, trucks) without leaving
their home or office and to construction sites, generators, and reserve tanks.

Our
mobile fueling solution gives our fleet, consumer, and other customers the ability to fuel their vehicles with the touch of an app or
regularly scheduled service, and without the inconvenience of going to the gas station.

Critical
Accounting Policies and Estimates

Our
discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared
in accordance with generally accepted accounting principles in the U.S., or GAAP. We have identified certain accounting policies as critical
to understanding our financial condition and results of our operations. For a detailed discussion on the application of these and other
accounting policies, see the notes to our financial statements included in this Annual Report on Form 10-K.

Results
of Operations

The
following table sets forth our results of operations for the year ended December 31, 2022, and 2021:

Non-GAAP
Financial Measures

Adjusted
EBITDA is a non-GAAP financial measure which we use in our financial performance analyses. This measure should not be considered a
substitute for GAAP-basis measures, nor should it be viewed as a substitute for operating results determined in accordance with
GAAP. We believe that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest
expense, taxes, depreciation, amortization, impairment of goodwill, other intangibles and fixed assets, and stock compensation
expense, provides useful supplemental information that is essential to a proper understanding of our financial results. Non-GAAP
measures are not formally defined by GAAP, and other entities may use calculation methods that differ from ours for the purposes of
calculating Adjusted EBITDA. As a complement to GAAP financial measures, we believe that Adjusted EBITDA assists investors who
follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that may obscure underlying
performance and distort comparability.

21

The
following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the year ended December
31, 2022, and 2021:

Year
ended December 31, 2022 compared to the Year ended December 31, 2021

Revenues

We
generated revenues of $15,044,721 for the year ended December 31, 2022, compared to $7,233,957 for the year ended December 31, 2021,
an increase of $7,810,764 or 108%. This increase is due to a 57% increase in gallons delivered as well as an increase in the average
price per gallon.

Cost
of sales was $15,218,234 for the year ended December 31, 2022, resulting in a gross profit of $(173,513), compared to $206,683 for the
prior year. The $8,190,960 or 117% increase in cost of sales is due to the increase in sales and an increase in labor costs primarily
related to the expansion to new markets.

Operating
Expenses

We
incurred operating expenses of $12,648,629 during the year ended December 31, 2022, as compared to $8,102,934 during the prior year,
an increase of $4,545,695 or 56%. This net increase consisted of a decrease of $483,791 in stock compensation expense and an increase
of $5,029,486 in other operating expenses. The increase was primarily due to increases in payroll, sales and marketing, insurance, technology,
and public company expenses.

Depreciation
and Amortization

Amortization
increased in the current year as a result of the acquisition of a fueling business. Depreciation increased in the current year as a result
of purchases of vehicles and delivery equipment.

Impairment
of Goodwill, Other Intangibles and Fixed Assets

During
the year ended December 31, 2022, the Company recorded an impairment loss of $1,987,500 related to a license of technology for which
the Company has proposed termination of the agreement and which is not expected to generate any revenue in 2023. The Company recorded
impairment of $258,114 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the expected
realizable value. Goodwill is considered impaired, and the Company recognized an impairment loss of $166,838, or the remaining balance
of goodwill, during the year ended December 31, 2022. This loss was primarily due to the fall in the Company’s stock price and
the decrease of the Company’s market capitalization as well as past operating performance. As a consequence, management forecasts
were revised, and additional risk factors were applied. The fair value of the intangibles was estimated using a combination of market
comparables (level 1 inputs) and expected present value of future cash flows (level 3 inputs) and as a result impairment was recorded
for a total of $482,064.

Other
Income (Expense)

Interest
expense decreased in the current year due to the early repayment in September 2021 of pre-IPO debt.

Net
Losses

We
sustained a net loss of $17,505,765 for the year ended December 31, 2022,
as compared to $9,383,397 for the prior year, an increase of $8,122,368 or 87% as a result of the above.

22

Liquidity
and Capital Resources

Cash
Flow Activities

As
of December 31, 2022, we had an accumulated deficit of $(34,845,161). We have incurred net losses since inception and have funded operations
primarily through sales of our common stock and issuance of notes payable, including to related parties. As of December 31, 2022, we
had $4,186,875 in cash and investments, as compared to December 31, 2021, when we had $16,924,146 in cash and investments.

Operating
Activities

Net
cash used in operating activities was $(11,599,581) for the year ended December 31, 2022, which was made up primarily by the net loss
and partially offset by stock compensation of $1,412,283 and depreciation and amortization of $1,769,621 and impairment loss of $2,894,516.
Net cash used in operating activities was $(6,306,761) during the prior year, which was
made up primarily by the net loss and partially offset by an increase in stock-based compensation of $1,896,074, warrants and shares
to lenders of $248,011, and depreciation and amortization of $872,834.

Investing
Activities

During
the year ended December 31, 2022, and 2021, we used $3,258,417 and $1,998,151, respectively, for the acquisition of fixed assets,
primarily delivery trucks. Investments matured during 2022 for total proceeds of $1,151,186. We used $321,250 for the acquisition of
a fueling business in 2022. We invested $3,367,953 in debt securities in 2021.

Financing
Activities

We
generated $2,533,589 of cash flows from financing activities during the year ended December 31, 2022, including $3,191,308 from new debt
borrowings, less $657,719 for the repayment of debt. All of the pre-acquisition debt was repaid following our IPO. In 2021, we generated
$24,370,464 of cash flows from financing activities, including $28,750,000 less related expense of $(3,500,426) from the Initial Public
Offering, $2,990,572 from new debt borrowings and $115,000 from sale of shares, less $3,984,682 for the repayment of debt. All of the
pre-acquisition debt was repaid following our IPO.

Liquidity
and Sources of Capital