NEXTNRG, INC. (NXXT)

CIK: 0001817004. SIC: 5500 Retail-Auto Dealers & Gasoline Stations. Latest 10-K as of: 2026-04-16.

SIC breadcrumb: Retail Trade > SIC Major Group 55 > SIC 5500 Retail-Auto Dealers & Gasoline Stations

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1817004. Latest filing source: 0001493152-26-016896.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001817004.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001817004.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001493152-26-023768.

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-05-15. Report date: 2026-03-31.

ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking
statements made by or on behalf of NextNRG, Inc. (“NextNRG,” “we,” “us,” “our,” or the
“Company”). The Company and its representatives may from time to time make written or oral statements that are “forward-looking,”
including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in
our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified
by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,”
“continue” or similar expressions. Such forward-looking statements include risks and uncertainties and there are important
factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These
factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2025, as the same may be updated from time to time, including in Part II, Item 1A, “Risk
Factors,” of this Quarterly Report on Form 10-Q.

Although
we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to
foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking
statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made,
in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate
under the circumstances.

Except
as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions
to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this
report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any
statement is based.

The
following discussion and analysis provides information we believe is relevant to an assessment and understanding of our unaudited
condensed consolidated operating results and financial condition. The following discussion should be read in conjunction with our
unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and the notes thereto included in
this Quarterly Report on Form 10-Q, as well as our other reports filed with the SEC from time to time, including, but not limited
to, our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

NextNRG
is Powering What’s Next by implementing artificial intelligence (“AI”) and machine learning (“ML”) into
renewable energy, next-generation energy infrastructure, battery storage, wireless electric vehicle (“EV”) charging and on-demand
mobile fuel delivery to create an integrated ecosystem.

At
the core of NextNRG’s strategy is its utility operating system, which leverages AI and ML to help make existing utilities’
energy management as efficient as possible, and the deployment of NextNRG smart microgrids, which utilize AI-driven energy management
alongside solar power and battery storage to enhance energy efficiency, reduce costs and improve grid resiliency. These microgrids are
designed to serve commercial properties, schools, hospitals, nursing homes, parking garages, rural and tribal lands, recreational facilities
and government properties, expanding energy accessibility.

NextNRG
continues to expand its growing fleet of fuel delivery trucks and national footprint. NextNRG is also integrating sustainable energy
solutions into its mobile fueling operations. The company hopes to be an integral part of assisting its fleet customers in their transition
to EV, supporting more efficient fuel delivery while advancing clean energy adoption. The transition process is expected to include the
deployment of NextNRG’s innovative wireless EV charging solutions.

Revenue
Sources

Sale
of Electricity

Solar
Electricity

NextNRG
plans to derive its operating revenues principally from power purchase agreements, net metering credit agreements, solar renewable energy
credits, and performance-based incentives. A portion of NextNRG’s power sales revenues is expected to be earned through the sale
of energy (based on kilowatt hours) pursuant to the terms of Power Purchase Agreements (“PPAs”). NextNRG’s PPAs will
typically have fixed or floating rates and are expected to be generally invoiced monthly.

Wireless
EV Charging

NextNRG
plans to sell energy to its wireless EV charging customers.

NextNRG
also plans to sell its innovative solutions to property owners, parking facilities, municipalities, and government agencies, as well
as charge point operators, empowering the growth of sustainable transportation infrastructure.

NextNRG
plans to generate revenue from the deployment of solar and battery storage solutions where applicable to further take advantage of the
renewable energy industry. Energy pricing is based on peak/off-peak rates at any given charging location. NextNRG plans to negotiate
our own PPA accordingly. NextNRG is also planning to sell energy to electric vehicle owners via wireless EV charging.

3

SaaS
& Licensing

Software
as a Service (“SaaS”) Agreements

NextNRG
plans to generate revenue from the sale of its energy management software under SaaS agreements with utility companies; microgrid companies;
and renewable energy generation companies. Additionally, any traditional customers which would like to own their own energy generation
systems will have the option of entering a SaaS agreement to purchase rights to the technology.

Hardware
Licensing

NextNRG
plans to generate licensing revenues from competitors or ancillary business participants who desire to utilize or integrate NextNRG’s
intellectual property, hardware, or software solutions within their proprietary product.

Sale
of Hardware

NextNRG
plans to generate revenues from the sale of hardware, e.g. solar panels, battery storage solution equipment, wireless charging
pad or bumper and vehicle receiver technology.

Potential
Customers

Potential
customers include property owners, electrical supply companies, management companies, all levels of government, original equipment manufacturers,
tribal land, car manufacturers, EV charging companies, wholesale electricity providers, utilities, and fleet owners.

Mobile
Fueling

Mobile
Fuel Delivery

NextNRG’s
mobile fueling solution is an on-demand and subscription fuel delivery service that brings fuel directly to consumers, commercial fleets,
and specialty vehicles at homes, workplaces, and job sites. Leveraging digital technology and GPS-based systems, this service responds
to the increasing preference for home and workplace product deliveries. Particularly, our fleet services are experiencing significant
growth, providing a streamlined, efficient fueling option that allows commercial operators to optimize operations and reduce downtime.
For the three months ended March 31, 2026 and the year ended December 31, 2025, we derived all of our revenues from mobile fuel deliveries.

Recent
Developments

Promissory
Note, dated as of December 26, 2024

On
December 26, 2024, the Company and Gad International Ltd. (the “Lender”) entered into a promissory note (the “Gad Note”)
for the sum of $2,500,000 (the “Loan”) to be used for the Company’s working capital needs, including without limitation
the purchase of equipment. Unless the Gad Note is otherwise accelerated or extended in accordance with the terms and conditions therein,
the balance of the Gad Note, along with accrued interest, will be due and payable in full on February 23, 2025. Further, the Company
agreed among other things to pay the Lender a commitment fee of $400,000 in consideration of the Loan, and an optional extension fee
of $200,000 for any month or part thereof in which the Company requests an additional 30-day extension to the Loan, upon the Lender’s
written consent. If any amount payable under the Loan is not paid when due, whether at stated maturity, by acceleration, or otherwise,
such overdue amount will bear interest at a rate of 21%. Additionally, the Company agreed to execute an irrevocable transfer instruction
with its transfer agent to issue $5,000,000 worth of shares of Company common stock to the Lender if the Gad Note is not repaid on or
before February 23, 2025. However, pursuant to an amendment to the Gad Note, dated January 15, 2025, between the Company and the Lender,
no shares of the Company can be issued without the Company first receiving shareholder approval. The Company has commenced the process
of obtaining shareholder approval and once the shareholder approval process is completed and the Company is authorized to issue the shares,
the Company will issue the shares. The Company shall take no action to impair, hinder or impede either the approval process or the issuance
of the shares in the event they become owed to Lender. Such shares of common stock will be valued based on the Nasdaq official closing
price for the Company’s common stock as of date of the issuance of the Gad Note. The note was extended to March 23, 2025, and in
exchange for the extension of the maturity date, the Company paid a fee of $200,000. The note was paid in full on March 26, 2025.

Promissory
Note, dated as of January 15, 2025

On
January 15, 2025, the Company and Alcourt LLC (“Alcourt”) entered into a promissory note (the “Alcourt Note”)
for the sum of $1,000,000 to be used for the Company’s working capital needs, including without limitation, the purchase of equipment.
The Alcourt Note was issued with an original issue discount of $50,000. The unpaid principal balance of the Alcourt Note has a fixed
rate of interest of 15% per annum. Unless the Alcourt Note is otherwise accelerated or extended in accordance with the terms and conditions
therein, the balance of the Alcourt Note, along with accrued interest, will be due and payable in full on April 15, 2025 (“Maturity
Date”). If the Alcourt Note is not repaid by the Maturity Date, for any reason whatsoever, the Company will issue shares of the
Company’s common stock with a then current value of $500,000 to Alcourt (the “Extension Fee”). The shares will be valued
based on the greater of: (i) the closing price of the Company’s common stock on the Maturity Date; or (ii) $1.00 per share; if
the Company’s common stock is trading below $1.00 per share, Alcourt can elect to receive the Extension Fee of $500,000 in cash.
The Company agreed to execute an irrevocable transfer instruction with its transfer agent to issue $500,000 worth of shares of Company
common stock to Alcourt if the Alcourt Note is not repaid on or before April 15, 2025. Upon payment of the Extension Fee, the Maturity
Date shall be extended until July 15, 2025. Additionally, if the Alcourt Note is paid at any time after the initial Maturity Date, the
Company shall pay a $50,000 termination fee together with the repayment of the principal, accrued unpaid interest, and any other charges
due to Alcourt. No shares of the Company shall be issued without the Company first receiving shareholder approval. The Company has commenced
the process of obtaining shareholder approval as soon as reasonably practicable after execution of the Alcourt Note. The note was repaid
in full in February 2025.

4

Shareholder
Approval

On
January 15, 2025, the holders of a majority of the Com

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-04-16. Report date: 2025-12-31.

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, 2025
and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations. 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.

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 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 the Financial Accounting
Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation”.

41

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

●

Entities
with more than 50% voting interest, unless control is not with the Company; and

●

Variable
interest entities (“VIEs”), where the Company is the primary beneficiary, possessing both (i) power over significant
activities and (ii) the obligation to absorb losses or receive benefits.

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.

Business
Combinations

For
transactions classified as business combinations, the Company:

●

Recognizes
and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition
date (ASC 805-20-25-1).

●

Records
goodwill as the excess of the fair value of consideration transferred over the fair value of net assets acquired, including any previously
held equity interests (ASC 805-30-30-1).

●

Expenses
acquisition-related costs as incurred, per ASC 805-10-25-23.

●

Uses
preliminary purchase price allocations, with adjustments permitted within the measurement period (not exceeding one year) per ASC
805-10-25-13. Adjustments beyond the measurement period are recorded in earnings.

Significant
judgments in fair value determinations include:

●

Intangible
asset valuations, based on estimates of future cash flows and discount rates.

●

Useful
life assessments, impacting amortization and financial results.

●

Contingent
consideration, which is remeasured at fair value through earnings per ASC 805-30-35-1.

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:

●

Applies
the “screen test” to determine whether substantially all of the fair value of gross assets acquired is concentrated in
a single identifiable asset or group of similar assets (ASC 805-10-55-3A).

●

Allocates
the purchase price using a cost accumulation model, assigning costs to acquired assets based on their relative fair values (ASC 805-50-30-3).

●

Capitalizes
direct acquisition costs as part of the asset’s cost, unlike business combinations where such costs are expensed (ASC 805-50-25-1).

42

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

●

The
recognition of goodwill (only in business combinations).

●

The
measurement and presentation of acquired assets and assumed liabilities.

●

The
Company’s financial position and results of operations.

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

●

The
legal acquiree (accounting acquirer) is treated as the continuing reporting entity, and its assets, liabilities, and operations are
measured at historical cost.

●

The
legal acquirer (accounting acquiree) is recognized at fair value, similar to a business combination.

●

No
goodwill is recognized, as the transaction is considered a capital reorganization rather than an acquisition of a business per ASC
805-40-30-2.

●

The
equity structure (common stock and additional paid-in capital) is adjusted to reflect that of the legal acquirer, but the retained
earnings balance is that of the accounting acquirer.

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:

●

A
detailed description of the transaction, including how control was obtained.

●

A
comparative analysis of financial statements before and after the acquisition.

●

Pro
forma financial information in accordance with Regulation S-X, Article 11, showing the impact of the transaction as if it had occurred
at the beginning of the reporting period.

●

Changes
in governance, management, and operations post-acquisition.

For
SEC registrants, a reverse merger with a public shell company may also trigger “Super 8-K” reporting requirements under 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:

●

Regulation
S-X, Rule 3-05: Requires separate financial statements of the acquired business if it meets significance thresholds under Rule 1-02(w).

●

Regulation
S-K, Item 101: Requires disclosure of the impact of material acquisitions on the Company’s business operations.

●

Regulation
S-K, Item 303: Mandates discussion of the impact of acquisitions on the Company’s financial condition and results of operations
in Management’s Discussion and Analysis.

●

Regulation
S-X, Article 11: Requires pro forma financial statements if the acquisition is significant.

●

Form
8-K, Item 2.01: Immediate reporting requirements for material acquisitions, including reverse mergers.

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 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.

43

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, 2025, and 2024, respectively, include: 

●

Allowance
for doubtful accounts and other receivables

●

Inventory
reserves and classifications

●

Valuation
of loss contingencies

●

Valuation
of stock-based compensation

●

Estimated
useful lives of property and equipment

●

Impairment
of intangible assets

●

Implicit
interest rate in right-of-use operating leases

●

Uncertain
tax positions

●

Valuation
allowance on deferred tax assets

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.

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:

1.

Industry
Cyclicality (ASC 275-10-50-6) – The Company’s financial performance is affected by industry trends, seasonality, and
shifts in market demand.

2.

Macroeconomic
Conditions (ASC 275-10-50-8) – Economic downturns, inflationary pressures, interest rate changes, and geopolitical risks may
impact consumer purchasing behavior and the Company’s revenue streams.

3.

Pricing
Volatility (ASC 275-10-50-4) – The cost and availability of raw materials, supply chain disruptions, and competitive pricing
pressures can lead to fluctuations in gross margins and profitability.

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 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:

●

A
review of outstanding accounts,

●

Historical
collection experience, and

●

Current
economic conditions (ASC 310-10-35-9).

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

44

Inventory

The
Company accounts for inventory in accordance with ASC 330, Inventory. Inventory consists solely of fuel and is stated at the lower of
cost or net realizable value 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:

●

Market
conditions affecting fuel prices,

●

Net
realizable value based on estimated selling price, and

●

Inventory
turnover trends (ASC 330-10-35-2).

Right
of Use Assets and Lease Obligations

The Company accounts for right-of-use (“ROU”)
assets and lease liabilities in accordance with 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 real-estate and certain equipment leases are classified as operating leases and are included as ROU 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:

●

The
useful life of leasehold improvements relative to the lease term,

●

The
economic performance of the business at the leased location,

●

The
comparative cost of renewal rates versus market rates, and

●

The
presence of any significant economic penalties for non-renewal (ASC 842-10-55-26).

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 Company’s operating
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).

45

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, 2025,
and 2024.

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

The
Company recognizes revenue in accordance with 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:

1.

Identify
the Contract with a Customer

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

●

The
contract creates enforceable rights and obligations between the Company and the customer.

●

The
contract has commercial substance (i.e., it affects the Company’s cash flows).

●

The
payment terms are identified, and the consideration is determinable.

●

It
is probable that the Company will collect the consideration in exchange for the goods or services transferred.

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.

2.

Identify
the Performance Obligations in the Contract

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:

●

Fuel
Sales – The delivery of fuel to a customer, with revenue recognized at the point of delivery.

●

Membership
Fees – Monthly membership services, with revenue recognized over time within a one-month membership cycle, as the customer
benefits from access to services throughout the period.

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

3.

Determine
the Transaction Price

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.

46

The
Company’s transaction price considerations include:

●

Fixed
consideration – Prices are clearly stated and do not vary based on performance.

●

No
variable consideration – The Company does not formally offer refunds, rebates, or pricing incentives. During the years ended
December 31, 2025 and 2024, respectively, the Company granted insignificant discounts of less than 1% of total revenues.

●

No
financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15.

4.

Allocate
the Transaction Price to Performance Obligations

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.

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

5.

Recognize
Revenue When (or As) Performance Obligations Are Satisfied

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.

●

Fuel
Sales: Control transfers at the time of fuel delivery, at which point revenue is recognized.

●

Membership
Fees: Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services
throughout the month.

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.

Sale-Leaseback
Transactions

During
the year ended December 31, 2025, the Company entered into four sale-leaseback transactions with Equify Financial, LLC under Master Lease
No. 17348L pursuant to which the Company sold certain transportation equipment and concurrently leased the equipment back for a 36-month
term, with monthly rent paid in advance and a lessee-paid TRAC residual due at the end of the term.

The
Company evaluated these transactions under ASC 606 and ASC 842-40 and concluded that the transfers did not qualify for sale accounting
because the present value of the lease payments, including the TRAC, represents substantially all of the fair value of the underlying
equipment (ASC 842-10-25-2(d)). Accordingly, the transactions are accounted for as financings: the equipment remains on the Company’s
balance sheet within property and equipment and continues to be depreciated on a straight-line basis over its estimated useful life of
five years; the cash proceeds received are recorded as a financing obligation; and scheduled lease payments are bifurcated between interest
expense (recognized using the implicit rate in the arrangement) and principal reduction of the financing obligation.

As
of December 31, 2025, the weighted-average implicit rate across the four arrangements was approximately 16.4% per annum and the aggregate
outstanding financing obligation was approximately $3.6 million.

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:

●

The
Company controls the fuel before it is transferred to the customer.

●

The
Company has discretion in pricing, as it sets the selling price of fuel.

●

The
Company is responsible for fulfilling the obligation of delivering fuel to the customer.

●

The
Company is exposed to inventory risk, as it procures and holds fuel before sale.

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

Revenue
Stream

Performance
Obligation

Recognition
Timing

Consideration
Type

Fuel
Sales

Fuel
Delivery

At
time of delivery

Fixed
price per gallon

Membership
Fees

Monthly
access to fuel services

Over
time (one-month cycle)

Fixed
monthly subscription

47

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 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, 2025 and 2024, 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, 2025 and 2024. 

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).

Factors
Considered in Valuation Allowance Assessment

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

●

Historical
earnings trends (cumulative pre-tax income or losses in the most recent three-year period)

●

Future
financial projections, including expected taxable income based on long-term estimates of business performance and market conditions

●

Statutory
carryforward periods for net operating losses and other deferred tax assets

●

Prudent
and feasible tax planning strategies that could impact the realization of deferred tax assets

●

Nature
and predictability of temporary differences and the timing of their reversal

●

Sensitivity
of financial forecasts to external factors such as commodity prices, market demand, and operational risks

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.

48

Valuation
Allowance Determination

At
December 31, 2025 and 2024, 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.

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:

●

Exercise
price – The agreed-upon price at which the option can be exercised.

●

Expected
dividends – The anticipated dividend yield over the expected life of the option.

●

Expected
volatility – Based on historical stock price fluctuations.

●

Risk-free
interest rate – Derived from U.S. Treasury securities with similar maturities.

●

Expected
life of the option – Estimated based on historical exercise patterns and contractual terms.

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

●

The
treatment of tax benefits and tax deficiencies in income tax reporting.

●

The
option to recognize forfeitures as they occur rather than estimating them upfront.

●

Cash
flow classification for certain tax-related transactions.

The
Company continues to evaluate and apply the latest 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.

49

Basic
EPS

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

●

Net
earnings available to common shareholders represent net earnings to common shareholders, adjusted for the allocation of earnings
to participating securities.

●

Losses
are not allocated to participating securities in accordance with ASC 260-10-45-61.

●

The
denominator includes common shares outstanding and certain other shares committed to be issued, such as restricted stock and restricted
stock units (“RSUs”), for which no future service is required.

Diluted
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.

●

Diluted
EPS is computed by taking the sum of:

○

Net
earnings available to common shareholders

○

Dividends
on preferred shares

○

Dividends
on dilutive mandatorily redeemable convertible preferred shares

○

Divided
by the weighted average number of common shares outstanding and certain other shares committed to be issued, plus all dilutive common
stock equivalents during the period, such as:

■

Stock
options

■

Warrants

■

Convertible
preferred stock

■

Convertible
debt

●

Preferred
shares and unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) qualify as participating securities under the two-class method, per ASC 260-10-45-62.

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:

●

Before
the requisite service is rendered for the right to retain the award, these instruments meet the definition of a participating security
under ASC 260-10-45-59.

●

RSUs
granted under an executive compensation plan, however, are not considered participating securities because the rights to dividend
equivalents are forfeitable (ASC 718-10-25).

Related
Parties

The
Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and 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:

●

Principal
owners of the Company.

●

Members
of management (including directors, executive officers, and key employees).

●

Immediate
family members of principal owners and members of management.

●

Entities
affiliated with principal owners or management through direct or indirect ownership.

●

Entities
with which the Company has significant transactions, where one party has the ability to exercise control or significant influence
over the management or operating policies of the other.

50

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:

●

The
nature of the relationship between the parties.

●

A
description of the transaction(s), including terms and amounts involved.

●

Any
amounts due to or from related parties as of the reporting date.

●

Any
other elements necessary for a clear understanding of the transactions’ effects on the financial statements.

Disclosures
are made in accordance with ASC 850-10-50-1 through 50-6 and 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.

●

See
Notes 1, 10 and 12, which discuss a common control merger between Next and EZFL, after year end, on February 13, 2025

●

See
Note 4 which includes accrued interest payable – related parties.

●

See
Notes 5 and 12 for a discussion of related party debt.

●

See
Note 7 regarding right-of-use operating lease with the Company’s Chief Technology Officer.

●

See
Note 8 for a discussion of equity transactions with certain officers and directors.

Recent
Accounting Standards 

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

●

Requiring
enhanced disclosures of significant segment expenses.

●

Aligning
segment reporting requirements with information regularly reviewed by management.

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

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

●

Standardizing
and disaggregating rate reconciliation categories.

●

Requiring
disclosure of income taxes paid by jurisdiction.

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.

51

In
November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires
additional disclosures of certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset
amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses
and the Company’s definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026,
and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact
this update will have on our annual disclosures; however, it will not impact our financial condition, results of operations, or cash
flows.

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, 2025 and 2024:

Years Ended December 31,

Year over Year Changes

2025

2024

Increase (Decrease)

Operating Expenses

Amount

Amount

$ Amount

% Change

Revenues

$

81,835,279

$

27,770,280

$

54,064,999

194.69

%

Cost of Sales

74,928,249

25,983,342

48,944,907

188.37

%

Operating Expenses

65,874,460

11,950,573

53,923,887

451.22

%

Depreciation and amortization

2,689,293

1,545,806

1,143,487

73.97

%

Impairment loss

8,535,825

-

8,535,825

100.00

%

Operating Loss

(70,192,548

)

(11,709,441

)

(58,483,107

)

499.45

%

Other income (expense)

(17,983,449

)

(9,687,192

)

(8,296,257

)

85.64

%

Net Loss

$

(88,175,997

)

$

(21,396,633

)

$

(66,779,364

)

312.10

%

52

Revenues

Revenues
for the year ended December 31, 2025, increased significantly compared to the prior year December 31, 2024. 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:

1.

Expanded
Customer Base

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.

2.

Fleet
Partnerships

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.

3.

Enhanced
Technology & Marketing

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:

1.

Higher
Fuel Volume

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.

2.

Fuel
Price Fluctuations

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.

3.

Logistics
& Delivery Costs

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 increased compared to the prior year, primarily due to an increase in sales and revenue.

53

Depreciation
and Amortization

Depreciation
and amortization also increased year over year. The primary driver of this increase was the depreciation of newly acquired vehicles during the year, reflecting the Company’s ongoing
investments in delivery vehicles, fueling technology, and other capital expenditures necessary to support continued growth and maintain
operational efficiency.

Other
Income (Expense)

Other
income and (expense) consisted of the following

For the Years Ended December 31,

Year over Year Changes

2025

2024

Increase (Decrease)

Amount

Amount

$ Amount

% Change

Interest income

$

8

$

283,193

$

(283,185

)

100.00

%

Other income

150,183

305,030

(154,847

)

(50.76

)%

Interest expense (including amortization of debt discount)

(17,270,979

)

(9,367,915

)

(7,903,064

)

84.36

%

Gain (loss) on settlement of liabilities

(862,661

)

-

(862,661

)

(100

)%

Loss on debt extinguishment - related party

-

(907,500

)

907,500

(100.00

)%

Total other income (expense) - net

$

(17,983,449

)

$

(9,687,192

)

$

(8,296,257

)

85.64

%

The
Company’s other income (expense), net, deteriorated significantly for the year ended December 31, 2025, 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 decreased in 2025, reflecting a continuation in the Company’s cash management strategy. In 2024, the Company had short-term
investments or interest-bearing accounts that generated interest, which did not recur in 2025.

Other
income

Other
income decreased year over year.

Interest
Expense (including amortization of debt discount)

Interest
expense surged in 2025, primarily due to:

1.

Default
Penalty Interest: The Company incurred significantly more in default penalty interest in 2025 than in the prior year.
This penalty arose from contractual defaults related to late note payments.

54

2.

Amortization
of Debt Discount: The amortization of debt discount increased to $9,586,418 in 2025 from $5,352,448 in 2024. This reflects additional
debt arrangements with original issue discounts. Additionally, in connection with the conversion of debt converted to equity, related
unamortized discounts were expensed at that time.

3.

Existing
and New Borrowings: Interest expense was recognized on outstanding debt instruments.

Loss
on Sale of Marketable Debt Securities - Net

The
Company had no activity related to marketable securities in 2024 or 2025.

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 2025, the Company did not record a loss on debt extinguishment.

Net
Loss

Years Ended December 31,

Year over Year Changes

2025

2024

Increase (Decrease)

Amount

Amount

$ Amount

% Change

Net Loss

$

(88,175,997

)

$

(21,396,633

)

$

(66,779,364

)

312.10

%

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.

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, 2025 and 2024:

Years Ended December 31,

Year over Year Changes

2025

2024

Increase (Decrease)

Amount

Amount

$ Amount

% Change

Net loss

$

88,175,997

$

21,396,633

$

66,779,364

312.10

%

Interest expense, net

17,270,979

9,367,915

7,903,064

84.36

%

Depreciation and amortization

2,689,293

1,545,806

839,222

73.97

%

Impairment of goodwill, other intangibles and fixed assets

8,535,825

13,422

8,522,403

63,495.78

%

Stock compensation

42,589,563

1,531,640

41,057,923

2,969.91

%

Adjusted EBITDA

$

17,090,337

$

8,937,850

$

7,440,017

83.24

%

55

Liquidity
and Capital Resources

Cash
Flow Activities

Our
cash balances at December 31, 2025 and 2024 were as follows:

Year-over-Year Changes

December 31,

December 31,

Increase (Decrease)

2025

2024

$ Amount

% Change

Cash and cash equivalents

$

384,140

$

1,612,117

$

(1,227,977

)

(76.17

)%

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

1.

Debt
Financing Received Late in the Year

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.

2.

Timing
of Expenses

Certain
operating expenses were either deferred or settled after year-end, resulting in higher cash on hand as of December 31, 2025. 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:

For the Years Ended

December 31,

Year over Year Changes

2025

2024

Increase (Decrease)

Net Cash Provided by (Used in)

Amount

Amount

$ Amount

% Change

Operating activities

$

(14,497,300

)

$

(6,257,209

)

$

(8,240,091

)

(131.69

)%

Investing activities

-

(11,677,978

)

$

11,677,978

100.00

%

Financing activities

13,269,323

18,526,043

$

(5,256,720

)

(28.37

)%

Net change in cash and cash equivalents

$

(1,227,977

)

$

590,856

$

(1,818,833

)

(307.83

)%

56

Year
Ended December 31, 2025 as compared to the Year Ended December 31, 2024

Operating
Activities

Net cash used in operating activities increased by
approximately $8,2 million, or 28.13%, year-over-year. This increase is largely due to the increase in operating expenses and net loss,
as well as a decrease in interest income.

Investing
Activities

Cash received from investing activities increased
$11.7 million, or 100%, from December 31, 2024 to December 31, 2025, driven by a decrease in a purchase of fixed assets and cash proceeds
from the sale of vehicles.

Financing
Activities

Net cash provided by financing activities decreased
by $5.3 million, or 28.37%, and was largely driven by proceeds from notes receivable and cash from the sale of common stock, offset by
the repayment of notes payable, and entry into a financing lease via a sales
leaseback transaction. .

Net
Change in Cash and Cash Equivalents

Overall, the Company’s cash position decreased
by approximately $1.2 million, or 76%, in 2025. This decrease is primarily the result of increased operating expenses, partially offset
by the increase in revenue, as well as by the decrease of cash provided by financing activities.

Cash
Flow Summary

1.

Strengthened
Liquidity: The significant uptick in financing inflows helped offset operating and investing outflows, resulting in a positive
net change in cash and cash equivalents.

2.

Growth-Focused
Investments: The higher cash outflows for investing activities underscore the Company’s commitment to scaling its operations,
although this increases near-term cash usage.

3.

Improving
Operational Cash Use: A reduction in net cash used in operating activities highlights improving efficiencies and stronger sales,
but continued focus on cost management remains critical to achieving positive operating cash flows in the future.

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.

57

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

For the Years Ended December 31,

2025

2024

Net Change

Operating activities

Net loss

$

(88,175,997

)

$

(21,396,634

)

$

(66,779,363

)

Adjustments to reconcile net income to net cash used in operations

Depreciation and amortization

2,385,028

1,545,806

839,222

Impairment loss - project deposit

3,929,161

-

3,929,161

Impairment loss - intangible assets

4,606,664

-

4,606,664

Impairment of fixed assets

-

13,422

(13,422

)

Contributed capital

571,215

168,700

402,515

Amortization of operating lease - right-of-use asset

-

236,243

(236,243

)

Amortization of operating lease - right-of-use asset - related party

106,603

55,791

50,812

Amortization of debt discount

5,697,124

5,352,448

344,676

Loss on settlement of liabilities- notes payable

3,965,8011

907,500

3,058,301

Loss on disposal of vehicles

-

-

-

Bad debt expense

(5,654

)

50,581

(56,235

)

Default penalty, note extension fee, and imputed interest

5,690,694

4,475,565

1,215,129

Stock issued for services

42,589,563

187,968

42,401,595

Stock issued for services - related parties

17,333

268,667

(251,334

)

(Increase) decrease in

Accounts Receivable

(418,896

)

(427,899

)

9,003

Inventory

(483,461

)

7,657

(491,118

)

Prepaids and other

(110,322

)

183,974

(294,296

)

Deposits

(181,595

)

-

(181,595

)

Increase (decrease) in

Accounts payable and accrued expenses

2,405,951

803,810

1,602,141

Accounts payable and accrued expenses - related party

2,502,104

1,528,173

973,931

Stock payable - related party

520,000

-

520,000

Operating lease liability

(4,831

)

(246,880

)

242,049

Operating lease liability - related party

(103,785

)

27,899

(131,684

)

Net cash used in operating activities

$

(14,497,300

)

$

(6,257,209

)

$

(8,240,091

)

For
the Years Ended December 31,

2025

2024

Net
Change

Investing
activities

Cash
proceeds from sale of vehicles

$

-

$

-

$

-

Cash
proceeds from the refund of project deposit (Yoshi)

-

-

-

Deposit
on future asset purchase (Yoshi)

-

(2,035,283

)

2,035,283

Project
deposit

-

(3,929,161

)

3,929,161

Purchase
of fixed assets

-

(5,696,384

)

5,696,384

Advances
- related party

-

(17,150

)

17,150

Net
cash provided by (used in) investing activities

$

-

$

(11,677,978

)

$

11,677,978

For
the Years Ended December 31,

2025

2024

Net
Change

Financing
activities

Proceeds
from issuance of Series B - convertible preferred stock - related party

$

-

$

1,400,000

$

(1,400,000

)

Proceeds
from notes payable

18,977,110

14,651,722

4,325,388

Proceeds
from notes payable - related party

2,001,594

3,300,000

(1,298,406

)

Proceeds
from common stock issued for cash

15,226,134

-

15,226,134

Cash
paid for direct offering costs - common stock

(1,557,005

)

-

(1,557,005

)

Equify

3,577,478

-

3,577,478

Repayments
on notes payable

(23,845,988

)

(825,679

)

(23,020,309

)

Repayments
on loan payable - related party

(1,110,000

)

-

(1,110,000

)

Net
cash provided by financing activities

$

13,269,323

$

18,526,043

$

(5,256,720

)

58

Conclusion

1.

Liquidity and Capital Resources: The decrease in cash from financing activities is primarily due to repayments of notes payable exceeding new funds received from the issuance of new notes payable. Higher interest expense and ongoing operational requirements underscore the importance of prudent cash management and careful monitoring of debt covenants.

2.

Focus
on Operational Efficiency: Management continues to prioritize cost controls, aiming to reduce the net cash used in operating
activities. Improved working capital management, route optimization, and potential price adjustments are key levers for achieving
positive cash flow from operations in future periods.

3.

Related-Party
Financing: The continued reliance on related-party notes and convertible preferred stock indicates a supportive investor base.
Nonetheless, the Company must remain mindful of the terms and potential ramifications of such financing, including interest rates,
default provisions, and equity dilution.

By
maintaining a disciplined approach to both spending and financing, the Company 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.

59

Reliance
on External Financing

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

●

Equity
Issuances: Raising capital through the sale of common or preferred shares, including convertible securities from related parties.

●

Debt
Financings: Securing loans and other debt instruments, often under terms that include default penalty interest or other onerous conditions,
which have contributed to higher financing costs.

●

Related-Party
Transactions: Engaging with supportive investors and related parties who have provided additional funds, albeit at terms that may
affect our overall capital structure.

Going
Concern Considerations

Our
independent registered public accounting firm has issued a going concern qualification, reflecting the material uncertainties surrounding
our ability to continue as a profitable entity. This qualification is primarily driven by:

●

The
historical and recurring net losses.

●

Our
dependence on external capital to finance operations.

●

The
risk that current financing arrangements may not be renewed or may be available only under less favorable terms.

Management
is actively pursuing strategies to enhance revenue generation, improve operational efficiencies, and secure additional financing on more
sustainable terms. We are evaluating various initiatives, including cost-containment measures, operational improvements, and strategic
partnerships, with the aim of transitioning to positive cash flow from operations. However, there remains a risk that these strategies
may not yield the desired outcomes in the near term.

Outlook
and Mitigating Actions

In
light of these challenges, we continue to closely monitor our liquidity position and are exploring multiple avenues to secure additional
funding. These include:

●

Negotiating
more favorable terms on existing and future debt.

●

Identifying
new equity partners or investors.

●

Optimizing
working capital through tighter control of receivables, payables, and inventory management.

While
these efforts are underway, our ability to meet operational and financial obligations over the next 12 months remains subject to significant
uncertainty. Investors and stakeholders should be aware of the risks associated with our current liquidity and capital structure, and
the potential need for additional financing that could result in further dilution or increased debt service obligations.

Going
Concern Qualification

As
reflected in the accompanying consolidated financial statements, for the year ended December 31, 2025, the Company had:

●

Net
loss available to common stockholders of $86,406,431; and

●

Net
cash used in operations was $14,497,300.

Additionally,
at December 31, 2025, the Company had:

●

Accumulated
deficit of $153,942,132;

●

Stockholders’
deficit of $22,114,845 and

●

Working
capital deficit of $25,115,995.

60

The
Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations. The Company
has relied on related parties for the debt-based funding of 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 financing will be available on terms which are favorable, or at all. If the Company is unable to raise additional
funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations.

We
manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company had cash on hand
of $384,140 at December 31, 2025.

The
Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues
from the sales of its products and services to achieve profitable operations. In making this assessment we performed a comprehensive
analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months
ending December 31, 2026, and our current capital structure including equity-based instruments and our obligations and debts.

These
factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent
to the date that these financial statements are issued.

The
consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going
concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern
and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Management’s
strategic plans include the following:

●

Expand
into new and existing markets (commercial and residential);

●

Obtain
additional debt and/or equity based financing for growth;

●

Collaborations
with other operating businesses for strategic opportunities; and

●

Acquire
other businesses to enhance or complement our current business model while accelerating our growth.

Recent
Developments

Promissory
Note, dated as of December 26, 2024

On
December 26, 2024, the Company and Gad International Ltd. (the “Lender”) entered into a promissory note (the “Gad Note”)
for the sum of $2,500,000 (the “Loan”) to be used for the Company’s working capital needs, including without limitation
the purchase of equipment. Unless the Gad Note is otherwise accelerated or extended in accordance with the terms and conditions therein,
the balance of the Gad Note, along with accrued interest, will be due and payable in full on February 23, 2025. Further, the Company
agreed among other things to pay the Lender a commitment fee of $400,000 in consideration of the Loan, and an optional extension fee
of $200,000 for any month or part thereof in which the Company requests an additional 30-day extension to the Loan, upon the Lender’s
written consent. If any amount payable under the Loan is not paid when due, whether at stated maturity, by acceleration, or otherwise,
such overdue amount will bear interest at a rate of 21%. Additionally, the Company agreed to execute an irrevocable transfer instruction
with its transfer agent to issue $5,000,000 worth of shares of Company common stock to the Lender if the Gad Note is not repaid on or
before February 23, 2025. However, pursuant to an amendment to the Gad Note, dated January 15, 2025, between the Company and the Lender,
no shares of the Company can be issued without the Company first receiving shareholder approval. The Company has commenced the process
of obtaining shareholder approval and once the shareholder approval process is completed and the Company is authorized to issue the shares,
the Company will issue the shares. The Company shall take no action to impair, hinder or impede either the approval process or the issuance
of the shares in the event they become owed to Lender. Such shares of common stock will be valued based on the Nasdaq official closing
price for the Company’s common stock as of date of the issuance of the Gad Note. The note was extended to March 23, 2025, and in
exchange for the extension of the maturity date, the Company paid a fee of $200,000. The note was paid in full on March 26, 2025.

61

Promissory
Note, dated as of December 30, 2024

On
December 30, 2024, the Company and NextNRG entered into a promissory note (the “December 30 Note”) for the sum of $330,000
to be used for the Company’s working capital needs, including without limitation the purchase of equipment. The unpaid principal
balance of the December 30 Note has a fixed rate of interest of 8% per annum. Unless the December 30 Note is otherwise accelerated or
extended in accordance with the terms and conditions therein, the balance of the December 30 Note, along with accrued interest, will
be due and payable in full on December 30, 2025. If the Company defaults on the December 30 Note, the unpaid principal and interest sums,
along with all other amounts payable, multiplied by 150% will be immediately due. Upon default, NextNRG will have the right to convert
all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the December 30 Note into fully
paid and non-assessable shares of the Company’s common stock. The conversion price shall equal the greater of the average VWAP
over the five trading day period prior to the conversion date; or $0.70 (the “Floor Price”). Notwithstanding the foregoing,
the conversion price shall not exceed the closing price of the Company’s common stock on the Nasdaq Capital Market on the date
of the December 30 Note. The Company and NextNRG have agreed that the total cumulative number of common stock issued to Next under the
December 30 Note, together with all other transaction documents may not exceed the requirements of Nasdaq Listing Rule 5635(d) (“Nasdaq
19.99% Cap”), except that such limitation will not apply following shareholder approval. If the Company is unable to obtain shareholder
approval to issue common stock to NextNRG in excess of the Nasdaq 19.99% Cap, then any remaining outstanding balance of the December
30 Note must be repaid in cash at the request of NextNRG. The December 30 Note contains a protection for NextNRG in the event the Company
effectuates a split of its common stock. In the event of a stock split, if the December 30 Note is issued and outstanding and has not
been converted, then the number of shares and the price for any conversion under the December 30 Note will be adjusted by the same ratios
or multipliers of any such subdivision, split, reverse split.

Michael
Farkas is the chief executive officer of NextNRG and is the beneficial holder of approximately 48.7% of the Company’s outstanding
shares of common stock.

Promissory
Note, dated as of January 15, 2025

On
January 15, 2025, the Company and Alcourt LLC (“Alcourt”) entered into a promissory note (the “Alcourt Note”)
for the sum of $1,000,000 to be used for the Company’s working capital needs, including without limitation, the purchase of equipment.
The Alcourt Note was issued with an original issue discount of $50,000. The unpaid principal balance of the Alcourt Note has a fixed
rate of interest of 15% per annum. Unless the Alcourt Note is otherwise accelerated or extended in accordance with the terms and conditions
therein, the balance of the Alcourt Note, along with accrued interest, will be due and payable in full on April 15, 2025 (“Maturity
Date”). If the Alcourt Note is not repaid by the Maturity Date, for any reason whatsoever, the Company will issue shares of the
Company’s common stock with a then current value of $500,000 to Alcourt (the “Extension Fee”). The shares will be valued
based on the greater of: (i) the closing price of the Company’s common stock on the Maturity Date; or (ii) $1.00 per share; if
the Company’s common stock is trading below $1.00 per share, Alcourt can elect to receive the Extension Fee of $500,000 in cash.
The Company agreed to execute an irrevocable transfer instruction with its transfer agent to issue $500,000 worth of shares of Company
common stock to Alcourt if the Alcourt Note is not repaid on or before April 15, 2025. Upon payment of the Extension Fee, the Maturity
Date shall be extended until July 15, 2025. Additionally, if the Alcourt Note is paid at any time after the initial Maturity Date, the
Company shall pay a $50,000 termination fee together with the repayment of the principal, accrued unpaid interest, and any other charges
due to Alcourt. No shares of the Company shall be issued without the Company first receiving shareholder approval. The Company has commenced
the process of obtaining shareholder approval as soon as reasonably practicable after execution of the Alcourt Note.

The
note was repaid in full in February 2025.

Shareholder
Approval

On
January 15, 2025, the holders of a majority of the Company’s voting capital stock approved the following corporate actions via
written consent (the “Authorizations”):

(i)

the
possible issuance of shares of the Company common stock with a then current value of $500,000 under that certain promissory note,
dated as of January 15, 2025, by and between the Company and Alcourt, in the event that such note is not repaid by April 15, 2025
(this note was repaid in full in February 2025);

(ii)

the
possible issuance of $5,000,000 worth of shares of Company common stock under that certain promissory note, dated as of December
26, 2024, by and between the Company and Gad, as amended by that certain amendment to promissory note, dated as of January 15, 2025,
in the event that such promissory note is not repaid on or before February 23, 2025 (the note was extended to March 23, 2025); and

(iii)

the
possible issuance of shares of Company common stock under those certain promissory notes by and between the Company and NextNRG Holding
Corp., dated as of November 14, 2024, December 2, 2024, December 3, 2024, December 17, 2024 and December 30, 2024, respectively.

Such
consents were obtained in compliance with Nasdaq Listing Rules 5635(a) and 5635(d), as applicable, which require, in relevant part, that
the Company may not issue shares of its common stock (or securities convertible into or exercisable for common stock) in other than public
offerings or in connection an acquisition without stockholder approval if the aggregate number of shares of common stock issued would
be equal to or greater than 20% of the Company’s issued and outstanding shares of common stock as of the date of issuance. The
Company filed with the Commission, and disseminated to its stockholders, a definitive information statement in respect of the Authorizations.

62

Closing
of the NextNRG Acquisition

The
Company, the members of Next Charging LLC (the “Members”) and Michael Farkas, an individual, as the representative of the
Members entered into an Exchange Agreement dated August 10, 2023 as amended by the Amended and Restated Exchange Agreement, dated November
2, 2023 (as so amended the “Original Exchange Agreement”), pursuant to which the Company agreed to acquire from the Members
100% of the membership interests of Next Charging LLC in exchange for the issuance by the Company to the Members of shares of common
stock, par value $0.0001 per share, of the Company (the “Common Stock”). Subsequently, Next Charging LLC converted to a corporation
organized in the State of Nevada named NextNRG Holding Corp. (“Next”) effective as of March 1, 2024 (the “Conversion”),
which Conversion continued the existence of the prior entity in the new corporate form and the prior members of Next Charging LLC remained
as shareholders of NextNRG.

On
June 11, 2024, in order to reflect the Conversion, the Company, all of the shareholders of Next (the “Shareholders”) and
Michael Farkas as the representative of the Shareholders (the “Shareholders’ Representative”) executed a second amended
and restated agreement to replace the Original Exchange Agreement in its entirety (the “Second Amended and Restated Exchange Agreement”).
Pursuant to the Second Amended and Restated Exchange Agreement, the Company agreed to acquire from the Shareholders 100% of the shares
of Next in exchange for the issuance by the Company to the Shareholders of Common Stock.

On
July 22, 2024, the Company and the Shareholders’ Representative entered into the first amendment to the Second Amended and Restated
Exchange Agreement (“First Amendment”) to add a new section 2.10 to the Second Amended and Restated Exchange Agreement providing
that, in the event that the Company at any time prior to the closing undertakes any forward split of the Common Stock, or any reverse
split of the Common Stock, any references to numbers of shares of Common Stock and the shares of Common Stock to be issued to the Shareholders
as set forth in the Second Amended and Restated Exchange Agreement shall be deemed automatically updated and adjusted to the extent still
applicable.

The
Company and the Shareholders’ Representative entered into the second amendment to the Second Amended and Restated Exchange Agreement
(“Second Amendment”). Under the Second Amendment, the consideration to be paid to the Shareholders was revised from 40,000,000
shares of Common Stock to 100,000,000 shares of Common Stock (“Exchange Shares”) of which, 25,000,000 or 50,000,000 shares
of the Exchange Shares would be vested on the closing date, and the remaining 75,000,000 or 50,000,000 shares of the Exchange Shares
would be subject to vesting or forfeiture. The Second Amendment also provides that in the event that the acquisition of an acquisition
target (as defined under the Second Amended and Restated Exchange Agreement) by Next (the “Target”), directly or indirectly
through Next or a subsidiary of Next, had been completed prior to the closing, then 50,000,000 of the Exchange Shares would be the “Vested
Shares” and 50,000,000 of the Exchange Shares would be the “Restricted Shares” subject to vesting. In the event that
the acquisition of the acquisition Target by Next, directly or indirectly through Next or a subsidiary of Next, had not been completed
prior to the closing, then 25,000,000 of the Exchange Shares shall be the “Vested Shares” and 75,000,000 of the Exchange
Shares shall be the “Restricted Shares” subject to vesting. The Second Amendment also amends and restates the vesting schedule
for the Restricted Shares and includes amendments to omit and amend certain provisions of the Second Amended and Restated Exchange Agreement
in light of the amendment to the Company’s amended and restated certificate of incorporation.

On
February 13, 2025, the closing of the transactions contemplated by the Second Amended and Restated Exchange Agreement, as amended by
the First Amendment and Second Amendment, was completed, and in connection therewith Next became a wholly owned subsidiary of the Company.

Off-Balance
Sheet Arrangements

As
of December 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.