What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 547 added, 740 removed, 568 unchanged (69% of the section changed)

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statement is based.

following discussion and analysis provides information we believe is relevant to an assessment and understanding of our unaudited consolidated

operating results and financial condition.

The following discussion should be read in conjunction with our unaudited consolidated financial

statements for the three and six months ended September 30, 2025 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, 2024.

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.

is Powering What’s Next by implementing artificial intelligence (“AI”) and machine learning (“ML”) into

1 unchanged sentence

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’

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

46 unchanged sentences

growth, providing a streamlined, efficient fueling option that allows commercial operators to optimize operations and reduce downtime.

For the nine months ended September 30, 2025 and the year ended December 31, 2025, we derived all of our revenues from mobile fuel deliveries.

Exchange with Next Holding

August 10, 2023, the Company, the members (the “Members”) of Next Charging LLC (“Next Charging”) and Michael

Farkas, as the representative of the Members, entered into an Exchange Agreement (the “Exchange Agreement”), pursuant to

which the Company agreed to acquire from the Members 100% of the membership interests of Next Charging (the “Membership Interests”)

in exchange for up to 40,000,00 shares of common stock.

Subsequently, Next Charging converted to a corporation organized in the State

of Nevada named NextNRG Holding Corp.

(“Next Holding”) 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 remained as shareholders

of Next Holding.

June 11, 2024, in order to reflect the Conversion, the Company, all of the shareholders of Next Holding and Mr.

Farkas as the representative

of the Next Holding executed a second amended and restated agreement to replace the 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 Next Holding 100% of the shares of Next Holding in exchange for the issuance by the Company to the Next Holding shareholders

of Company common stock.

September 25, 2024, the Company and Mr.

Farkas entered into the second amendment to the Second Amended and Restated Exchange Agreement

(“Second Amendment”) to change the number of the Company’s common stock shares to be issued to the Next Holding shareholders

by the Company in exchange for 100% of the shares of Next Holding to 100,000,000 shares of the Company’s common stock.

Second Amendment also provided that in the event Next Holding completes the acquisition of STAT-EI, Inc.

(“SEI” or “STAT”),

prior to the closing, then 50,000,000 shares will vest on the closing date, and the remaining 50,000,000 shares will be subject to vesting

or forfeiture (such shares subject to vesting or forfeiture, the “Restricted Shares”).

Next Holding completed the acquisition

of SEI on January 19, 2024, and thus 50,000,000 vested on that closing date.

The remaining 50,000,000 restricted shares are subject to

vesting or forfeiture.

25,000,000 of the 50,000,000 restricted shares will vest, if at all, upon the Company commercially deploying the

third solar, wireless electric vehicle charging, microgrid, and/or battery storage system (such systems as more specifically defined

under the Second Amended and Restated Exchange Agreement, as amended) and 25,000,000 of the 50,000,000 Restricted Shares will vest, if

at all, upon the Company either reaching annual revenues exceeding $100 million, the Company completing projects with deployment costs

greater than $100 million, or the Company completing a capital raise greater than $25 million.

to closing, the Company (i) increased the number of its authorized shares of common stock from 50,000,000 to 500,000,000, (ii) received

stockholder approval, (iii) received third-party consents, and (iv) ensured compliance with the rules and regulations of The Nasdaq Stock

February 13, 2025, the closing of the transactions contemplated by the Second Amended and Restated Exchange Agreement, as amended, was

Pursuant to the terms of the Second Amended and Restated Exchange Agreement, as amended, the Company issued an aggregate of

100,000,000 shares of common stock in exchange for all of the issued and outstanding common stock of Next Holding, and Next Holding became

a wholly owned subsidiary of the Company.

and Director Changes

February 14, 2025, in connection with the Next Closing, (i) Mr.

Farkas was appointed Chief Executive Officer and Executive Chairman of

(ii) Yehuda Levy ceased to be the Company’s Interim Chief Executive Officer;

and (iii) Joel Kleiner was appointed

Chief Financial Officer of the Company.

Commitment Underwritten Public Offering

February 18, 2025, the Company closed a public offering of 5,000,000 shares of common stock at a price to the public of $3.00 per share

(the “Offering Price”), for gross proceeds of $15,000,000, before deducting underwriting discounts and offering expenses.

In addition, the Company granted the underwriters a 45-day option to purchase up to an additional 750,000 shares of common stock to cover

over-allotments, if any.

February 13, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with ThinkEquity LLC

(“Representative”), as representative of the underwriters (“Underwriters”) named on Schedule I thereto, relating

to the Company’s firm commitment underwritten public offering (the “Offering”) of common stock.

Pursuant to the Underwriting

Agreement, the Company agreed to sell 5,000,000 shares of common stock to the Underwriters at the Offering Price, and granted the Representative

a 45-day over-allotment option to purchase up to 750,000 additional shares of common stock, equivalent to 15% of the shares of common

stock sold in the Offering (the “Option”), pursuant to the Company’s registration statement on Form S-1, as amended

333-261984) (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities

closing of the Offering occurred on February 18, 2025.

The net proceeds to the Company from the sale of the shares, after deducting the

underwriting discounts and commissions and other estimated offering expenses payable by the Company, was approximately $13.3 million.

The Company used the net proceeds from the Offering to expand its business, repay outstanding indebtedness, and general corporate purposes,

including working capital.

closing of the Offering, the Company issued the Representative warrants (the “Representative’s Warrants”) as compensation

to purchase up to 250,000 shares of common stock, representing 5% of the aggregate number of shares sold in the Offering.

The Representative’s

Warrants are exercisable at a per share exercise price of $3.75, which represents 125% of the Offering Price.

The Representative’s

Warrants are exercisable, in whole or in part, during the 4.5-year period commencing 180 days from the commencement of sales of the shares

in the Offering.

Underwriting Agreement contains customary representations, warranties and covenants made by the Company.

It also provides for customary

indemnification by each of the Company and the Underwriters, severally and not jointly, for losses or damages arising out of or in connection

with the Offering, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.

addition, pursuant to the terms of the Underwriting Agreement, each of the Company’s directors, executive officers and holders

of 5% or more of the shares have entered into “lock-up” agreements with the Representative that generally prohibit, without

the prior written consent of the Representative and subject to certain exceptions, the sale, transfer or other disposition of securities

of the Company for a period of six months (with respect to the Company’s directors and executive officers) and three months (with

respect to the holders of 5% or more of the issued and outstanding shares of Common Stock who are not directors and executive officers)

from February 13, 2025.

Further, pursuant to the terms of the Underwriting Agreement, the Company has agreed for a period of three months

from February 13, 2025, subject to certain exceptions, not to (i) offer, pledge, sell, contract to sell, sell any option or contract

to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or

dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable

for shares of capital stock of the Company;

(ii) file or cause the filing of any registration statement under the Securities Act with

respect to any shares of common stock or other capital stock or any securities convertible into or exercisable or exchangeable for common

stock or other capital stock of the Company, other than a customary universal “shelf” registration statement, which the Company

will file within 30 days following the earlier of the expiration of such three month period or the date the Company becomes initially

eligible to file such registration statement;

(iii) complete any offering of debt securities of the Company, other than entering into

a line of credit, term loan arrangement or other debt instrument with a traditional bank, or (iv) enter into any swap or other arrangement

that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company.

for a period of 24 months after February 13, 2025, the Company will not directly or indirectly enter into an agreement to engage in any

“at-the-market”, continuous equity or variable rate transaction without the prior written consent of the Representative.

a period of 36 months following February 18, 2025, the Representative will have an irrevocable right of first refusal to act as sole

investment banker, sole book-runner and/or sole placement agent, at the Representative’s sole discretion, for each and every future

public and private equity and debt offerings for the Company, or any successor to or any subsidiary of the Company, including all equity

linked financings, on terms customary to the Representative.

The Representative will have the sole right to determine whether or not

any other broker-dealer will have the right to participate in any such offering and the economic terms of any such participation.

Representative will not have more than one opportunity to waive or terminate the right of first refusal in consideration of any payment

March 24, 2025, the Company entered into a Sale of Future Receipts Agreement (the “Redstone Agreement”) by and between the

Company and Redstone Advance Inc.

(“Redstone”).

Pursuant to the terms of the Redstone Agreement, the Company agreed to (i)

sell to Redstone proceeds of future sales made by the Company (collectively, the “Future Receipts”) in the amount of $3,217,700

(the “Purchased Amount”);

and (ii) deliver 20% of the Future Receipts to Redstone in accordance with the terms of the Redstone

As payment for the Purchased Amount, Redstone agreed to pay to the Company $2,300,000, minus $784,000 (representing fees and

amounts to satisfy prior balances), resulting in a net payment to the Company of $1,516,000.

to the terms of the Redstone Agreement, the Company authorized Redstone to debit $125,000 (the “Initial Periodic Amount”),

intended to represent 20% of the Company’s Future Receipts, or any updated periodic amount (the “Periodic Amount”)

from the Company’s specified account each business day.

At any time, the Company or Redstone may obtain a reconciliation of the

Company’s actual revenue to adjust the Periodic Amount to more closely reflect the Company’s actual Future Receipts times

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the

Company’s outstanding common stock, personally guaranteed the Company’s obligations under the Redstone Agreement.

Advance Agreement

March 25, 2025, the Company entered into a Future Receivables Sale and Purchase Agreement (the “Mr.

Advance Agreement”) by

and between the Company and Funderzgroup LLC DBA Mr.

Advance (“Mr.

Pursuant to the terms of the Mr.

Advance Agreement,

the Company agreed to sell to Mr.

Advance its right, title and interest in 7.54% of proceeds of Future Receipts until the Purchased Amount

has been delivered to Mr.

As consideration, Mr.

Advance agreed to pay to the Company $2,300,000, minus $784,035 representing

fees and amounts to satisfy prior balances, resulting in a net payment to the Company of $1,515,965.

to the terms of the Mr.

Advance Agreement, the Company authorized Mr.

Advance to debit $125,000 on a weekly basis (subject to modification

as set forth in the Mr.

Advance Agreement), intended to represent 7.54% of the Company’s Future Receipts.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the Company’s

outstanding common stock, personally guaranteed the Company’s obligations under the Mr.

Advance Agreement.

on March 25, 2025, the Company entered into a Fee Agreement (the “Fee Agreement”) with Mr.

Farkas, the Company’s Chief

Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the Company’s outstanding shares of

common stock.

Pursuant to the terms of the Fee Agreement, in consideration of Mr.

Farkas personally guaranteeing certain loans entered

into by the Company, the Company agreed to pay to Mr.

Farkas a fee in the aggregate amount of 3% of the funds personally guaranteed by

Farkas on behalf of the Company.

The Company agreed to pay such fee upon receipt of the loan funds by the Company.

March 31, 2025, the Company entered into a Standard Merchant Cash Advance Agreement (the “WCG Agreement”) with Wynwood Capital

Group LLC (“WCG”).

Pursuant to the terms of the WCG Agreement, the Company agreed to (i) sell to WCG all of its future accounts,

contract rights, and other obligations arising from or relating to the payment of monies from each of the Company’s customers and/or

other third party payors (collectively, the “Receivables”) in the amount of $699,500 (the “Receivables Purchased Amount”);

and (ii) deliver 9.72% of the Receivables to WCG in accordance with the terms of the WCG Agreement.

As payment for the Receivables Purchased

Amount, WCG agreed to pay to the Company $500,000, minus a $15,000 origination fee.

to the terms of the WCG Agreement, the Company authorized WCG to debit $27,980 (the “Initial Estimated Payment”), intended

to approximate 9.72% of the Company’s Receivables on a weekly basis.

The Company may request a reconciliation to ensure that the

amount collected by WCG equals 9.72% of the Receivables.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the

Company’s outstanding common stock, personally guaranteed the Company’s obligations under the WCG Agreement.

Promissory Note

March 31, 2025, the Company issued a promissory note, in the principal sum of 1,000,000 (the “Alcourt Note”), in favor of

Alcourt LLC (“Alcourt”).

The Alcourt Note bears interest at a rate of 15% per annum and has an original issue discount of

The Alcourt Note matures on April 30, 2025;

provided, however, if the Alcourt Note is not paid on April 30, 2025, the Company

will pay $150,000 to Alcourt and upon payment, the maturity date of the Alcourt Note will be extended to May 31, 2025.

There is no prepayment

2025, as part of the sale and leaseback of 34 vehicles to Yoshi, Inc., proceeds of $250,000 from the sale were paid to Alcourt as a partial

payment towards this note.

Note, dated as of May 5, 2025

May 5, 2025, the Company and Michael D.

Farkas entered into a promissory note (the “May 5 Note”) for the principal sum of

$600,000 to be used for the Company’s working capital needs.

The unpaid principal balance of the May 5 Note has a fixed interest

rate of 12% per annum and matures on the earlier of (i) May 5, 2026 or (ii) the date the Company completes a cumulative capital raise

of at least $4,000,000 following the date of the May 5 Note.

Further, the Note was issued with an original issue discount of $72,000.

Note, dated May 9, 2025

May 9, 2025, the Company and Mr.

Farkas entered into a promissory note (the “May 9 Note”) for the principal sum of $112,000

to be used for the Company’s working capital needs.

The unpaid principal balance of the May 9 Note has a fixed interest rate of

12% per annum and matures on the earlier of (i) May 9, 2026 or (ii) the date the Company completes a cumulative capital raise of at least

$4,000,000 following the date of the May 9 Note.

Further, the May 9 Note was issued with an original issue discount of $12,000.

Note, dated as of May 19, 2025

May 19, 2025, the Company and Mr.

Farkas entered into a promissory note (the “May 19 Note”) or the principal sum of $224,000

to be used for the Company’s working capital needs.

The unpaid principal balance of the May 19 Note has a fixed interest rate of

12% per annum and matures on May 13, 2026.

Further, the May 19 Note was issued with an original issue discount of $24,000.

Note, dated as of May 20, 2025

May 20, 2025, the Company and Mr.

Farkas entered into a promissory note (the “May 20 Note”) or the principal sum of $196,000

to be used for the Company’s working capital needs.

The unpaid principal balance of the May 20 Note has a fixed interest rate of

12% per annum and matures on May 20, 2026.

Further, the May 20 Note was issued with an original issue discount of $21,000.

Master Lease Agreement

June 9, 2025, the Company entered into a Master Lease Agreement (the “Master Lease”), dated as of May 29, 2025, with Equify

Financial, LLC (“Equify”).

Pursuant to the terms of the Master Lease, Equify agreed to lease to the Company certain equipment

as set forth in lease schedules that may be entered into from time to time (each, a “Lease”).

Each Lease will constitute

a separate lease or financing as indicated on such Lease Schedule of the equipment described on each Lease.

The Master Lease is not a

commitment to enter into any Lease, or lease or finance any property unless expressly agreed in writing.

term of each Lease will continue for the number of months set forth in the Lease.

to the terms of the Master Lease, the Company agreed to pay to Equify all rent monthly in advance, and to pay all other amounts due under

each Lease as and when required under the Master Lease, as indicated in the Lease.

If any rent or other amount due under a Lease is not

received when due, the Company will pay a late charge equal to 5% of the overdue amount, together with interest at the rate of 18% per

annum, provided that no late charge will exceed the maximum amount permitted by applicable law.

otherwise stated in the Lease, the Company will pay to Equify, on or before the first rent payment date, two full payments, one to be

applied to the Company’s obligation to pay the first payment and the other to be applied to the last payment due under the Lease.

Company agreed to indemnify, hold harmless and defend Equify and its officers, directors, employees, successors and/or assigns against

any and all claims, demands, suits and legal proceedings, in any way arising out of or involving the equipment leased under the Master

Lease, the Master Lease and/or any Lease or other document entered into in connection with the Master Lease.

Master Lease contains representations, warranties and covenants that are customary for a transaction of this type.

001 under Master Lease

June 9, 2025, the Company and Equify entered into Equipment Lease Schedule No.

001 under the Master Lease (“Lease No.

dated as of May 29, 2025, pursuant to which Equify agreed to lease to the Company certain equipment as set forth in Lease No.

a total equipment cost of $899,640 .

001 has an initial term of 36 months.

Pursuant to the terms of Lease No.

001, the Company

agreed to pay an initial rent payment of $27,886, followed by 35 rent payments, each in the amount of $27,790 beginning on August 1,

long as the Company is not in default or suffered an event that with notice or lapse of time could constitute an event of default under

001 and Lease No.

001 has not been previously terminated or cancelled, the Company may purchase all (but not less than all)

of Equify’s rights, title and interests with respect to the equipment leased thereunder upon expiration of the initial lease term

upon not more than 120 calendar days nor less than 90 calendar days prior written notice to Equify for a purchase price equal to:

$179,928 (which amount is the parties’ true estimate of the fair market value of the equipment at the end of the initial lease

term), plus (b) applicable sales taxes and other amounts due or payable with respect to such sale;

plus (c) any and all other amounts

due under Lease No.

Note, dated as of June 10, 2025

June 10, 2025, the Company and Mr.

Farkas entered into a promissory note (the “June 10 Note”) or the principal sum of $436,000

to be used for the Company’s working capital needs.

The unpaid principal balance of the June 10 Note has a fixed interest rate

of 12% per annum and matures on June 9, 2026.

Further, the June 10 Note was issued with an original issue discount of $46,000.

Farkas is the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the

Company’s outstanding common stock.

Debt Agreement

June 27, 2025, the Company entered into a Future Receivables Sale and Purchase Agreement (the “Venture Debt Agreement”) by

and between the Company and Venture Debt, LLC (“Venture Debt”).

Pursuant to the terms of the Venture Debt Agreement, the

Company agreed to (i) sell to Venture Debt proceeds of future sales made by the Company (collectively, the “Future Receipts”)

in the amount of $1,500,000 (the “Purchased Amount”);

and (ii) deliver bi-weekly payments of the Future Receipts to Venture

Debt in accordance with the terms of the Venture Debt Agreement.

As consideration, Venture Debt agreed to pay to the Company $1,500,000,

minus $75,000 representing fees, resulting in a net payment to the Company of $1,425,000.

to the terms of the Venture Debt Agreement, the Company authorized Venture Debt to debit $75,000 on a bi-weekly basis.

Venture Debt Agreement also included a flat-rate interest fee of $675,000, which was paid in shares of the Company’s common stock

at a price per share of $3.00.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the Company’s

outstanding common stock, personally guaranteed the Company’s obligations under the Venture Debt Agreement.

App Agreement

June 27, 2025, the Company entered into a Future Receivables Sale and Purchase Agreement (the “Funders App Agreement”) by

and between the Company and Funders App LLC (“Funders App”).

Pursuant to the terms of the Funders App Agreement, the Company

agreed to (i) sell to Funders App proceeds of future sales made by the Company (collectively, the “Future Receipts”) in the

amount of $1,500,000 (the “Purchased Amount”);

and (ii) deliver bi-weekly payments of the Future Receipts to Funders App

in accordance with the terms of the Funders App Agreement.

As consideration, Funders App agreed to pay to the Company $1,500,000, minus

$75,000 representing fees, resulting in a net payment to the Company of $1,425,000.

to the terms of the Funders App Agreement, the Company authorized Funders App to debit $75,000 on a bi-weekly basis.

Funders App Agreement also included a flat-rate interest fee of $675,000, which was paid in shares of the Company’s common stock

at a price per share of $3.00.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and beneficial holder of a majority of the Company’s

outstanding common stock, personally guaranteed the Company’s obligations under the Venture Debt Agreement.

the three months ended September 30, 2025 and 2024, we generated revenues of $22,860,041 and $6,985,963, respectively, and reported a

net loss of $14,974,993 and $10,618,576, respectively.

For the nine months ended September 30, 2025 and 2024, we generated revenues of

$58,824,282 and $20,977,860, respectively, and reported a net loss of $60,046,267 and $18,840,928, respectively, and cash flows used

in operating activities of $15,168,347 and $8,331,359 , respectively.

As noted in our unaudited consolidated financial statements,

as of September 30, 2025, we had an accumulated deficit of $127,173,896.

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.

Note, dated as of December 26, 2024

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.

Note, dated as of January 15, 2025

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

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;

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.

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”):

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);

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);

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.

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.

Company filed with the Commission, and disseminated to its stockholders, a definitive information statement in respect of the Authorizations.

the three months ended March 31, 2026 and 2025, we generated revenues of $21,059,130 and $16,272,673, respectively, and reported a

net loss of $5,111,370 and $8,937,999, respectively, and cash flows used in operating activities of $[15,168,347] and $5,771,840,

respectively.

As noted in our unaudited condensed consolidated financial statements, as of March 31, 2026, we had an accumulated

deficit of $159,080,034.

of Operations

following table sets forth our results of operations for the three and nine months ended September 30, 2025 and 2024:

and amortization

the three months ended September 30, 2025 compared to the three months ended September 30, 2024

for the three months ended September 30, 2025 increased significantly compared to the three months ended September 30, 2024.

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:

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.

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.

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

of sales rose in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, 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 included:

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.

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.

& 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.

incurred operating expenses of $10,906,663 during the three months ended September 30, 2025, compared to $3,191,826 during the prior

year, representing an increase of $7,714,837.

This increase was primarily due to $7.0 million in stock-based compensation expenses from

issuances to employees and consultants during the three months ended September 30, 2025 and vesting of options and RSUs, as well as an

increase in other general and administrative expenses related to the continued growth of the Company.

and Amortization

and amortization expense saw an increase in the three months ended September 30, 2025, compared to the same period in 2024.

This increase

was primarily driven by added depreciation related to the 99 trucks acquired in late 2024.

expense consisted of the following:

the Three Months Ended

September 30,

over Period Changes

(expense) income

(loss) on settlement

expense (including amortization of debt discount)

other expense - net

$ (5,973,126 )

$ (7,634,127 )

$ (1,661,001 )

Company’s other expense, net, decreased in the three months ended September 30, 2025, compared to the three months ended September

The primary drivers were a decrease in interest expense, partially offset by an increase in loss on debt extinguishment.

is a detailed breakdown of the major components.

was very little change in interest income in the three months ended September 30, 2025, compared to the same period in 2024.

(expense) income

expense, including loss on settlement, decreased significantly in the three months ended September 30, 2025, compared to the three months

ended September 30, 2024, driven primarily by a decrease in interest expense, partially offset by the loss on settlement for the sale

of trucks to Equify at less than carrying value.

Expense (including amortization of debt discount)

expense increased in 2025, primarily due to:

of Debt Discount:

The amortization of debt discount increased due to 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

and New Borrowings:

The interest expense recognized on outstanding debt instruments was lower than the three months ended September

Period-over-Period

loss including non-controlling interest

following table sets forth our results of operations for the three months ended March 31, 2026 and 2025:

Three Months Ended

Cost of sales

Operating expenses

Depreciation and amortization

Operating loss

(11,805,553 )

Other income (expense)

Net loss including non-controlling interest

$ (10,766,492 )

$ (8,937,999 )

net loss increased significantly in the three months ended September 30, 2025, as a result of the categories discussed above, most materially

by a large grant of stock-based compensation to employees and consultants for $7.0 million.

Overall, the increase in revenues, driven

by both volume and pricing, showcased 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.

the nine months ended September 30, 2025 compared to nine six months ended September 30, 2024

for the nine months ended September 30, 2025 increased significantly compared to the nine months ended September 30, 2024.

was primarily attributable to a rise in gallons delivered as well as an uptick in the average price per gallon.

the three months ended March 31, 2026 compared to the three months ended March 31, 2025

for the three months ended March 31, 2026 increased significantly compared to the three months ended March 31, 2025.

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:

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.

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.

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

of sales rose in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, in line with the higher

sales volumes and expanded market coverage.

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.

Fleet Partnerships.

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.

Enhanced Technology &

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.

of sales rose in the three months ended March 31, 2026, compared to the three months ended March 31, 2025, in line with the higher sales

volumes and expanded market coverage.

Despite the increase in absolute costs, gross profit improved, reflecting disciplined pricing,

1 unchanged sentence

Key factors influencing cost of sales included:

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.

Price Fluctuations.

Higher Fuel Volume.

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.

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.

& Delivery Costs.

However, the Company’s dynamic pricing strategies and supplier

relationships helped ensure that these fluctuations did not adversely impact overall profitability.

Logistics & Delivery

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.

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.

We incurred operating expenses of $10,734,480 during the three months ended

March 31, 2026, compared to $5,538,505 during the prior year, representing an increase of $5,195,975.

This increase was primarily due

to a stock based compensation expense of $7,859,677, partially offset by cost cutting measures by the Company, resulting in the ability

to maintain steady operating expenses while scaling revenue.

and Amortization

and amortization expense saw an increase in the nine months ended September 30, 2025, compared to the same period in 2024.

and amortization expense saw an increase in the three months ended March 31, 2026, compared to the same period in 2025.

This increase

was primarily driven by added depreciation related to the 99 trucks acquired in late 2024.

incurred operating expenses of $48,224,935 during the nine months ended September 30, 2025, compared to $7,887,726 during the prior year,

representing an increase of $40,337,209.

This increase was primarily due to $31.1 million in stock-based compensation expenses from issuances

to employees and consultants during the nine months ended September 30, 2025 and vesting of options and RSUs, as well as an increase

in other general and administrative expenses related to the continued growth of the Company.

Income (Expense)

income (expense) consisted of the following:

the Nine Months Ended

September 30,

was primarily due to the purchase of additional trucks during the year ended December 31, 2025.

expense consisted of the following:

the Three Months Ended

over Period Changes

(loss) on settlement

(expense) income

expense (including amortization of debt discount)_

(12,034,378 )

(10,672,879 )

other expense - net

$ (14,524,825 )

$ (11,395,870 )

$ (3,128,955 )

Company’s other expense, net, increased in the nine months ended September 30, 2025, compared to the nine months ended September

The primary drivers were the increase in interest expense—particularly from default penalty interest and extension fees—and

the loss on debt extinguishment associated with related-party debt transactions.

Below is a detailed breakdown of the major components.

was very little change in interest income in the nine months ended September 30, 2025, compared to the same period in 2024.

expense, including loss on settlement, increased significantly in the nine months ended September 30, 2025, compared to the nine months

ended September 30, 2024, driven primarily by the loss on settlement for the purchase of trucks from Yoshi, Inc.

at a purchase price

higher than fair value, the loss on settlement for the sale of trucks to Equify for less than carrying value, and the loss on settlement

of accounts payable.

Company’s other expense, net, decreased in the three months ended March 31, 2026, compared to the three months ended March 31,

The primary drivers were a decrease in interest expense, partially offset by a decrease in other income.

Below is a detailed breakdown

of the major components.

Expense (including amortization of debt discount)

expense increased in 2025, primarily due to:

of Debt Discount:

The amortization of debt discount increased in the nine months ended September 30, 2025 compared to the same period

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.

and New Borrowings:

Interest expense was recognized on outstanding debt instruments.

Period-over-Period

loss including non-controlling interest

was a decrease of $2,642,801 in interest expense from $3,323,397 in the three months ended March 31, 2025 to only $680,596 in the three

months ended March 31, 2026.

expense in both periods was primarily due to:

Amortization of Debt Discount:

The amortization of debt discount increased due to 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.

Existing and New Borrowings:

The interest expense recognized on outstanding debt instruments was lower than the three months ended March 31, 2025.

Three Months Ended

Period-over-Period Changes

Increase (Decrease)

Net loss including non-controlling interest

$ (10,766,492 )

1 unchanged sentence

$ (4,339,971 )

net loss was the result of the categories discussed above, most materially by a large stock-based compensation expense during the nine

months ended September 30, 2025 of $31.1 million.

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.

net loss decreased in the three months ended March 31, 2026, as a result of the categories discussed above.

Overall, the increase in

revenues, driven by both volume and pricing, showcased the Company’s successful market expansion and deepening fleet partnerships.

While costs of sales naturally rose with higher delivery volumes, disciplined operational execution and strategic pricing helped improve

gross profit and maintain steady operating costs to improve net loss.

Ongoing cost-optimization initiatives further reduced operating

expenses, though the Company continues to invest in talent and technology to fuel long-term growth.

Financial Measures

13 unchanged sentences

of some investment analysts who adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability.

following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the three and nine months

ended September 30, 2025 and 2024:

$ (14,974,993 )

$ (10,618,576 )

$ (60,046,267 )

$ (18,840,928 )

and amortization

$ (3,015,131 )

$ (3,226,942 )

$ (15,131,420 )

following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the three months ended

31, 2026 and 2025:

Three Months Ended

Period-over-Period Changes

Increase (Decrease)

Net loss including non-controlling interest

$ (1,966,179 )

Interest expense, net

Depreciation and amortization

Stock compensation

Adjusted EBITDA

and Capital Resources

1 unchanged sentence

We had cash of $208,048

and $911,558 as of September 30, 2025 and 2024, respectively.

and $2,116,932 as of March 31, 2026 and 2025, respectively.

Flow Activities

cash balances at September 30, 2025 and 2024 were as follows:

cash balances at March 31, 2026 were as follows:

Period-over-Period

and cash equivalents

Cash and cash equivalents

$ (1,908,884 )

and cash equivalents decreased year over year.

1 unchanged sentence

and repayment of outstanding debt positions throughout the period.

cash used in operating activities was $14,104,694 for the nine months ended September 30, 2025, which was made up primarily by the

net loss of $60,046,267 and offset by non-cash adjustments for a net amount of $45,941,573, most notably including an expense of

$32.5 million related to stock issued for services and prepaid stock to employees and consultants.

Net cash used in operating

activities was $4,178,320 during the nine months ended September 30, 2024, which was made up primarily by the net loss of $18,840,928

and offset by non-cash adjustments for a net amount of $14,662,608.

During the nine

months ended September 30, 2025 net cash used by investing activities was $3,532,763.

This includes cash received as part of the

sale of vehicles and the application of a deposit on assets to the purchase of such assets.

Net cash provided by investing activities during the prior year was $(55,704) resulting from related party

advances and a deposit on future asset purchase.

We generated $19,613,683

of cash flows from financing activities during the nine months ended September 30, 2025, including net proceeds from offerings of $13,815,772

after cash paid for offering costs, as well as proceeds from notes of $18,648,546 offset by repayments of $22,703,992.

We generated $4,124,321

of cash flows from financing activities during the nine months ended September 30, 2024, including $3,550,000 in proceeds from notes payable

offset by $825,679 in repayments.

The Company has sustained

net losses since inception and does not have sufficient revenues and income to fully fund its operations.

As a result, the Company has

relied on equity and debt financings to fund its activities to date.

For the nine months ended September 30, 2025, the Company had a net

loss of $60,046,267.

At September 30, 2025, the Company had an accumulated deficit of $127,173,896.

The Company anticipates that it will

continue to generate operating losses and use cash in operations through the foreseeable future.

Net cash used in operating activities was $2,148,891 for the three months

ended March 31, 2026, which was made up primarily by the net loss of $6,971,820 and offset by non-cash adjustments for a net amount of

$8,617,601, most notably including an expense of $7.9 million related to stock issued for services.

Net cash used in operating activities

was $5,771,840 during the three months ended March 31, 2025, which was made up primarily by the net loss of $8,937,999 and offset by non-cash

adjustments for a net amount of $3,166,159.

During the three months ended March 31, 2026 and 2025

net cash used by investing activities was $0.

Net cash provided by financing

activities decreased significantly from $6,276,655 in the three months ended March 31, 2025 to $1,972,799 in 2026.

This decrease reflects

a decrease in proceeds from notes payable and from common stock issued for cash, partially offset by a decrease in repayments of notes

The Company has sustained net losses since inception and does not have sufficient

revenues and income to fully fund its operations.

As a result, the Company has relied on equity and debt financings to fund its activities

For the three months ended March 31, 2026, the Company had a net loss of $10,766,492.

At March 31, 2026, the Company had an accumulated

deficit of $164,735,156.

The Company anticipates that it will continue to generate operating losses and use cash in operations through

the foreseeable future.

Operating Performance and Financing

23 unchanged sentences

Our funding strategies have included:

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

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.

Equity Issuances:

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

Debt Financings:

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.

and Mitigating Actions

1 unchanged sentence

These include:

more favorable terms on existing and future debt.

new equity partners or investors.

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

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.

these efforts are underway, our ability to meet operational and financial obligations over the next 12 months remains subject to significant

2 unchanged sentences

Concern Qualification

reflected in the accompanying unaudited consolidated financial statements, for the nine months ended September 30, 2025, the Company

loss available to common stockholders of $59,464,757;

cash used in operations was $14,104,694.

reflected in the accompanying unaudited condensed consolidated financial statements, for the three months ended March 31, 2026, the

Net loss available to common stockholders of $10,880,521;

Net cash used in operations was $2,148,891.

Additionally,

at September 30, 2025, the Company had:

deficit of 127,173,896;

Stockholders’

deficit of $17,269,661;

capital deficit of $29,972,856.

at March 31, 2026, the Company had:

Accumulated deficit of 164,735,156;

Stockholders’ deficit of $22,048,064;

Working capital deficit of $25,004,379.

Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations.

14 unchanged sentences

The Company had cash on hand

of $653,869 at September 30, 2025.

of $208,048 at March 31, 2026.

Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues

5 unchanged sentences

to the date that these financial statements are issued.

consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going

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.

condensed 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.

is actively pursuing strategies to enhance revenue generation, improve operational efficiencies, and secure additional financing on more

5 unchanged sentences

Management’s strategic plans include the following:

into new and existing markets (commercial and residential);

additional debt and/or equity based financing for growth;

our transaction with Next Holding (occurred February 13, 2025);

Collaborations

with other operating businesses for strategic opportunities;

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

Expand into new and existing

markets (commercial and residential);

Obtain additional debt and/or

equity based financing for growth;

Closed our transaction with

Next Holding (occurred February 13, 2025);

Collaborations with other

operating businesses for strategic opportunities;

Acquire other businesses

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

Sheet Financing Arrangements

7 unchanged sentences

Accounting Policies and Estimates

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.

discussion and analysis of our financial condition and results of operations is based on our condensed 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

our significant accounting policies are more fully described in Note 2 — Summary of Significant Accounting Policies of

the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, 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.

preparation of these condensed 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.

our significant accounting policies are more fully described in Note 2 — Summary of Significant Accounting

Policies of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q,

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.

of Consolidation

consolidated financial statements have been prepared in accordance with U.S.

GAAP and include the accounts of the Company and its wholly

owned subsidiaries.

The Company consolidates entities where it has a controlling financial interest, as defined by the Financial Accounting

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

condensed consolidated financial statements have been prepared in accordance with U.S.

GAAP and include the accounts of the Company

and its wholly owned subsidiaries.

The Company consolidates entities where it has a controlling financial interest, as defined by

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

“Consolidation”.

accordance with ASC 810-10, consolidation applies to:

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

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.

Entities with more than 50%

voting interest, unless control is not with the Company;

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.

intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45.

10 unchanged sentences

transactions classified as business combinations, the Company:

and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition

date (ASC 805-20-25-1).

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).

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

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.

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.

beyond the measurement period are recorded in earnings.

judgments in fair value determinations include:

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

life assessments, impacting amortization and financial results.

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

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.

SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant.

1 unchanged sentence

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

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).

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

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

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).

classification between business combinations and asset acquisitions requires significant judgment, particularly when applying the screen

Incorrect classification can materially impact:

recognition of goodwill (only in business combinations).

measurement and presentation of acquired assets and assumed liabilities;

Company’s financial position and results of operations.

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.

and Financial Reporting Considerations

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

S-X, Rule 3-05:

Regulation S-X, Rule 3-05:

Requires separate financial statements of the acquired business if it meets significance thresholds under Rule 1-02(w).

S-K, Item 101:

Regulation S-K, Item 101:

Requires disclosure of the impact of material acquisitions on the Company’s business operations.

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.

S-X, Article 11:

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.

8-K, Item 2.01:

Immediate reporting requirements for material acquisitions, including reverse mergers.

Form 8-K, Item 2.01:

reporting requirements for material acquisitions, including reverse mergers.

Company continuously evaluates acquisitions, including reverse acquisitions, to ensure proper classification and compliance with ASC

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280-10-50-1 states that an operating segment is a component of a public entity that:

in business activities from which it may earn revenues and incur expenses;

operating results that are regularly reviewed by the Company’s chief operating decision maker (“CODM”), which is

our Chief Executive Officer to make decisions about resource allocation and performance assessment;

discrete financial information available.

Engages in business activities

from which it may earn revenues and incur expenses;

Has operating results that

are regularly reviewed by the Company’s chief operating decision maker (“CODM”), which is our Chief Executive Officer

to make decisions about resource allocation and performance assessment;

Has discrete financial information

ASC 280-10-50-5, a public entity is required to report separately only those operating segments that meet certain quantitative thresholds.

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expenses that are regularly provided to the CODM and used in assessing segment performance and resource allocation.

adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.

adoption of ASU 2023-07 did not have a material impact on the Company’s condensed consolidated financial

of Estimates and Assumptions

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and qualitative assessments that it believes are reasonable under the circumstances.

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

for doubtful accounts and other receivables

reserves and classifications

of loss contingencies

of stock-based compensation

useful lives of property and equipment

of intangible assets

interest rate in right-of-use operating leases

tax positions

Significant estimates for the three months ended March

31, 2026, and 2025, respectively, include:

Allowance for doubtful accounts

and other receivables

Inventory reserves and classifications

Valuation of loss contingencies

Valuation of stock-based

Estimated useful lives of

property and equipment

Impairment of intangible

Implicit interest rate in

right-of-use operating leases

Uncertain tax positions

allowance on deferred tax assets

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Key factors contributing to variability in sales and earnings include:

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

shifts in market demand.

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.

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.

Industry Cyclicality (ASC

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

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.

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.

these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting

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820 requires the use of observable inputs whenever available and establishes a three-tier hierarchy for measuring fair value:

1 – Quoted market prices (unadjusted) for identical assets or liabilities in active markets.

2 – Observable inputs other than quoted prices in active markets, such as quoted prices for similar assets and liabilities

or inputs that are directly or indirectly observable.

3 – Unobservable inputs that require significant judgment, including management assumptions and estimates based on available

Level 1 – Quoted market

prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Observable

inputs other than quoted prices in active markets, such as quoted prices for similar assets and liabilities or inputs that are directly

or indirectly observable.

Level 3 – Unobservable

inputs that require significant judgment, including management assumptions and estimates based on available market data.

classification of an asset or liability within the hierarchy is based on the lowest level of input that is significant to the fair value

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party balances)— are recorded at historical cost.

As of September 30, 2025 and December 31, 2024, respectively, the carrying amounts

As of March 31, 2025 and December 31, 2025, respectively, the carrying amounts

of these instruments approximated their fair values due to their short-term maturities.

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and Cash Equivalents and Concentration of Credit Risk

purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months

or less at the purchase date and money market accounts to be cash equivalents.

purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity

of three months or less at the purchase date and money market accounts to be cash equivalents.

Company accounts for available-for-sale (“AFS”) debt securities in accordance with FASB ASC 320, Investments—Debt and

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of Gains, Losses, and Amortization

gains and losses, including impairments, are recorded in net income in accordance with ASC 320-10-35-25.

basis for sales is determined using the first-in, first-out (“FIFO”) method, per ASC 320-10-35-4.

and discounts on AFS debt securities are amortized using the straight-line method over the security’s life, in accordance with

ASC 320-10-35-10.

Realized gains and losses,

including impairments, are recorded in net income in accordance with ASC 320-10-35-25.

Cost basis for sales is determined

using the first-in, first-out (“FIFO”) method, per ASC 320-10-35-4.

Premiums and discounts on

AFS debt securities are amortized using the straight-line method over the security’s life, in accordance with ASC 320-10-35-10.

Company evaluates AFS debt securities for other-than-temporary impairment (“OTTI”) in accordance with ASC 320-10-35-33 to

The assessment considers:

extent and duration of declines in fair value below amortized cost,

financial condition and creditworthiness of the issuer, and

Company’s intent and ability to hold the security until recovery.

The extent and duration of

declines in fair value below amortized cost,

The financial condition and

creditworthiness of the issuer, and

The Company’s intent

and ability to hold the security until recovery.

an OTTI is identified, the impairment loss is recognized in earnings as the difference between the amortized cost and the fair value

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is determined based on:

review of outstanding accounts;

collection experience;

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

A review of outstanding accounts;

Historical collection experience;

Current economic conditions

(ASC 310-10-35-9).

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

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assesses the recoverability of inventory each reporting period and establishes reserves for potential inventory write-downs when necessary.

The Company evaluates factors such as:

conditions affecting fuel prices,

realizable value based on estimated selling price, and

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

Company evaluates factors such as:

Market conditions affecting

Net realizable value based

on estimated selling price, and

Inventory turnover trends

(ASC 330-10-35-2).

Concentrations

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Factors considered include, but are not limited to:

changes in expected performance compared to prior forecasts;

in asset utilization, including discontinued or modified use;

industry or economic trends that impact asset value;

shifts in the Company’s business operations (ASC 360-10-35-21).

Significant changes in expected

performance compared to prior forecasts;

Changes in asset utilization,

including discontinued or modified use;

Negative industry or economic

trends that impact asset value;

Strategic shifts in the Company’s

business operations (ASC 360-10-35-21).

Assessment Process

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generated from the use and ultimate disposition of the asset group to its carrying amount (ASC 360-10-35-17).

the undiscounted cash flows exceed the carrying amount, no impairment is recognized.

the undiscounted cash flows are less than the carrying amount, an impairment loss is recognized, measured as the excess of the carrying

amount over the fair value of the asset (ASC 360-10-35-18).

If the undiscounted cash

flows exceed the carrying amount, no impairment is recognized.

If the undiscounted cash

flows are less than the carrying amount, an impairment loss is recognized, measured as the excess of the carrying amount over the fair

value of the asset (ASC 360-10-35-18).

Software Considerations

internal-use capitalized software, impairment is assessed under ASC 350-40-35, which requires evaluation when:

the nine months ended September 30, 2025 and 2024, the Company did not record any impairment losses.

the three months ended March 31, 2026 and 2025, the Company did not record any impairment losses.

Issue Discounts (“OIDs”) and Other Debt Discounts

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certain notes issued, the Company may provide the debt holder with an OID, which is recorded as a debt discount, reducing the face value

The discount is amortized to interest expense over the term of the debt in the unaudited consolidated statements of operations.

discount is amortized to interest expense over the term of the debt in the unaudited condensed consolidated statements of

and Other Equity Issued with Debt

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Company classifies its leases as either operating or finance leases based on the criteria outlined in ASC 842-10-25-2.

The Company’s

leases primarily consist of operating leases, which are included as ROU assets and operating lease liabilities on the consolidated balance

Company’s leases primarily consist of operating leases, which are included as ROU assets and operating lease liabilities on

the condensed consolidated balance sheet.

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

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determining the lease term, the Company evaluates whether renewal options are reasonably certain to be exercised, as required by ASC

Factors considered include:

useful life of leasehold improvements relative to the lease term;

economic performance of the business at the leased location;

comparative cost of renewal rates versus market rates;

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

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;

The presence of any significant

economic penalties for non-renewal (ASC 842-10-55-26).

a renewal option is deemed reasonably certain to be exercised, the ROU asset and lease liability reflect those additional future lease

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suggest the carrying amount may not be recoverable.

No impairments of ROU assets were recognized for the years ended December 31, 2024,

No impairments of ROU assets were recognized for the three months ended March 31, 2026,

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

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

the Contract with a Customer

Identify the Contract with a Customer

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

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

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

payment terms are identified, and the consideration is determinable.

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

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.

for mobile fuel sales and memberships meet these criteria.

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credit risk in accordance with ASC 606-10-25-5.

the Performance Obligations in the Contract

Identify the Performance Obligations in the Contract

performance obligation is a distinct good or service promised in the contract that is both capable of being distinct and distinct in

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

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

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.

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.

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

the Transaction Price

Determine the Transaction Price

transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the

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Company’s transaction price considerations include:

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

variable consideration – The Company does not formally offer refunds, rebates, or pricing incentives.

During the years ended

December 31, 2024 and 2023, respectively, the Company granted insignificant discounts of less than 1% of total revenues.

financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15.

the Transaction Price to Performance Obligations

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 three months ended March 31, 2026 and 2025,

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.

Allocate the Transaction Price to Performance Obligations

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

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

Revenue When (or As) Performance Obligations Are Satisfied

Recognize Revenue When (or As) Performance Obligations Are Satisfied

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.

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

Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services

throughout the month.

Control transfers

at the time of fuel delivery, at which point revenue is recognized.

Membership Fees:

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

Company does not recognize revenue based on customer invoicing dates;

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The Company has determined that it is the principal in these transactions based on the following factors:

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

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

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

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

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.

on these factors, the Company recognizes revenue on a gross basis, as it is the principal in fuel sales transactions in accordance with

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These costs primarily include:

Costs – The cost of procuring fuel for resale, including fluctuations in market pricing, supplier agreements, and transportation

Wages and Benefits – Compensation, payroll taxes, and employee benefits associated with the Company’s delivery personnel.

Fuel Costs – The cost

of procuring fuel for resale, including fluctuations in market pricing, supplier agreements, and transportation expenses.

Driver Wages and Benefits

– Compensation, payroll taxes, and employee benefits associated with the Company’s delivery personnel.

of sales is recognized in the same period as the related revenue in accordance with FASB ASC 705, Cost of Sales and Services.

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costs include all costs incurred to acquire fuel, including supporting transportation costs prior to delivery to customers.

do not include any depreciation of property and equipment as there are no significant amounts that could be attributed to fuel costs.

Accordingly, depreciation and amortization are separately classified in the consolidated statements of operations and are not recorded

in cost of sales.

costs do not include any depreciation of property and equipment as there are no significant amounts that could be attributed to fuel

Accordingly, depreciation and amortization are separately classified in the condensed consolidated statements of operations

and are not recorded in cost of sales.

Company accounts for income taxes using the asset and liability method prescribed by FASB ASC 740, Income Taxes.

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in the financial statements (ASC 740-10-50-15).

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).

Company also recognizes interest and penalties related to uncertain tax positions in other expense in the condensed consolidated

statement of operations (ASC 740-10-45-25).

No interest and penalties were recorded for the years ended December 31, 2025 and

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

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

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

carryforward periods for net operating losses and other deferred tax assets

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

and predictability of temporary differences and the timing of their reversal

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

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

cumulative three-year losses are a strong indicator that a valuation allowance may be needed, ASC 740-10-30-23 states that a valuation

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Allowance Determination

December 31, 2024 and 2023, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting

in a net carrying amount of $0.

This determination was based on cumulative losses in recent years and the lack of sufficient positive

evidence to support the realization of deferred tax assets in the near term (ASC 740-10-30-24).

March 31, 2026 and December 31, 2025, 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).

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.

costs are expensed as incurred, in accordance with ASC 720-35, “Advertising Costs.” These costs are recognized as operating

expenses in the period in which they are incurred and are classified within general and administrative expenses in the consolidated statements

of operations.

costs are expensed as incurred, in accordance with ASC 720-35, “Advertising Costs.” These costs are recognized as

operating expenses in the period in which they are incurred and are classified within general and administrative expenses in the

condensed consolidated statements of operations.

Company does not capitalize direct-response advertising costs, as they do not meet the criteria for deferral under ASC 720-35-25-1.

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

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

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

volatility – Based on historical stock price fluctuations.

interest rate – Derived from U.S.

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.

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

Expected life of the option

– Estimated based on historical exercise patterns and contractual terms.

Additionally,

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compensation, including:

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

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

flow classification for certain tax-related transactions.

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.

Company continues to evaluate and apply the latest Accounting Standards Updates (ASUs) and interpretive releases related to stock-based

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Treatment of Warrants

issued in conjunction with common stock issuance are initially recorded at fair value as a reduction in Additional Paid-In Capital

(APIC), in accordance with ASC 815-40-25.

issued for services are recorded at fair value and expensed over the requisite service period or immediately upon issuance if no

service period exists, as per ASC 718-10-25.

classified as liabilities due to settlement features or pricing adjustments are remeasured at fair value each reporting period, with

changes recognized in earnings, following ASC 815-40-35.

Warrants issued in conjunction

with common stock issuance are initially recorded at fair value as a reduction in Additional Paid-In Capital (APIC), in accordance

with ASC 815-40-25.

Warrants issued for services

are recorded at fair value and expensed over the requisite service period or immediately upon issuance if no service period exists,

as per ASC 718-10-25.

Warrants classified as liabilities

due to settlement features or pricing adjustments are remeasured at fair value each reporting period, with changes recognized in earnings,

following ASC 815-40-35.

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

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

earnings available to common shareholders represent net earnings to common shareholders, adjusted for the allocation of earnings

to participating securities.

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

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.

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.

Earnings Per Share (EPS)

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by ASC 260-10-45-45.

EPS is computed by taking the sum of:

earnings available to common shareholders

on preferred shares

on dilutive mandatorily redeemable convertible preferred shares

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:

preferred stock

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.

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

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.

Loss Per Share Considerations

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

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.

granted under an executive compensation plan, however, are not considered participating securities because the rights to dividend

equivalents are forfeitable (ASC 718-10-25).

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).

Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k).

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parties include, but are not limited to:

owners of the Company.

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

family members of principal owners and members of management.

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

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.

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.

party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company

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Company discloses all material related party transactions, including:

nature of the relationship between the parties.

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

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

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

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.

are made in accordance with ASC 850-10-50-1 through 50-6 and SEC Regulation S-X, Rule 4-08(k), which requires registrants to disclose

material related party transactions and their effects on the financial position and results of operations.

Note 1, which discusses the common control merger between the Company and Next Holding, on February 13, 2025.

Note 4 which includes accrued liabilities – related parties.

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

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

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

See Note 1, which discusses

the common control merger between the Company and Next Holding, on February 13, 2025.

See Note 4 which includes

accrued liabilities – 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.

Accounting Standards

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

the troubled debt restructuring (TDR) model for creditors under ASC 310, “Receivables.”

enhanced vintage disclosures related to credit losses, including gross write-offs by year of origination.

the accounting guidance under ASC 326, “Financial Instruments – Credit Losses,” to enhance disclosures regarding

loan refinancings and restructurings for borrowers experiencing financial difficulty.

Eliminates the troubled debt

restructuring (TDR) model for creditors under ASC 310, “Receivables.”

Requires enhanced vintage

disclosures related to credit losses, including gross write-offs by year of origination.

Updates the accounting guidance

under ASC 326, “Financial Instruments – Credit Losses,” to enhance disclosures regarding loan refinancings and restructurings

for borrowers experiencing financial difficulty.

Company adopted ASU 2022-02 on January 1, 2023.

The adoption did not have a material impact on the Company’s consolidated financial

The adoption did not have a material impact on the Company’s condensed

consolidated financial statements.

2023-07 – Segment Reporting (Topic 280):

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

enhanced disclosures of significant segment expenses.

segment reporting requirements with information regularly reviewed by management.

Requiring enhanced disclosures

of significant segment expenses.

Aligning segment reporting

requirements with information regularly reviewed by management.

Company adopted ASU 2023-07 on January 1, 2024.

The adoption did not have a material impact on the Company’s consolidated financial

The adoption did not have a material impact on the Company’s condensed

consolidated financial statements.

Issued Accounting Standards Not Yet Adopted

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

Standardizing

and disaggregating rate reconciliation categories.

disclosure of income taxes paid by jurisdiction.

Standardizing and disaggregating

rate reconciliation categories.

Requiring disclosure of income

taxes paid by jurisdiction.

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

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Accounting Standards Updates

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.

These reclassifications had no impact on the Company’s consolidated

results of operations, stockholders’ equity, or cash flows.

FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the

Company’s condensed consolidated financial position, results of operations, or cash flows.

These reclassifications had no

impact on the Company’s condensed consolidated results of operations, stockholders’ equity, or cash flows.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis