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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-15 · 912 added, 561 removed, 554 unchanged (73% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),

and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking

statements made by or on behalf of NextNRG, Inc.

(“NextNRG,” “we,” “us,” “our,” or the

The Company and its representatives may from time to time make written or oral statements that are “forward-looking,”

including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in

our reports and presentations to stockholders or potential stockholders.

In some cases, forward-looking statements can be identified

by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,”

“continue” or similar expressions.

Such forward-looking statements include risks and uncertainties and there are important

factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on

Form 10-K for the fiscal year ended December 31, 2025, as the same may be updated from time to time, including in Part II, Item 1A, “Risk

Factors,” of this Quarterly Report on Form 10-Q.

Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities

Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe

harbor for forward-looking statements made by or on behalf of NextNRG, Inc.

(“NextNRG,” “we,”

“us,” “our,” or the “Company”).

The Company and its representatives may from time to time make

written or oral statements that are “forward-looking,” including statements contained in this report and other filings

with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential

stockholders.

In some cases, forward-looking statements can be identified by words such as “believe,”

“expect,” “anticipate,” “plan,” “potential,” “continue” or similar

Such forward-looking statements include risks and uncertainties and there are important factors that could cause actual

results to differ materially from those expressed or implied by such forward-looking statements.

These factors, risks and

uncertainties can be found in Part I, Item 1A, “Risk Factors,” of Amendment No.

1 to the Company’s Annual Report

on Form 10-K/A for the fiscal year ended December 31, 2025, as the same may be updated from time to time, including in Part II, Item

1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.

we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to

11 unchanged sentences

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.

unaudited condensed consolidated financial statements for the three and six months ended June 30, 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, Amendment No.

1 to our Annual Report on Form 10-K/A for the year ended December 31, 2025.

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

50 unchanged sentences

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

For the three months ended March 31, 2026 and the year ended December 31, 2025, we derived all of our revenues from mobile fuel deliveries.

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.

For the six months ended June 30, 2026 and the year ended December 31, 2025, we derived the majority of our revenues from mobile fuel deliveries.

March 9, 2026, the Company entered into a Future Receivables Sale and Purchase Agreement (the “Receivables Agreement”), dated

as of March 5, 2026, with Funderzgroup LLC DBA Monetafi (the “Purchaser”).

Pursuant to the Receivables Agreement, the Company

agreed to sell to the Purchaser 6.87% (the “Specified Percentage”) of the Company’s future receipts until $2,772,000

(the “Purchased Amount”) has been delivered to the Purchaser.

In consideration, the Purchaser paid $2,100,000 to the Company,

less applicable fees in the amount of $105,035.

The Company agreed to deliver to the Purchaser a fixed amount, initially equal to $231,000

on a biweekly basis, that the parties agreed to be a good faith approximation of the Specified Percentage of the future receipts.

security for payment and performance of the Company’s obligations, the Company granted the Purchaser a first-priority lien on all

of the Company’s accounts, including, but not limited to, deposit accounts, accounts receivable, other receivables and inventory.

Upon the occurrence of an event of default, the entire unpaid portion of the Purchased Amount becomes immediately due, together with

specified damages, and bears simple interest at a rate of 9% per annum from the default date until paid in full.

The Receivables Agreement

does not have a fixed duration and will expire on the date on which the Purchased Amount and all other sums due to the Purchaser are

paid in full.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and a significant stockholder, personally

guaranteed the Company’s obligations under the Receivables Agreement.

The Company accounts for the Receivables Agreement as debt

in accordance with ASC 470.

As of June 30, 2026, the outstanding balance under the Receivables Agreement was $664,988.

April 1, 2026, the Company and Leviston Resources, LLC (“Leviston”) entered into a Securities Purchase Agreement dated

as of April 1, 2026 (the “Leviston SPA”), pursuant to which the Company agreed to sell, and Leviston agreed to purchase,

a senior secured convertible promissory note in the principal amount of $1,724,444 (the “Leviston Note”) for a purchase

price of $1,552,000.

The Leviston Note carries an original issue discount of $172,444.

The Company also incurred debt issuance costs

of $15,000 in connection with the Leviston Note.

Pursuant to the terms of the Leviston SPA, the Company agreed to issue 243,300

shares of the Company’s common stock to Leviston as additional consideration for the Leviston Note.

Such shares were issued on

April 1, 2026.

has rollover rights and piggyback registration rights pursuant to the terms of the Leviston SPA.

In addition, until the later of (i)

October 1, 2027 or (ii) the date that the balance due under the Leviston Note is paid in full, Leviston has a right of participation

in, and a right of first refusal regarding, any financing transaction.

The Company has also granted Leviston “most favored nation”

rights for so long as any obligations remain outstanding under the transaction documents.

Leviston SPA contains customary representations, warranties and covenants for a transaction of this type.

transactions that were the subject of the Leviston SPA closed on April 1, 2026.

Leviston Note bears interest at a rate of 10% and matures on October 1, 2026.

Interest is guaranteed for the entirety of the six-month

term of the Leviston Note, regardless of any reduction of the principal amount, conversion or prepayment.

The Leviston Note is a senior

secured obligation of the Company, with first priority over all current and future indebtedness;

provided, however, that the Company

may close equipment financing, with such financing secured by first priority lien(s) against the equipment being financed and second

priority lien(s) (behind Leviston’s security interest) against the Company’s other assets.

The Company’s obligations

under the Leviston Note are secured pursuant to the terms of the Pledge and Security Agreement, dated as of April 1, 2026, by and between

the Company and Leviston (the “Leviston Security Agreement”).

Leviston Note is convertible into shares of the Company’s common stock only upon and following an Event of Default (as defined

in the Leviston Note), at the option of Leviston.

Upon an Event of Default, Leviston may convert any portion of the outstanding principal,

accrued interest, default interest, and a fixed conversion fee of $1,950 per conversion into common stock.

The conversion price will

be equal to 80% of the average of the three lowest daily volume-weighted average prices (VWAP) of the common stock during the 15 trading

days immediately preceding the conversion date, subject to a floor price of $0.10 per share.

Leviston Note contains an equity blocker that prohibits Leviston from converting the Leviston Note if such conversion would result in

Leviston and its affiliates beneficially owning more than 4.99% of the Company’s outstanding common stock;

provided, however, that

Leviston may elect to increase this limitation to 9.99% upon 61 days’ prior notice to the Company, or immediately if Leviston is

not subject to the reporting requirements of Section 13 of the Exchange Act.

addition, the Leviston Note contains a hard cap on the number of shares issuable to Leviston at 19.99% of the outstanding shares.

to the terms of the Leviston Note, the parties agreed that, notwithstanding any other conversion, adjustment or other provision, the

Company may not issue a cumulative number of shares of common stock to Leviston and its affiliates pursuant to the Leviston Note and

the other transaction documents that would exceed the 19.99% limitation set forth in the Nasdaq Stock Market’s (“Nasdaq”)

Listing Rule 5635(d), unless the Company obtains stockholder approval to exceed such threshold in accordance with Nasdaq rules.

Company may prepay the Leviston Note at any time prior to October 1, 2026;

provided, however, that (i) if the prepayment date occurs

within 60 days of April 1, 2026, the Company must pay Leviston the outstanding principal amount, all guaranteed interest for the full

six-month term (regardless of how much of the term has elapsed as of the prepayment date), and any other amounts due under the Leviston

Note, with no prepayment premium;

and (ii) if the prepayment date occurs after 60 days from April 1, 2026, the Company must pay Leviston

110% multiplied by the sum of (a) the outstanding principal amount, (b) all guaranteed interest for the full six-month term (regardless

of how much of the term has elapsed as of the prepayment date), and (c) any other amounts due under the Leviston Note.

Leviston Note contains customary Events of Default, the occurrence of which grant Leviston, among other things, the right to accelerate

the entire unpaid balance of the Leviston Note.

Upon the occurrence of an Event of Default, the Leviston Note provides that, among other

things, all outstanding obligations under the Leviston Note and related transaction documents, including principal, accrued interest,

monitoring fees, and legal expenses, will automatically increase to 150% of the then-outstanding balance.

Additionally, all outstanding

obligations will accrue interest at a default rate equal to the lesser of 18% per annum or the maximum rate permitted by law.

April 1, 2026, the Company issued the Leviston Note in favor of Leviston pursuant to the terms of the Leviston SPA.

May 29, 2026, the Company repaid the Leviston Note in full, including outstanding principal of $1,724,444 and guaranteed interest of $86,222, in the aggregate amount of $1,810,666, together

with a penalty of $91,222 (for total cash payments of $1,901,888).

As a result, the Company’s obligations under the Leviston Note and the Leviston

Security Agreement have been satisfied and the security interest granted thereunder has terminated.

Security Agreement

April 1, 2026, in connection with the issuance of the Leviston Note, the Company and Leviston entered into the Leviston Security Agreement.

dated as of April 1, 2026.

Pursuant to the terms of the Leviston Security Agreement, the Company granted

to Leviston a continuing, first-priority security interest in substantially all of its assets to secure the prompt payment and performance

of its obligations under the Leviston Note and related transaction documents.

The collateral includes, but is not limited to, the Company’s

accounts, inventory, equipment, general intangibles, deposit accounts, and 100% of the equity interests in the Company’s directly

owned subsidiaries (the “Pledged Equity”).

The Company is subject to negative covenants that, subject to certain exceptions,

prohibit the sale, lease, or encumbrance of the collateral without Leviston’s prior written consent.

Upon the occurrence and during

the continuance of an Event of Default, Leviston may, among other remedies:

(i) accelerate all obligations and take possession of the

(ii) exercise all voting and consensual rights pertaining to the Pledged Equity;

(iii) appoint a receiver over the Company’s

and/or (iv) sell the collateral at public or private sales to satisfy the outstanding debt.

security interest will terminate only upon the full satisfaction or termination of the Company’s obligations under the Leviston

Leviston Security Agreement contains customary representations, warranties and covenants for a transaction of this type.

Business Loan and Security Agreement

April 7, 2026, the Company and Cashera Private Credit Inc.

(“Cashera”) entered into a Business Loan and Security Agreement

(the “Cashera Loan Agreement”), dated as of April 1, 2026, pursuant to which Cashera provided a term loan to the Company

in the principal amount of $750,000 (the “Cashera Loan”).

The Company received net disbursement proceeds of $712,500 after

deduction of a $37,500 origination fee.

The Cashera Loan carries a total interest expense of $300,000, resulting in a total repayment

obligation of $1,050,000.

The Cashera Loan is scheduled to be repaid in 24 weekly installments of $43,750, beginning immediately following

disbursement, with a maturity date of October 1, 2026.

The annual percentage rate for the Cashera Loan is approximately 173.06%.

Cashera Loan is secured by a first-priority security interest in substantially all of the Company’s assets, including accounts,

inventory, equipment, deposit accounts and intellectual property.

Additionally, the Cashera Loan is personally guaranteed by Michael

Farkas, the Company’s Chief Executive Officer, Chairman of the Board and substantial stockholder, and cross-guaranteed by NextNRG

Ops LLC, a wholly owned subsidiary of the Company.

Cashera Loan Agreement contains various restrictive covenants, including a prohibition on taking additional debt without Cashera’s

prior written consent and a notification requirement if its bank account balances fall below 33% of the balance represented at the time

If the Company takes additional debt without prior written consent, the Company will incur a $75,000 stacking fee for each

an event of default, Cashera may, among other things, (i) accelerate the entire unpaid balance, (ii) charge a default fee equal to 25%

of the outstanding balance, (iii) take possession of and sell the collateral, and/or (iv) file a confession of judgment in the State

of Utah, allowing for the summary entry of a legal judgment without trial.

Cashera Loan Agreement contains representations, warranties and covenants as set forth therein.

Hudson Securities Purchase Agreement

April 17, 2026, the Company entered into a Securities Purchase Agreement (the “Agile Hudson SPA”), dated as of April 15,

2026, with Agile Hudson Partners LLC (“Agile Hudson”), pursuant to which the Company issued a secured promissory note in

the aggregate principal amount of $275,000 (the “Agile Hudson Note”) to Agile Hudson.

The Agile Hudson Note was issued with

an original issue discount of $25,000, resulting in a purchase price of $250,000.

As additional consideration, the Company issued 50,000

shares of common stock (the “Agile Hudson Commitment Shares”) to Agile Hudson on April 17, 2026.

at any time after the date of the Agile Hudson SPA, the Company’s common stock would be deemed to be a “penny stock”

as defined in Rule 3a51-1 under the Exchange Act (the “Trigger Date”), then the remaining Agile Hudson Commitment Shares

held by Agile Hudson as of the Trigger Date (the “Remaining Agile Hudson Commitment Shares”) will automatically be deemed

cancelled and extinguished and the Company will pay to Agile Hudson on the Trigger Date an amount in cash equal to the number of Remaining

Agile Hudson Commitment Shares multiplied by $0.35 (subject to adjustment as set forth in the Agile Hudson SPA).

the later of October 15, 2027, or the date that the Agile Hudson Note is extinguished in its entirety, Agile Hudson has a right of participation

in any future Company equity or debt offering as set forth in the Agile Hudson SPA.

Agile Hudson also has piggyback registration rights

and “most favored nation” rights for so long as any obligations remain outstanding under the Agile Hudson Note.

order to ensure compliance with Nasdaq Listing Rule 5635(d), the Company agreed to seek stockholder approval, on or before October 15,

2027, to issue to Agile Hudson over 10,000,000 shares of common stock (the “Exchange Cap”).

Agile Hudson SPA contains customary representations, warranties and covenants for a transaction of this type.

Additionally, pursuant

to the terms of the Agile Hudson SPA, the Company is subject to a negative covenant prohibiting the Company from effectuating or entering

into any agreement involving a “Variable Rate Transaction” (as hereinafter defined) until the later of (i) October 15, 2027,

or (ii) such time as the Agile Hudson Note is extinguished in its entirety.

A “Variable Rate Transaction” includes any issuance

or sale of debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, shares

of the Company’s common stock at a price that (A) varies with the trading prices of the common stock after the initial issuance

or (B) is subject to a reset at a future date or upon the occurrence of specified or contingent events.

The term also encompasses the

entry into an equity line of credit or similar agreement where securities may be issued at a future determined price, other than an equity

line of credit with Hudson Global Ventures, LLC.

transactions that were the subject of the Agile Hudson SPA closed on April 17, 2026.

Agile Hudson Note carries a one-time guaranteed interest charge of 10% (equal to $27,500), which was earned in full upon issuance, and

matures on April 15, 2027 (the “Agile Hudson Maturity Date”).

Company’s obligations under the Agile Hudson Note are secured by a security interest in the Company’s assets pursuant to

the Security Agreement, entered into on April 17, 2026 and dated as of April 15, 2026, by and between the registrant, NextNRG Ops LLC,

NextNRG Topanga Microgrid LLC, NextNRG Sunnyside Microgrid LLC, NextNRG Holding Corp.

(NextNRG Ops LLC, NextNRG Topanga Microgrid LLC,

NextNRG Sunnyside Microgrid LLC, NextNRG Holding Corp., the “Guarantors” and collectively with the Company, the “Debtors”),

and Agile Hudson (the “Agile Hudson Security Agreement”).

The Agile Hudson Note ranks pari passu with the Company’s

existing secured debt held by Leviston Resources, LLC (“Leviston”) and FirstFire Global Opportunities Fund, LLC (“FirstFire”).

six months after the issuance date, Agile Hudson has the right to convert all or any portion of the outstanding principal and interest

into shares of the Company’s common stock.

The conversion price is a variable market price equal to 80% of the average of the three

lowest volume-weighted average prices during the 15 trading days immediately preceding the conversion date, subject to a floor price

of $0.10 per share.

The Agile Hudson Note includes an equity blocker that prohibits Agile Hudson from owning more than 4.99% (or up to

9.99% upon notice) of the Company’s outstanding common stock.

In addition, shares issuable under the Agile Hudson Note will be

limited to the Exchange Cap unless the Company has received stockholder approval as set forth in the Agile Hudson SPA.

Company may prepay the Agile Hudson Note at any time prior to the Agile Hudson Maturity Date.

Prepayment during the first 60 days requires

a payment of 100% of the principal and interest;

thereafter, the prepayment amount increases to 110%.

Additionally, Agile Hudson has

the right to require the Company to apply up to 100% of proceeds from future debt or equity financings to repay the Agile Hudson Note.

Agile Hudson Note contains various restrictive covenants, including, but not limited to, prohibitions on effectuating Variable Rate Transactions

or certain prohibited transactions, such as merchant cash advances, paying cash dividends or selling significant assets without consent.

Events of default include, among others, failure to pay principal or interest, failure to deliver conversion shares, breach of covenants,

and the restatement of certain financial statements.

Upon an event of default, the Agile Hudson Note will become immediately due and

payable, and the Company will pay the principal amount then outstanding, plus accrued interest (including any default interest, which

will be the lesser of 18% per annum or the maximum amount permitted by law), multiplied by 150%.

In addition, the principal balance of

the Agile Hudson Note will increase by $5,000 monthly after an event of default until the Agile Hudson Note is repaid in its entirety.

April 17, 2026, the Company issued the Agile Hudson Note in favor of Agile Hudson pursuant to the terms of the Agile Hudson SPA.

May 28, 2026, the Company repaid the Agile Hudson Note in full, including all outstanding principal and guaranteed interest, in the aggregate

amount of $302,500.

As a result, the Company’s obligations under the Agile Hudson Note have been satisfied.

Hudson Security Agreement

to the terms of the Agile Hudson Security Agreement, the Debtors granted a first-priority security interest in all of their assets, whether

now owned or thereafter acquired, to Agile Hudson to secure the prompt payment and performance of the Company’s obligations under

the Agile Hudson Note.

The collateral subject to the security interest includes, but is not limited to, goods, inventory, machinery,

and equipment;

accounts, deposit accounts, and cash;

intellectual property, and the equity interests held by the Company in the Guarantors.

Agile Hudson Security Agreement contains customary representations, warranties, and covenants.

security interests granted under the Agile Hudson Security Agreement rank pari passu in priority with the security interests previously

established for the Company’s existing secured debt, which includes debt held by Leviston and FirstFire.

Securities Purchase Agreement

April 17, 2026, the Company entered into a Securities Purchase Agreement (the “FirstFire SPA”), dated as of April 17, 2026,

with FirstFire, pursuant to which the Company issued a secured promissory note in the aggregate principal amount of $275,000 (the “FirstFire

Note”) to FirstFire.

The FirstFire Note was issued with an original issue discount of $25,000, resulting in a purchase price of

As additional consideration, the Company issued 50,000 shares of common stock (the “FirstFire Commitment Shares”)

to FirstFire on April 17, 2026.

at any time after the date of the FirstFire SPA, the Company’s common stock would be deemed to be a “penny stock” as

defined in Rule 3a51-1 under the Exchange Act, then the remaining FirstFire Commitment Shares held by FirstFire as of the Trigger Date

(the “Remaining FirstFire Commitment Shares”) will automatically be deemed cancelled and extinguished and the Company will

pay to FirstFire on the Trigger Date an amount in cash equal to the number of Remaining FirstFire Commitment Shares multiplied by $0.35

(subject to adjustment as set forth in the FirstFire SPA).

the later of October 17, 2027, or the date that the FirstFire Note is extinguished in its entirety, FirstFire has a right of participation

in any future Company equity or debt offering as set forth in the FirstFire SPA.

FirstFire also has piggyback registration rights and

“most favored nation” rights for so long as any obligations remain outstanding under the FirstFire Note.

order to ensure compliance with Nasdaq Listing Rule 5635(d), the Company agreed to seek stockholder approval, on or before October 17,

2027, to issue to FirstFire shares in excess of the Exchange Cap.

FirstFire SPA contains customary representations, warranties and covenants for a transaction of this type.

Additionally, pursuant to

the terms of the FirstFire SPA, the Company is subject to a negative covenant prohibiting the Company from effectuating or entering into

any agreement involving a Variable Rate Transaction until the later of (i) October 17, 2027, or (ii) such time as the FirstFire Note

is extinguished in its entirety.

transactions that were the subject of the FirstFire SPA closed on April 17, 2026.

FirstFire Note carries a one-time guaranteed interest charge of 10% (equal to $27,500), which was earned in full upon issuance, and matures

on April 17, 2027 (the “FirstFire Maturity Date”).

Company’s obligations under the FirstFire Note are secured by a security interest in the Company’s assets pursuant to the

Security Agreement, dated as of April 17, 2026, by and between the registrant, the Guarantors, and FirstFire (the “FirstFire Security

The FirstFire Note ranks pari passu with the Company’s existing secured debt held by Leviston and Agile Hudson.

six months after the issuance date, FirstFire has the right to convert all or any portion of the outstanding principal and interest into

shares of the Company’s common stock.

The conversion price is a variable market price equal to 80% of the average of the three

lowest volume-weighted average prices during the 15 trading days immediately preceding the conversion date, subject to a floor price

of $0.10 per share.

The FirstFire Note includes an equity blocker that prohibits FirstFire from owning more than 4.99% (or up to 9.99%

upon notice) of the Company’s outstanding common stock.

In addition, shares issuable under the FirstFire Note will be limited to

the Exchange Cap unless the Company has received stockholder approval as set forth in the FirstFire SPA.

Company may prepay the FirstFire Note at any time prior to the FirstFire Maturity Date.

Prepayment during the first 60 days requires

a payment of 100% of the principal and interest;

thereafter, the prepayment amount increases to 110%.

Additionally, FirstFire has the

right to require the Company to apply up to 100% of proceeds from future debt or equity financings to repay the FirstFire Note.

FirstFire Note contains various restrictive covenants, including, but not limited to, prohibitions on effectuating Variable Rate Transactions

or certain prohibited transactions, such as merchant cash advances, paying cash dividends or selling significant assets without consent.

Events of default include, among others, failure to pay principal or interest, failure to deliver conversion shares, breach of covenants,

and the restatement of certain financial statements.

Upon an event of default, the FirstFire Note will become immediately due and payable,

and the Company will pay the principal amount then outstanding, plus accrued interest (including any default interest, which will be

the lesser of 18% per annum or the maximum amount permitted by law), multiplied by 150%.

In addition, the principal balance of the FirstFire

Note will increase by $5,000 monthly after an event of default until the FirstFire Note is repaid in its entirety.

April 17, 2026, the Company issued the FirstFire Note in favor of FirstFire pursuant to the terms of the FirstFire SPA.

May 28, 2026, the Company repaid the FirstFire Note in full, including all outstanding principal and guaranteed interest, in the aggregate

amount of $302,500.

As a result, the Company’s obligations under the FirstFire Note have been satisfied.

Security Agreement

to the terms of the FirstFire Security Agreement, the Debtors granted a first-priority security interest in all of their assets, whether

now owned or thereafter acquired, to FirstFire to secure the prompt payment and performance of the Company’s obligations under

the FirstFire Note.

The collateral subject to the security interest includes, but is not limited to, goods, inventory, machinery, and

accounts, deposit accounts, and cash;

intellectual property, and the equity interests held by the Company in the Guarantors.

FirstFire Security Agreement contains customary representations, warranties, and covenants.

security interests granted under the FirstFire Security Agreement rank pari passu in priority with the security interests previously

established for the Company’s existing secured debt, which includes debt held by Leviston and Agile Hudson.

April 27, 2026, the Company entered into a Business Loan and Security Agreement (the “Venture Debt Agreement”), dated as

of April 27, 2026, with Venture Debt, LLC (“Venture Debt”), pursuant to which Venture Debt provided the Company a loan in

the principal amount of $1,000,000 (the “Venture Debt Loan”).

The Company received net disbursement proceeds of $930,000

after deducting a $70,000 origination fee.

The Venture Debt Loan carries a $450,000 interest expense, resulting in a total repayment

obligation of $1,450,000.

The Venture Debt Loan is scheduled to be repaid in 24 weekly installments of $60,417, beginning immediately

following disbursement, with a maturity date of October 13, 2026.

The annual percentage rate for the Venture Debt Loan is approximately

Company may prepay the Venture Debt Loan in whole or in part.

If the Company elects to prepay the Venture Debt Loan in its entirety,

it is entitled to a prepayment interest reduction percentage of 25%.

This reduction applies only to the aggregate amount of unpaid interest

remaining on the Venture Debt Loan at the time of prepayment.

Notwithstanding this reduction, 75% of the remaining unpaid interest remains

due and payable upon such prepayment.

The Company may make partial prepayments, but such payments will not reduce the total interest

expense over the life of the Venture Debt Loan.

Venture Debt Agreement contains customary representations, warranties and covenants for a transaction of this type.

The Venture Debt

Agreement also contains certain negative covenants that, among other things, restrict the Company’s ability to incur additional

indebtedness.

Specifically, the Company is prohibited from entering into any loan agreement or arrangement involving the sale or assignment

of its future receipts (such as merchant cash advances) with any party other than Venture Debt, if such arrangement carries an interest

rate greater than 10%.

These restrictions are subject to certain exceptions, including the following:

● Conventional bank

loans and bank financing arrangements are permitted;

● Financing arrangements are permitted provided that the proceeds are used to repay Venture Debt in full at the closing of such

financing and prior to the release of any funds to the Company.

to the terms of the Venture Debt Agreement, Venture Debt can impose a $145,000 fee for each violation of this provision.

Venture Debt Agreement contains comprehensive events of default provisions.

In addition to customary defaults, such as non-payment and

breaches of representations or warranties, the Venture Debt Agreement includes several restrictive triggers, including the following:

● A default occurs

if the Company’s indebtedness to other lenders could potentially be accelerated, or if the Company defaults on any other existing

or future agreement with Venture Debt.

● The filing of any federal or state tax liens, or the entry of a judgment exceeding 15 days without satisfaction or stay, constitutes

● Defaults are triggered by any material change in ownership or organizational structure, the death or dissolution of key control persons

(including 10% stockholders), or the cessation of a substantial part of the Company’s current business.

● Venture Debt may declare a default if it believes in good faith that the prospect of payment or performance is impaired, or if a material

adverse change in the Company’s business or financial condition occurs.

● Taking additional financing, such as credit card advances or additional working capital loans without Venture Debt’s prior written

consent, is an express event of default.

the occurrence of an event of default under the Venture Debt Agreement, Venture Debt may, without notice or demand:

● Cease further loan

advances and debit due amounts directly from the Company’s accounts;

● Declare all outstanding obligations immediately due and payable;

● Take possession of, assemble, and sell the collateral at public or private sale;

● Appoint a receiver to manage the collateral and collect revenues;

● Seek a deficiency judgment against the Company or any guarantors if collateral proceeds are insufficient to satisfy the debt.

Debt’s remedies are cumulative and may be exercised singularly or concurrently.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and a significant stockholder, personally

guaranteed the Company’s obligations under the Venture Debt Agreement.

Venture Debt Loan is secured by a security interest in all of the Company’s and Mr.

Farkas’ assets and personal property.

May 25, 2026, the Company entered into a securities purchase agreement (the “May 2026 SPA”) with an institutional investor.

Pursuant to the May 2026 SPA, the Company agreed to sell to the investor, and the investor agreed to purchase from the Company, in a

private placement offering, an aggregate of 10,000,000 shares of the Company’s common stock at a purchase price of $0.64 per share,

for aggregate gross proceeds of $6,400,000.

The offering closed on May 27, 2026, upon satisfaction of customary closing conditions.

Company intends to use the net proceeds from the private placement to support continued growth across its operating segments, strengthen

working capital, accelerate strategic expansion initiatives, and eliminate $2,415,666 of convertible debt.

to the May 2026 SPA, the Company agreed to file a resale registration statement with the Securities and Exchange Commission (the “SEC”)

to register the issued shares for resale.

The Company agreed to file the registration statement as soon as practicable (and in any event

within 10 calendar days of the May 2026 SPA), and to use commercially reasonable efforts to have such registration statement declared

effective within 30 days after its filing, or 60 days in the event of a review by the SEC.

May 2026 SPA provides that, for a period commencing upon the signing of the May 2026 SPA until 30 days after the effective date of the

registration statement, neither the Company nor any of its subsidiaries shall (i) issue, enter into any agreement to issue or announce

the issuance or proposed issuance of any common stock or common stock equivalents, or (ii) file any registration statement or any amendment

or supplement thereto.

The restrictions are subject to certain exceptions as described in the May 2026 SPA.

Further, for a period of

60 days following the effective date of the registration statement, the Company is also prohibited from effecting or entering into an

agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination

of units thereof) involving an at-the-market offering or a Variable Rate Transaction, as defined in the May 2026 SPA.

addition, each of the Company’s directors and executive officers entered into a lock-up agreement (the “Lock-Up Agreement”)

pursuant to which they agreed not to offer, sell, contract to sell, hypothecate, pledge or otherwise dispose any shares of common stock

for a period of 60 days following the effective date of the registration statement, subject to certain customary exceptions.

May 25, 2026, in connection with the private placement offering, the Company entered into a Placement Agency Agreement (the “Placement

Agency Agreement”) with A.G.P./Alliance Global Partners (the “Placement Agent”).

The Company agreed to pay the Placement

Agent an aggregate cash fee equal to 7.0% of the aggregate gross proceeds of the private placement offering and agreed to reimburse the

Placement Agent for up to $60,000 in expenses.

The shares were not registered under the Securities Act and were offered pursuant to an

exemption from the registration requirements of the Securities Act provided under Section 4(a)(2) of the Securities Act and/or Rule 506

of Regulation D promulgated under the Securities Act.

June 16, 2026, the Company entered into a Stock Purchase Agreement (the “June 2026 SPA”) with Michael D.

Company’s Chief Executive Officer and Executive Chairman and a significant stockholder of the Company.

Pursuant to the terms

of the June 2026 SPA, the Company agreed to issue 260,000 shares of common stock to Mr.

Farkas at a price per share of $0.386, for

an aggregate purchase price of $100,360 (the “Purchase Price”).

In lieu of delivering the Purchase Price, Mr.

absolved the Company of liabilities totaling $100,360 owed to Mr.

Farkas pursuant to that certain promissory note, dated March 7,

2024, issued by the Company in favor of Mr.

Farkas (the “2024 Note”).

On June 16, 2026, the Company and Mr.

agreed to terminate the 2024 Note upon the agreement to issue, on June 16, 2026, 260,000 shares of the Company’s common

stock pursuant to the June 2026 SPA.

June 30, 2026, the Company entered into a Standard Merchant Cash Advance Agreement (the “Avanza MCA”) with Avanza Capital

Holdings, LLC (“Avanza”).

Pursuant to the terms of the Avanza MCA, the Company sold to Avanza $1,499,900 of the Company’s

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

(the “Receivables Purchased Amount”) for a purchase price of $1,000,000.

The net funds provided to the Company totaled $940,000,

following the deduction of an underwriting and program fee of $60,000.

consideration, the Company is required to remit to Avanza a specified percentage of 25% of the Company’s daily settlements and

receivables until the Receivables Purchased Amount is delivered in full.

The Avanza MCA establishes an initial estimated periodic payment

of $62,496 to be collected via automated clearing house debit from a designated depository account every Tuesday, subject to reconciliation

protocols based on the Company’s actual volume of receipts.

The total amount collected by Avanza toward the Receivables Purchased

Amount during any specific month is capped at $268,732, subject to certain conditions and default exclusions.

The Company may prepay

the outstanding balance of the Receivables Purchased Amount at any time without penalty.

Company’s obligations under the Avanza MCA are secured by a first priority security interest in all of the Company’s present

and future accounts, deposit accounts, accounts receivable, chattel paper, documents, equipment, general intangibles, instruments, inventory,

and all proceeds thereof.

Avanza MCA contains customary representations, warranties, covenants, and events of default.

Upon the occurrence of an Event of Default

(as defined in the Avanza MCA), Avanza may invoke specified protections, including declaring the full uncollected Receivables Purchased

Amount plus all fees immediately due and payable, enforcing its security interest in the collateral, and electing to recover 25% of the

unpaid balance as liquidated damages for collection expenses.

connection with entry into the Avanza MCA, Mr.

Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors

and a significant stockholder of the Company, personally guaranteed the full and prompt performance of all representations, warranties,

and covenants made by the Company under the Avanza MCA.

Purchase Agreement

July 24, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional

investor (the “Investor”).

Pursuant to the Purchase Agreement, the Company agreed to sell, and the Investor agreed to purchase,

a senior secured convertible note of the Company, in the aggregate original principal amount of $2,000,000 (the “Note”),

which is convertible into shares of common stock of the Company (the “Conversion Shares”).

The closing of the transaction

contemplated under the Purchase Agreement occurred on July 24, 2026.

Upon the closing, the Company issued the Note and received gross

proceeds of approximately $1.8 million.

The Company intends to use the net proceeds from the sale of the Note for general corporate purposes

and working capital requirements.

to the Purchase Agreement, the Company agreed not to issue any equity, equity-linked securities, debt or preferred shares in any Subsequent

Placement (as defined in the Purchase Agreement) so long as the Note is outstanding, subject to certain exceptions.

The Company also

agreed to provide the Investor with a right of participation in 100% of any Subsequent Placement until the later of the four-month anniversary

of the closing date and the date the Note is no longer outstanding.

Note bears interest at a rate of 12% per annum and will mature on October 24, 2026.

From and after the occurrence and during the continuance

of any Event of Default (as defined in the Note), the interest rate will increase by 9% until such Event of Default is subsequently cured.

The maturity date may be extended for an additional three months by mutual written consent of the Company and the Investor or at the

option of the Investor, subject to the terms of the Note.

On the maturity date, the Company shall pay to the Investor an amount in cash

representing the sum of (i) 50% of all outstanding principal (the “Payment Premium”), (ii) all outstanding principal, and

(iii) all accrued and unpaid interest and Late Charges (as defined in the Note) on such principal and interest.

The Note is convertible

at the option of the Investor into Conversion Shares at a fixed conversion price equal to $0.75 per share.

Company may, at any time and with 30 days’ prior notice, redeem all of the outstanding amount then remaining under the Note for

cash in an amount equal to the sum of (i) the Payment Premium, (ii) all outstanding principal, and (iii) all accrued and unpaid interest

and Late Charges on such principal and interest as of the applicable redemption date.

to the Note, if the Company shall determine to prepare and file with the Securities and Exchange Commission a registration statement

or offering statement of any of its equity securities (other than on Form S-4 or Form S-8), then the Company shall deliver to the Investor

a written notice of such determination and, if within 15 days after the date of the delivery of such notice, the Investor shall so request

in writing, the Company shall include in such registration statement or offering statement all or any number of Conversion Shares and/or

any capital stock of the Company issued or issuable with respect to the Conversion Shares or the Note as requested by the Investor.

Note is secured by the collateral set forth in the Security and Pledge Agreement (as defined below) and is guaranteed by each of the

Company’s subsidiaries pursuant to a Guaranty (the “Guaranty”).

and Pledge Agreement

connection with the Purchase Agreement and the Note, on July 24, 2026, the Company, certain subsidiaries of the Company (each a “Grantor”

and together with the Company, collectively, the “Grantors”) and the Investor also entered into a security and pledge agreement

(the “Security and Pledge Agreement”).

Pursuant to the Security and Pledge Agreement, the Grantors have granted a security

interest in the Collateral (as defined in the Security and Pledge Agreement), which includes substantially all of the assets of the Company.

the three months ended June 30, 2026 and 2025, we generated revenues of $27,747,948 and $19,691,568, respectively, and reported a

net loss of $6,613,514 and $36,133,275, respectively.

For the six months ended June 30, 2026 and 2025, we generated revenues of

$48,807,078 and $35,964,241, respectively, and reported a net loss of $17,380,006 and $45,071,274, respectively, and cash flows used

in operating activities of $4,635,804 and $6,336,312, respectively.

As noted in our unaudited condensed consolidated financial

statements, as of June 30, 2026, we had an accumulated deficit of $171,454,754.

of Operations

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

following table sets forth our results of operations for the three months and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Cost of sales

1 unchanged sentence

Depreciation and amortization

Operating loss

Loss from operations

(30,765,704 )

Other income (expense)

Net loss including non-controlling interest

(14,521,055 )

(36,519,576 )

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:

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

Other expense

$ (6,624,702 )

$ (36,133,275 )

$ (17,391,194 )

$ (45,071,274 )

the three months ended June 30, 2026 compared to the three months ended June 30, 2025

for the three months ended June 30, 2026 increased significantly compared to the three months ended June 30, 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

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,

higher-margin sales, and operational efficiencies.

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, NextNRG benefits from increased, repeat business.

Technology & Marketing.

Ongoing enhancements to the NextNRG 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 June 30, 2026, compared to the three months ended June 30, 2025, in line with higher sales volumes

and expanded market coverage.

Cost of sales increased 42.3%, outpacing the 40.9% increase in revenues, causing gross margin to decline

to 7.05% for the three months ended June 30, 2026, from 7.97% for the three months ended June 30, 2025.

Although gross profit increased

in absolute dollars to $1,955,638 from $1,569,816, the decline in gross margin was primarily attributable to higher fuel acquisition

and delivery costs, which rose faster than the average price per gallon realized on customer sales, together with a sales mix weighted

toward lower-margin fuel deliveries.

incurred operating expenses of $6,036,281 during the three months ended June 30, 2026, compared to $31,779,768 during the prior year,

representing a decrease of $25,743,487.

This decrease was primarily due to a decrease in stock-based compensation to employees

and consultants from $25,499,097 during the three months

ended June 30, 2025 to $1,396,757 during the three months ended June 30, 2026.

and Amortization

and amortization expense saw a decrease in the three months ended June 30, 2026, compared to the same period in 2025.

This decrease was

primarily due to the disposal of certain fixed assets between June 30, 2025 and June 30, 2026.

expense consisted of the following for the three months ended June 30, 2026 and 2025:

For the Three Months Ended

Period-over-Period Changes

(Decrease) Increase

Interest income

Gain (loss) on settlement of liabilities

Gain on sale of asset

Interest expense (including amortization of debt discount)

Total other expense - net

Company’s other expense, net, decreased in the three months ended June 30, 2026, compared to the three months ended June

The primary drivers were an increase in gain (loss) on settlement of liabilities and a decrease in interest expense (including amortization of debt discount).

is a detailed breakdown of the major components.

Gain (Loss) on Settlement of Liabilities

There was a gain on settlement of liabilities of $368,819

during the three months ended June 30, 2026, as compared to a loss on settlement of liabilities of $1,134,944 during the three months

ended June 30, 2025.

Expense (including amortization of debt discount)

was a decrease of $1,640,302 in interest expense from $4,319,031 in the three months ended June 30, 2025 to $2,678,729 in the three

months ended June 30, 2026.

expense in both periods was primarily due to:

Amortization of Debt Discount:

The amortization of debt discount decreased due to the reduction in debt carrying large discounts.

Existing and New Borrowings:

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

Three Months Ended

Period-over-Period Changes

$ (6,624,702 )

$ (36,133,275 )

$ (29,508,573 )

net loss decreased in the three months ended June 30, 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.

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.

the six months ended June 30, 2026 compared to the six months ended June 30, 2025

for the six months ended June 30, 2026 increased significantly compared to the six months ended June 30, 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

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, NextNRG 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 revenues.

of sales rose in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, 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:

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.

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.

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.

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.

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 $16,770,761 during the six months ended June 30, 2026, compared to $37,318,273 during the prior year,

representing a decrease of $20,547,512.

This decrease was primarily due to a $25,499,097 grant of stock-based compensation to employees

and consultants during the six months ended June 30, 2025 compared to $9,256,434 during the six months ended June 30, 2026.

and Amortization

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 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

expense (including amortization of debt discount)_

other expense - net

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.

and amortization expense saw an increase in the six months ended June 30, 2026, compared to the same period in 2025.

expense consisted of the following for the six months ended June 30, 2026 and 2025:

For the Six Months Ended

Period-over-Period Changes

(Decrease) Increase

Interest income

Gain (loss) on settlement of liabilities

Gain on sale of asset

Interest expense (including amortization of debt discount)

Total other expense - net

Company’s other expense, net, decreased in the six months ended June 30, 2026, compared to the six months ended June 30,

The primary drivers were an increase in gain (loss) on settlement of liabilities and a decrease in interest expense (including amortization of debt discount).

a detailed breakdown of the major components.

Gain (Loss) on Settlement of Liabilities

There was a gain on settlement of liabilities of $368,819 during the six months ended June 30, 2026, as compared

to a loss on settlement of liabilities of $1,134,944 during the six months ended June 30, 2025.

Expense (including amortization of debt discount)

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.

was a decrease of $4,283,103 in interest expense from $7,642,428 in the six months ended June 30, 2025 to $3,359,325 in the six

months ended June 30, 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.

The amortization of debt discount decreased due to the reduction in debt instruments carrying large discounts.

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

The interest expense recognized on outstanding debt instruments was lower than the six months ended June

Six Months Ended

Period-over-Period Changes

Increase (Decrease)

Net loss including non-controlling interest

$ (17,391,194 )

1 unchanged sentence

$ (27,680,080 )

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.

net loss decreased in the six months ended June 30, 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.

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

EBITDA and average fuel margin per gallon are non-GAAP financial measures which we use in our financial performance analyses.

These measures

should not be considered a substitute for GAAP-basis measures, nor should they be viewed as a substitute for operating results determined

EBITDA is a non-GAAP financial measure which we use in our financial performance analyses.

should not be considered a substitute for GAAP-basis measures, nor should it be viewed as a substitute for operating results determined

in accordance with GAAP.

2 unchanged sentences

expense, provides useful supplemental information that is essential to a proper understanding of our financial results.

We also believe

that the presentation of average fuel margin per gallon, a non-GAAP financial measure calculated by subtracting cost of sales specific

to fuel purchases and merchant fees from net sales and dividing it by the number of gallons delivered in the reporting period.

measures are not formally defined by GAAP, and other entities may use calculation methods that differ from ours for the purposes of calculating

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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 months ended

31, 2026 and 2025:

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

ended June 30, 2026 and 2025:

Three Months Ended

Period-over-Period Changes

Increase (Decrease)

Net loss including non-controlling interest

Six Months Ended

$ (6,624,702 )

Interest expense, net

$ (36,133,275 )

$ (17,391,194 )

$ (45,071,274 )

Interest expense

Depreciation and amortization

Stock compensation

Stock-based compensation

Adjusted EBITDA

$ (2,213,843 )

$ (5,759,395 )

$ (3,368,979 )

$ (10,640,661 )

and Capital Resources

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We had cash of $883,696

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

and $384,140 as of June 30, 2026 and 2025, respectively.

Flow Activities

cash balances at March 31, 2026 were as follows:

Period-over-Period

cash balances at June 30, 2026 and December 31, 2025 were as follows:

Period-over-Period Changes

Cash and cash equivalents

$ (1,908,884 )

and cash equivalents decreased year over year.

The primary drivers of this increase were the Company’s net loss from operations

and repayment of outstanding debt positions throughout the period.

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.

Cash and cash equivalents increased $499,556, or 130.05%, from December 31, 2025 to June 30, 2026.

The primary drivers of this increase were the Company’s financing via the sale of stock and new promissory notes.

cash used in operating activities was $4,567,606 for the six months ended June 30, 2026, primarily composed of the net loss of $17,391,194,

offset by non-cash adjustments for a net amount of $12,823,588, most notably including an expense of $9,256,434 related to stock issued

for services.

Net cash used in operating activities was $6,336,312 for the six months ended June 30, 2025, primarily composed of the

net loss of $45,071,274, offset by non-cash adjustments for a net amount of $38,734,962.

cash provided by investing activities for the six months ended June 30, 2026 and 2025 was $57,875 and $531,850, respectively, related

to cash proceeds received as part of the sale of vehicles.

generated $5,077,485 of cash flows from financing activities during the six months ended June 30, 2026, including net proceeds from

offerings of $7,302,455 after cash paid for offering costs, as well as proceeds from notes payable of $6,912,081, offset by

repayments of $7,565,592 and repayments of $915,507 on financing lease liabilities.

We generated $6,845,183 of cash flows from

financing activities during the six months ended June 30, 2025, including net proceeds from offerings of $13,669,129 after offering

costs, and $11,468,849 in proceeds from notes payable offset by $18,292,795 in repayments.

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

result, the Company has relied on equity and debt financings to fund its activities to date.

For the six months ended June 30, 2026,

the Company had a net loss of $17,380,007.

At June 30, 2026, the Company had an accumulated deficit of $171,465,942.

The Company anticipates

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

Operating Performance and Financing

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Our funding strategies have included:

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.

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.

and Mitigating Actions

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These include:

Negotiating more favorable

terms on existing and future debt.

Identifying new equity partners

or investors.

Optimizing working capital

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

more favorable terms on existing and future debt.

new equity partners or investors.

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

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Concern Qualification

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.

reflected in the accompanying unaudited condensed consolidated financial statements, for the six months ended June 30, 2026, the Company

loss available to common stockholders of $17,512,623;

cash used in operations was $4,567,606.

Additionally,

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.

at June 30, 2026, the Company had:

deficit of $171,454,754;

Stockholders’

deficit of $21,311,533;

capital deficit of $25,605,123.

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

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The Company had cash on hand

of $208,048 at March 31, 2026.

of $883,696 at June 30, 2026.

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

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analysis of our current circumstances including our financial position, our cash flows and cash usage forecasts for the twelve months

ended December 31, 2025, and our current capital structure including equity-based instruments and our obligations and debts.

ending June 30, 2027, and our current capital structure including equity-based instruments and our obligations and debts.

factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent

to the date that these financial statements are issued.

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.

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

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Management’s strategic plans include the following:

Expand into new and existing

markets (commercial and residential);

Obtain additional debt and/or

equity based financing for growth;

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.

into new and existing markets (commercial and residential);

additional debt and/or equity based financing for growth;

Collaborations

with other operating businesses for strategic opportunities;

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

Sheet Financing Arrangements

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statements, which were prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

generally accepted accounting principles (“U.S.

preparation of these condensed consolidated financial statements requires us to make estimates and assumptions for the reported

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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.

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

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”.

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:

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.

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.

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

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transactions classified as business combinations, the Company:

Recognizes and measures identifiable

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

Records goodwill as the excess

of the fair value of consideration transferred over the fair value of net assets acquired, including any previously held equity interests

(ASC 805-30-30-1).

Expenses acquisition-related

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

Uses preliminary purchase

price allocations, with adjustments permitted within the measurement period (not exceeding one year) per ASC 805-10-25-13.

beyond the measurement period are recorded in earnings.

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.

judgments in fair value determinations include:

Intangible asset valuations,

based on estimates of future cash flows and discount rates.

Useful life assessments,

impacting amortization and financial results.

Contingent consideration,

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

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.

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

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

Applies the “screen

test” to determine whether substantially all of the fair value of gross assets acquired is concentrated in a single identifiable

asset or group of similar assets (ASC 805-10-55-3A).

Allocates the purchase price

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

Capitalizes direct acquisition

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

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).

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

Incorrect classification can materially impact:

The recognition of goodwill

(only in business combinations).

The measurement and presentation

of acquired assets and assumed liabilities;

The Company’s financial

position and results of operations.

recognition of goodwill (only in business combinations).

measurement and presentation of acquired assets and assumed liabilities;

Company’s financial position and results of operations.

and Financial Reporting Considerations

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

Regulation S-X, Rule 3-05:

S-X, Rule 3-05:

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

Regulation S-K, Item 101:

S-K, Item 101:

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

Regulation S-K, Item 303:

Mandates discussion of the impact of acquisitions on the Company’s financial condition and results of operations in Management’s

Discussion and Analysis.

Regulation S-X, Article 11:

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:

Requires pro forma financial statements if the acquisition is significant.

Form 8-K, Item 2.01:

reporting requirements for material acquisitions, including reverse mergers.

8-K, Item 2.01:

Immediate 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:

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

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.

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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The Company has determined that it operates as two reportable segments,

as its CODM reviews the business as a whole rather than by distinct business components.

as its CODM reviews the business based on these two distinct business components.

of ASU 2023-07 – Segment Reporting

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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 condensed consolidated financial

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

of Estimates and Assumptions

preparation of financial statements in conformity with U.S.

Generally Accepted Accounting Principles (GAAP) requires management to make

GAAP requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities

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

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

estimates for the three and six months ended June 30, 2026, and 2025, 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

Valuation allowance on deferred tax assets

and Uncertainties

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Key factors contributing to variability in sales and earnings include:

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.

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.

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:

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.

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

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

As of June 30, 2026 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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of Gains, Losses, and Amortization

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.

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.

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

The assessment considers:

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.

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.

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:

A review of outstanding accounts;

Historical collection experience;

Current economic conditions

(ASC 310-10-35-9).

review of outstanding accounts;

collection experience;

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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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).

conditions affecting fuel prices,

realizable value based on estimated selling price, and

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

Concentrations

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Factors considered include, but are not limited to:

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).

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).

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).

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).

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).

Software Considerations

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

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

the three and six months ended June 30, 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

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

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

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.

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

the condensed consolidated balance sheet.

The 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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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).

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).

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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it would incur to borrow on a collateralized basis over a similar term and currency environment (ASC 842-20-30-3).

accordance with ASC 360-10-35, the Company evaluates ROU assets for impairment indicators whenever events or changes in circumstances

suggest the carrying amount may not be recoverable.

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

accordance with ASC 360-10-35, the Company evaluates ROU assets for impairment indicators whenever events or changes in

circumstances suggest the carrying amount may not be recoverable.

No impairments of ROU assets were recognized for the three and six

months ended June 30, 2026, and 2025.

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

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

The contract creates enforceable

rights and obligations between the Company and the customer.

The contract has commercial

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

The payment terms are identified,

and the consideration is determinable.

It is probable that the Company

will collect the consideration in exchange for the goods or services transferred.

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.

for mobile fuel sales and memberships meet these criteria.

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

Fuel Sales – The delivery

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

Membership Fees – Monthly

membership services, with revenue recognized over time within a one-month membership cycle, as the customer benefits from access to

services throughout the period.

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.

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

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Company’s transaction price considerations include:

Fixed consideration –

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

No variable consideration

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

During the 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.

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 three and six

months ended June 30, 2026 and 2025, respectively, the Company granted insignificant discounts of less than 1% of total

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

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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.

Membership Fees:

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.

Revenue 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:

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.

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.

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:

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.

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.

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.

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.

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 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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statements only if it is more likely than not (greater than 50% likelihood) to be sustained upon examination by tax authorities.

of December 31, 2025 and 2024, respectively, the Company had no uncertain tax positions that qualified for recognition or disclosure

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

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).

of June 30, 202 6 and December 31, 2025, respectively, the Company had no uncertain

tax positions that qualified for recognition or disclosure 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 condensed consolidated statement

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

No interest and penalties were recorded for the years ended December 31, 2025 and 2024.

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

Historical earnings trends

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

Future financial projections,

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

Statutory carryforward periods

for net operating losses and other deferred tax assets

Prudent and feasible tax

planning strategies that could impact the realization of deferred tax assets

Nature and predictability

of temporary differences and the timing of their reversal

Sensitivity of financial

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

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

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

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).

June 30, 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

condensed 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:

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.

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.

Treasury securities with similar maturities.

Expected life of the option

– Estimated based on historical exercise patterns and contractual terms.

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

Additionally,

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compensation, including:

The treatment of tax benefits

and tax deficiencies in income tax reporting.

The option to recognize forfeitures

as they occur rather than estimating them upfront.

Cash flow classification

for certain tax-related transactions.

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.

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

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.

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.

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

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average number of common shares outstanding, including certain other shares committed to be issued.

Earnings Per Share (EPS)

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

Net earnings available to

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

Losses are not allocated

to participating securities in accordance with ASC 260-10-45-61.

The denominator includes

common shares outstanding and certain other shares committed to be issued, such as restricted stock and restricted stock units (“RSUs”),

for which no future service is required.

Earnings Per Share (EPS)

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.

EPS is calculated under both the two-class method and the treasury stock method, and the more dilutive result is reported, as required

by ASC 260-10-45-45.

Diluted EPS is computed by

taking the sum of:

Net earnings available to

common shareholders

Dividends on preferred shares

Dividends on dilutive mandatorily

redeemable convertible preferred shares

Divided by the weighted average

number of common shares outstanding and certain other shares committed to be issued, plus all dilutive common stock equivalents during

the period, such as:

Stock options

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.

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.

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.

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).

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).

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:

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.

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.

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:

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.

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.

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.

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.

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 former Chief Technology Officer.

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

Accounting Standards

2022-02 – Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures

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

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 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:

Requiring enhanced disclosures

of significant segment expenses.

Aligning segment reporting

requirements with information regularly reviewed by management.

enhanced disclosures of significant segment expenses.

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 condensed

consolidated financial statements.

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.

Requiring disclosure of income

taxes paid by jurisdiction.

Standardizing

and disaggregating rate reconciliation categories.

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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(Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

Disaggregation of Income Statement Expenses.

This standard requires additional disclosures

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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 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.

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

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What changed 10-Q

Item 2. Management’s Discussion and Analysis