What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-27 compared with 2024-04-01 · 1041 added, 175 removed, 30 unchanged (98% of the section changed)

3 unchanged sentences

The following discussion and analysis of our financial

condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and

condition and results of operations should be read in conjunction with our consolidated financial statements and

related notes included in this Annual Report on Form 10-K and the audited financial statements and notes thereto as of and for the year

1 unchanged sentence

the context requires otherwise, references in this Annual Report on Form 10-K to “we,” “us,” and “our”

refer to Ezfill Holdings, Inc.

Forward-Looking

information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities

Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,

which are subject to the “safe harbor” created by those sections.

These forward-looking statements include, but are not limited

to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and

plans and objectives of management.

The words “anticipates,” “believes,” “estimates,” “expects,”

“intends,” “may,” “plans,” “projects,” “will,” “would” and similar

expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should

not place undue reliance on our forward-looking statements.

Actual results or events could differ materially from the plans, intentions

and expectations disclosed in the forward-looking statements that we make.

These forward-looking statements involve risks and uncertainties

that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation,

the risks set forth in our filings with the SEC.

The forward-looking statements are applicable only as of the date on which they are

made, and we do not assume any obligation to update any forward-looking statements.

We were incorporated under the laws

of Delaware in March 2019.

We are in the business of operating mobile fueling trucks and are headquartered in Miami, Florida.

EzFill provides

its customers the ability to have fuel delivered to their vehicles (cars, boats, trucks) without leaving their home or office and to construction

sites, generators and reserve tanks.

Our mobile fueling solution gives

our fleet, consumer and other customers the ability to fuel their vehicles with the touch of an app or regularly scheduled service, and

without the inconvenience of going to the gas station.

On April 27, 2023, the Company executed

a 1-for-8 reverse stock split and decreased the number of shares of its authorized common stock from 500,000,000 shares to 50,000,000

and its preferred stock from 50,000,000 to 5,000,000.

As a result, all share activity has been restated as if the reverse stock split

had been consummated as of the beginning of the respective period.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of

operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting

principles in the U.S., or GAAP.

We have identified certain accounting policies as critical to understanding our financial condition

and results of our operations.

For a detailed discussion on the application of these and other accounting policies, see the notes to

our financial statements included in this Annual Report on

refer to NextNRG, Inc.

were incorporated under the laws of Delaware in March 2019.

We are in the business of operating mobile fueling trucks and are headquartered

in Miami, Florida.

NextNRG provides its customers with the ability to have fuel delivered to their vehicles (cars, boats, trucks) without

leaving their home or office and to construction sites, generators and reserve tanks.

mobile fueling solution gives our fleet, consumer and other customers the ability to fuel their vehicles with the touch of an app or

regularly scheduled service, and without the inconvenience of going to the gas station.

Accounting Policies and Estimates

discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which

were prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”).

The preparation of these consolidated

financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, and expenses.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent

from other sources.

Actual results may differ from these estimates under different assumptions or conditions, and those differences may

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

the Notes to Consolidated Financial Statements included in this annual report, we believe the following discussion addresses our most critical

accounting policies, which are those that are most important to our financial condition and results of operations and which require our

most difficult, subjective and complex judgments.

of Consolidation

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

GAAP and include the accounts of the Company and its wholly

owned subsidiaries.

The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”.

accordance with ASC 810-10, consolidation applies to:

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

Interest Entities (VIEs), where the Company is the primary beneficiary, possessing both (i)

power over significant activities and (ii) the obligation to absorb losses or receive benefits.

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

The Company continuously evaluates its investments

and relationships to assess consolidation requirements.

Combinations, Asset Acquisitions, and Reverse Acquisitions

Company accounts for acquisitions in accordance with ASC 805, “Business Combinations,” and applicable SEC reporting requirements

under Regulation S-X, Rule 3-05 and Regulation S-K, Items 101 and 303.

Transactions qualifying as business combinations are accounted

for under the acquisition method, while those classified as asset acquisitions follow the guidance in ASC 805-50.

Additionally, the Company

evaluates whether a transaction qualifies as a reverse acquisition under ASC 805-40 and applies the appropriate accounting and disclosure

requirements.

transactions classified as business combinations, the Company:

and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests

at their fair values at the acquisition date (ASC 805-20-25-1).

goodwill as the excess of the fair value of consideration transferred over the fair value

of net assets acquired, including any previously held equity interests (ASC 805-30-30-1).

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

preliminary purchase price allocations, with adjustments permitted within the measurement

period (not exceeding one year) per ASC 805-10-25-13.

Adjustments beyond the measurement

period are recorded in earnings.

judgments in fair value determinations include:

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

life assessments, impacting amortization and financial results.

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

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

The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests.

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

the “screen test” to determine whether substantially all of the fair value of

gross assets acquired is concentrated in a single identifiable asset or group of similar

assets (ASC 805-10-55-3A).

the purchase price using a cost accumulation model, assigning costs to acquired assets based

on their relative fair values (ASC 805-50-30-3).

● Capitalizes

direct acquisition costs as part of the asset’s cost, unlike business combinations

where such costs are expensed (ASC 805-50-25-1).

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

Incorrect classification can materially impact:

recognition of goodwill (only in business combinations).

measurement and presentation of acquired assets and assumed liabilities.

Company’s financial position and results of operations.

reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the accounting acquiree, and

the entity whose equity interests are acquired (the legal acquiree) is identified as the accounting acquirer under ASC 805-40, “Reverse

Acquisitions.”

for Reverse Acquisitions

legal acquiree (accounting acquirer) is treated as the continuing reporting entity, and its

assets, liabilities, and operations are measured at historical cost.

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

goodwill is recognized, as the transaction is considered a capital reorganization rather

than an acquisition of a business per ASC 805-40-30-2.

equity structure (common stock and additional paid-in capital) is adjusted to reflect that

of the legal acquirer, but the retained earnings balance is that of the accounting acquirer.

Requirements for Reverse Acquisitions

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

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

comparative analysis of financial statements before and after the acquisition.

forma financial information in accordance with Regulation S-X, Article 11, showing the impact

of the transaction as if it had occurred at the beginning of the reporting period.

in governance, management, and operations post-acquisition.

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

Form 8-K, Item 2.01, requiring disclosure within four business days of the transaction closing.

and Financial Reporting Considerations

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

S-X, Rule 3-05:

Requires separate financial statements of the acquired business if it meets

significance thresholds under Rule 1-02(w).

S-K, Item 101:

Requires disclosure of the impact of material acquisitions on the Company’s

business operations.

S-K, Item 303:

Mandates discussion of the impact of acquisitions on the Company’s financial

condition and results of operations in Management’s Discussion and Analysis (MD&A).

S-X, Article 11:

Requires pro forma financial statements if the acquisition is significant.

8-K, Item 2.01:

Immediate reporting requirements for material acquisitions, including reverse

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

805, SEC reporting requirements, and regulatory guidance.

of Estimates and Assumptions

preparation of financial statements in conformity with U.S.

Generally Accepted Accounting Principles (GAAP) requires management to make

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

at the date of the financial statements, and the recognition of revenues and expenses during the reporting period.

Actual results may

differ from these estimates, and such differences could be material.

accordance with ASC 250-10-50-4, changes in estimates are recorded in the period in which they become known and are accounted for prospectively.

The Company bases its estimates on historical experience, industry trends, and other relevant factors, incorporating both quantitative

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

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

for doubtful accounts and other receivables

reserves and classifications

of loss contingencies

of stock-based compensation

useful lives of property and equipment

of intangible assets

interest rate in right-of-use operating leases

tax positions

allowance on deferred tax assets

and Uncertainties

Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic

fluctuations.

The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential

business disruptions, supply chain constraints, and liquidity challenges.

accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect

its financial condition, results of operations, and business outlook.

Key factors contributing to variability in sales and earnings include:

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

liquidity, business continuity, and long-term strategic growth.

The Company continuously assesses these risks and implements measures

to mitigate their potential impact.

Company accounts for accounts receivable in accordance with FASB ASC 310, Receivables.

Receivables are recorded at their net realizable

value, which represents the amount management expects to collect from outstanding customer balances (ASC 310-10-35-7).

Company extends credit to customers based on an evaluation of their financial condition and other factors.

The Company does not require

collateral, and interest is not accrued on overdue accounts receivable (ASC 310-10-45-4).

for Doubtful Accounts

periodically assesses the collectability of accounts receivable and establishes an allowance for doubtful accounts as needed.

The allowance

is determined based on:

review of outstanding accounts,

collection experience, and

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).

Company accounts for inventory in accordance with FASB ASC 330, Inventory.

Inventory consists solely of fuel and is stated at the lower

of cost or net realizable value (“LCNRV”) using the first-in, first-out (FIFO) method, as required by ASC 330-10-35-1.

Valuation and Reserve Assessment

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

The Company evaluates factors such as:

conditions affecting fuel prices,

realizable value based on estimated selling price, and

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

of Use Assets and Lease Obligations

Company accounts for right-of-use (ROU) assets and lease liabilities in accordance with FASB ASC 842, Leases.

These amounts reflect the

present value of the Company’s estimated future minimum lease payments over the lease term, including any reasonably certain renewal

options, discounted using a collateralized incremental borrowing rate (ASC 842-20-30-1).

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

The Company’s

leases primarily consist of operating leases, which are included as Right-of-Use Assets and Operating Lease Liabilities on the consolidated

balance sheet.

Company has elected the short-term lease exemption allowed under ASC 842-20-25-2, whereby leases with a term of 12 months or less are

not recorded on the balance sheet.

Instead, lease payments are expensed on a straight-line basis over the lease term.

Term and Renewal Options

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

Factors considered include:

useful life of leasehold improvements relative to the lease term,

economic performance of the business at the leased location,

comparative cost of renewal rates versus market rates, and

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

The Company’s operating leases contain renewal options with no residual value guarantees.

Currently, management does

not expect to exercise any renewal options, which are therefore excluded in the measurement of lease obligations.

Rate and Lease Liability Measurement

the implicit rate in the leases is not readily determinable, the Company applies an incremental borrowing rate that represents the rate

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

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

suggest the carrying amount may not be recoverable.

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

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

Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by Accounting Standards

Update (ASU) 2014-09.

Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer

in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

Company generates revenue from mobile fuel sales, which can be purchased as a one-time transaction or through a monthly membership.

from fuel sales is recognized at the time of delivery, and membership revenue is recognized at the end of each month, reflecting the

satisfaction of the performance obligation over time within a one-month membership cycle.

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

the Contract with a Customer

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

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

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

payment terms are identified, and the consideration is determinable.

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

services transferred.

for mobile fuel sales and memberships meet these criteria.

Collectability is assessed based on historical customer payment trends and

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

the Performance Obligations in the Contract

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

the context of the contract, per ASC 606-10-25-19.

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

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

Fees – Monthly membership services, with revenue recognized over time within a one-month

membership cycle, as the customer benefits from access to services throughout the period.

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

the Transaction Price

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

customer, per ASC 606-10-32-2.

Company’s transaction price considerations include:

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

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

During the years ended December 31, 2024 and 2023, respectively, the Company

granted insignificant discounts of less than 1% of total revenues.

financing component – Payments are made upon fuel delivery or at the end of the monthly

membership cycle, per ASC 606-10-32-15.

the Transaction Price to Performance Obligations

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

a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices

(“SSP”) as required by ASC 606-10-32-28.

The standalone selling price is determined based on observable sales data.

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

Revenue When (or As) Performance Obligations Are Satisfied

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

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

Revenue is recognized over time within a one-month cycle, as customers receive continuous

access to fuel delivery services throughout the month.

Company does not recognize revenue based on customer invoicing dates;

instead, it ensures revenue recognition aligns with the actual

satisfaction of performance obligations per ASC 606-10-25-31.

Agent Considerations

evaluating whether the Company acts as a principal or an agent in its fuel sales transactions, the Company applies the guidance in ASC

606-10-55-36 through 55-40.

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

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

ASC 606-10-55-37A.

of Compliance with ASC 606 and ASU Updates

Consideration

time of delivery

price per gallon

access to fuel services

time (one-month cycle)

monthly subscription

Liabilities (Deferred Revenue)

liabilities represent amounts received from customers before the satisfaction of performance obligations, which are subsequently recognized

as revenue upon fulfillment.

ASC 606-10-45-2, the Company discloses contract balances related to deferred revenue when applicable.

Any prepayments received for fuel

deliveries or memberships are classified as contract liabilities until revenue recognition criteria are met.

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

Under this method, deferred

tax assets and liabilities are recognized for the future tax consequences of differences between the financial reporting and tax bases

of assets and liabilities.

These amounts are measured using enacted tax rates expected to apply in the periods when temporary differences

reverse (ASC 740-10-30-8).

effect of a change in tax rates on deferred tax balances is recognized as income or expense in the period that includes the enactment

date (ASC 740-10-45-4).

Tax Positions

Company evaluates uncertain tax positions in accordance with ASC 740-10-25, which requires that a tax position be recognized in the financial

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

of December 31, 2024 and 2023, respectively, the Company had no uncertain tax positions that qualified for recognition or disclosure

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

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

(ASC 740-10-45-25).

No interest and penalties were recorded for the years ended December 31, 2024 and 2023.

of Deferred Tax Assets

Company’s deferred tax assets include certain future tax benefits, such as net operating losses (NOLs), tax credits, and deductible

temporary differences.

Under ASC 740-10-30-5, a valuation allowance is required if it is more likely than not that some portion, or all,

of the deferred tax assets will not be realized.

Company reviews the realizability of deferred tax assets on a quarterly basis, or more frequently if circumstances warrant, considering

both positive and negative evidence (ASC 740-10-30-16).

Considered in Valuation Allowance Assessment

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

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

financial projections, including expected taxable income based on long-term estimates of

business performance and market conditions

carryforward periods for net operating losses and other deferred tax assets

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

and predictability of temporary differences and the timing of their reversal

● Sensitivity

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

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

allowance determination is not solely based on past losses—all available positive and negative evidence must be considered.

Allowance Determination

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

in a net carrying amount of $0.

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

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

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.

Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using

the fair value-based method.

Under this guidance, compensation cost is measured at the grant date based on the fair value of the award

and is recognized over the requisite service period, typically the vesting period.

718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services.

applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may

be settled using equity instruments.

compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees,

aligning non-employee share-based payment accounting with that of employees.

The fair value of stock-based compensation is determined

as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting

period in accordance with ASC 718.

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

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

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

volatility – Based on historical stock price fluctuations.

interest rate – Derived from U.S.

Treasury securities with similar maturities.

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

Additionally,

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

compensation, including:

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

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

flow classification for certain tax-related transactions.

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

compensation to ensure compliance with evolving financial reporting requirements.

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

Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share.” The calculation

of basic EPS follows the two-class method and is determined by dividing net earnings available to common shareholders by the weighted

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

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:

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.

Earnings Per Share (EPS)

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.

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:

■ Convertible

preferred stock

■ Convertible

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

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

Participating

Securities & Share-Based Compensation

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

the requisite service is rendered for the right to retain the award, these instruments meet

the definition of a participating security under ASC 260-10-45-59.

granted under an executive compensation plan, however, are not considered participating securities

because the rights to dividend equivalents are forfeitable (ASC 718-10-25).

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

Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled

by, or are under common control with the Company.

parties include, but are not limited to:

owners of the Company.

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

family members of principal owners and members of management.

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

with which the Company has significant transactions, where one party has the ability to exercise

control or significant influence over the management or operating policies of the other.

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

in a manner that could prevent either party from fully pursuing its own separate economic interests.

Company discloses all material related party transactions, including:

nature of the relationship between the parties.

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

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

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

the financial statements.

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.

Notes 1, 10 and 12, which discusses a common control merger between Next and EZFL, after

year end, on February 13, 2025

● See Note 4 which

includes accrued interest payable – related parties.

● See Notes 5 and

12 for a discussion of related party debt.

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

● See Note 8 for

a discussion of equity transactions with certain officers and directors.

Accounting Standards

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

Troubled Debt Restructurings and Vintage Disclosures

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

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

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

of origination.

the accounting guidance under ASC 326, “Financial Instruments – Credit Losses,”

to enhance disclosures regarding loan refinancings and restructurings for borrowers experiencing

financial difficulty.

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

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

2023-07 – Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

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

enhanced disclosures of significant segment expenses.

segment reporting requirements with information regularly reviewed by management.

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

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

Issued Accounting Standards Not Yet Adopted

2023-09 – Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

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

● Standardizing

and disaggregating rate reconciliation categories.

disclosure of income taxes paid by jurisdiction.

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

adoption is permitted.

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

Accounting Standards Updates

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

consolidated financial position, results of operations, or cash flows.

of Operations

The following table sets forth our results of operations

for the year ended December 31, 2023, and 2022:

Year Ended December 31,

Company operates an on-demand mobile fueling service that allows customers—ranging from individual consumers to commercial fleets—to

schedule fuel deliveries directly to their vehicles or equipment via a proprietary technology platform.

The Company’s revenue is

generated primarily from the sale and delivery of fuel.

Cost of sales includes the cost of fuel, direct labor, and other delivery-related

Operating expenses consist of selling, general and administrative expenses, technology development, and other unallocated overhead.

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

Years Ended December 31,

Year over Year Changes

Increase (Decrease)

Operating Expenses

Cost of Sales

2 unchanged sentences

Operating Loss

(17,486,279 )

Other income (expense)

1 unchanged sentence

$ (10,471,889 )

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure which

we use in our financial performance analyses.

This measure should not be considered a substitute for GAAP-basis measures, nor should it

be viewed as a substitute for operating results determined in accordance with GAAP.

We believe that the presentation of Adjusted EBITDA,

a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation, amortization, impairment of goodwill,

other intangibles and fixed assets, and stock compensation expense, provides useful supplemental information that is essential to a proper

understanding of our financial results.

Non-GAAP measures are not formally defined by GAAP, and other entities may use calculation methods

that differ from ours for the purposes of calculating Adjusted EBITDA.

As a complement to GAAP financial measures, we believe that Adjusted

EBITDA assists investors who follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that

may obscure underlying performance and distort comparability.

The following is a reconciliation of net loss to the

non-GAAP financial measure referred to as Adjusted EBITDA for the year ended December 31, 2023, and 2022:

Year Ended December 31,

for the year ended December 31, 2024, increased significantly compared to the prior year December 31, 2023.

This growth was primarily

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

Several factors contributed to this

Customer Base

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

partnerships with commercial fleet operators continued to drive fueling volumes.

These partnerships often involve recurring, contracted

deliveries that provide a stable, predictable revenue stream.

As more fleet operators adopt on-demand fueling to reduce downtime and

optimize logistics, EzFill benefits from increased, repeat business.

Technology & Marketing

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 year over year, in line with the higher sales volumes and expanded market coverage.

Despite the increase in absolute costs,

gross profit improved, reflecting disciplined pricing, higher-margin sales, and operational efficiencies.

Key factors influencing cost

of sales include:

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

price swings can significantly affect fuel costs.

However, the Company’s dynamic pricing strategies and supplier relationships

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

& Delivery Costs

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.

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

Streamlined staffing and improved operational processes led to lower headcount-related

After establishing brand awareness in key regions, the Company optimized

its marketing spend, focusing on more targeted campaigns rather than broad-based advertising.

& Technology:

Renegotiated insurance policies and a strategic re-evaluation of technology

expenditures contributed to reduced overhead.

Company Expenses:

Enhanced internal controls and better vendor management lowered certain

fees and administrative costs associated with being a publicly traded company.

these savings were partially offset by a small increase in stock-based compensation, underscoring the Company’s commitment to attracting

and retaining top talent through equity incentives.

and Amortization

and amortization declined marginally year over year.

The primary driver of this decrease was an impairment of certain equipment totaling

This reduction was partially offset by new asset additions of approximately $38,554, reflecting the Company’s ongoing

investments in delivery vehicles, fueling technology, and other capital expenditures necessary to support continued growth and maintain

operational efficiency.

Income (Expense)

income and (expense) consisted of the following

For the Years Ended December 31,

Year over Year Changes

Increase (Decrease)

Interest income

Interest expense (including amortization of debt discount)

Loss on sale of marketable debt securities - net

Loss on debt extinguishment - related party

Total other income (expense) - net

$ (8,906,889 )

$ (1,938,329 )

$ (6,968,560 )

Company’s other income (expense), net, deteriorated significantly for the year ended December 31, 2024, compared to the prior year.

The primary drivers were the increase in interest expense—particularly from default penalty interest—and the loss on debt

extinguishment associated with related-party debt transactions.

Below is a detailed breakdown of the major components.

income dropped to zero in 2024, reflecting a shift in the Company’s cash management strategy.

In 2023, the Company had short-term

investments or interest-bearing accounts that generated interest, which did not recur in 2024.

income rose significantly, driven by one-time gains, settlements, or other ancillary revenue sources.

The Company’s expansion and

increased commercial activities may have contributed to additional non-operating income streams.

Expense (including amortization of debt discount)

expense surged in 2024, primarily due to:

Penalty Interest :

The Company incurred $4,475,565 in default penalty interest during

2024, compared to none in the prior year.

This penalty arose from contractual defaults.

defaults occurred in connection with conversion of debt to equity.

of Debt Discount :

The amortization of debt discount increased to $2,645,291 in 2024 from

$1,403,244 in 2023.

This reflects additional debt arrangements with original issue discounts.

Additionally, in connection with the conversion of debt converted to equity, related unamortized

discounts were expensed at that time.

and New Borrowings :

Interest expense was recognized on outstanding debt instruments.

on Sale of Marketable Debt Securities - Net

Company had no activity related to marketable securities in 2024.

In 2023, there was an insignificant loss of $27,160.

on Debt Extinguishment – Related Party

Company recorded a loss on debt extinguishment of $907,500 in 2024 in connection with the conversion of related-party debt to Series

A Preferred Stock.

By contrast, in 2023, the Company recorded a $291,000 loss tied to extending the maturity date on the same related-party

Years Ended December 31,

Year over Year Changes

Increase (Decrease)

$ (16,189,008 )

$ (10,471,889 )

$ (5,717,119 )

net loss was the result of the categories discussed above.

Overall, the increase in revenues, driven by both volume and pricing, showcases

the Company’s successful market expansion and deepening fleet partnerships.

While costs naturally rose with higher delivery volumes,

disciplined operational execution and strategic pricing helped improve gross profit.

Ongoing cost-optimization initiatives further reduced

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

Financial Measures

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

This measure should not be considered a substitute

for GAAP-basis measures, nor should it be viewed as a substitute for operating results determined in accordance with GAAP.

that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation,

amortization, impairment of goodwill, other intangibles and fixed assets, and stock compensation expense, provides useful supplemental

information that is essential to a proper understanding of our financial results.

Non-GAAP measures are not formally defined by GAAP,

and other entities may use calculation methods that differ from ours for the purposes of calculating Adjusted EBITDA.

As a complement

to GAAP financial measures, we believe that Adjusted EBITDA assists investors who follow the practice of some investment analysts who

adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability.

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

31, 2024 and 2023:

Years Ended December 31,

Year over Year Changes

Increase (Decrease)

Interest expense, net

3 unchanged sentences

Adjusted EBITDA

$ (6,013,755 )

$ (11,409,859 )

Gallons delivered

Average fuel margin per gallon

Year ended December 31, 2023 compared to the Year

ended December 31, 2022

We generated revenues of $23,216,423 for the year

ended December 31, 2023, compared to $15,044,721 for the year ended December 31, 2022, an increase of $8,171,702 or 54%.

This increase

is due to a 39% increase in gallons delivered as well as an increase in the average price per gallon.

The additional gallons were in existing

as well as new markets.

Cost of sales was $21,845,574 for the year ended December

31, 2023, resulting in a gross profit of 1,370,849, compared to $(173,513) for the prior year.

The $6,627,340 or 44% increase in cost

of sales is due to the increase in sales and an increase in labor costs primarily related to the expansion into new markets.

profit improved year over year due to higher fuel revenues as well as increased delivery fees and driver efficiency.

Operating Expenses

We incurred operating expenses of $9,087,223

during the year ended December 31, 2023, as compared to $15,543,145 during the prior year, a decrease of $6,455,922 or 42%.

decrease was primarily due to decreases in payroll, sales and marketing, insurance, technology, and public company expenses offset

by an increase in stock based compensation.

Depreciation and Amortization

Depreciation increased in the current year as a result

of the increase in the fleet of delivery vehicles.

Amortization decreased in the current year as a result of the impairment of goodwill

and other intangible assets recorded in the fourth quarter of 2022.

Impairment of Goodwill, Fixed Assets and Other

During the year ended December 31, 2023, the Company

recorded impairment of $105,506 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the

expected realizable value.

During the year ended December 31, 2022, the Company recorded an impairment loss of $1,987,500 related to a

license of technology for which the Company has proposed termination of the agreement and which was not expected to generate any revenue

Goodwill was considered impaired, and the Company recognized an impairment loss of $166,838, or the remaining balance of goodwill.

This loss was primarily due to the fall in the Company’s stock price and the decrease of the Company’s market capitalization

as well as past operating performance.

As a consequence, management forecasts were revised, and additional risk factors were applied.

The fair value of the intangibles was estimated using a combination of market comparables (level 1 inputs) and expected present value

of future cash flows (level 3 inputs) and as a result impairment was recorded for a total of $482,064.

Also, the Company recorded an impairment

of $258,114 related to materials purchased for construction of delivery vehicles to reduce the carrying value to the expected realizable

Other Income (Expense)

Interest expense increased in the current year due

to increased borrowing for truck purchases.

We sustained a net loss of $10,471,889 for the year

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

Liquidity and Capital Resources

Cash Flow Activities

As of December 31, 2023, we had an accumulated deficit

of $(43,317,050).

We have incurred net losses since inception and have funded operations primarily through sales of our common stock and

issuance of notes payable, including to related parties.

As of December 31, 2023, we had $226,985 in cash and investments, as compared

to December 31, 2022 when we had $4,186,875 in cash and investments.

and Capital Resources

Flow Activities

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

Year over Year Changes

Increase (Decrease)

Cash and cash equivalents

and cash equivalents increased increase year over year.

The primary drivers of this increase were:

Financing Received Late in the Year

Company secured additional financing toward the end of the fiscal year, boosting its cash position.

This infusion of funds was a key

component in supporting ongoing operational needs and future growth initiatives.

operating expenses were either deferred or settled after year-end, resulting in higher cash on hand as of December 31, 2024.

variance can create short-term fluctuations in the Company’s reported cash balances.

the Company’s stronger cash position provides added liquidity to support daily operations, manage working capital requirements,

and pursue strategic opportunities.

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

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

For the Years Ended December 31,

Year over Year Changes

Increase (Decrease)

Net Cash Provided by (Used in)

Operating activities

Net cash used in operating activities was $(6,643,397)

during year ended December 31, 2023, which was made up primarily by the net loss and partially offset by stock compensation of $1,525,146

and depreciation and amortization of $1,108,186 and impairment loss of $105,506 and loss on debt extinguishment – related party

of $291,000 and amortization of debt discount of $1,403,244.

Net cash used in operating activities was $(11,599,581) for the prior year

ended December 31, 2022, which was made up primarily by the net loss and partially offset by stock compensation of $1,412,283 and depreciation

and amortization of $1,769,621 and impairment losses of $2,894,516.

$ (4,585,605 )

$ (6,643,397 )

Investing activities

During the year ended December 31, 2023, we provided

cash of $2,170,732, during the year ended December 31, 2022 we used cash of $(3,258,417).

Investments matured during 2023 of $2,130,116.

Also in 2023 we had refunds on prior purchases of fixed assets, primarily delivery trucks of $40,616.

Investments matured during 2022

for total proceeds of $1,151,186.

We used $321,250 for the acquisition of a fueling business in 2022.

We used $3,258,417 for the acquisition

of fixed assets, primarily delivery trucks

$ (8,096,312 )

Financing activities

We generated $2,632,857 of cash flows from financing

activities during the year ended December 31, 2023 including $4,590,600 in new loans for truck purchases, $250,000 loan from a related

party, less principal repayments of $3,732,889 and received proceeds from the issuance of common stock from the ATM of $25,308 and recorded

related expenses of $25,308.We generated $2,533,589 of cash flows from financing activities during the year ended December 31, 2022, including

$3,191,308 from new debt borrowings, less $657,719 for the repayment of debt.

Liquidity and Sources of Capital

From inception to December 31, 2023, we have funded

our activities through capital contributions from issuances of notes payable and the sale of securities pursuant to the exemption provided

by Regulation D, by sale of securities to accredited investors and a public offering.

We have also financed truck purchases from manufacturer

loans and from our bank line of credit.

Although our financial statements for the year ended

December 31, 2023 were prepared under the assumption that we would continue our operations as a going concern, the report of our independent

registered public accounting firm that accompanies our financial statements for the year ended December 31, 2023 contains a going concern

qualification in which said firm expressed substantial doubt about our ability to continue as a going concern, based on the financial

statements at that time.

The Company has sustained a net loss since inception and does not have sufficient revenues and income to fully

fund the operations.

As a result, the Company has relied on loans from stockholders and others as well as stock sales to fund its activities

For the year ended December 31, 2023, the Company had a net loss of $10,471,889.

At December 31, 2023, the Company had an accumulated

Net change in cash and cash equivalents

$ (1,839,808 )

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

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

improvement primarily reflects stronger operational performance, including higher revenues and improved working capital management, which

reduced the Company’s cash burn.

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

the prior year.

used in investing activities increased substantially, driven by higher capital expenditures (vehicles purchased, not yet placed in service

as well as a deposit paid on future asset purchase), offset by no proceeds in the current year from the sales of marketable securities.

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

cash provided by financing activities rose significantly, reflecting successful capital-raising efforts.

This increase could be attributable

Proceeds from the issuance of notes payable and notes payable – related

The Company secured additional debt contributing to higher inflows.

Proceeds from issuing preferred shares bolstered the cash balance, supporting

ongoing operations and strategic initiatives.

Change in Cash and Cash Equivalents

the Company’s cash position improved by approximately $2.1 million, transitioning from a net outflow in the prior year to a net

inflow in 2024.

This positive swing is primarily the result of substantial financing proceeds received late in the year, alongside more

favorable operating cash flows.

The timing of major expenses and capital projects also influenced the Company’s cash balance at

The significant uptick in financing inflows helped offset operating and investing

outflows, resulting in a positive net change in cash and cash equivalents.

Growth-Focused

Investments :

The higher cash outflows for investing activities underscore the Company’s

commitment to scaling its operations, although this increases near-term cash usage.

Operational Cash Use :

A reduction in net cash used in operating activities highlights

improving efficiencies and stronger sales, but continued focus on cost management remains

critical to achieving positive operating cash flows in the future.

the Company’s cash flow trends reflect a deliberate effort to fund growth initiatives while managing day-to-day operational needs.

Management believes that recent financing activities, coupled with ongoing improvements in operational efficiency, will position the

Company for future stability and expansion.

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

in the tables below:

For the Years Ended December 31,

Operating activities

$ (16,189,008 )

$ (10,471,889 )

$ (5,717,119 )

Adjustments to reconcile net income to net cash used in operations

Depreciation and amortization

Impairment of fixed assets

Amortization of bond premium and realized loss on investments in debt securities

Amortization of operating lease - right-of-use asset

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

Amortization of debt discount

Bad debt expense

Stock issued in connection with loan interest expense - related party

Stock issued for services

Stock issued for services - related parties

Default penalty interest expense

Loss on debt extinguishment - related party

Accounts Receivable

Prepaids and other

Increase (decrease) in

Accounts payable and accrued expenses

Accounts payable and accrued expenses - related party

Operating lease liability

Operating lease liability - related party

Net cash used in operating activities

$ (4,585,605 )

$ (6,643,397 )

For the Years Ended December 31,

Investing activities

Purchase of vehicles not yet placed into service

$ (5,219,876 )

Deposit paid on future asset purchase

Proceeds from sale of marketable debt securities

Advances - related party

Purchase of fixed assets - net of refunds on prior purchases

Net cash provided by (used in) investing activities

$ (5,925,580 )

$ (8,096,312 )

For the Years Ended December 31,

Financing activities

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

Proceeds from notes payable

Proceeds from notes payable - related party

Proceeds from common stock issued for cash

Cash paid for direct offering costs - common stock

Repayments on line of credit

Repayments on notes payable

Repayments on loan payable - related party

Net cash provided by financing activities

and Capital Resources :

The significant increase in cash from financing activities late

in the year has improved the Company’s liquidity.

However, higher interest expense

and ongoing operational requirements underscore the importance of prudent cash management

and careful monitoring of debt covenants.

The Company’s heavier investment in vehicles and deposits for future

assets highlights a strategic push toward market expansion and increased service capacity.

While these initiatives may weigh on near-term free cash flow, they are expected to enhance

revenue-generating potential in the long term.

on Operational Efficiency :

Management continues to prioritize cost controls, aiming to

reduce the net cash used in operating activities.

Improved working capital management, route

optimization, and potential price adjustments are key levers for achieving positive cash

flow from operations in future periods.

Related-Party

The continued reliance on related-party notes and convertible preferred stock

indicates a supportive investor base.

Nonetheless, the Company must remain mindful of the

terms and potential ramifications of such financing, including interest rates, default provisions,

and equity dilution.

maintaining a disciplined approach to both spending and financing, EzFill aims to strengthen its balance sheet and sustain the growth

momentum of its on-demand fueling business.

and Sources of Capital

this time, we believe our existing funding sources may not be sufficient to meet our operational requirements and service our debt obligations

over the next 12 months from the issuance date of these consolidated financial statements.

This assessment is based on our historical

operating performance, ongoing capital needs, and our current reliance on external financing.

Operating Performance and Financing

inception, the Company has incurred net losses and has not generated sufficient revenues or positive operating income to independently

fund our operations.

Consequently, we have depended on equity and debt financings—including those from related parties—to

finance our activities and support our growth initiatives.

This reliance on external funding has been critical for maintaining day-to-day

operations, expanding our service capacity, and investing in technology and assets.

However, it has also introduced risks related to

interest expense, equity dilution, and dependency on the availability of future financing.

Liquidity Position

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

recent improvements in cash balances due to targeted financing activities, we continue to face challenges in achieving sustainable cash

flow from operations.

The timing of expenditures and capital outlays, coupled with the inherent volatility in revenue generation in our

industry, adds to the uncertainty of our liquidity profile.

Obligations and Capital Expenditures

significant portion of our near-term cash outflows is attributable to scheduled debt repayments and interest expense, including higher

financing costs incurred from default penalty interest and increased debt discount amortization.

Additionally, as we invest in capital

expenditures—such as the purchase of new delivery vehicles and technology enhancements—to support expansion into new markets,

our cash requirements remain elevated.

These commitments, while essential for long-term growth, further strain our liquidity in the short

on External Financing

the current financial dynamics, we have continually relied on external sources of capital.

Our funding strategies have included:

Raising capital through the sale of common or preferred shares, including convertible

securities from related parties.

Securing loans and other debt instruments, often under terms that include default

penalty interest or other onerous conditions, which have contributed to higher financing

● 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.

Concern Considerations

independent registered public accounting firm has issued a going concern qualification, reflecting the material uncertainties surrounding

our ability to continue as a profitable entity.

This qualification is primarily driven by:

historical and recurring net losses.

dependence on external capital to finance operations.

risk that current financing arrangements may not be renewed or may be available only under

less favorable terms.

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

sustainable terms.

We are evaluating various initiatives, including cost-containment measures, operational improvements, and strategic

partnerships, with the aim of transitioning to positive cash flow from operations.

However, there remains a risk that these strategies

may not yield the desired outcomes in the near term.

and Mitigating Actions

light of these challenges, we continue to closely monitor our liquidity position and are exploring multiple avenues to secure additional

These include:

● Negotiating

more favorable terms on existing and future debt.

● Identifying

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

Investors and stakeholders should be aware of the risks associated with our current liquidity and capital structure, and

the potential need for additional financing that could result in further dilution or increased debt service obligations.

Concern Qualification

reflected in the accompanying consolidated financial statements, for the year ended December 31, 2024, the Company had:

● Net loss available

to common stockholders of $16,447,279;

● Net cash used in

operations was $4,585,641

Additionally,

at December 31, 2024, the Company had:

● Accumulated deficit

of $61,764,329

● Stockholders’

equity of $2,155,571;

● Working capital

deficit of $7,416,533

We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable

Since inception, the Company’s operations have

primarily been funded through proceeds received in equity and debt financings.

In September 2021, the Company completed its Initial Public

Offering and raised $25,250,000 in net proceeds after deducting the underwriting discount and offering expenses.

The Company anticipates

that it will need to raise additional capital, in order to continue to fund its operations.

There is no assurance that the Company will

be able to obtain funds on commercially acceptable terms, if at all.

There is also no assurance that the amount of funds the Company might

raise will enable the Company to complete its initiatives or attain profitable operations.

The Company’s operating needs include

the planned costs to operate its business, including amounts required to fund working capital and capital expenditures.

The Company’s

future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability

to successfully expand to new markets, competition, and the need to enter into collaborations with other companies or acquire other companies

to enhance or complement its product and service offerings.

There can be no assurances that, in the event that we require additional financing,

such financing will be available on terms which are favorable to us, or at all.

If we are unable to raise additional funding to meet our

working capital needs in the future, we will be forced to delay or reduce, limit or cease our operations.

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

has relied on related parties for the debt based funding of its operations.

There is no assurance that the Company will be able to obtain

funds on commercially acceptable terms, if at all.

There is also no assurance that the amount of funds the Company might raise will enable

the Company to complete its initiatives or attain profitable operations.

Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital

and capital expenditures.

The Company’s future capital requirements and the adequacy of its available funds will depend on many

factors, including the Company’s ability to successfully expand to new markets, competition, and the need to enter into collaborations

with other companies or acquire other companies to enhance or complement its product and service offerings.

can be no assurances that financing will be available on terms which are favorable, or at all.

If the Company is unable to raise additional

funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations.

manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements.

The Company had cash on hand

of $438,299 at December 31, 2024.

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

from the sales of its products and services to achieve profitable operations.

In making this assessment we performed a comprehensive

analysis of our current circumstances including:

our financial position, our cash flows and cash usage forecasts for the twelve months

ended December 31, 2025, 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.

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

Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern

and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

strategic plans include the following:

● Expand into new

and existing markets (commercial and residential);

additional debt and/or equity based financing for growth;

our transaction with NextNRG, Inc.

(occurred February 13, 2025);

● Collaborations

with other operating businesses for strategic opportunities;

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

Note dated December 2, 2024

December 2, 2024, the Company and NextNRG entered into a promissory note (the “December 2 Note”) for the sum of $715,000

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

The December 2 Note has an original issue discount (“OID”) equal

The unpaid principal balance of the December 2 Note has a fixed rate of interest of 8% per annum.

Unless the December 2 Note

is otherwise accelerated, or extended in accordance with the terms and conditions therein, the balance of the December 2 Note, along

with accrued interest, will be due and payable in full on December 2, 2025.

If the Company defaults on the December 2 Note, the unpaid

principal and interest sums, along with all other amounts payable, multiplied by 150% will be immediately due.

Upon default, NextNRG

will have the right to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under

the December 2 Note into fully paid and non-assessable shares of the Company’s common stock.

The conversion price shall equal the

greater of the average VWAP over the five (5) Trading Day period prior to the conversion date;

or $0.70 (the “Floor Price”).

Notwithstanding the foregoing, the conversion price shall not exceed the closing price of the Company’s Common Stock on the Nasdaq

Capital Market on the date of the December 2 Note.

The Company and NextNRG have agreed that the total cumulative number of common stock

issued to NextNRG under the December 2 Note, together with all other transaction documents may not exceed the requirements of Nasdaq

Listing Rule 5635(d) (“Nasdaq 19.99% Cap”), except that such limitation will not apply following shareholder approval.

the Company is unable to obtain shareholder approval to issue common stock to Next in excess of the Nasdaq 19.99% Cap, then any remaining

outstanding balance of this December 2 Note must be repaid in cash at the request of NextNRG.

The December 2 Note contains a protection

for NextNRG in the event the Company effectuates a split of its common stock.

In the event of a stock split, if the December 2 Note is

issued and outstanding and has not been converted, then the number of shares and the price for any conversion under the December 2 Note

will be adjusted by the same ratios or multipliers of, any such subdivision, split, reverse split.

Note dated December 3, 2024

December 3, 2024, the Company and NextNRG entered into a promissory note (the “December 3 Note”) for the sum of $275,000

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

The December 3 Note has an original issue discount (“OID”) equal

The unpaid principal balance of the December 3 Note has a fixed rate of interest of 8% per annum.

Unless the December 3 Note

is otherwise accelerated, or extended in accordance with the terms and conditions therein, the balance of the December 3 Note, along

with accrued interest, will be due and payable in full on December 3, 2025.

If the Company defaults on the December 3 Note, the unpaid

principal and interest sums, along with all other amounts payable, multiplied by 150% will be immediately due.

Upon default, NextNRG

will have the right to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under

the December 3 Note into fully paid and non-assessable shares of the Company’s common stock.

The conversion price shall equal the

greater of the average VWAP over the five (5) Trading Day period prior to the conversion date;

or $0.70 (the “Floor Price”).

Notwithstanding the foregoing, the conversion price shall not exceed the closing price of the Company’s Common Stock on the Nasdaq

Capital Market on the date of the December 3 Note.

The Company and Next have agreed that the total cumulative number of common stock

issued to Next under this Note, together with all other transaction documents may not exceed the requirements of Nasdaq Listing Rule

5635(d) (“Nasdaq 19.99% Cap”), except that such limitation will not apply following shareholder approval.

If the Company

is unable to obtain shareholder approval to issue common stock to Next in excess of the Nasdaq 19.99% Cap, then any remaining outstanding

balance of this December 3 Note must be repaid in cash at the request of Next.

The December 3 Note contains a protection for Next in

the event the Company effectuates a split of its common stock.

In the event of a stock split, if the December 3 Note is issued and outstanding

and has not been converted, then the number of shares and the price for any conversion under the December 3 Note will be adjusted by

the same ratios or multipliers of, any such subdivision, split, reverse split.

Note dated December 17, 2024

December 17, 2024, the Company and NextNRG entered into a promissory note (the “December 17 Note”) for the sum of $580,000

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

The unpaid principal balance of the December 17 Note has a fixed rate of interest

of 8% per annum.

Unless the December 17 Note is otherwise accelerated, or extended in accordance with the terms and conditions therein,

the balance of the December 17 Note, along with accrued interest, will be due and payable in full on December 17, 2025.

As part of the

promissory note, the parties acknowledged that $379,755.39 of the Loan was sent directly to a third party as a down payment for the purchase

of equipment.

If the Company defaults on the December 17 Note, the unpaid principal and interest sums, along with all other amounts payable,

multiplied by 150% will be immediately due.

Upon default, NextNRG will have the right to convert all or any part of the outstanding and

unpaid principal, interest, penalties, and all other amounts under the December 17 Note into fully paid and non-assessable shares of

the Company’s common stock.

The conversion price shall equal the greater of the average VWAP over the five (5) Trading Day period

prior to the conversion date;

or $0.70 (the “Floor Price”).

Notwithstanding the foregoing, the conversion price shall not

exceed the closing price of the Company’s Common Stock on the Nasdaq Capital Market on the date of the December 17 Note.

and NextNRG have agreed that the total cumulative number of common stock issued to Next under this Note, together with all other transaction

documents may not exceed the requirements of Nasdaq Listing Rule 5635(d) (“Nasdaq 19.99% Cap”), except that such limitation

will not apply following shareholder approval.

If the Company is unable to obtain shareholder approval to issue common stock to Next

in excess of the Nasdaq 19.99% Cap, then any remaining outstanding balance of this December 17 Note must be repaid in cash at the request

The December 17 Note contains a protection for NextNRG in the event the Company effectuates a split of its common stock.

the event of a stock split, if the December 17 Note is issued and outstanding and has not been converted, then the number of shares and

the price for any conversion under the December 17 Note will be adjusted by the same ratios or multipliers of, any such subdivision,

split, reverse split.

Farkas is the chief executive officer of NextNRG and is the beneficial holder of approximately 68.14% of the Company’s outstanding

shares of common stock.

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,

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 twenty-one percent (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.

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.

Note, dated as of December 30, 2024

December 30, 2024, the Company and NextNRG entered into a promissory note (the “December 30 Note”) for the sum of $330,000

to be used for the Company’s working capital needs, including without limitation the purchase of equipment.

The unpaid principal

balance of the December 30 Note has a fixed rate of interest of 8% per annum.

Unless the December 30 Note is otherwise accelerated, or

extended in accordance with the terms and conditions therein, the balance of the December 30 Note, along with accrued interest, will

be due and payable in full on December 30, 2025.

If the Company defaults on the December 30 Note, the unpaid principal and interest sums,

along with all other amounts payable, multiplied by 150% will be immediately due.

Upon default, NextNRG will have the right to convert

all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the December 30 Note into fully

paid and non-assessable shares of the Company’s common stock.

The conversion price shall equal the greater of the average VWAP

over the five (5) Trading Day period prior to the conversion date;

or $0.70 (the “Floor Price”).

Notwithstanding the foregoing,

the conversion price shall not exceed the closing price of the Company’s Common Stock on the Nasdaq Capital Market on the date

of the December 30 Note.

The Company and NextNRG have agreed that the total cumulative number of common stock issued to Next under the

December 30 Note, together with all other transaction documents may not exceed the requirements of Nasdaq Listing Rule 5635(d) (“Nasdaq

19.99% Cap”), except that such limitation will not apply following shareholder approval.

If the Company is unable to obtain shareholder

approval to issue common stock to NextNRG in excess of the Nasdaq 19.99% Cap, then any remaining outstanding balance of the December

30 Note must be repaid in cash at the request of NextNRG.

The December 30 Note contains a protection for NextNRG in the event the Company

effectuates a split of its common stock.

In the event of a stock split, if the December 30 Note is issued and outstanding and has not

been converted, then the number of shares and the price for any conversion under the December 30 Note will be adjusted by the same ratios

or multipliers of, any such subdivision, split, reverse split.

Farkas is the chief executive officer of NextNRG and is the beneficial holder of approximately 68.14% of the Company’s outstanding

shares of common stock.

Note, dated as of January 15, 2025

January 15, 2025, the Company and Alcourt LLC (the “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 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

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.

This note was repaid

in February 2025.

holders of a majority of the Company’s voting capital stock, by written consents in lieu of meetings delivered on January 15, 2025,

pursuant to Section 228 of the Delaware General Corporation Law and Section 9 of Article II of our bylaws, provided approval for the

following corporate actions (the “Authorizations”):

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 LLC, in the event that such note is not repaid by April 15,

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 International Ltd., 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;

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.

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 has filed with the Commission a definitive information statement under cover of Schedule 14C in respect of the Authorizations

and expects to disseminate such information statement as soon as reasonably practicable.

Receivable Financing Arrangements, dated as of December 27, 2024

December 27, 2024, the Company entered certain receivable financing arrangements with the following parties:

(i) Revenue Purchase Agreement

and Guaranty of Performance with GALT FUNDING Co.

(the “Galt Agreement”);

(ii) Sales of Future Receipts Agreement with Redstone

(the “Redstone Agreement”);

and (iii) Future Receivables Sale and Purchase Agreement with Funderzgroup LLC dba

Advance (the “Funderzgroup Agreement”, and together with the Galt Agreement and the Redstone Agreement, the “Receivable

Financing Agreements”).

Each of the Receivable Financing Agreements shall expire when the amounts financed thereunder are paid

in full to the respective lenders, which the Company expects to be approximately six (6) months from the date of their signing.

Agreement provides the Company with $500,000 in receivables financing subject to an origination fee of $15,000 and a payment schedule

of $27,500 per week.

The Redstone Agreement provides the Company with $1,000,000 in receivables financing subject to an origination fee

of $30,035 and a payment schedule of $55,000 per week.

The Funderzgroup Agreement provides the Company with $1,000,000 in receivables

financing subject to fees of $30,035 and a payment schedule of $55,000 per week.

Each of the Receivable Financing Agreements provide

for certain representations and covenants that are customary for these types of transactions.

Sheet Arrangements

do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4).

Quantitative and Qualitative Disclosures About Market Risk

reporting companies are not required to provide the information required by this item.

PART I - FINANCIAL

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

What changed 10-K

Item 7. Management’s Discussion and Analysis