NEXTNRG, INC. 10-K

Item 8. Financial Statements and Supplementary Data NextNRG, Inc. Page(s) Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets F- 2 Consolidated Statements of Operations F-3 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) F-4 - F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 - F-81 93 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of NEXTNRG, Inc. and Subsidiaries Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of NEXTNRG, Inc. and Subsidiaries (the Company) as of December 31, 2024 and 2023 and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024 and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company suffered a net loss from operations and has insufficient revenues and income to fully fund the operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audits of the consolidated financial statements that were communicated, or required to be communicated, to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which they relate. Going Concern Due to the net loss for the year, the Company evaluated the need for a going concern. Auditing management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which are not able to be substantiated. As discussed in Note 1, the Company suffered a net loss from operations and has an accumulated deficit for the year ended December 31, 2024. To evaluate the appropriateness of the going concern, we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going concern. /s/ M&K CPAS, PLLC We have served as the Company’s auditor since 2020 The Woodlands, Texas March 27, 2025 PCAOB ID # 2738 F- 1 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. Consolidated Balance Sheets December 31, 2024 December 31, 2023 Assets Current Assets Cash $ 438,299 $ 226,985 Accounts receivable - net 1,614,664 1,192,340 Inventory 126,400 134,057 Due from related party 17,150 - Prepaids and other 42,509 220,909 Total Current Assets 2,239,022 1,774,291 Deposit on future asset purchase 2,035,283 - Property and equipment - net 7,475,673 3,310,187 Operating lease - right-of-use asset 61,151 297,394 Operating lease - right-of-use asset - related party 314,957 286,397 Operating lease - right-of-use asset 314,957 286,397 Deposits 49,041 49,063 Total Assets $ 12,175,127 $ 5,717,332 Liabilities and Stockholders’ Equity (Deficit) Current Liabilities Accounts payable and accrued expenses $ 1,468,788 $ 845,275 Accounts payable and accrued expenses - related parties 83,204 72,428 Accounts payable and accrued expenses 83,204 72,428 Notes payable - net 5,718,076 946,228 Notes payable - related parties - net 1,954,289 4,802,115 Notes payable - net 1,954,289 4,802,115 Operating lease liability 69,128 246,880 Operating lease liability - related party 103,799 72,034 Operating lease liability 103,799 72,034 Dividends payable (common stock) - related parties 258,271 - Total Current Liabilities 9,655,555 6,984,960 Long Term Liabilities Notes payable - net 151,907 353,490 Operating lease liability - 69,128 Operating lease liability - related party 212,094 215,960 Operating lease liability 212,094 215,960 Total Long Term Liabilities 364,001 638,578 Total Liabilities 10,019,556 7,623,538 Commitments and Contingencies - - Stockholders’ Equity (Deficit) Preferred stock - $ 0.0001 par value; 5,000,000 shares authorized none issued and outstanding, respectively - - Convertible Preferred stock - Series A, $ 0.0001 par value; 513,000 shares designated 363,000 and none issued and outstanding, respectively 36 - Convertible Preferred stock - Series B, $ 0.0001 par value; 150,000 shares designated 140,000 and none issued and outstanding, respectively 14 - Preferred stock value 14 - Common stock - $ 0.0001 par value, 500,000,000 shares authorized 6,571,343 and 1,806,612 shares issued and outstanding, respectively 667 180 Common stock issuable ( 0 and 104,000 shares, respectively) - 10 Additional paid-in capital 63,919,183 43,410,654 Accumulated deficit ( 61,764,329 ) ( 45,317,050 ) Total Stockholders’ Equity (Deficit) 2,155,571 ( 1,906,206 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 12,175,127 $ 5,717,332 The accompanying notes are an integral part of these consolidated financial statements F- 2 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. Consolidated Statements of Operations (Unaudited) 2024 2023 For the Year Ended December 31, 2024 2023 Sales - net $ 27,770,279 $ 23,216,423 Costs and expenses Cost of sales 25,467,415 21,845,574 General and administrative expenses 8,505,461 8,796,223 Depreciation and amortization 1,079,522 1,108,186 Total costs and expenses 35,052,398 31,749,983 Loss from operations ( 7,282,119 ) ( 8,533,560 ) Other income (expense) Interest income - 34,327 Other income 249,253 64,800 Interest expense (including amortization of debt discount) ( 8,248,642 ) ( 1,719,296 ) Loss on sale of marketable debt securities - net - ( 27,160 ) Loss on debt extinguishment - related party ( 907,500 ) ( 291,000 ) Total other income (expense) - net ( 8,906,889 ) ( 1,938,329 ) Net loss $ ( 16,189,008 ) $ ( 10,471,889 ) Preferred stock dividend - payable on Series A convertible preferred stock - to be issued in common stock ( 168,923 ) - Preferred stock dividend - payable on Series B convertible preferred stock - to be issued in common stock ( 89,348 ) - Preferred stock dividend ( 89,348 ) - Net loss available to common stockholders - basic and diluted $ ( 16,447,279 ) $ ( 10,471,889 ) Loss per share - basic and diluted $ ( 4.66 ) $ ( 6.98 ) Weighted average number of shares - basic and diluted 3,586,399 1,501,215 The accompanying notes are an integral part of these unaudited consolidated financial statements F- 3 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. Consolidated Statements of Changes in Stockholders’ Deficit For the Three and Nine Months Ended September 30, 2024 (Unaudited) Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity (Deficit) Series A - Convertible Series B - Convertible Additional Total Preferred Stock Preferred Stock Common Stock Common Stock Issuable Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity (Deficit) December 31, 2023 - $ - - $ - 1,806,612 $ 180 104,000 $ 10 $ 43,410,654 $ ( 45,317,050 ) - $ ( 1,906,206 ) Stock based compensation - related parties - - - - 224,820 21 - - 805,979 - 806,000 Stock issued for cash - related party - - 140,000 14 - - - - 1,399,986 - 1,400,000 Stock issued for accounts payable - - - - 2,703 - - - 10,000 - 10,000 Stock issued in connection with loan interest expense - related party - - - - - - 138,000 14 677,536 - 677,550 Conversion of debt - related party - preferred stock 363,000 36 - - - - - - 3,629,964 - 3,630,000 Stock issued as debt issue costs - related party - - - - 425,978 40 - - 2,020,347 - 2,020,387 Stock issued for services - - - - 212,730 22 - - 725,618 - 725,640 Conversion of debt - related party - common stock - - - - 3,525,341 353 - - 9,796,343 - 9,796,696 Issuance of previously issuable common stock - related party - - - - 242,000 24 ( 242,000 ) ( 24 ) - - - Loss on debt extinguishment - related party - - - - - - - - 907,500 - 907,500 Stock issued as deposit for future asset purchase - - - - 201,613 20 - - 535,263 - 535,283 Reverse split true up adjustment - - - - 66,030 7 - - ( 7 ) - - Series A and B - convertible preferred stock dividends - payable in common stock - - - - - - - - - ( 258,271 ) ( 258,271 ) Net loss - - - - - - - - - ( 16,189,008 ) - ( 16,189,008 ) December 31, 2024 363,000 $ 36 140,000 $ 14 6,707,827 $ 667 - $ - $ 63,919,183 $ ( 61,764,329 ) - $ 2,155,571 The accompanying notes are an integral part of these unaudited consolidated financial statements F- 4 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. Consolidated Statements of Changes in Stockholders’ Equity (Deficit) For the Year Ended December 31, 2023 Shares Amount Shares Amount Shares Amount Capital Deficit Loss (Deficit) Additional Accumulated Other Total Stockholders’ Preferred Stock Common Stock Common Stock Issuable Paid-in Accumulated Comprehensive Equity Shares Amount Shares Amount Shares Amount Capital Deficit Loss (Deficit) December 31, 2022 - $ - 1,334,270 $ 133 - $ - $ 40,675,065 $ ( 34,845,161 ) $ ( 44,590 ) $ 5,785,447 Balance - $ - 1,334,270 $ 133 - $ - $ 40,675,065 $ ( 34,845,161 ) $ ( 44,590 ) $ 5,785,447 Stock based compensation - related parties - - 268,986 27 - - 1,215,338 - - 1,215,365 Stock based compensation - other - - - - - - 37,031 - - 37,031 Stock sold for cash (ATM) - net of offering costs - - 3,357 - - - 25,308 - - 25,308 Cash paid for direct offering costs ( 25,308 ) ( 25,308 ) Unrealized gain on debt securities - - - - - - - - 44,590 44,590 Stock issued as debt issue costs - related party - - 160,000 16 104,000 10 919,474 - - 919,500 Stock issued for services - - 40,000 4 - - 272,746 - - 272,750 Loss on debt extinguishment - related party 291,000 291,000 Net loss - - - - - - - ( 10,471,889 ) - ( 10,471,889 ) December 31, 2023 - $ - 1,806,612 $ 180 104,000 $ 10 $ 43,410,654 $ ( 45,317,050 ) $ - $ ( 1,906,206 ) Balance - $ - 1,806,612 $ 180 104,000 $ 10 $ 43,410,654 $ ( 45,317,050 ) $ - $ ( 1,906,206 ) The accompanying notes are an integral part of these unaudited consolidated financial statements F- 5 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. Consolidated Statements of Cash Flows (Unaudited) 2024 2023 For the Year Ended December 31, 2024 2023 Operating activities Net loss $ ( 16,189,008 ) $ ( 10,471,889 ) Adjustments to reconcile net loss to net cash used in operations Depreciation and amortization 1,079,522 1,108,186 Impairment of fixed assets 13,422 105,506 Impairment of goodwill and other intangible assets - - Amortization of bond premium and realized loss on investments in debt securities - 34,556 Amortization of operating lease - right-of-use asset 236,243 224,388 Amortization of operating lease - right-of-use asset - related party 81,203 30,160 Amortization of debt discount 2,645,291 1,403,244 Bad debt expense 41,836 83,564 Stock issued in connection with loan interest expense - related party 677,550 - Stock issued for services 725,640 309,781 Stock issued for services - related parties 806,000 1,215,365 Default penalty interest expense 4,475,565 - Loss on debt extinguishment - related party 907,500 291,000 Contributed services - related parties - - Changes in operating assets and liabilities (Increase) decrease in Accounts Receivable ( 464,160 ) ( 509,212 ) Inventory 7,657 17,191 Prepaids and other 174,382 108,442 Deposits 22 3,674 Increase (decrease) in Accounts payable and accrued expenses 193,513 ( 411,204 ) Accounts payable and accrued expenses - related party 326,907 72,428 Operating lease liability ( 246,880 ) ( 230,014 ) Operating lease liability - related party ( 77,810 ) ( 28,563 ) Net cash used in operating activities ( 4,585,605 ) ( 6,643,397 ) Investing activities Purchase of vehicles not yet placed into service ( 5,219,876 ) - Deposit paid on future asset purchase ( 650,000 ) - Proceeds from sale of marketable debt securities - 2,130,116 Advances - related party ( 17,150 ) - Purchase of fixed assets - net of refunds on prior purchases ( 38,554 ) 40,616 Net cash used provided by (used in) investing activities ( 5,925,580 ) 2,170,732 Financing activities Proceeds from issuance of Series B - convertible preferred stock - related party 1,400,000 - Proceeds from notes payable 5,174,930 250,000 Proceeds from notes payable - related party 5,245,000 4,590,600 Proceeds from common stock issued for cash - 25,308 Cash paid for direct offering costs - common stock - ( 25,308 ) Repayments on line of credit - ( 1,000,000 ) Repayments on notes payable ( 1,097,431 ) ( 945,243 ) Repayments on loan payable - related party - ( 262,500 ) Net cash provided by financing activities 10,722,499 2,632,857 Net decrease in cash 211,314 ( 1,839,808 ) Cash - beginning of year 226,985 2,066,793 Cash - end of year $ 438,299 $ 226,985 Supplemental disclosure of cash flow information Cash paid for interest $ 193,604 $ 178,944 Cash paid for income tax $ - $ - Supplemental disclosure of non-cash investing and financing activities Conversion of debt - related party - Series A, preferred stock $ 3,630,000 $ - Conversion of debt - related party - common stock $ 9,322,500 $ - Conversion of accrued interest - related party - common stock $ 474,196 Accrued debt discount (OID) $ 440,000 Debt discount (OID) in connection with the issuance of notes payable $ 902,570 Debt discount (OID) in connection with the issuance of notes payable - related party $ 2,486,887 $ 1,621,650 Series A and B - preferred stock dividends - payable in common stock $ 258,271 $ - Stock issue to settle accounts payable $ 10,000 Deposit paid on future asset purchase (common stock issuance) $ 535,283 Deposit paid on future asset purchase (note payable) $ 850,000 Realized gains on sale of investments in debt securities - elimination of AOCL $ - $ 44,590 True up notes payable and vehicle balances for actual borrowings $ - $ 24,664 Termination of right-of-use asset - related party $ 230,605 Right-of-use asset obtained in exchange for new operating lease liability - related party $ 340,368 $ 316,557 The accompanying notes are an integral part of these unaudited consolidated financial statements F- 6 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Note 1 - Organization and Nature of Operations Organization and Nature of Operations NextNRG, Inc. (formerly known as EzFill Holdings, Inc.) and Subsidiaries (“Next”, “NextNRG,” “we,” “our” or “the Company”), was incorporated on April 20, 2016 , in the State of Florida. EzFill Holdings, Inc. (“EZFL”) was incorporated on March 28, 2019 , in the State of Delaware and operates an on-demand mobile gas delivery service as well as beginning to provide services as a renewable energy company focused on developing and deploying wireless electric vehicle charging technology integrated with battery storage and solar energy solutions. Its wholly owned subsidiary Neighborhood Fuel Holdings, LLC, is inactive. Common Control Merger (Related Party) On February 13, 2025, the Company executed a share exchange agreement with Next (an entity controlled by Michael Farkas (“Farkas”)), an entity under common control. Pursuant to the terms of the agreement EZFL issued 100,000,000 shares of common stock in exchange for all of the issued and outstanding common stock of Next. In connection with this transaction, the Company changed its name from EzFill Holdings, Inc. to NextNRG, Inc. See Note 12. NASDAQ – Continued Listing Rule or Standard As previously disclosed, on August 22, 2023, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company’s stockholders’ equity did not comply with the minimum $ 2,500,000 stockholders’ equity requirement for continued listing set forth in Listing Rule 5550(b) (the “Equity Rule”). Upon submission of the Company’s plan to regain compliance, the Staff granted the Company an extension until February 20, 2024 to comply with this requirement. On February 21, 2024, the Company received a delist determination letter (the “Delist Letter”) from the Staff advising the Company that the Staff had determined that the Company did not meet the terms of the extension. Specifically, the Company did not complete its proposed transaction to regain compliance with the Equity Rule and evidence compliance on or before February 20, 2024. See Form 8-K filed on February 23, 2024. F- 7 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company had requested an appeal for the Staff’s determination. A hearing occurred on May 2, 2024. At the hearing, the Company presented its plan for regaining compliance with the Equity Rule and may request a further extension to complete the execution of its plan. On August 30, 2024, the Company received a letter from Nasdaq confirming that the Company has (i) regained compliance with the Equity Rule, as required by the Panel’s decision dated May 13, 2024, as amended, and (ii) in application of Listing Rule 5815(d)(4)(B), the Company will be subject to a mandatory panel monitor for a period of one year from the date of such letter. If, within that one-year monitoring period, the Staff finds that the Company is no longer in compliance with the Equity Rule, then, notwithstanding Listing Rule 5810(c)(2), the Company will not be permitted to provide Staff with a plan of compliance with respect to such deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to such deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Listing Rule 5810(c)(3). Instead, the Staff will issue a Delist Determination Letter, and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/ present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(C) and the Company’s securities may at that time be delisted from Nasdaq. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Liquidity and Going Concern As 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 ; and ● Net cash used in operations was $ 4,585,605 Additionally, at December 31, 2024, the Company had: ● Accumulated deficit of $ 61,764,329 ● Stockholders’ equity of $ 2,155,571 ; and ● Working capital deficit of $ 7,416,533 F- 8 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations. The Company has relied on related parties for the debt based funding of its operations. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully expand to new markets, competition, and the need to enter into collaborations with other companies or acquire other companies to enhance or complement its product and service offerings. There can be no assurances that financing will be available on terms which are favorable, or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations. We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company had cash on hand of $ 438,299 at December 31, 2024. The Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months ended December 31, 2025, and our current capital structure including equity-based instruments and our obligations and debts. These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. F- 9 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 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 NextNRG, Inc. (occurred February 13, 2025); ● Collaborations with other operating businesses for strategic opportunities; and ● Acquire other businesses to enhance or complement our current business model while accelerating our growth. Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”. In accordance with ASC 810-10, consolidation applies to: ● Entities with more than 50% voting interest, unless control is not with the Company; and ● Variable Interest Entities (VIEs), where the Company is the primary beneficiary, possessing both (i) power over significant activities and (ii) the obligation to absorb losses or receive benefits. All intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45. The Company continuously evaluates its investments and relationships to assess consolidation requirements. Business Combinations, Asset Acquisitions, and Reverse Acquisitions The Company accounts for acquisitions in accordance with ASC 805, “Business Combinations,” and applicable SEC reporting requirements under Regulation S-X, Rule 3-05 and Regulation S-K, Items 101 and 303. Transactions qualifying as business combinations are accounted for under the acquisition method, while those classified as asset acquisitions follow the guidance in ASC 805-50. Additionally, the Company evaluates whether a transaction qualifies as a reverse acquisition under ASC 805-40 and applies the appropriate accounting and disclosure requirements. F- 10 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Business Combinations For transactions classified as business combinations, the Company: ● Recognizes and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition date (ASC 805-20-25-1). ● Records goodwill as the excess of the fair value of consideration transferred over the fair value of net assets acquired, including any previously held equity interests (ASC 805-30-30-1). ● Expenses acquisition-related costs as incurred, per ASC 805-10-25-23. ● Uses preliminary purchase price allocations, with adjustments permitted within the measurement period (not exceeding one year) per ASC 805-10-25-13. Adjustments beyond the measurement period are recorded in earnings. Significant judgments in fair value determinations include: ● Intangible asset valuations, based on estimates of future cash flows and discount rates. ● Useful life assessments, impacting amortization and financial results. ● Contingent consideration, which is remeasured at fair value through earnings per ASC 805-30-35-1. For SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant. The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests. Asset Acquisitions For transactions classified as asset acquisitions under ASC 805-50, the Company: ● Applies the “screen test” to determine whether substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or group of similar assets (ASC 805-10-55-3A). ● Allocates the purchase price using a cost accumulation model, assigning costs to acquired assets based on their relative fair values (ASC 805-50-30-3). ● Capitalizes direct acquisition costs as part of the asset’s cost, unlike business combinations where such costs are expensed (ASC 805-50-25-1). F- 11 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The classification between business combinations and asset acquisitions requires significant judgment, particularly when applying the screen test. Incorrect classification can materially impact: ● The recognition of goodwill (only in business combinations). ● The measurement and presentation of acquired assets and assumed liabilities. ● The Company’s financial position and results of operations. Reverse Acquisitions A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the accounting acquiree, and the entity whose equity interests are acquired (the legal acquiree) is identified as the accounting acquirer under ASC 805-40, “Reverse Acquisitions.” Accounting for Reverse Acquisitions ● The legal acquiree (accounting acquirer) is treated as the continuing reporting entity, and its assets, liabilities, and operations are measured at historical cost. ● The legal acquirer (accounting acquiree) is recognized at fair value, similar to a business combination. ● No goodwill is recognized, as the transaction is considered a capital reorganization rather than an acquisition of a business per ASC 805-40-30-2. ● The equity structure (common stock and additional paid-in capital) is adjusted to reflect that of the legal acquirer, but the retained earnings balance is that of the accounting acquirer. Disclosure Requirements for Reverse Acquisitions Under SEC Regulation S-X, Rule 3-05, and Regulation S-K, Items 101 and 303, the Company must disclose: ● A detailed description of the transaction, including how control was obtained. ● A comparative analysis of financial statements before and after the acquisition. ● Pro forma financial information in accordance with Regulation S-X, Article 11, showing the impact of the transaction as if it had occurred at the beginning of the reporting period. ● Changes in governance, management, and operations post-acquisition. For SEC registrants, a reverse merger with a public shell company may also trigger “Super 8-K” reporting requirements under SEC Form 8-K, Item 2.01, requiring disclosure within four business days of the transaction closing. F- 12 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Regulatory and Financial Reporting Considerations For SEC registrants, acquisitions may trigger additional disclosure and reporting requirements: ● Regulation S-X, Rule 3-05: Requires separate financial statements of the acquired business if it meets significance thresholds under Rule 1-02(w). ● Regulation S-K, Item 101: Requires disclosure of the impact of material acquisitions on the Company’s business operations. ● Regulation S-K, Item 303: Mandates discussion of the impact of acquisitions on the Company’s financial condition and results of operations in Management’s Discussion and Analysis (MD&A). ● Regulation S-X, Article 11: Requires pro forma financial statements if the acquisition is significant. ● Form 8-K, Item 2.01: Immediate reporting requirements for material acquisitions, including reverse mergers. The Company continuously evaluates acquisitions, including reverse acquisitions, to ensure proper classification and compliance with ASC 805, SEC reporting requirements, and regulatory guidance. Business Segments and Expense Disclosure The Company follows ASC 280, Segment Reporting, which requires public entities to report financial and descriptive information about their reportable operating segments. ASC 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 Chief Operating Decision Maker (“CODM,” which is our Chief Executive Officer) to make decisions about resource allocation and performance assessment; and ● Has discrete financial information available. Under ASC 280-10-50-5, a public entity is required to report separately only those operating segments that meet certain quantitative thresholds. However, as specified in ASC 280-10-50-11, if a company’s business activities are managed as a single operating segment and reviewed on a consolidated basis, the company may report as a single segment. The Company has determined that it operates as one reportable segment, as its CODM reviews the business as a whole rather than by distinct business components. F- 13 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Application of ASU 2023-07 – Segment Expense Disclosure Requirements In October 2023, the FASB issued ASU 2023-07, which enhances segment reporting by requiring public entities to disclose significant segment expenses that are regularly reviewed by the CODM. However, under ASC 280-10-50-31, these requirements apply only to entities with multiple reportable segments. Since the Company operates as a single reportable segment, it is not required to disclose segment expenses separately. Although ASC 280-10-50-32 allows entities to voluntarily disclose additional segment-related information, including a breakdown of expenses, the Company is not required to present individual expense categories, and has not done so, because its operations are reviewed and managed as a single segment. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the recognition of revenues and expenses during the reporting period. Actual results may differ from these estimates, and such differences could be material. In accordance with ASC 250-10-50-4, changes in estimates are recorded in the period in which they become known and are accounted for prospectively. The Company bases its estimates on historical experience, industry trends, and other relevant factors, incorporating both quantitative and qualitative assessments that it believes are reasonable under the circumstances. Significant estimates for the years ended December 31, 2024, and 2023, respectively, include: ● Allowance for doubtful accounts and other receivables ● Inventory reserves and classifications ● Valuation of loss contingencies ● Valuation of stock-based compensation ● Estimated useful lives of property and equipment ● Impairment of intangible assets ● Implicit interest rate in right-of-use operating leases ● Uncertain tax positions ● Valuation allowance on deferred tax assets F- 14 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Risks and Uncertainties The Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic fluctuations. The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential business disruptions, supply chain constraints, and liquidity challenges. In accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect its financial condition, results of operations, and business outlook. Key factors contributing to variability in sales and earnings include: 1. Industry Cyclicality (ASC 275-10-50-6) – The Company’s financial performance is affected by industry trends, seasonality, and shifts in market demand. 2. Macroeconomic Conditions (ASC 275-10-50-8) – Economic downturns, inflationary pressures, interest rate changes, and geopolitical risks may impact consumer purchasing behavior and the Company’s revenue streams. 3. Pricing Volatility (ASC 275-10-50-4) – The cost and availability of raw materials, supply chain disruptions, and competitive pricing pressures can lead to fluctuations in gross margins and profitability. Given these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting liquidity, business continuity, and long-term strategic growth. The Company continuously assesses these risks and implements measures to mitigate their potential impact. Fair Value of Financial Instruments The Company accounts for financial instruments in accordance with Financial Accounting Standards Board (FASB) ASC 820, Fair Value Measurements, which establishes a framework for measuring fair value and requires related disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the Company’s principal market or, if none exists, the most advantageous market for the asset or liability. F- 15 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Fair Value Hierarchy ASC 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. The classification of an asset or liability within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Level 3 valuations generally require more judgment and complexity, often involving a combination of cost, market, or income approaches, as well as assumptions about market conditions, pricing, and other factors. Fair Value Determination and Use of External Advisors The Company assesses the fair value of its financial instruments and, where appropriate, may engage external valuation specialists to assist in determining fair value. While management believes that recorded fair values are reasonable, they may not necessarily reflect net realizable values or future fair values. Financial Instruments Carried at Historical Cost The Company’s financial instruments—including cash, accounts receivable, accounts payable, and accrued expenses (including related party balances)—are recorded at historical cost. As of December 31, 2024 and 2023, respectively, the carrying amounts of these instruments approximated their fair values due to their short-term maturities. Fair Value Option Under ASC 825 ASC 825-10, Financial Instruments, permits entities to elect the fair value option for certain financial assets and liabilities. This election is made on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If elected, unrealized gains and losses are recognized in earnings at each reporting date. The Company has not elected the fair value option for any of its outstanding financial instruments. F- 16 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Cash and Cash Equivalents and Concentration of Credit Risk For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At December 31, 2024 and 2023, respectively, the Company did not have any cash equivalents. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $ 250,000 . At December 31, 2024 and 2023, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits. Investments The Company accounts for available-for-sale (AFS) debt securities in accordance with FASB ASC 320, Investments—Debt and Equity Securities. These securities are recorded at fair value, with unrealized gains and losses recognized as a component of other comprehensive income (OCI) unless deemed other-than-temporary, per ASC 320-10-35-1. Recognition 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. Impairment Assessment The Company evaluates AFS debt securities for other-than-temporary impairment (OTTI) in accordance with ASC 320-10-35-33 to 35. 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. F- 17 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 If an OTTI is identified, the impairment loss is recognized in earnings as the difference between the amortized cost and the fair value of the security, per ASC 320-10-35-34. The new fair value becomes the adjusted cost basis, and subsequent recoveries are not recognized in earnings (ASC 320-10-35-35). During the years ended December 31, 2024 and 2023, respectively, there were no impairments taken. Investment Activity For the years ended December 31, 2024, and 2023, the Company received proceeds of $ 0 and $ 2,130,116 , respectively, from the sale and liquidation of its investment portfolio. Realized losses, including bond premium amortization, were $ 0 and $ 34,556 for the years ended December 31, 2024, and 2023, respectively. Accounts Receivable The Company accounts for accounts receivable in accordance with FASB ASC 310, Receivables. Receivables are recorded at their net realizable value, which represents the amount management expects to collect from outstanding customer balances (ASC 310-10-35-7). The Company extends credit to customers based on an evaluation of their financial condition and other factors. The Company does not require collateral, and interest is not accrued on overdue accounts receivable (ASC 310-10-45-4). Allowance for Doubtful Accounts Management periodically assesses the collectability of accounts receivable and establishes an allowance for doubtful accounts as needed. The allowance is determined based on: ● A review of outstanding accounts, ● Historical collection experience, and ● Current economic conditions (ASC 310-10-35-9). Accounts deemed uncollectible are written off against the allowance when determined to be uncollectible (ASC 310-10-35-10). F- 18 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Applicability of ASC 326 (“CECL”) The Company has assessed the applicability of ASC 326, Financial Instruments—Credit Losses (CECL), which requires an expected credit loss model for financial assets measured at amortized cost. However, ASC 326 primarily applies to financial institutions and entities with long-term financing receivables. Since the Company’s accounts receivable are short-term trade receivables that do not meet the scope requirements of ASC 326-20-15-2, it continues to apply the incurred loss model under ASC 310 for estimating credit losses. The following is a summary of the Company’s accounts receivable at December 31, 2024 and 2023: Schedule of Accounts Receivable December 31, 2024 December 31, 2023 Accounts receivable $ 1,696,436 $ 1,274,112 Less: allowance for doubtful accounts 81,772 81,772 Accounts receivable - net $ 1,614,664 $ 1,192,340 For the years ended December 31, 2024 and 2023, bad debt was as follows: Schedule of Bad Debt December 31, 2024 December 31, 2023 Bad debt expense $ 41,836 $ 83,564 Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations. Inventory The Company accounts for inventory in accordance with FASB ASC 330, Inventory. Inventory consists solely of fuel and is stated at the lower of cost or net realizable value (“LCNRV”) using the first-in, first-out (FIFO) method, as required by ASC 330-10-35-1. F- 19 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Inventory Valuation and Reserve Assessment Management assesses the recoverability of inventory each reporting period and establishes reserves for potential inventory write-downs when necessary. The Company evaluates factors such as: ● Market conditions affecting fuel prices, ● Net realizable value based on estimated selling price, and ● Inventory turnover trends (ASC 330-10-35-2). For the years ended December 31, 2024 and 2023, respectively, the Company did no t record any provisions for inventory obsolescence or impairment. At December 31, 2024 and 2023, the Company had inventory of $ 126,400 and $ 134,057 , respectively. Concentrations The Company evaluates and discloses significant concentrations of risk in accordance with FASB ASC 275-10, Risks and Uncertainties. These risks may arise from customer concentrations, vendor reliance, geographic dependence, or other economic factors that could materially impact the Company’s financial position, results of operations, and cash flows. A concentration exists when a single customer, supplier, or market accounts for a significant portion (typically greater than 10%) of the Company’s total revenues, accounts receivable, or vendor purchases (ASC 275-10-50-16). Customer and Sales Concentrations The Company’s revenue stream may be dependent on a limited number of key customers. A loss of any significant customer, a decline in demand from such customers, or a deterioration in their financial condition could negatively impact the Company’s future revenues and profitability. Accounts Receivable Concentrations The Company extends credit to customers based on their financial strength, payment history, and other relevant factors. A significant concentration of accounts receivable from a limited number of customers could expose the Company to credit risk and potential collection issues. The Company regularly evaluates the creditworthiness of its customers and may require advance payments, letters of credit, or other credit enhancements to mitigate risks. F- 20 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Vendor and Supplier Concentrations The Company relies on a limited number of vendors for certain key materials or services. A disruption in supply, changes in pricing, or financial instability of a major supplier could materially impact the Company’s ability to procure necessary materials, leading to increased costs, delays in production, or operational disruptions. The Company continuously assesses vendor relationships and explores alternative suppliers when necessary to mitigate supply chain risks. Concentration Summary The following table presents customers and vendors that individually accounted for more than 10% of total sales, accounts receivable, or vendor purchases in the comparative periods presented: Schedule of Concentration of Risk Sales Year Ended December 31, Customer 2024 2023 A 20.19 % 22.19 % B 9.72 % 12.07 % Total 29.91 % 34.26 % Accounts Receivable Year Ended December 31, Year Ended December 31, Customer 2024 2023 A 37.56 % 46.57 % B 8.54 % 13.50 % Total 46.10 % 60.07 % F- 21 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Vendor Purchases Year Ended December 31, Vendor 2024 2023 A 40.48 % 48.93 % B 44.43 % 38.29 % C 13.69 % 12.11 % Total 98.60 % 99.33 % Management’s Risk Mitigation Strategies To address these risks, the Company implements the following strategies: ● Diversification of Customer Base – Actively seeking new customers to reduce reliance on a small number of key accounts. ● Credit Risk Management – Regularly reviewing customer creditworthiness and adjusting credit terms as necessary. ● Supplier Contingency Planning – Identifying alternative vendors to mitigate the impact of potential supply chain disruptions. The Company continuously monitors these risks and adjusts its business strategies to reduce its exposure to customer, credit, and supplier risks, ensuring financial stability and operational continuity. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation, in accordance with ASC 360, “Property, Plant, and Equipment.” Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance expenditures that do not materially extend the useful life of an asset are expensed as incurred. Significant improvements or upgrades that increase the asset’s productivity, efficiency, or useful life are capitalized. Upon disposal or sale of property and equipment, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the statement of operations, in accordance with ASC 360-10-40-5. The Company evaluates the carrying value of property and equipment whenever events or changes in circumstances indicate that the asset may be impaired. If impairment indicators exist, the Company assesses recoverability based on the undiscounted future cash flows expected from the use and disposition of the asset. If the carrying amount exceeds the estimated recoverable amount, an impairment loss is recognized in accordance with ASC 360-10-35-17. F- 22 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 See note 3 for discussion of impairments of long lived assets. Impairment of Long-lived Assets including Internal Use Capitalized Software Costs The Company evaluates the recoverability of long-lived assets, including identifiable intangible assets and internal-use capitalized software costs, in accordance with FASB ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets. An impairment review is triggered when events or circumstances indicate that the carrying value of an asset group may not be recoverable. 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, and ● Strategic shifts in the Company’s business operations (ASC 360-10-35-21). Impairment Assessment Process When impairment indicators exist, the Company performs a recoverability test by comparing the undiscounted future cash flows expected to be 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). Internal-Use Software Considerations For internal-use capitalized software, impairment is assessed under ASC 350-40-35, which requires evaluation when: ● A software project is abandoned or significantly modified, ● The software is no longer expected to provide substantive economic benefit, or ● The software is expected to be replaced by newer technology. F- 23 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Impairment Results For the years ended December 31, 2024, and 2023, the Company recorded an impairment loss of $ 13,422 and $ 0 , respectively, related to various equipment. This impairment loss has been recorded as a component of general and administrative expenses in the accompanying consolidated statements of operation. See Note 3 for further discussion of long-lived asset impairments. Derivative Liabilities The Company evaluates financial instruments containing characteristics of both liabilities and equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. Accounting for Derivative Liabilities Derivative liabilities are revalued at fair value at each reporting period, with changes in fair value recognized in the results of operations as a gain or loss on derivative remeasurement (ASC 815-40-35-4). The Company uses a binomial pricing model to determine the fair value of these instruments. Conversion and Extinguishment of Derivative Liabilities When a debt instrument with an embedded conversion option (e.g., convertible debt or warrants) is converted into shares of common stock or repaid, the Company: ● Records the newly issued shares at fair value; ● Derecognizes all related debt, derivative liabilities, and unamortized debt discounts; and ● Recognizes a gain or loss on debt extinguishment, if applicable (ASC 470-50-40-2). For equity-based derivative liabilities (e.g., warrants) that are extinguished, any remaining liability balance is reclassified to additional paid-in capital (ASC 815-40-35-9). Reclassification of Equity Instruments to Liabilities Equity instruments initially classified as equity may be reclassified as liabilities if they no longer meet equity classification criteria under ASC 815-40-25. In such cases, they are remeasured at fair value on the date of reclassification, with changes recognized in earnings (ASC 815-40-35-8). F- 24 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Derivative Liability Balances As of December 31, 2024, and 2023, the Company had no derivative liabilities outstanding. Original Issue Discounts and Other Debt Discounts The Company accounts for original issue discounts (OID) and other debt discounts in accordance with FASB ASC 835-30, Interest—Imputation of Interest. These discounts are recorded as a reduction of the carrying amount of the related debt and are amortized to interest expense over the term of the debt using the effective interest method, unless the straight-line method is materially similar (ASC 835-30-35-2). Original Issue Discounts (OID) For certain notes issued, the Company may provide the debt holder with an original issue discount (OID), which is recorded as a debt discount, reducing the face value of the note. The discount is amortized to interest expense over the term of the debt in the Consolidated Statements of Operations. Stock and Other Equity Issued with Debt The Company may issue common stock or other equity instruments in connection with debt issuance. When stock is issued, it is recorded at fair value and treated as a debt discount, reducing the carrying amount of the note. These discounts are amortized to interest expense over the life of the debt (ASC 470-20-25-2). The combined debt discounts, including OID and stock-related discounts, cannot exceed the face amount of the debt (ASU 2020-06). Debt Issuance Costs Debt issuance costs, including fees paid to lenders or third parties, are capitalized as a debt discount and amortized to interest expense over the life of the debt in accordance with ASC 835-30-45-1. These costs are presented as a direct deduction from the carrying amount of the debt liability rather than as a separate asset (ASC 835-30-45-3). Right of Use Assets and Lease Obligations The Company accounts for right-of-use (ROU) assets and lease liabilities in accordance with FASB ASC 842, Leases. These amounts reflect the present value of the Company’s estimated future minimum lease payments over the lease term, including any reasonably certain renewal options, discounted using a collateralized incremental borrowing rate (ASC 842-20-30-1). F- 25 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company classifies its leases as either operating or finance leases based on the criteria outlined in ASC 842-10-25-2. The Company’s leases primarily consist of operating leases, which are included as Right-of-Use Assets and Operating Lease Liabilities on the consolidated balance sheet. Short-Term Leases The Company has elected the short-term lease exemption allowed under ASC 842-20-25-2, whereby leases with a term of 12 months or less are not recorded on the balance sheet. Instead, lease payments are expensed on a straight-line basis over the lease term. Lease Term and Renewal Options In determining the lease term, the Company evaluates whether renewal options are reasonably certain to be exercised, as required by ASC 842-10-30-1. Factors considered include: ● The useful life of leasehold improvements relative to the lease term, ● The economic performance of the business at the leased location, ● The comparative cost of renewal rates versus market rates, and ● The presence of any significant economic penalties for non-renewal (ASC 842-10-55-26). If a renewal option is deemed reasonably certain to be exercised, the ROU asset and lease liability reflect those additional future lease payments. The Company’s operating leases contain renewal options with no residual value guarantees. Currently, management does not expect to exercise any renewal options, which are therefore excluded in the measurement of lease obligations. Discount Rate and Lease Liability Measurement Since the implicit rate in the leases is not readily determinable, the Company applies an incremental borrowing rate that represents the rate it would incur to borrow on a collateralized basis over a similar term and currency environment (ASC 842-20-30-3). Lease Impairment In accordance with ASC 360-10-35, the Company evaluates ROU assets for impairment indicators whenever events or changes in circumstances suggest the carrying amount may not be recoverable. No impairments of ROU assets were recognized for the years ended December 31, 2024, and 2023. See Note 7 for details on third-party and related-party operating leases. F- 26 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Revenue Recognition The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by Accounting Standards Update (ASU) 2014-09. Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company generates revenue from mobile fuel sales, which can be purchased as a one-time transaction or through a monthly membership. Revenue from fuel sales is recognized at the time of delivery, and membership revenue is recognized at the end of each month, reflecting the satisfaction of the performance obligation over time within a one-month membership cycle. The Company follows the five-step revenue recognition model outlined in ASC 606-10-05-4: 1.Identify the Contract with a Customer A contract exists when the following criteria are met, per ASC 606-10-25-1: ● The contract creates enforceable rights and obligations between the Company and the customer. ● The contract has commercial substance (i.e., it affects the Company’s cash flows). ● The payment terms are identified, and the consideration is determinable. ● It is probable that the Company will collect the consideration in exchange for the goods or services transferred. Contracts for mobile fuel sales and memberships meet these criteria. Collectability is assessed based on historical customer payment trends and credit risk in accordance with ASC 606-10-25-5. 2.Identify the Performance Obligations in the Contract A performance obligation is a distinct good or service promised in the contract that is both capable of being distinct and distinct in the context of the contract, per ASC 606-10-25-19. The Company has determined that its contracts, based on sales type, contain two distinct performance obligations: ● Fuel Sales – The delivery of fuel to a customer, with revenue recognized at the point of delivery. ● Membership Fees – Monthly membership services, with revenue recognized over time within a one-month membership cycle, as the customer benefits from access to services throughout the period. F- 27 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 These performance obligations are not bundled or combined, as each service is separately identifiable, in accordance with ASC 606-10-25-22. 3.Determine the Transaction Price The transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the customer, per ASC 606-10-32-2. The Company’s transaction price considerations include: ● Fixed consideration – Prices are clearly stated and do not vary based on performance. ● No variable consideration – The Company does not formally offer refunds, rebates, or pricing incentives. During the years ended December 31, 2024 and 2023, respectively, the Company granted insignificant discounts of less than 1% of total revenues. ● No financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15. 4.Allocate the Transaction Price to Performance Obligations For contracts with a single performance obligation, the entire transaction price is allocated to that obligation, per ASC 606-10-32-40. If a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices (“SSP”) as required by ASC 606-10-32-28. The standalone selling price is determined based on observable sales data. The Company’s fuel sales and memberships each have a distinct standalone selling price, eliminating the need for allocation adjustments. 5.Recognize Revenue When (or As) Performance Obligations Are Satisfied Revenue is recognized at the point in time when control over a product or service is transferred to the customer, in accordance with ASC 606-10-25-30. ● Fuel Sales: Control transfers at the time of fuel delivery, at which point revenue is recognized. ● Membership Fees: Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services throughout the month. F- 28 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company does not recognize revenue based on customer invoicing dates; instead, it ensures revenue recognition aligns with the actual satisfaction of performance obligations per ASC 606-10-25-31. Principal vs. Agent Considerations In evaluating whether the Company acts as a principal or an agent in its fuel sales transactions, the Company applies the guidance in ASC 606-10-55-36 through 55-40. The Company has determined that it is the principal in these transactions based on the following factors: ● The Company controls the fuel before it is transferred to the customer. ● The Company has discretion in pricing, as it sets the selling price of fuel. ● The Company is responsible for fulfilling the obligation of delivering fuel to the customer. ● The Company is exposed to inventory risk, as it procures and holds fuel before sale. Based on these factors, the Company recognizes revenue on a gross basis, as it is the principal in fuel sales transactions in accordance with ASC 606-10-55-37A. Summary of Compliance with ASC 606 and ASU Updates Revenue Stream Performance Obligation Recognition Timing Consideration Type Fuel Sales Fuel Delivery At time of delivery Fixed price per gallon Membership Fees Monthly access to fuel services Over time (one-month cycle) Fixed monthly subscription Contract Liabilities (Deferred Revenue) Contract liabilities represent amounts received from customers before the satisfaction of performance obligations, which are subsequently recognized as revenue upon fulfillment. Under ASC 606-10-45-2, the Company discloses contract balances related to deferred revenue when applicable. Any prepayments received for fuel deliveries or memberships are classified as contract liabilities until revenue recognition criteria are met. As of December 31, 2024 and 2023, the Company had $ 0 deferred revenue. F- 29 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The following represents the Company’s disaggregation of revenues for the years ended December 31, 2024 and 2023: Schedule of Disaggregation of Revenue Year Ended December 31, 2024 2023 Revenue % of Revenues Revenue % of Revenues Fuel sales $ 26,694,186 96.13 % $ 22,677,304 97.68 % Other 1,076,093 3.87 % 539,119 2.32 % Total Sales $ 27,770,279 100.00 % $ 23,216,423 100.00 % Cost of Sales Cost of sales consists of direct expenses incurred in the delivery of the Company’s products and services. 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. Cost of sales is recognized in the same period as the related revenue in accordance with FASB ASC 705, Cost of Sales and Services. The Company regularly evaluates its cost structure to ensure efficient fuel procurement and operational cost management. Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by FASB ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial reporting and tax bases of assets and liabilities. These amounts are measured using enacted tax rates expected to apply in the periods when temporary differences reverse (ASC 740-10-30-8). The effect of a change in tax rates on deferred tax balances is recognized as income or expense in the period that includes the enactment date (ASC 740-10-45-4). Uncertain Tax Positions The Company evaluates uncertain tax positions in accordance with ASC 740-10-25, which requires that a tax position be recognized in the financial statements only if it is more likely than not (greater than 50% likelihood) to be sustained upon examination by tax authorities. F- 30 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 As of December 31, 2024 and 2023, respectively, the Company had no uncertain tax positions that qualified for recognition or disclosure in the financial statements (ASC 740-10-50-15). The Company also recognizes interest and penalties related to uncertain tax positions in other expense in the consolidated statement of operations (ASC 740-10-45-25). No interest and penalties were recorded for the years ended December 31, 2024 and 2023, respectively. Valuation of Deferred Tax Assets The Company’s deferred tax assets include certain future tax benefits, such as net operating losses (NOLs), tax credits, and deductible temporary differences. Under ASC 740-10-30-5, a valuation allowance is required if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company reviews the realizability of deferred tax assets on a quarterly basis, or more frequently if circumstances warrant, considering both positive and negative evidence (ASC 740-10-30-16). Factors Considered in Valuation Allowance Assessment The Company evaluates multiple factors in determining whether a valuation allowance is necessary, including: ● Historical earnings trends (cumulative pre-tax income or losses in the most recent three-year period) ● Future financial projections, including expected taxable income based on long-term estimates of business performance and market conditions ● Statutory carryforward periods for net operating losses and other deferred tax assets ● Prudent and feasible tax planning strategies that could impact the realization of deferred tax assets ● Nature and predictability of temporary differences and the timing of their reversal ● Sensitivity of financial forecasts to external factors such as commodity prices, market demand, and operational risks While cumulative three-year losses are a strong indicator that a valuation allowance may be needed, ASC 740-10-30-23 states that a valuation allowance determination is not solely based on past losses—all available positive and negative evidence must be considered. F- 31 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Valuation Allowance Determination At December 31, 2024 and 2023, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting in a net carrying amount of $ 0 . This determination was based on cumulative losses in recent years and the lack of sufficient positive evidence to support the realization of deferred tax assets in the near term (ASC 740-10-30-24). The Company will continue to evaluate its valuation allowance each reporting period and will recognize deferred tax assets in the future if sufficient positive evidence emerges to support their realization. Advertising Costs Advertising costs are expensed as incurred, in accordance with ASC 720-35, “Advertising Costs.” These costs are recognized as operating expenses in the period in which they are incurred and are classified within general and administrative expenses in the consolidated statements of operations. The Company does not capitalize direct-response advertising costs, as they do not meet the criteria for deferral under ASC 720-35-25-1. The Company recognized $ 164,296 and $ 136,582 in marketing and advertising costs during the years ended December 31, 2024 and 2023, respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, typically the vesting period. ASC 718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. It also applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may be settled using equity instruments. In compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees, aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting period in accordance with ASC 718. F- 32 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company determines the fair value of stock options using the Black-Scholes option pricing model, considering the following key assumptions: ● Exercise price – The agreed-upon price at which the option can be exercised. ● Expected dividends – The anticipated dividend yield over the expected life of the option. ● Expected volatility – Based on historical stock price fluctuations. ● Risk-free interest rate – Derived from U.S. Treasury securities with similar maturities. ● Expected life of the option – Estimated based on historical exercise patterns and contractual terms. Additionally, the Company follows the guidance under ASU 2016-09, which introduced amendments to simplify certain accounting aspects of share-based compensation, including: ● The treatment of tax benefits and tax deficiencies in income tax reporting. ● The option to recognize forfeitures as they occur rather than estimating them upfront. ● Cash flow classification for certain tax-related transactions. The Company continues to evaluate and apply the latest Accounting Standards Updates (ASUs) and interpretive releases related to stock-based compensation to ensure compliance with evolving financial reporting requirements. Stock Warrants In connection with certain financing transactions (debt or equity), consulting arrangements, or strategic partnerships, the Company may issue warrants to purchase shares of its common stock. These standalone warrants are not puttable or mandatorily redeemable by the holder and are classified as equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity.” The fair value of warrants issued for compensation purposes is measured using the Black-Scholes option pricing model, consistent with the guidance in ASC 718-10-30. However, if warrants meet the definition of derivative liabilities under ASC 815, “Derivatives and Hedging,” fair value is determined using a binomial pricing model or other appropriate valuation techniques, as required by ASC 815-40-15. Accounting 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. F- 33 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Basic and Diluted Earnings (Loss) per Share and Reverse Stock Split The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share.” The calculation of basic EPS follows the two-class method and is determined by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding, including certain other shares committed to be issued. Basic Earnings Per Share (EPS) Basic EPS is calculated using the two-class method, as prescribed by ASC 260-10-45-60, and is computed as follows: ● Net earnings available to common shareholders represent net earnings to common shareholders, adjusted for the allocation of earnings to participating securities. ● Losses are not allocated to participating securities in accordance with ASC 260-10-45-61. ● The denominator includes common shares outstanding and certain other shares committed to be issued, such as restricted stock and restricted stock units (“RSUs”), for which no future service is required. Diluted Earnings Per Share (EPS) Diluted EPS is calculated under both the two-class method and the treasury stock method, and the more dilutive result is reported, as required by ASC 260-10-45-45. ● Diluted EPS is computed by taking the sum of: ○ Net earnings available to common shareholders ○ Dividends on preferred shares ○ Dividends on dilutive mandatorily redeemable convertible preferred shares ○ Divided by the weighted average number of common shares outstanding and certain other shares committed to be issued, plus all dilutive common stock equivalents during the period, such as: ■ Stock options ■ Warrants ■ Convertible preferred stock ■ Convertible debt ● Preferred shares and unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) qualify as participating securities under the two-class method, per ASC 260-10-45-62. F- 34 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Net Loss Per Share Considerations In computing net loss per share, unvested shares of common stock are excluded from the denominator, as required by ASC 260-10-45-48. Participating Securities & Share-Based Compensation Restricted stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively. Therefore: ● Before the requisite service is rendered for the right to retain the award, these instruments meet the definition of a participating security under ASC 260-10-45-59. ● RSUs granted under an executive compensation plan, however, are not considered participating securities because the rights to dividend equivalents are forfeitable (ASC 718-10-25). The following potentially dilutive equity securities outstanding as of December 31, 2024 and 2023 were as follows: Schedule of Dilutive Equity Securities Outstanding December 31, 2024 December 31, 2023 Series A, preferred stock 1,644,022 - Series B, preferred stock 724,638 - Series A, preferred stock - dividends 61,204 - Series B, preferred stock - dividends 32,372 - Warrants (vested) 46,344 81,452 Total common stock equivalents 2,508,579 81,452 Series A and B, preferred shares as well as the related dividends on each class of Series A and B, preferred shares are convertible into common stock. See Note 8. Warrants included as common stock equivalents represent those that are fully vested and exercisable. See Note 8. Based on the potential common stock equivalents noted above at December 31, 2024, the Company has sufficient authorized shares of common stock ( 500,000,000 ) to settle any potential exercises of common stock equivalents. F- 35 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 On April 27, 2023, the Company executed a 1:8 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 and per share amounts have been retroactively restated to the earliest period presented in the accompanying consolidated financial statements. On July 25, 2024, the Company’s Board of Directors authorized a 1:2.5 reverse stock split . As a result, all share and per share amounts have been retroactively restated to the earliest period presented in the accompanying consolidated financial statements. Related Parties The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k). Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties include, but are not limited to: ● 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. A party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company in a manner that could prevent either party from fully pursuing its own separate economic interests. The Company discloses all material related party transactions, including: ● The nature of the relationship between the parties. ● A description of the transaction(s), including terms and amounts involved. ● Any amounts due to or from related parties as of the reporting date. ● Any other elements necessary for a clear understanding of the transactions’ effects on the financial statements. F- 36 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Disclosures are made in accordance with ASC 850-10-50-1 through 50-6 and SEC Regulation S-X, Rule 4-08(k), which requires registrants to disclose material related party transactions and their effects on the financial position and results of operations. ● See 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. ● 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. Related Party Agreement with Company owned by Daniel Arbour In 2023, the Company entered into a consulting agreement with an affiliate of a board member to provide services as an outsourced chief revenue officer. The Company will pay $ 5,000 per month and cover certain other expenses. The initial term of the agreement is for one year. All amounts have been paid. See Note 7. Related Party Agreement with Company owned by Avishai Vaknin In 2023, the Company entered into a services agreement with an affiliate of the Company’s Chief Technology Officer. Services include overseeing all matters relating to the Company’s technology. The Company will pay $ 10,000 USD per month and cover other pre-approved expenses. The initial term of the agreement is for one year. All amounts have been paid. In connection with this agreement, the Company issued 130,000 shares of common stock. At December 31, 2024 and 2023, 104,000 and 104,000 shares have vested, respectively. The remaining 26,000 shares will vest in April 2025 ( 13,000 shares) and April 2026 ( 13,000 shares), respectively. See Note 7. Due From Related Party During the year ended December 31, 2024, the Company advanced $ 17,150 to an entity controlled by Michael Farkas (a former material debt lender), and greater than 20 % stockholder in the Company. The advance related to fees incurred by that entity for professional services. F- 37 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Recent Accounting Standards ASU 2022-02 – Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In March 2022, the FASB issued ASU 2022-02, which: ● 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. The Company adopted ASU 2022-02 on January 1, 2023. The adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, which enhances disclosure requirements for reportable segments by: ● Requiring enhanced disclosures of significant segment expenses. ● Aligning segment reporting requirements with information regularly reviewed by management. The Company adopted ASU 2023-07 on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements by: ● Standardizing and disaggregating rate reconciliation categories. ● Requiring disclosure of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. Early adoption is permitted. F- 38 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company is currently assessing the impact of ASU 2023-09 on its income tax disclosures and reporting requirements. Other Accounting Standards Updates The FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. Reclassifications Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated results of operations, stockholders’ equity, or cash flows, and did not affect previously reported consolidated net income (loss) or financial position. Note 3 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment Estimated Useful December 31, 2024 December 31, 2023 Lives (Years) Vehicles $ 10,338,924 * $ 5,119,048 5 Equipment 304,191 265,637 5 Office furniture 129,475 129,475 5 Leasehold improvements - 29,422 5 Office equipment 9,471 9,471 5 Property and equipment, gross 10,782,061 5,553,053 Accumulated depreciation ( 3,306,388 ) ( 2,242,866 ) Total property and equipment - net $ 7,475,673 $ 3,310,187 Asset Purchase – Vehicles - Shell * In 2024, the Company executed an asset purchase agreement with Shell Retail and Convenience Operations, d/b/a Shell TapUp and d/b/a Instafuel (“Shell”) to purchase 73 vehicles ($ 5,139,877 ) and above ground storage tanks ($ 80,000 ) as part of a growth and expansion plan for a total purchase price of $ 5,219,877 . The Company began its Shell related operations in January 2025, and at that time placed these assets into service. These vehicles have a useful life of five ( 5 ) years. See Note 9 regarding related right-of-use operating leases. F- 39 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Deposit on Future Asset Purchase - Yoshi In 2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, the Company acquired various vehicles as part of a growth and expansion plan. The Company has access to and utilizes these vehicles for mobile fueling as part of its ongoing operations. Since the transaction did not close until February 2025, the payments made/due as of December 31, 2024, have been classified as a component of deposit on future asset purchase totaling $ 2,035,283 . See Note 9. Year Ended December 31, 2024 Depreciation and amortization expense for the years ended December 31, 2024 and 2023, was $ 1,079,523 and $ 1,107,302 , respectively. During the years ended December 31, 2024 and 2023, the Company recorded an impairment loss of $ 13,422 and $ 0 , respectively, related to leasehold improvements made to certain leased office space that is no longer used. This impairment loss has been recorded as a component of general and administrative expenses in the accompanying consolidated statements of operation. Depreciation and amortization are included as a component of general and administrative expenses in the accompanying consolidated statements of operations. Impairment losses of property and equipment are included as a component of general and administrative expenses in the accompanying consolidated statements of operations. Year ended December 31, 2023 The Company recorded an impairment loss of $ 105,506 related to items classified as construction in process that were deemed unusable. During the year ended December 31, 2023, the Company adjusted the balance of its vehicles and related notes payable – vehicles by $ 24,664 to true up the amounts to their actual balances. F- 40 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Note 4 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities were as follows at December 31, 2024 and 2023 respectively: Schedule of Accounts Payable and Accrued Liabilities December 31, 2024 December 31, 2023 Accounts payable $ 1,468,788 $ 845,275 Accrued liabilities - related parties 73,250 - Accrued interest payable - related parties 9,954 72,428 Accounts payable and accrued liabilities $ 1,551,992 $ 917,703 Note 5 – Debt The following represents a summary of the Company’s debt (notes payable – related parties, third party debt for notes payable (including those owed on vehicles), and line of credit, including key terms, and outstanding balances at December 31, 2024 and 2023, respectively. Notes Payable – Related Parties The following is a summary of the Company’s notes payable – related parties at December 31, 2024 and 2023: Summary of Notes Payable $ - Face amount of note Advances 5,267,500 Debt discount/issue costs ( 1,608,900 ) Amortization of debt discount/issue costs 1,406,015 Repayments ( 262,500 ) Balance - December 31, 2023 4,802,115 Advances 5,711,500 Debt discount/issue costs - original issue discount ( 466,500 ) Debt discount/issue costs - stock issuances ( 2,020,387 ) Amortization of debt discount/issue costs 2,562,561 Default penalty interest expense 4,317,500 Conversion of debt - preferred stock ( 3,630,000 ) Conversion of debt - common stock ( 9,322,500 ) Balance - December 31, 2024 $ 1,954,289 The following is a detail of the Company’s notes payable – related parties at December 31, 2024 and 2023: F- 41 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Schedule of Detailed Company’s Notes Payable Notes Payable - Related Parties Note Holder Issue Date Maturity Date Shares Issued with Debt Interest Rate Default Interest Rate Default Conversion Rate Collateral December 31, 2024 December 31, 2023 Note #1 April 19, 2023 July 17, 2024 100,000 A, B 10.00 % 18.00 % 150.00 % All assets $ - $ 1,500,000 Note #2 September 22, 2023 July 17, 2024 60,000 A, B 10.00 % 18.00 % 150.00 % All assets - 600,000 Note #3 October 13, 2023 July 17, 2024 176,000 A, B 0.00 % 18.00 % 150.00 % All assets - 320,000 Note #4 July 5, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 440,000 Note #5 August 2, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 440,000 Note #6 August 23, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 110,000 Note #7 August 30, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 165,000 Note #8 September 6, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 220,000 Note #9 September 13, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 110,000 Note #10 November 3, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 165,000 Note #11 November 21, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 220,000 Note #12 December 4, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 220,000 Note #13 December 13, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 165,000 Note #14 December 18, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 110,000 Note #15 December 20, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 55,000 Note #16 December 27, 2023 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - 165,000 Note #17 January 5, 2024 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - - Note #18 January 16, 2024 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - - Note #19 January 25, 2024 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - - Note #20 February 7, 2024 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - - Note #21 February 20, 2024 August 16, 2024 - 8.00 % 18.00 % 150.00 % All assets - - Note #22 February 28, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #23 March 8, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #24 March 15, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #25 March 26, 2024 August 16, 2024 13,889 C 8.00 % 18.00 % 150.00 % All assets - - Note #26 April 2, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #27 April 8, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #28 April 22, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #29 May 8, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #30 May 15, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #31 May 20, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #32 May 28, 2024 August 16, 2024 13,889 C 8.00 % 18.00 % 150.00 % All assets - - Note #33 June 10, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #34 June 28, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #35 July 5, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #36 July 10, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #37 July 22, 2024 August 16, 2024 20,800 C 8.00 % 18.00 % 150.00 % All assets - - Note #38 August 6, 2024 August 16, 2024 53,500 C 8.00 % 18.00 % 150.00 % All assets - - Note #39 August 14, 2024 August 16, 2024 53,500 C 8.00 % 18.00 % 150.00 % All assets - - Note #40 November 14, 2024 November 14, 2025 - 8.00 % 0.00 % 150.00 % None 181,500 - Note #41 December 2, 2024 December 2, 2025 - 8.00 % 0.00 % 150.00 % None 715,000 - Note #42 December 3, 2024 December 3, 2025 - 8.00 % 0.00 % 150.00 % None 275,000 - Note #43 December 17, 2024 December 17, 2025 - 8.00 % 0.00 % 150.00 % None 580,000 - Note #44 December 30, 2024 December 30, 2025 - 8.00 % 0.00 % 150.00 % None 330,000 - 2,081,500 5,005,000 Less: unamortized debt discount 127,211 202,885 $ 1,954,289 $ 4,802,115 F- 42 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 A See discussion below regarding global amendment for Notes #1, #2 and #3. B See discussion below regarding the limitation on the issuance of this lender due to a 9.99 % equity ownership blocker. C These shares of common stock ( 425,978 ) were issued with the underlying original issue discount notes and treated as additional debt discount. Year Ended December 31, 2023 Note #1 – Note Payable – Related Party - Material Stockholder greater than 5% and related Loss on Debt Extinguishment During 2023, the Company originally executed a six-month (6) note payable with a face amount of $ 1,500,000 , less an original issue discount of $ 150,000 , along with an additional $ 140,000 in transaction related fees (total debt discount and issue costs of $ 290,000 ), resulting in net proceeds of $ 1,210,000 . The $ 290,000 in debt discounts and issuance costs are being amortized over the life of the note to interest expense in the accompanying consolidated statements of operations. In connection with obtaining this debt, the Company also committed 100,000 shares of common stock to the lender as additional interest expense (commitment fee). Under the terms of the agreement, only 40,000 shares of common stock were required to be issued on the commitment date resulting in a fair value of $ 256,000 ($ 6.40 /share), based upon the quoted closing price. The Company recorded this amount as a debt discount which was being amortized over the life of the note. Total debt discounts recorded aggregated $ 546,000 . See Note 8. In October 2023 (the initial maturity date), the Company executed a loan extension with the lender to extend the due date from October 2023 to April 2024. At this time, the remaining 60,000 shares were issued to the lender. The Company evaluated the modification of terms under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension of the maturity date resulted in significant and consequential changes to the economic substance of the debt and thus resulted in an extinguishment of the debt. Specifically, on the date of modification, the Company determined that the present value of the cash flows of the modified debt instrument was greater than 10% different from the present value of the remaining cash flows under the original debt instrument. F- 43 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 For the year ended December 31, 2023, the Company recorded a loss on debt extinguishment of $ 291,000 as follows: Schedule of Loss on Debt Extinguishment Fair value of debt and common stock on extinguishment date * $ 1,791,000 Fair value of debt subject to modification 1,500,000 Loss on debt extinguishment - related party $ 291,000 * The Company valued the issuance of the 60,000 commitment shares at $ 291,000 , based upon the quoted closing trading price on the date of modification ($ 4.85 /share). Pursuant to the January 17, 2024 global amendment, effective for all previously issued notes with this lender, in the event of default, the lender may convert the note into shares of common stock equal to the greater of $ 3.08 and the lower of the average VWAP over the ten (10) preceding trading days; or the greater of the average of the VWAP over the ten (10) preceding trading days or a floor price of $ 1.75 . Additionally, if the Company raises $ 10,000,000 or more, then Note #3 will be repaid. If the Company raises $ 15,000,000 or more, then both Notes #2 and #3 will be repaid. The Company has determined that in the event of default, the note at that time may be treated as a derivative liability subject to financial reporting at fair value and related mark to market adjustments in subsequent reporting periods. This note is subject to cross-default. In the event this note or any other notes issued by this lender are in default (Notes #1, #2 and #3), all of the notes with this lender will be considered in default. See May 9, 2024 loan date extension below. This lender is considered a related party since it has a greater than 5 % controlling interest in the Company’s outstanding common stock. See discussion regarding debt conversion below on August 16, 2024. Note #2 – Note Payable – Related Party - Material Stockholder greater than 5% During 2023, the Company executed a six-month (6) note payable with a face amount of $ 600,000 , less an original issue discount of $ 60,000 , along with an additional $ 28,900 in transaction related fees (total debt discount and issue costs in cash of $ 88,900 ), resulting in net proceeds of $ 511,100 . F- 44 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 In connection with obtaining this note, the Company also issued 60,000 shares of common stock to the lender having a fair value of $ 406,500 , based upon the quoted closing trading price ($ 6.78 /share). The issuance of these shares resulted in an additional debt issue cost. In total, the Company recorded debt discounts/issuance costs of $ 495,400 which is being amortized over the life of the note to interest expense in the accompanying consolidated statements of operations. See Note 8. While the note was initially due in March 2024, the Company had the right to extend the note by an additional six-months (6) to September 2024. The note was not formally extended on its maturity date, however, the lender has not given notice on default. Pursuant to the January 17, 2024 global amendment, effective for all previously issued notes with this lender, in the event of default, the lender may convert the note into shares of common stock equal to the greater of $ 3.08 and the lower of the average VWAP over the ten (10) preceding trading days; or the greater of the average of the VWAP over the ten (10) preceding trading days or a floor price of $ 1.75 . Additionally, if the Company raises $ 10,000,000 or more, then Note #3 will be repaid. If the Company raises $ 15,000,000 or more, then both Notes #2 and #3 will be repaid. The Company has determined that in the event of default, the note at that time may be treated as a derivative liability subject to financial reporting at fair value and related mark to market adjustments in subsequent reporting periods. This note is subject to cross-default. In the event this note or any other notes issued by this lender are in default (Notes #1, #2 and #3), all of the notes with this lender will be considered in default. See May 9, 2024 loan date extension below. This lender is considered a related party since it has a greater than 5 % controlling interest in the Company’s outstanding common stock. See discussion regarding debt conversion below on August 16, 2024. F- 45 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Note #3 – Note Payable – Related Party - Material Stockholder greater than 5% In October 2023, the Company executed a three-month (3) note payable with a face amount of $ 320,000 , less an original issue discount of $ 48,000 , resulting in net proceeds of $ 272,000 . In connection with obtaining this note, the Company was required to issue 104,000 shares of common stock to the lender having a fair value of $ 539,760 , based upon the quoted closing trading price ($ 5.19 /share). However, the issuance of these shares would result in the lender having a greater than 9.99 % ownership of the Company, which is prohibited by agreement. These shares are classified as common stock issuable in the accompanying consolidated balance sheets. The future issuance of these shares resulted in an additional debt issue cost. In total, the Company recorded debt discounts/issuance costs of $ 320,000 which is being amortized over the life of the note to interest expense. The aggregate discounts calculated above exceeded the face amount of the note and therefore were limited to the face amount of the note totaling $ 320,000 . Pursuant to the January 17, 2024 global amendment, effective for all previously issued notes with this lender, in the event of default, the lender may convert the note into shares of common stock equal to the greater of $ 3.08 and the lower of the average VWAP over the ten (10) preceding trading days; or the greater of the average of the VWAP over the ten (10) preceding trading days or a floor price of $ 1.75 . Additionally, if the Company raises $ 10,000,000 or more, then Note #3 will be repaid. If the Company raises $ 15,000,000 or more, then both Notes #2 and #3 will be repaid. The Company has determined that in the event of default, the note at that time may be treated as a derivative liability subject to financial reporting at fair value and related mark to market adjustments in subsequent reporting periods. This note is subject to cross-default. In the event this note or any other notes issued by this lender are in default (Notes #1, #2 and #3), all of the notes with this lender will be considered in default. See May 9, 2024 loan date extension below. This lender is considered a related party since it has a greater than 5 % controlling interest in the Company’s outstanding common stock. F- 46 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 In January 2024, with respect to Notes #2 and #3 discussed above, as a result of extending the note maturity dates as amended to April 19, 2024, the Company was required to issue 72,000 shares of common stock. However, the issuance of these shares would result in the lender having a greater than 9.99 % ownership of the Company, which is prohibited by agreement. The Company determined the fair value of these shares was $ 270,000 ($ 3.75 /share), based upon the quoted closing trading price, and recorded additional interest expense during the year ended December 31, 2024. See discussion regarding debt conversion below on August 16, 2024. Extension of Notes #1, #2 and #3 On May 9, 2024, with respect to Notes #1, #2 and #3 discussed above, as a result of extending the note maturity dates as amended to July 17, 2024, the Company was required to issue 66,000 shares of common stock. However, the issuance of these shares would result in the lender having a greater than 9.99 % ownership of the Company, which is prohibited by agreement. The Company determined the fair value of these shares was $ 407,550 ($ 6.18 /share), based upon the quoted closing trading price, and recorded additional interest expense during the year ended December 31, 2024. Debt Conversion to Series A Preferred Stock On August 16, 2024, the Company converted all outstanding principal ($ 2,420,000 ) and accrued interest ($ 0 ) into 363,000 share of Series A, Preferred Stock, $ 10 /share stated value. At the time of conversion, the lender executed a 150 % penalty interest feature. As a result, the Company increased its interest expense and related debt by $ 1,210,000 for a total of $ 3,630,000 of debt that was converted. As a result of the debt conversion, the balance due to this lender was $ 0 . F- 47 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The fair value of the Series A, preferred stock and related loss on debt extinguishment at the conversion date was based on the as-converted basis, calculated as follows: Schedule of Debt Extinguishment Market price per share of common stock - on date of issuance $ 2.76 Discount to market price on date of issuance 80 % Conversion price per share $ 2.21 Series A, preferred stock - stated value per share $ 10.00 Conversion price per share $ 2.21 Number of shares of common stock - for each share of Series A, preferred stock held 4.53 Series A, preferred shares issued 363,000 Number of shares of common stock - for each share of Series A, preferred stock held 4.53 Equivalent common shares 1,644,022 Market price per share of common stock - on date of issuance $ 2.76 As converted valuation of Series A, preferred stock $ 4,537,500 Debt converted in exchange for Series A, preferred stock 3,630,000 Loss on debt extinguishment - related party $ 907,500 See Note 8 regarding features of this class of securities. Common Stock Issuable – Notes #1, #2 and #3 In connection with the conversion of these notes on August 16, 2024, 242,000 shares of common stock previously issuable were issued. The net effect on stockholders equity was $ 0 . F- 48 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Notes #4 - #44 - Notes Payable – Related Party - Material Stockholder greater than 20% The Company has entered into multiple short-term notes payable agreements (one year or less) with a related party controlled by Michael Farkas, a greater than 20 % stockholder. Year Ended December 31, 2024 New Issuances During 2024, the Company executed several two-month notes payable with an aggregate face amount of $ 5,711,500 , issued at a discount of $ 466,500 , resulting in net proceeds of $ 5,245,000 . As part of securing these notes, the Company issued 425,978 shares of common stock to the lender, valued at $ 2,020,387 , based on the quoted closing trading price ($ 2.81 - $ 7.10 per share). In total, the Company recorded debt discounts and issuance costs of $ 2,486,887 , which are amortized over the life of the notes as interest expense. Debt Conversion and Maturity Details ● Converted Notes: Notes totaling $ 3,630,000 were originally due two months from their issuance date but were subject to automatic two-month renewals if unpaid or unconverted. These notes were never in default and were subsequently converted into common stock on August 16, 2024. ● Outstanding Notes: As of December 31, 2024, the remaining notes totaled $ 2,081,500 and mature one year from their issuance date. These notes bear interest at 8 %. Interest and Default Provisions for Converted Notes Prior to conversion, these notes ($ 3,630,000 ) bore interest at 8 % for the first nine months, then 18 % per month thereafter if still outstanding. The lender was required to issue a written notice of default in the event of non-compliance. If a default had occurred, the following provisions would have applied: 1. Penalty Interest & Acceleration: All outstanding principal and accrued interest would be multiplied by 150% and become immediately due. 2. Early Repayment Trigger: If the Company had raised $ 3,000,000 (debt or equity) before conversion, the entire outstanding balance would have become immediately due. F- 49 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 3. Conversion Rights Upon Default: The lender had the right to convert any or all of the outstanding principal and accrued interest into common stock at the greater of: ○ The 10-day VWAP closing price preceding the conversion date. ○ $ 1.75 per share (the floor price). Assessment of Derivative Liability Under ASC 815 The Company assessed whether derivative accounting was required for these conversion features. In connection with the August 16, 2024 debt conversion the Company evaluated whether any of the debt conversion features required derivative liability accounting under ASC 815-40, “Contracts in Entity’s Own Equity.” ● The lender had the right to convert debt into common stock at the greater of: 1. The 10-day VWAP closing price preceding the conversion date. 2. A floor price of $ 1.75 per share. ● At the conversion date, the Company’s stock price was $ 2.76 per share, which was above the $ 1.75 floor price. ● Since the conversion occurred outside an event of default, and the lender was required to convert at the higher market price ($ 2.76 ), not the floor price ($ 1.75 ), the conversion feature did not meet the criteria for liability classification under ASC 815-40-25. ● The Company concluded that the conversion feature was indexed to its own stock, did not expose the Company to variable pricing risk, and did not contain features requiring derivative liability classification. Accordingly, no derivative liability was recorded in connection with these debt conversions. Summary - Fair Value Accounting for Debt Conversions – Related Parties – Notes #1 - #39 The Company evaluated the fair value accounting treatment for the August 16, 2024, debt conversion in accordance with ASC 470-50, “Debt – Modification and Extinguishment”, and ASC 815, “Derivatives and Hedging”. Upon conversion, the outstanding principal and accrued interest of the notes payable (#4 - #39) were exchanged for 3,525,341 shares of common stock, with a fair value of $ 2.76 per share. Since the fair value of the equity closely approximated the carrying amount of the converted debt ($ 9,796,696 ), no gain or loss on debt extinguishment was recognized. F- 50 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The total debt converted for all related party notes is summarized from above as follows: Schedule of Total Debt Converted for all Related Party Notes Notes #1 - 3 Notes #4 - 39 Total Notes payable $ 2,420,000 $ 6,215,000 $ 8,635,000 Accrued interest payable - 316,130 316,130 Total debt prior to 150% default penalty 2,420,000 6,531,130 8,951,130 150% default penalty 1,210,000 3,265,566 4,475,566 Total debt converted to equity $ 3,630,000 $ 9,796,696 $ 13,426,696 In connection with the debt conversion of notes #1 - #3, the Company issued 363,000 shares of Series A, Convertible preferred stock. In connection with the debt conversion of notes #4 - #39, the Company issued 3,525,341 shares of common stock. See Note 8 for details on the features of this class of securities issued in the conversion. Year Ended December 31, 2023 During the year ended December 31, 2023, the Company executed several two-month (2) notes payable with an aggregate face amount of $ 2,585,000 , less original issue discounts of $ 235,000 , resulting in net proceeds of $ 2,350,000 . These notes are initially due two-months (2) from their issuance dates. If the notes reach maturity and are still outstanding, the notes and related accrued interest will automatically renew for successive two-month (2) periods. These notes bear interest at 8 % for the 1 st nine-months (9), then 18 % each month thereafter. The lender is required to issue in writing any event of default. If an event of default occurs, all outstanding principal and accrued interest will be multiplied by 150% and become immediately due. Additionally, if the Company raises $ 3,000,000 (debt or equity based), the entire outstanding principal and accrued interest are immediately due. Finally, in an event of default, the lender has the right to convert any or all of the outstanding principal and accrued interest into common stock equal to the greater of the average VWAP closing price over the ten (10) trading days ending on the date of conversion or $ 1.75 (the floor price). In the event such a conversion were to occur, which can only happen by default, the Company would evaluate the potential for recording derivative liabilities. At December 31, 2023, the Company was not in default on any of these notes and believed it was in compliance with all terms and conditions of the notes. F- 51 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 This lender is considered a related party as it is controlled by Michael Farkas, who is a greater than 20 % stockholder in the Company. Note Payable - Other Year Ended December 31, 2023 During 2023, an entity controlled by this majority stockholder (approximately 20 % common stock ownership at that time) advanced unsecured working capital funds (net proceeds after original issue discount of $ 12,500 was $ 250,000 ) to the Company. In 2023, the note principal of $ 262,500 along with accrued interest of $ 13,125 , aggregating $ 275,625 was repaid. Notes Payable (non-vehicles) The following is a detail of the Company’s notes payable (non-vehicles) at December 31, 2024 and 2023, respectively: Summary of Notes Payable Loan #1 Loan #2 Loan #3 Loan #4 Loan #5 Loan #6 Loan #7 Loan #8 Total Balance - December 31, 2022 $ - $ - $ - $ - $ - $ - $ - $ - $ - Face amount of note 275,250 - - - - - - - 275,250 Debt discount ( 25,250 ) - - - - - - - ( 25,250 ) Amortization of debt discount 9,729 - - - - - - - 9,729 Repayments ( 133,289 ) - - - - - - - ( 133,289 ) Balance - December 31, 2023 126,440 - - - - - - - 126,440 Balance 126,440 - - - - - - - 126,440 Face amount of note - 277,500 600,000 250,000 2,500,000 1,320,000 1,320,000 660,000 6,927,500 Debt discount - ( 27,500 ) - - ( 440,000 ) ( 350,035 ) ( 350,000 ) ( 175,000 ) ( 1,342,535 ) Amortization of debt discount 15,521 13,575 - - 37,288 7,693 7,692 962 82,731 Repayments ( 141,961 ) ( 134,264 ) - - - - - - ( 276,225 ) Balance - September 30, 2024 $ - $ 129,311 $ 600,000 $ 250,000 $ 2,097,288 $ 977,658 $ 977,692 $ 485,962 $ 5,517,911 Balance $ - $ 129,311 $ 600,000 $ 250,000 $ 2,097,288 $ 977,658 $ 977,692 $ 485,962 $ 5,517,911 The following represents the details of the notes summarized in the table above. Loan #1 In April 2023, the Company executed a note payable with a face amount of $ 275,250 . Under the terms of the agreement, the lender will withhold 8.9 % of the Company’s daily funds arising from sales through the lender’s payment processing services until the Company has repaid the $ 275,250 (interest is $ 25,250 ). The $ 25,250 is considered a debt issuance cost and is being amortized over the life of the note to interest expense in the accompanying consolidated statements of operations. The Company received net proceeds of $ 250,000 . This note was unsecured. F- 52 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Loan #2 In April 2024, the Company executed a note payable with a face amount of $ 277,500 . Under the terms of the agreement, the lender will withhold 8.1 % of the Company’s daily funds arising from sales through the lender’s payment processing services until the Company has repaid the $ 277,500 (interest is $ 27,500 ). The $ 27,500 is considered a debt issuance cost and will be amortized over the life of the note to interest expense. This note represented the refinancing of the initial note from April 2023 (Loan #1). Under the terms of the new agreement, the Company received net proceeds of $ 192,131 , which is a result of the repayment of the outstanding balance of $ 57,869 on the date of refinancing (gross amount of note exclusive of interest was $ 250,000 ). On the date of refinancing, all previous outstanding unamortized debt discount associated with the initial advance (Loan #1) was expensed. This note is unsecured. Loans #3 and #4 In November 2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, the Company acquired various vehicles as part of a growth and expansion plan. The Company has access to and utilizes these vehicles for mobile fueling as part of its ongoing operations. Since the transaction did not close until February 2025, the payments made/due as of December 31, 2024, have been classified as a component of deposit on future asset purchase totaling $ 2,035,283 . In 2025, this amount will be reclassified to property and equipment. As part of the consideration due to the seller, the Company was required to pay $ 1,250,000 , plus an additional $ 250,000 , between six (6) and nine (9) months from the transaction date. As of December 31, 2024, the Company had paid $ 650,000 , however an additional $ 850,000 remained due and outstanding as a condition for closing the asset purchase. In February 2025, an additional $ 600,000 was paid. At the date of these consolidated financial statements, and pursuant to the repayment terms, the balance of $ 250,000 remains and is due between May and August 2025. These loans are unsecured. F- 53 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Loan #5 In December 2024, the Company executed a two-month (2) loan for $ 2,500,000 . The Company was required to pay transaction fees of $ 440,000 . The Company received the entire $ 2,500,000 as proceeds, rather than the transaction fees being netted from the closing. These fees totaling $ 440,000 were recorded both as an original discount and accrued expenses. In the event of default, this note will accrue interest at 21 %. In February 2025, the Company obtained an additional 30-day extension, with a new maturity date occurring in March 2025, in exchange for $ 200,000 . This loan is unsecured. Loan #6 In December 2024, the Company executed a loan for $ 1,320,000 . The Company was required to pay transaction fees of $ 350,035 (debt discount), resulting in net proceeds of $ 969,965 . The Company is required to make 24 weekly payments of $ 55,000 to repay this loan. This loan is unsecured. Loan #7 In December 2024, the Company executed a loan for $ 1,320,000 . The Company was required to pay transaction fees of $ 350,000 (debt discount), resulting in net proceeds of $ 970,000 . The Company is required to make 24 weekly payments of $ 55,000 to repay this loan. This loan is unsecured. Loan #8 In December 2024, the Company executed a loan for $ 660,000 . The Company was required to pay transaction fees of $ 175,000 (debt discount), resulting in net proceeds of $ 485,000 . The Company is required to make 24 weekly payments of $ 27,500 to repay this loan. This loan is unsecured. Notes Payable - Vehicles The following is a summary of the Company’s notes payable for its vehicles at December 31, 2024 and 2023, respectively: Summary of Notes Payable Balance - December 31, 2022 $ 2,009,896 Repayments ( 836,618 ) Balance - December 31, 2023 $ 1,173,278 Repayments ( 821,206 ) Balance - December 31, 2024 $ 352,072 F- 54 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The following is a detail of the Company’s notes payable for its vehicles at December 31, 2024 and 2023, respectively: Schedule of Detailed Company’s Notes Payable Notes Payable - Vehicles Issue Date Maturity Date Interest Rate Default Interest Rate Collateral December 31, 2024 December 31, 2023 January 15, 2021 November 15, 2025 11.00 % N/A This vehicle $ 14,352 $ 28,370 April 9, 2019 February 17, 2024 4.90 % N/A This vehicle - 1,873 December 15, 2021 December 18, 2024 3.50 % N/A This vehicle - 37,823 December 16, 2021 December 18, 2024 3.50 % N/A This vehicle - 37,023 January 11, 2022 January 25, 2025 3.50 % N/A This vehicle 3,201 40,911 January 11, 2022 January 25, 2025 3.50 % N/A This vehicle 3,216 40,911 January 11, 2022 January 25, 2025 3.50 % N/A This vehicle 3,216 40,911 January 11, 2022 January 25, 2025 3.50 % N/A This vehicle 3,216 40,911 February 8, 2022 February 10, 2025 3.50 % N/A This vehicle 6,247 43,046 February 8, 2022 February 10, 2025 3.50 % N/A This vehicle 6,248 43,046 February 8, 2022 February 10, 2025 3.50 % N/A This vehicle 6,377 43,944 February 8, 2022 February 10, 2025 3.50 % N/A This vehicle 6,247 43,045 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,792 50,157 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,792 50,157 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 13,792 51,157 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,960 50,862 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,987 50,925 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,987 50,925 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,987 50,925 April 5, 2022 April 20, 2025 3.50 % N/A This vehicle 12,986 50,925 August 4, 2022 August 18, 2025 4.99 % N/A This vehicle 8,541 20,837 August 4, 2022 August 18, 2025 4.99 % N/A This vehicle 8,542 20,838 November 1, 2021 November 11, 2025 4.84 % N/A This vehicle 8,761 17,913 November 1, 2021 November 11, 2025 0.00 % N/A This vehicle 8,884 18,572 November 1, 2021 November 11, 2025 0.00 % N/A This vehicle 8,884 18,572 June 1, 2022 May 23, 2026 0.90 % N/A This vehicle 14,137 24,035 June 1, 2022 May 23, 2026 0.90 % N/A This vehicle 14,150 24,032 April 27, 2022 May 10, 2027 9.05 % N/A This vehicle 79,052 107,047 April 27, 2022 May 1, 2026 8.50 % N/A This vehicle 44,518 73,585 352,072 1,173,278 Less: current portion 200,165 819,788 Long term portion $ 151,907 $ 353,490 F- 55 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Debt Maturities The following represents future maturities of the Company’s various debt arrangements as follows: Schedule of Maturities of Long Term Debt For the Year Ended December 31, Notes Payable Notes Payable - Related Party * Vehicle Notes Payable Total 2025 6,793,236 2,081,500 282,411 9,157,147 2026 - - 54,774 54,774 2027 - - 14,887 14,887 Total $ 6,793,236 $ 2,081,500 $ 352,072 $ 9,226,808 * In connection with the common control merger with Next in February 2025, future filings will no longer report this amount in this table, as it will be eliminated in consolidation. The above table does not include unamortized debt discounts associated with the net amounts reported on the accompanying consolidated balance sheets. Line of Credit Year Ended December 31, 2023 In 2021, the Company entered into a Securities-Based Line of Credit, Promissory Note, Security, Pledge and Guaranty Agreement (the “Line of Credit”) with City National Bank of Florida. The line of credit had an outstanding balance of $ 1,000,000 at December 31, 2022 and was repaid in 2023 for $ 1,008,813 (principal of $ 1,000,000 plus accrued interest of $ 8,813 ). To secure the repayment of the Credit Limit, the Bank had a first priority lien and continuing security interest in the securities held in the Company’s investment portfolio with the Bank. The Company liquidated its entire position in the investment portfolio in 2023. In connection with the repayment of the line of credit, no further advances had been made and the bank closed the line of credit. Note 6 – Fair Value of Financial Instruments The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. F- 56 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company did not have any assets or liabilities measured at fair value on a recurring basis at December 31, 2024 and 2023, respectively. Note 7 – Commitments and Contingencies Operating Leases The Company accounts for leases in accordance with ASC 842: Leases, which requires lessees to apply the right-of-use (ROU) model by recognizing a right-of-use asset and a lease liability for all leases with terms exceeding 12 months. Lease classification determines the pattern of expense recognition in the consolidated statement of operations: ● Operating leases: Recognized on a straight-line basis as lease expense over the lease term. ● Finance leases: Recognized with amortization of the ROU asset and interest expense on the lease liability. Lessors classify leases as sales-type, direct financing, or operating leases based on whether they transfer risks, rewards, and control of the asset (ASC 842-10-25-2): ● If all risks, rewards, and control transfer, the lease is treated as a sale (sales-type lease). ● If risks and rewards transfer but control does not, the lease is classified as financing. ● If neither risks, rewards, nor control transfer, it is classified as an operating lease. Lease Recognition and Measurement The Company evaluates whether an arrangement contains a lease at inception and recognizes the lease in the financial statements upon lease commencement (the date the underlying asset is available for use). ROU assets represent the Company’s right to use an asset over the lease term, while lease liabilities reflect the present value of future lease payments. At lease commencement: ● ROU assets and lease liabilities are initially measured at the present value of lease payments. ● The Company primarily uses its incremental borrowing rate (IBR) to determine the present value of lease payments, except when an implicit rate is readily determinable (ASC 842-20-30-3). ● The IBR is based on market data, adjusted for credit risk and lease term. F- 57 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Practical Expedients and Lease Components The Company applies certain practical expedients to simplify lease accounting: ● Lease and non-lease components are combined for classification and measurement, except for direct sales-type leases and production equipment embedded in supply agreements (ASC 842-10-15-37). ● Short-term leases (12 months or less, without purchase or renewal options) are not recorded on the balance sheet (ASC 842-20-25-2). Lease Term and Expense Recognition ● Lease liabilities include options to extend or terminate when reasonably certain of exercise (ASC 842-10-55-26). ● Operating lease expense is recognized on a straight-line basis over the lease term and reported under general and administrative expenses. ● Variable lease payments based on an index/rate are initially measured using the rate at lease commencement, with differences expensed as incurred (ASC 842-10-30-5). Company Lease Commitments As of December 31, 2024, and 2023, the Company had no finance leases under ASC 842. On December 3, 2021, the Company entered into a lease agreement for 5,778 square feet of office space, commencing January 1, 2022. ● Lease term: 39 months ● Total monthly payment: $ 21,773 (including base rent, estimated operating expenses, and sales tax) ● Base rent: $ 14,743 (subject to a 3% annual increase); abated in months 1, 13, and 25 ● Initial ROU asset recognized: $ 735,197 (non-cash asset addition) F- 58 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The tables below present information regarding the Company’s operating lease assets and liabilities at December 31, 2024 and 2023, respectively: Schedule of Operating Lease Assets and Liabilities December 31, 2024 December 31, 2023 Assets Operating lease - right-of-use asset - non-current $ 61,151 $ 297,394 Liabilities Operating lease liability $ 69,128 $ 316,008 Weighted-average remaining lease term (years) 0.25 1.25 Weighted-average discount rate 5 % 5 % The components of lease expense were as follows: Schedule of Components of Lease Expense December 31, 2024 December 31, 2023 Operating lease costs Amortization of right-of-use operating lease asset $ 236,243 $ 224,388 Lease liability expense in connection with obligation repayment 9,534 21,389 Total operating lease costs $ 245,777 $ 245,777 Supplemental cash flow information related to operating leases was as follows: Operating cash outflows from operating lease (obligation payment) $ 256,414 $ 251,403 Right-of-use asset obtained in exchange for new operating lease liability $ - $ - F- 59 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Future minimum lease payments under non-cancellable leases for the years ended December 31, were as follows: Schedule of Future Minimum Payments Under Non-Cancellable Leases 2025 $ 69,421 2026 2027 Total undiscounted cash flows 69,421 Less: amount representing interest ( 293 ) Present value of operating lease liability 69,128 Less: current portion of operating lease liability 69,128 Long-term operating lease liability $ - Operating Leases – Related Party On August 1, 2023, the Company entered into a 48-month lease agreement for 1,200 square feet of office space owned by the Company’s Chief Technology Officer (CTO). ● Total Monthly Payment: $ 6,955 (inclusive of base rent, estimated operating expenses, and sales tax). ● Annual Increase: The lease is subject to a 3% annual escalation. ● Initial Right-of-Use (ROU) Asset: The Company recognized a non-cash ROU asset addition of $ 316,557 in accordance with ASC 842: Leases. Right-of-Use Asset - Lease Termination – Related Party On October 1, 2024, the existing lease was terminated with no additional consideration paid for early termination. Additionally, no penalties were incurred. For financial accounting purposes, the transaction was insignificant. New Right-of-Use Asset – Related Party On October 1, 2024, the Company signed a lease for 3,500 square feet of office space owned by the Company’s Chief Technology Officer. The lease term is 36 months, and the total monthly payment is $ 10,300 , including base rent, estimated operating expenses and sales tax. The lease is subject to a 3 % annual increase. An initial Right of Use (“ROU”) asset of $ 340,368 will be recognized as a non-cash asset addition. F- 60 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The tables below present information regarding the Company’s operating lease assets and liabilities at December 31, 2024 and 2023, respectively: Schedule of Operating Lease Assets and Liabilities December 31, 2024 December 31, 2023 Assets Operating lease - right-of-use asset - non-current $ 314,957 $ 286,397 Liabilities Operating lease liability $ 315,893 $ 287,994 Weighted-average remaining lease term (years) 2.75 3.58 Weighted-average discount rate 5 % 5 % The components of lease expense were as follows: Schedule of Components of Lease Expense December 31, 2024 December 31, 2023 Operating lease costs Amortization of right-of-use operating lease asset $ 81,203 $ 30,160 Lease liability expense in connection with obligation repayment 16,102 6,212 Total operating lease costs $ 97,305 $ 36,372 Supplemental cash flow information related to operating leases was as follows: Operating cash outflows from operating lease (obligation payment) $ 93,912 $ 34,775 Right-of-use asset obtained in exchange for new operating lease liability $ 340,368 $ 316,557 F- 61 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Future minimum lease payments under non-cancellable leases for the years ended December 31, were as follows: Schedule of Future Minimum Payments Under Non-Cancellable Leases 2025 $ 124,527 2026 128,263 2027 98,345 Total undiscounted cash flows 351,135 Less: amount representing interest ( 35,242 ) Present value of operating lease liability 315,893 Less: current portion of operating lease liability 103,799 Long-term operating lease liability $ 212,094 See Note 10 for termination of lease and execution of new lease. Employment Agreements Year Ended December 31, 2023 During 2023, the Company executed employment agreements with certain of its officers and directors. These agreements contain various compensation arrangements pertaining to the issuance of stock and cash. The stock portion of the compensation contains vesting provisions and are expensed as earned. For more information on these agreements see related Form 8K’s filed on: ● February 10, 2023 (Non-Independent Director), ● April 19, 2023 (Chief Technology Officer) (“CTO”); and ● April 24, 2023 (Interim Chief Executive Officer) (“ICEO”) Non-Independent Director In February 2023, the Company’s non-independent director received 4,167 shares of common stock, having a fair value of $ 40,000 , based upon the quoted closing price ($ 9.60 /share). This expense was recorded as a component of general and administrative expenses for the year ended December 31, 2023. Chief Technology Officer In April 2023, the Company’s CTO was entitled to receive up to 130,000 shares of common stock, subject to vesting provisions for services rendered. These shares had a fair value of $ 832,000 on the grant date based upon the quoted closing trading price ($ 6.40 /share). F- 62 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 For the year ended December 31, 2023, the CTO vested in 104,000 shares of common stock, having a fair value of $ 665,600 . Additionally, the remaining 26,000 shares vest 13,000 each in April 2025 and 2026, respectively. A corresponding expense totaling $ 52,000 was recorded for those shares ( 26,000 ) which were part of this employment agreement that had not yet vested. Total expense recorded during the year ended December 31, 2023 for the CTO was $ 717,600 . Total expense recorded during the year ended December 31, 2024 for the CTO was $ 34,666 . This expense was recorded as a component of general and administrative expenses for the years ended December 31, 2024 and 2023, respectively. The Company has filed several Form 8K’s during July and August 2023 as well as February 2025, related to the hiring and termination of various officers, directors and board members. Board Directors (New Board Members) In 2023, the Company granted various board directors an aggregate of 88,336 shares of common stock having a fair value of $ 455,000 on the grant date based upon the quoted closing trading price ($ 4.95 - $ 5.53 /share). All shares vested in June 2024 coinciding with the Company’s annual meeting. The Company recognized an expense of $ 238,334 related to the vesting of these shares over the term in which services were provided. In 2024, the Company granted various board directors an aggregate of 136,484 shares of common stock having a fair value of $ 520,000 on the grant date based upon the quoted closing trading price ($ 3.81 /share). All shares vested on December 31, 2024. The Board of Directors had its annual meeting on January 16, 2025 to approve these issuances as well as establish pricing for these awards. Board Directors (Former Board Members) The Company recognized an expense of $ 207,083 related to the vesting of shares over the term in which services were being provided in 2023 (through June 2023 prior to termination, these awards had been fully vested). Year Ended December 31, 2024 In connection with the employment agreements noted above, the Company recorded stock based compensation of $ 286,000 . F- 63 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Contingencies – Legal Matters The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries. As of December 31, 2024 and 2023, respectively, the Company is not aware of any litigation, pending litigation, or other transactions that require accrual or disclosure. Note 8 – Stockholders’ Equity (Deficit) Change in Authorized Shares On June 14, 2024, the Company’s Board of Directors approved an increase in authorized common stock from 50,000,000 to 500,000,000 shares. This increase was made to: ● Support current and future equity financings, ● Facilitate conversions of preferred stock into common stock, ● Enable future stock-based compensation plans, and ● Provide flexibility for potential mergers, acquisitions, and other corporate transactions. As of December 31, 2024, the Company had four (4) classes of stock, detailed as follows: Preferred Stock (Undesignated) The Company’s undesignated preferred stock provides flexibility for future corporate financing and strategic transactions. ● Authorized Shares: 5,000,000 ● Issued & Outstanding: None ● Par Value: $ 0.0001 per share ● Voting Rights: None ● Ranking: Senior to all other classes of stock, including Series A and Series B Preferred Stock, unless otherwise designated ● Dividends: None , unless declared by the Board of Directors ● Liquidation Preference: None ● Redemption Rights: None ● Conversion Rights: None F- 64 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Board of Directors has the authority to issue preferred stock in one or more series and determine the rights, privileges, and restrictions of each series without further stockholder approval. Convertible Preferred Stock – Series A On August 16, 2024, the Company designated and issued Series A Convertible Preferred Stock as part of a debt-to-equity conversion. ● Authorized Shares: 513,000 ( none designated in 2023) ● Issued & Outstanding: 363,000 shares as of December 31, 2024 ● Par Value: $ 0.0001 per share ● Stated Value: $ 10 per share ● Conversion Terms: ○ Fixed conversion rate: 4.53 shares of common stock per Series A Preferred Stock ○ Conversion price: ■ Calculated as $10 per share ÷ 80% of the minimum trading price at issuance ($2.21 per share) ■ Results in a fixed number of common shares per preferred share ○ Total equivalent common shares at December 31, 2024: 1,644,022 ○ No variable number of shares are required for settlement ○ (See Note 5 for detailed calculations.) ● Dividend Provisions: ○ Rate: 10% per year (2.5% per quarter), accrued and payable in common stock ○ Calculation: ■ Shares issued × Stated value × Dividend percentage ÷ Fixed conversion price ($2.21/share) ○ No potential dilution beyond the fixed conversion amount ● Voting Rights: Equal to the number of converted common shares ● Liquidation Preference: None ● Redemption Rights: None ● Derivative Liability Assessment: ○ Evaluated under ASC 815 (“Derivatives and Hedging”) ○ The Series A Convertible Preferred Stock does not meet the definition of a derivative liability since its conversion feature is fixed and does not require a variable number of settlement shares. F- 65 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Convertible Preferred Stock – Series B On October 1, 2024, the Company designated and issued Series B Convertible Preferred Stock as part of a structured financing transaction. ● Authorized Shares: 150,000 ( none designated in 2023) ● Issued & Outstanding: 140,000 shares as of December 31, 2024 ● Par Value: $ 0.0001 per share ● Stated Value: $ 10 per share ● Conversion Terms: ○ Fixed conversion rate: 5.18 shares of common stock per Series B Preferred Stock ○ Conversion price: ■ Calculated as $10 per share ÷ 70% of the minimum trading price at issuance ($1.93 per share) ■ Results in a fixed number of common shares per preferred share ○ Total equivalent common shares at December 31, 2024: 724,638 ○ No variable number of shares are required for settlement ● Dividend Provisions: ○ Rate: 12% per year (3% per quarter), accrued and payable in common stock ○ Calculation: ■ Shares issued × Stated value × Dividend percentage ÷ Fixed conversion price ($1.93/share) ○ No potential dilution beyond the fixed conversion amount ● Voting Rights: Equal to the number of converted common shares ● Liquidation Preference: None ● Redemption Rights: None ● Derivative Liability Assessment: ○ Evaluated under ASC 815 ○ The Series B Convertible Preferred Stock does not meet the definition of a derivative liability due to its fixed conversion price. F- 66 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Common Stock ● Authorized Shares: 500,000,000 ● Issued & Outstanding: ○ 6,571,343 shares as of December 31, 2024 ○ 1,806,612 shares as of December 31, 2023 ● Par Value: $ 0.0001 per share ● Voting Rights: 1 vote per share ● Dividends: None Summary of All Classes of Equity The following table summarizes the various classes of equity the Company is authorized to issue at December 31, 2024. Summary of Various Classes of Equity Stock Authorized Issued and Outstanding/ Par Stated Conversion Voting Liquidation Redemption Derivative Class Shares Designated Value Value Ratio Rights Dividends Preference Rights Liability Preferred Stock 5,000,000 None $ 0.0001 N/A None None None None None No Series A, Preferred 513,000 363,000 $ 0.0001 $ 10/share 4.53 common shares for each preferred share (fixed) Equivalent to as converted shares 10% annually paid in common stock None None No Series B, Preferred 150,000 140,000 $ 0.0001 $ 10/share 4.53 common shares for each preferred share (fixed) Equivalent to as converted shares 12% annually paid in common stock None None No Common 500,000,000 6,571,343 $ 0.0001 N/A None 1 vote per share N/A N/A N/A N/A Securities and Incentive Plans The Company maintains stock-based compensation plans under which stock options, restricted stock, and other equity awards are granted to employees, directors, and consultants. For detailed information on the Company’s Stock Incentive Plans, refer to Schedule 14A Information Statements filed with the U.S. Securities and Exchange Commission (SEC). All issuances under these plans for the years ended December 31, 2024 and 2023 are disclosed in the consolidated financial statements. F- 67 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Equity Transactions for the Years Ended December 31, 2024 Stock Issued for Debt Issuance Costs – Related Party The Company issued 425,978 shares of common stock in connection with the issuance of several notes payable (See Note 5), having a fair value of $ 2,020,387 ($ 2.81 - $ 7.10 /share), based upon the quoted closing trading price. This lender (an entity controlled by the Company’s Chief Executive Officer) holds a greater than 20% ownership of the Company. Vesting of Employee Shares – Related Parties The Company issued 88,336 shares of common stock (par value of $ 9 ) in connection with the vesting of shares previously granted in 2023 to various board directors. The effect of issuing these shares had no net effect of stockholder’s deficit as the share issuance was reflected at par value. The Company recorded $ 251,334 of expense in 2024, related to the vesting of these shares in 2024. The Company issued 136,484 shares of common stock to various board directors for services rendered in 2024, having a fair value of $ 520,000 ($ 3.81 /share), based upon the quoted closing trading price. Total share based payments with board directors were $ 771,334 . Also, see Note 7 for the expense recorded in 2024 of $ 34,666 related to the vesting of shares for the Company’s Chief Technology Officer. Total share based payments with board directors and officers for the year ended December 31, 2024 totaled $ 806,000 . Stock Issued for Services The Company issued 212,730 shares of common stock to consultants for services rendered, having a fair value of $ 725,640 ($ 0.0001 - $ 3.52 /share), based upon the quoted closing trading price. Series B, Preferred Stock Issued for Cash – Related party The Company issued 140,000 shares of Series B, preferred stock to a related party for $ 1,400,000 ($ 10 /stated value per share). The related party holds a greater than 20 % ownership of the Company. F- 68 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Common Stock Issued in Debt Conversion – Related party The Company converted all outstanding principal ($ 6,215,000 ) and accrued interest ($ 316,130 ) into 3,525,341 shares of common stock. At the time of conversion, the lender executed a 150 % penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $ 3,265,565 for a total of $ 9,796,696 of debt that was converted. As a result of this debt conversion, the balance due to this lender was $ 0 . The fair value of the common stock at the conversion date was $ 2.76 /share. Accordingly, since this was a related party transaction, no gain on debt extinguishment was recorded. The related party holds a greater than 20 % ownership of the Company. See Note 5. Stock Issued to Settle Accounts Payable The Company issued 2,703 shares of common stock to a vendor for services rendered, having a fair value of $ 10,000 ($ 3.70 /share), based upon the quoted closing price. Series A, Preferred Stock Issued in Debt Conversion – Related party On August 16, 2024, the Company converted all outstanding principal ($ 2,420,000 ) and accrued interest ($ 0 ) into 363,000 share of Series A, Preferred Stock, $ 10 /share stated value. At the time of conversion, the lender executed a 150 % penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $ 1,210,000 for a total of $ 3,630,000 of debt that was converted. As a result of this debt conversion, the balance due to this related party lender was $ 0 . The related party holds a greater than 5 % ownership of the Company. See Note 5 regarding debt conversion and related loss on debt extinguishment. Series A and B – Preferred Stock Dividends Payable in Common Stock – Related Parties In accordance with the terms of the Company’s Series A and B, Preferred stock, the Company is required to accrue dividends on a quarterly basis. Similar to the Series A and B, convertible preferred stock, dividends are accrued using a fixed conversion price. There are no other provisions that could result in a variable number of shares required for settlement in the future. Additionally, the Company has considered relevant accounting guidance, and has determined that there are no provisions related to its dividends that would require derivative liability treatment. F- 69 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company has calculated its dividends payable as follows: Schedule of Dividends Payable Series A - Convertible Preferred Stock Series B - Convertible Preferred Stock Total Dividends Payable Shares issued and outstanding 363,000 140,000 Stated value per share $ 10 $ 10 Dividend rate (10%/12%) 10 % 12 % Dividend shares due per year 363,000 168,000 Market price - at issuance date 2.76 2.76 Minimum price - 70%/80% discount to market price 80 % 70 % Conversion price 2.21 1.93 Dividend shares due per quarter 41,101 21,739 62,840 Equivalent common shares - per year 164,402 86,957 251,359 Total dividend shares due - at reporting date 61,204 32,372 93,576 Market price - at issuance date (fixed rate) $ 2.76 $ 2.76 Fair value of dividends payable - at reporting date $ 168,924 $ 89,347 $ 258,271 Equity Transactions for the Year Ended December 31, 2023 Stock Issued for Cash The Company sold 3,357 shares of common stock for $ 25,308 ($ 7.65 – $ 8.83 /share) through at the market (“ATM”) sales via a sales agent who was eligible for commissions of 3 % for any sales of common stock made. The Company also paid $ 25,308 in related expenses as direct offering costs in connection with the sale of these shares. Stock Issued for Services – Related Parties The Company issued an aggregate 268,986 shares of common stock to a Company officer as well various board members for services rendered, having a fair value of $ 1,215,365 ($ 4.38 – $ 8.78 /share), based upon the quoted closing trading price. The issuance of these shares was pursuant to vesting. F- 70 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Stock Issued for Services The Company issued 40,000 shares of common stock to consultants for services rendered, having a fair value of $ 272,750 ($ 4.80 - $ 11.98 /share), based upon the quoted closing trading price. Stock Issued for Debt Issuance Costs – Related Party (Common Stock Issuable) The Company issued 264,000 shares of common stock in connection with the issuance notes payable (See Note 5), having a fair value of $ 919,500 ($ 5.18 - $ 6.78 /share), based upon the quoted closing trading price. Of the total 264,000 shares issued, 104,000 shares remain unissued (common stock issuable) since the issuance of these shares would give this lender greater than 9.99 % ownership of the Company, which is prohibited by agreement. See Note 5. This lender holds a greater than 5 % controlling interest in the Company and a significant lender. Restricted Stock and Related Vesting A summary of the Company’s nonvested shares (due to service based restrictions) as of December 31, 2024 and 2023, is presented below: Schedule of Company Nonvested Shares Weighted Average Number of Grant Date Non-Vested Shares Shares Fair Value Balance - December 31, 2022 42,192 $ 1.40 Granted 330,554 5.77 Vested ( 104,699 ) 6.72 Cancelled/Forfeited ( 153,711 ) 5.53 Balance - December 31, 2023 114,336 6.40 Granted - - Vested ( 88,336 ) 5.15 Cancelled/Forfeited - - Balance - December 31, 2024 26,000 $ 6.40 The Company has issued various equity grants to board directors, officers, consultants and employees. These grants typically contain a vesting period of one to three years and require services to be performed in order to vest in the shares granted. F- 71 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Company determines the fair value of the equity grant on the issuance date based upon the quoted closing trading price. These amounts are then recognized as compensation expense over the requisite service period and are recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations. The Company recognizes forfeitures of restricted shares as they occur rather than estimating a forfeiture rate. Any unvested share based compensation is reversed on the date of forfeiture, which is typically due to service termination. At December 31, 2024, unrecognized stock compensation expense related to restricted stock was $ 45,067 , which will be recognized over a weighted-average period of 1.11 years During the years ended December 31, 2024 and 2023, the Company recognized compensation expense of $ 286,000 and $ 290,334 , related to the vesting of these shares. Stock Options Stock option transactions for the year ended December 31, 2023 is summarized as follows: Schedule of Stock Option Activity Weighted Weighted Weighted Average Average Average Remaining Aggregate Grant Number of Exercise Contractual Intrinsic Date Stock Options Options Price Term (Years) Value Fair Value Outstanding - December 31, 2022 37,392 $ 19.05 3.68 $ - $ - Vested and Exercisable - December 31, 2022 34,526 $ 19.44 3.47 $ - $ - Unvested and non-exercisable - December 31, 2022 2,866 $ 14.36 4.16 $ - $ - Granted 101,930 $ 17.41 $ 0.73 Exercised - $ - Cancelled/Forfeited ( 139,322 ) $ 17.85 Outstanding - December 31, 2023 - $ - - $ - $ - Vested and Exercisable - December 31, 2023 - $ - - $ - $ - Unvested and non-exercisable - December 31, 2023 - $ - - $ - $ - Year Ended December 31, 2023 The Company granted 101,930 stock options, having a fair value of $ 73,920 . Of the total, 21,930 were granted to our former Chief Executive Officer in lieu of accrued salary totaling $ 50,000 . These options were fully vested on the grant date. F- 72 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The remaining 80,000 options were granted to consultants for a project that was cancelled in 2023. As a result, the Company recorded a grant date fair value of $ 23,920 . All previously recorded stock based compensation ($ 7,973 ) was reversed in 2023. There was a net effect of $ 0 on the consolidated statements of operations for this grant. The fair value of the stock options granted in 2023 were determined using the Black-Scholes Option pricing model with the following assumptions: Schedule of Fair Value Assumptions Expected term (years) 5.00 Expected volatility 59 % - 62 % Expected dividends 0 % Risk free interest rate 4.00 % In, 2023, the Company determined that all outstanding options previously granted were held by former officers, directors and employees. None of these individuals had timely exercised their options post termination in an allowable time period, resulting in the cancellation and forfeiture of any issued and outstanding amounts held. Warrants Warrant activity for the years ended December 31, 2024 and 2023 are summarized as follows: Schedule of Stock Warrant Activity Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Warrants Price Term (Years) Value Outstanding - December 31, 2022 81,452 $ 10.36 2.22 $ 82,756 Vested and Exercisable - December 31, 2022 81,452 $ 10.36 2.22 $ 82,756 Unvested - December 31, 2022 - $ - - $ - Granted - Exercised - Cancelled/Forfeited - Outstanding - December 31, 2023 81,452 $ 10.36 1.22 $ 36,030 Vested and Exercisable - December 31, 2023 81,452 $ 10.36 1.22 $ 36,030 Unvested and non-exercisable - December 31, 2023 - $ - - $ - Granted - Exercised - Cancelled/Forfeited ( 35,107 ) $ 17.28 Outstanding - December 31, 2024 46,344 $ 5.12 0.65 $ 9,156 Vested and Exercisable - December 31, 2024 46,344 $ 5.12 0.65 $ 9,156 Unvested and non-exercisable - December 31, 2024 - $ - - $ - F- 73 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Note 9 – Asset Purchase Agreements Yoshi, Inc. In 2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, the Company acquired various vehicles as part of a growth and expansion plan. The Company has access to and utilizes these vehicles for mobile fueling as part of its ongoing operations. Since the transaction did not close until February 2025, the payments made/due as of December 31, 2024, have been classified as a component of deposit on future asset purchase totaling $ 2,035,283 . Consideration for this asset purchase consisted of the following: 1 Cash - $ 1,250,000 ; 2 Common Stock – 201,613 shares of common stock; having a fair value of $ 535,283 ($ 2.66 /share), based upon the quoted closing price; and 3 Note Payable - $ 250,000 1 At December 31, 2024, the Company had paid $ 650,000 . The balance of $ 600,000 was paid in February 2025. 2 All shares were issued as of December 31, 2024 3 At December 31, 2024, the $ 250,000 had not yet been paid. In February 2025, the balance was paid. Shell In 2024, the Company executed an asset purchase agreement with Shell Retail and Convenience Operations, d/b/a Shell TapUp and d/b/a Instafuel (“Shell”) to purchase 73 vehicles ($ 5,139,877 ) and above ground storage tanks ($ 80,000 ) as part of a growth and expansion plan for a total purchase price of $ 5,219,877 . The Company began its Shell related operations in January 2025, and at that time placed these assets into service. These vehicles have a useful life of five ( 5 ) years. F- 74 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Right-of-Use Assets – Operating Leases - Shell In connection with the closing of the Shell transaction, the Company assumed certain operating leases (parking lots and offices) subsequent to year end. These leases had commencement dates ranging from January – February 2025 ending between October 2028 – June 2029. Total payments over the remaining lease terms are approximately $ 814,000 . Note 10 – Common Control Merger Entry into Material Definitive Agreement Related Party – as Amended and Restated On August 10, 2023, the Company, the members (the “Members”) of NextNRG Holding Corp. (“NextNRG”) and Michael Farkas, an individual, as the representative of the members, entered into an Exchange Agreement (the “Exchange Agreement”), pursuant to which the Company agreed to acquire from the Members 100 % of the membership interests of NextNRG (the “Membership Interests”) in exchange for up to 40,000,00 shares of common stock. On September 25, 2024, the Company and the Shareholders’ Representative entered into the second amendment to the Second Amended and Restated Exchange Agreement (“Second Amendment Agreement”) to change the number of the Company’s common stock shares to be issued to the NextNRG Shareholders by the Company in exchange for 100 % of the shares of NextNRG to 100,000,000 shares of the Company’s common stock. The Second Amendment Agreement also provides that in the event NextNRG completes the acquisition of STAT-EI, Inc. (“SEI” or “STAT”), prior to the closing, then 50,000,000 shares will vest on the closing date, and the remaining 50,000,000 shares will be subject to vesting or forfeiture (such shares subject to vesting or forfeiture, the “Restricted Shares”). As noted above, NextNRG completed the acquisition of SEI on January 19, 2024, and thus 50,000,000 will vested on the closing date, and 50,000,000 Restricted Shares will be subject to vesting or forfeiture. 25,000,000 of the 50,000,000 Restricted Shares will vest, if at all, upon the Company commercially deploying the third solar, wireless electric vehicle charging, microgrid, and/or battery storage system (such systems as more specifically defined under the Exchange Agreement) and 25,000,000 of the 50,000,000 Restricted Shares will vest, if at all, upon the Company either reaching annual revenues exceeding $ 100 million, the Company completing projects with deployment costs greater than $ 100 million, or the Company completing a capital raise greater than $ 25 million. F- 75 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 The Closing is subject to customary closing conditions, including (i) that the Company take the actions necessary to amend its certificate of incorporation to increase the number of authorized shares of Common Stock from 50,000,000 shares of Common Stock to 500,000,000 shares of Common Stock, (ii) the receipt of the requisite stockholder approval, (iii) the receipt of the requisite third-party consents and (iv) compliance with the rules and regulations of The Nasdaq Stock Market. On March 1, 2024, Next Charging LLC reincorporated in the state of Nevada as a C-Corporation and changed its name to NextNRG Holding Corp. The transaction closed on February 13, 2025. See Note 12. Note 11 – Income Taxes The Components of the deferred tax assets and liabilities at December 31, 2024 and 2023 were approximately as follows: Schedule of Deferred Tax Assets and Liabilities December 31, 2024 December 31, 2023 Deferred Tax Assets Stock based compensation $ 346,000 $ 142,000 Intangibles 907,000 719,000 Net operating loss carryforward 13,460,000 10,775,000 Lease liabilities 43,000 80,000 Capitalized research expenditures 367,000 367,000 Bad debt reserve 31,000 21,000 Other 9,000 9,000 Total deferred tax assets 15,163,000 12,113,000 Deferred Tax Liabilities Depreciation ( 442,000 ) ( 683,000 ) Prepaid assets ( 92,000 ) ( 47,000 ) Right-of-Use asset ( 128,000 ) ( 75,000 ) Total deferred tax liabilities ( 662,000 ) ( 805,000 ) Deferred Tax Assets 14,501,000 11,308,000 Less: valuation allowance ( 14,501,000 ) ( 11,308,000 ) Deferred tax asset - net $ - $ - The components of the income tax benefit and related valuation allowance for the years ended December 31, 2024 and 2023 was approximately as follows: F- 76 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Schedule of Income Tax Benefit and Related Valuation Allowance December 31, 2024 December 31, 2023 Current $ - $ - Deferred ( 3,193,000 ) ( 2,588,000 ) Total income tax provision (benefit) ( 3,193,000 ) ( 2,588,000 ) Less: valuation allowance 3,193,000 2,588,000 Total Tax Provision $ - $ - A reconciliation of the provision for income taxes for the years ended December 31, 2024 and 2023 as compared to statutory rates was approximately as follows: Schedule of Reconciliation of Provision for Income Taxes December 31, 2024 December 31, 2023 Federal income tax expense (benefit) - 21 % $ ( 3,400,000 ) $ ( 2,199,000 ) State income tax expense (benefit) - 4.35 % - net of federal effect ( 704,000 ) ( 455,000 ) Permanent differences - net 911,000 ( 25,000 ) Deferred adjustments - 91,000 Change in valuation allowance 3,193,000 2,588,000 Income tax expense (benefit) $ - $ - Federal net operating loss carry forwards at December 31, 2024 and 2023 were approximately as follows: Schedule of Operating Loss Carry Forwards December 31, 2024 December 31, 2023 $ 59,000,000 $ 43,000,000 The Company reviews its filing positions for all open tax years in all U.S. Federal and State jurisdictions where the Company is required to file. The tax years subject to examination include the years 2021 and forward. There are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company incurs an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. F- 77 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Note 12 - Subsequent Events Subsequent to December 31, 2024, the Company had the following transactions: Notes Payable Proceeds The Company executed a three-month (3) note payable with a face amount of $ 1,000,000 , less an original issue discount of $ 50,000 , along with an additional $ 10,000 in transaction related fees (total debt discount and issue costs in cash of $ 60,000 ), resulting in net proceeds of $ 940,000 . The note bears interest at 15 %. The note ($ 1,000,000 ) was repaid in February 2025, including interest ($ 19,288 ) for a total repayment of $ 1,019,288 . Repayments The Company repaid $ 6,089,288 of various loans and notes payable. Notes Payable – Related Party Prior to the Common Control Merger, the Company repaid $ 203,000 to Next. Guarantee Arrangement – Chief Executive Officer On March 25, 2025, the Company entered into an agreement with its Chief Executive Officer. Under this agreement, in exchange for personally guaranteeing certain Company debt, the Chief Executive Officer will receive a fee equal to 3 % of the guaranteed debt. This fee will be paid when the funds are received. Loan Payable #1 On March 24, 2025, the Company executed a loan for $ 3,217,700 . The Company was required to pay transaction fees of $ 69,000 and an original issue discount of $ 917,700 (debt discount). Additionally, the previous outstanding loan #6 (see Note 5), of $ 715,000 was repaid in full. The Company received net proceeds of $ 1,516,700 . The Company is required to make 24 weekly payments of $ 125,000 to repay this loan. This loan is unsecured. Loan Payable #2 On March 24, 2025, the Company executed a loan for $ 3,217,700 . The Company was required to pay transaction fees of $ 69,000 and an original issue discount of $ 917,700 (debt discount). Additionally, the previous outstanding loan #7 (see Note 5), of $ 715,000 was repaid in full. The Company received net proceeds of $ 1,516,700 . The Company is required to make 24 weekly payments of $ 125,000 to repay this loan. This loan is unsecured. On March 26, 2025, the Company fully repaid $ 2,500,000 on outstanding loan #5 (see Note 5. Stock Issued for Cash and Warrants – Public Offering On February 18, 2025, the Company sold 5,000,000 shares of common stock for gross proceeds of $ 15,000,000 ($ 3 /share). In connection with this offering, the Company paid direct offering costs of $ 1,538,914 , resulting in net proceeds of $ 13,461,086 . The proceeds from the offering are expected to be used for: ● Expanding operations and infrastructure; ● Repaying outstanding debt; and ● Funding general corporate purposes, including working capital requirements Additionally, the Company granted the underwriter the option to purchase up to 750,000 additional over-allotment shares of common stock at $ 3 /share, for a period of 45 days (through March 30, 2025) The underwriter was also issued 250,000 warrants for services rendered in connection with the offering, which will be accounted for as a direct offering cost. These warrants are exercisable at $ 3.75 /share. These warrants are exercisable beginning 6 months after the grant date and for an additional 4 ½ years through February 13, 2030. F- 78 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Stock Issued for Services The Company issued 364,108 shares of common stock to consultants for services rendered, having a fair value of $ 1,324,243 ($ 2.72 - $ 3.90 /share), based upon the quoted closing trading price. Stock Issued to Settle Accounts Payable The Company issued 15,000 shares of common stock to a vendor to settle outstanding accounts payable, having a fair value of $ 46,650 ($ 3.11 /share), based upon the quoted closing trading price. Common Control Merger (Related Party) Transaction Overview On February 13, 2025, the Company executed a share exchange agreement with Next (an entity controlled by Michael Farkas (“Farkas”)), an entity under common control. Pursuant to the terms of the agreement EZFL issued 100,000,000 shares of common stock in exchange for all of the issued and outstanding common stock of Next. Corporate Name Change The Company changed its name from EzFill Holdings, Inc. to NextNRG, Inc. Overview of NextNRG, Inc. NextNRG, founded by Farkas, is a renewable energy company focused on developing and deploying wireless electric vehicle charging technology integrated with battery storage and solar energy solutions. Common Control Determination The Company has determined that this transaction qualifies as a common control merger under ASC 805-50-15-6, which defines control as the ability to direct management and policies by ownership, contractual arrangements, or other means. F- 79 NEXTNRG, INC. AND SUBSIDIARIES FORMERLY KNOWN AS EZFILL HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Key factors included in our assessment of common control are as follows: ● EZFL Control: ○ Farkas controlled more than 20 % of EZFL prior to December 31, 2023, as the largest individual shareholder; ○ As the primary debt lender prior to and at the time of the merger, Farkas had the ability to influence critical financial decisions; ○ EZFL’s liquidity was significantly supported by NextNRG funding prior to and at the time of the merger, reflecting decisions and activities controlled by Farkas; and ○ On the date of merger, Farkas controlled approximately 70 % of EZFL. ● NextNRG Control: ○ Farkas concurrently exercised control over NextNRG prior to December 31, 2023. For further details, refer to the Form 8-K filed on February 18, 2025. Anticipated Accounting Treatment – Related Party As both EZFL and NextNRG shared common ownership at all times prior to, at the time of and subsequent to the merger date, this transaction is classified as a common control merger. At the date of acquisition, Farkas owned approximately 70 % of EZFL and 67 % of NextNRG. See authoritative guidance throughout ASC 805-50, 260-10 and ASC 280: 1. Retention of Historical Carrying Amounts The acquired entity’s assets and liabilities are recorded at their historical carrying amounts. 2. Pooling-of-Interests Approach Identifies that transfers between entities under common control do not represent a change in ownership. In these transactions, the entity receiving net assets or exchanging shares is required to measure the assets and liabilities at their carrying amounts as recorded in the transferring entity’s separate financial statements (which reflect the historical cost basis established by the ultimate parent). Essentially, this guidance results in an accounting treatment similar to the pooling-of-interests method. F- 80 3. Retrospective Application to Financial Statements The historical financial statements are adjusted as if the merger had occurred at the beginning of the earliest period presented. By doing so, all periods in the financial statements are made comparable, reflecting the merger’s effects consistently. 4. Equity Adjustments Adjustments to Additional Paid-In Capital (APIC) and retained earnings are made to reconcile historical balances. Historical retained earnings (deficit) are combined and consolidated. 5. Earnings per Share ● The 100,000,000 shares of common stock issued are treated as outstanding for all historical periods. ● Retroactive adjustments are required when a change in the capital structure occurs through a stock dividend, stock split, or reverse split. Common control transactions are typically accounted for on a carryover basis, the historical EPS is not retroactively adjusted for such stock issuances unless the transaction’s structure meets the criteria for a capital structure change (i.e. a stock dividend or split). ● The merger’s retrospective application necessitates recalculating EPS for all periods presented. This ensures comparability by applying historical carrying values to both entities. ● Only vested shares are included in diluted EPS. 6. Goodwill and Intangible Assets In a common control merger, the Company will not recognize goodwill or intangible assets. 7. Segment Reporting The Company will assess its business operations and determine the requisite segments to recognized. All current and historical periods will be adjusted to reflect these allocations. The Company expects to presents its consolidated financial statements with segments for mobile fueling services, energy infrastructure services, and technology solutions. The related accounting and financial reporting for this transaction will first be reflected in the Company’s future March 31, 2025 filing on Form 10-Q. Chief Executive Officer Transition At the time of closing, the Company accepted the resignation of Yehuda Levy as Interim Chief Executive Officer. The Board of Directors subsequently appointed Michael D. Farkas as Chief Executive Officer, Director, and Executive Chairman. Mr. Farkas, previously the Managing Member and CEO of NextNRG, is also the significant controlling stockholder of the Company’s issued and outstanding common stock. Chief Financial Officer Transition At the time of closing, the Company accepted the resignation of Michael Handleman as Chief Financial Officer and appointed Joel Kleiner as his successor. Further details regarding these officer transitions are available in the Form 8-K filed on February 18, 2025. F- 81 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.