Nextnrg, Inc 10-Q for FY2026 Q1
Nextnrg, Inc. (NXXT)
About this 10-Q
Nextnrg, Inc filed this 10-Q on May 15, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $21.06M
- up 29.4% from $16.27M a year earlier
- Net loss
- $10.73M
- compared with a net loss of $8.79M a year earlier
- Diluted EPS
- -$0.07
- compared with -$1.59 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
or
For the transition period from [____] to [____]
Commission
file number
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the last 90 days.
Indicate
by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 15, 2026, shares of the registrant’s common stock, par value $ per share, were outstanding.
NextNRG, Inc.
Table of Contents
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NextNRG, Inc. and Subsidiaries
(f/k/a EZFill Holdings, Inc.)
Condensed Consolidated Balance Sheets
| For the 3
months ended | For the Year ended | |||||||
March 31, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable - net | ||||||||
| Inventory | ||||||||
| Prepaids and other | ||||||||
| Total current assets | ||||||||
| Property and equipment - net | ||||||||
| Operating lease - right-of-use asset | ||||||||
| Operating lease - right-of-use asset - related party | ||||||||
| Operating lease - right-of-use asset | ||||||||
| Deposits | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable and accrued expenses - related parties | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Notes payable - net | ||||||||
| Notes payable - related parties - net | ||||||||
| Notes payable - net | ||||||||
| Stock payable - related parties | ||||||||
| Operating lease liability | ||||||||
| Operating lease liability - related party | ||||||||
| Operating lease liability | ||||||||
| Dividends payable (common stock) - related parties | ||||||||
| Total current liabilities | ||||||||
| Notes payable - net | ||||||||
| Financing lease liability | ||||||||
| Operating lease liability | ||||||||
| Operating lease liability - related party | ||||||||
| Operating lease liability | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Convertible preferred stock - Series A, $ par value; shares designated; and issued and outstanding, respectively | ||||||||
| Convertible preferred stock - Series B, $ par value; shares designated issued and outstanding, respectively | ||||||||
| Preferred stock value | ||||||||
| Common stock - $ par value, shares authorized and shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Stockholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| F-1 |
NextNRG, Inc. and Subsidiaries
(f/k/a EzFill Holdings, Inc.)
Condensed Consolidated Statements of Operations
(Unaudited)
| 2026 | 2025 | |||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Sales - net | $ | $ | ||||||
| Costs and expenses | ||||||||
| Cost of sales | ||||||||
| Gross margin | ||||||||
| General and administrative expenses | ||||||||
| Depreciation and amortization | ||||||||
| Impairment loss | ||||||||
| Total costs and expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest income | ||||||||
| Other income | ||||||||
| Interest expense (including amortization of debt discount) | ( | ) | ( | ) | ||||
| Total other income (expense) - net | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Net loss available to common stockholders before preferred stock dividends | ( | ) | ( | ) | ||||
| Preferred stock dividend - payable on Series A convertible preferred stock - to be issued in common stock | ( | ) | ( | ) | ||||
| Preferred stock dividend - payable on Series B convertible preferred stock - to be issued in common stock | ( | ) | ( | ) | ||||
| Preferred stock dividend | ( | ) | ( | ) | ||||
| Net loss available to common stockholders - basic and diluted | ( | ) | ( | ) | ||||
| Per-share data | ||||||||
| Basic and diluted loss per share | ) | ) | ||||||
| Weighted average number of shares - basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| F-2 |
NextNRG, Inc. and Subsidiaries
(f/k/a EzFill Holdings, Inc.)
Condensed Consolidated Statements of Changes in Stockholders’ Deficit
For the Three Months Ended March 31, 2026
(Unaudited)
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Deficit | |||||||||||||||||||||||||||||||
Series A - | Series
B - | Common Stock | Additional | Accumulated | Non-Controlling | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Deficit | |||||||||||||||||||||||||||||||
| January 1, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Conversion of Series A convertible preferred stock to common stock | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Cash paid as direct offering cost | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for Series A convertible preferred stock dividend shares payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for Series B convertible preferred stock dividend shares payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Series B - convertible preferred stock dividends - payable in common stock | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||
| Stock issued for conversion of notes payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Non-controlling interest | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| F-3 |
NextNRG, Inc. and Subsidiaries
(f/k/a EzFill Holdings, Inc.)
Condensed Consolidated Statements of Changes in Stockholders’ Deficit
(Unaudited)
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Deficit | |||||||||||||||||||||||||||||||
Series
A - | Series
B - | Common Stock | Additional | Accumulated | Non-Controlling | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Deficit | |||||||||||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Contributed Capital | - | - | - | |||||||||||||||||||||||||||||||||||||
| Conversion of Series A convertible preferred stock to common stock | - | |||||||||||||||||||||||||||||||||||||||
| Cash paid as direct offering cost | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||||||
| Stock issued as loan extension fee | - | - | ||||||||||||||||||||||||||||||||||||||
| Equity issued for loan fees | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock for Series A convertible preferred stock dividend shares payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for Series B convertible preferred stock dividend shares payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Series A - convertible preferred stock dividends - payable in common stock | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Series B - convertible preferred stock dividends - payable in common stock | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Stock based compensation - related parties | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock issued for conversion of accounts payable | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock issued for conversion of notes payable | - | - | ||||||||||||||||||||||||||||||||||||||
| Par value true up adjustment | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||
| Non-controlling interest | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| F-4 |
NextNRG, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| 2026 | 2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows used in operating activities | ||||||||
| Net loss including non-controlling interest | $ | ( |
) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operations | ||||||||
| Contributed capital | ||||||||
| Depreciation and amortization | |
|||||||
| Amortization of intangible assets | ||||||||
| Amortization of operating lease - right-of-use asset | |
|||||||
| Amortization of operating lease - right-of-use asset - related party | |
|||||||
| Amortization of debt discount | |
|||||||
| Bad debt expense | |
|||||||
| Stock issued in connection with loan extension fee | ||||||||
| Stock issued for services | ||||||||
| Stock issued for services - related parties | ||||||||
| Loan forgiveness - other income | ( | ) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( |
) | ( | ) | ||||
| Inventory | ( |
) | ( | ) | ||||
| Prepaids and other | ( |
) | ( | ) | ||||
| Deposits | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable and accrued expenses - related party | ||||||||
| Operating lease liability | ( |
) | ( | ) | ||||
| Operating lease liability - related party | ( |
) | ( | ) | ||||
| Net cash used in operating activities | ( |
) | ( | ) | ||||
| Cash flow from investing activities | ||||||||
| Net cash used in investing activities | ||||||||
| Cash flow from financing activities | ||||||||
| Proceeds from notes payable | |
|||||||
| Proceeds from notes payable - related parties | ||||||||
| Proceeds from common stock issued for cash | |
|||||||
| Cash paid for direct offering costs - common stock | ( |
) | ( | ) | ||||
| Repayments on notes payable | ( |
) | ( | ) | ||||
Repayments on financing lease liability | ( |
) | ||||||
| Repayments on advances payable - related party | ( |
) | ( | ) | ||||
| Net cash provided by financing activities | |
|||||||
| Net increase (decrease) in cash | ( |
) | ||||||
| Cash - beginning of period | |
|||||||
| Cash - end of period | $ | |
$ | |||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | |
$ | |||||
| Cash paid for income tax | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
Stock issued for conversion of notes payable | $ | $ | ||||||
| Reclassification of prior period deposit to purchase of vehicles (Yoshi) | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liability - related party | $ | $ | ||||||
| Debt discount (OID) in connection with the issuance of notes payable | $ | $ | ||||||
| Series A and B convertible - preferred stock dividends - payable in common stock | $ | $ | ||||||
| Issuance of common stock for Series A convertible preferred stock dividend shares payable | $ | |
$ | |||||
| Issuance of common stock for Series B convertible preferred stock dividend shares payable – related party | $ | $ | ||||||
| Series B – convertible preferred stock distribution - prior investment - related party | $ | $ | ||||||
| Conversion of Series A preferred stock to common stock | $ | |
$ | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-5 |
NEXTNRG, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
Note 1 - Organization and Nature of Operations
Organization and Nature of Operations
NextNRG, Inc. (formerly known as EzFill Holdings, Inc.) and its subsidiaries (“Next,” “NextNRG,” “we,” “our” or the “Company”), was incorporated on April 20, 2016, in the State of Florida. The Company 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.
EzFill-FL, LLC was established on July 27, 2016 in the State of Florida. The assets of EzFill-FL, LLC constituting the mobile fueling business were acquired as of April 9, 2019 by EzFill Holdings, Inc. (“EZFL”), which was incorporated on March 28, 2019, in the State of Delaware.
Schedule of Organizational Structure
Organizational Structure
| Company Name | Incorporation Date | State of Incorporation | ||
| Inactive | Inactive | |||
| * |
Common Control Merger (Related Party)
Transaction Overview
On
August 10, 2023, the Company, the members (the “Members”) of Next Charging LLC (“Next Charging”) and Michael
Farkas, as the representative of the Members, entered into an Exchange Agreement (the “Exchange Agreement”), pursuant to
which the Company agreed to acquire from the Members
On June 11, 2024, in order to reflect the Conversion, the Company, all of the shareholders of Next Holding and Mr. Farkas as the representative of the Next Holding executed a second amended and restated agreement to replace the Exchange Agreement in its entirety (the “Second Amended and Restated Exchange Agreement”). Pursuant to the Second Amended and Restated Exchange Agreement, the Company agreed to acquire from the Next Holding 100% of the shares of Next Holding in exchange for the issuance by the Company to the Next Holding shareholders of Company common stock.
| F-6 |
On
September 25, 2024, the Company and Mr. Farkas entered into the second amendment to the Second Amended and Restated Exchange Agreement
(“Second Amendment”) to change the number of the Company’s common stock shares to be issued to the Next Holding shareholders
by the Company in exchange for
The
Second Amendment also provided that in the event Next Holding completes the acquisition of STAT-EI, Inc. (“SEI” or “STAT”),
prior to the closing, then shares will vest on the closing date, and the remaining shares will be subject to vesting
or forfeiture (such shares subject to vesting or forfeiture, the “Restricted Shares”). Next Holding completed the acquisition
of SEI on January 19, 2024, and thus vested on that closing date. The remaining restricted shares are subject to
vesting or forfeiture. of the restricted shares will vest, if at all, upon the Company commercially deploying the
third solar, wireless electric vehicle charging, microgrid, and/or battery storage system (such systems as more specifically defined
under the Second Amended and Restated Exchange Agreement, as amended) and of the Restricted Shares will vest, if
at all, upon the Company either reaching annual revenues exceeding $
Prior to closing, the Company (i) increased the number of its authorized shares of common stock from to , (ii) received stockholder approval, (iii) received third-party consents, and (iv) ensured compliance with the rules and regulations of The Nasdaq Stock Market.
Transaction Closing
On February 13, 2025, the closing of the transactions contemplated by the Second Amended and Restated Exchange Agreement, as amended, was completed. Pursuant to the terms of the Second Amended and Restated Exchange Agreement, as amended, the Company issued an aggregate of shares of common stock in exchange for all of the issued and outstanding common stock of Next Holding, and Next Holding became a wholly owned subsidiary of the Company.
Corporate Name Change
On February 13, 2025, the Company changed its name from EzFill Holdings, Inc. to NextNRG, Inc.
Next NRG Business Overview
NextNRG is Powering What’s Next by implementing artificial intelligence (“AI”) and machine learning (“ML”) into renewable energy, next-generation energy infrastructure, battery storage, wireless electric vehicle (“EV”) charging and on-demand mobile fuel delivery to create an integrated ecosystem.
At the core of NextNRG’s strategy is its utility operating system, which leverages AI and ML to help make existing utilities’ energy management as efficient as possible, and the deployment of NextNRG smart microgrids, which utilize AI-driven energy management alongside solar power and battery storage to enhance energy efficiency, reduce costs and improve grid resiliency. These microgrids are designed to serve commercial properties, schools, hospitals, nursing homes, parking garages, rural and tribal lands, recreational facilities and government properties, expanding energy accessibility.
NextNRG continues to expand its growing fleet of fuel delivery trucks and national footprint. NextNRG is also integrating sustainable energy solutions into its mobile fueling operations. The company hopes to be an integral part of assisting its fleet customers in their transition to EV, supporting more efficient fuel delivery while advancing clean energy adoption. The transition process is expected to include the deployment of NextNRG’s innovative wireless EV charging solutions.
| F-7 |
Common Control Determination
The Company has determined that the Company’s acquisition of Next Holding qualifies as a common control merger under the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 805-50-15-6, which defines control as the ability to direct management and policies by ownership, contractual arrangements, or other means.
Key factors included in our assessment of common control are as follows:
| ● | Company Control: |
| ○ | Mr. Farkas controlled more than 20% of the Company prior to December 31, 2023, as the largest individual shareholder; | |
| ○ | As the primary debt lender prior to and at the time of the merger, Mr. Farkas had the ability to influence critical financial decisions; | |
| ○ | The Company’s liquidity was significantly supported by Next Holding funding prior to and at the time of the merger, reflecting decisions and activities controlled by Mr. Farkas; and | |
| ○ | On
the date of merger, Mr. Farkas controlled approximately |
| ● | Next Holding Control: |
| ○ | Mr. Farkas concurrently exercised control over Next Holding prior to December 31, 2023. |
Accounting Treatment
As both the Company and Next Holding 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, Mr. Farkas owned approximately
For the following discussion, 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.
| F-8 |
2. Pooling-of-Interests Approach
The 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.
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 (“EPS”)
| ● | 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). | |
| ● | 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 recognize. All current and historical periods will be adjusted to reflect these allocations. The Company presents its consolidated financial statements with segments for mobile fuel delivery and energy infrastructure.
| F-9 |
Common Control Transactions and Equity Adjustments
As noted above, on February 13, 2025, the Company executed a common control transaction as defined under ASC 805-50-15-6 through 15-9, Business Combinations – Related Issues. In accordance with ASC 805-50-30-5, the transaction was accounted for using the carryover basis of accounting, whereby the assets and liabilities of the transferred entity were recognized at their historical book values with no new goodwill or gain recognized.
Although the common control transaction was effective as of February 13, 2025, certain historical intercompany capital transactions and equity issuances— such as investments in affiliates—were not fully eliminated or reclassified at the transaction date. These amounts continued to reside on the individual ledgers of the respective legal entities as equity instruments or investment balances. In accordance with ASC 805-50-45-2, transactions between entities under common control that are recognized at book value may result in adjustments to equity, typically reflected in APIC.
In the future, the Company expects to record permanent equity reclassifications at the individual entity level to eliminate these historical intercompany equity balances. These adjustments will not be processed as temporary consolidation-level eliminations but will instead be reflected directly in APIC to present the economic substance of the transaction consistent with the principles of common control accounting. This approach ensures that the condensed consolidated financial statements do not reflect duplicative equity or investment balances and avoids the continued need for recurring consolidation-level elimination entries.
These equity adjustments had no impact on the Company’s consolidated net income, cash flows, or total stockholders’ deficit. The Company may continue to evaluate and adjust legacy intercompany equity positions in future periods as part of its ongoing consolidation process.
The line item “Common Control Adjustments” presented within the condensed consolidated statement of changes in stockholders’ deficit represents reclassifications of historical intercompany equity balances resulting from prior transactions among entities under common control. These are adjustments recorded directly to APIC and do not reflect third-party capital transactions.
Chief Executive Officer Transition
On February 14, 2025, in connection with the closing of the Next Holding acquisition, 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 Chief Executive Officer of Next Holding, is also the significant controlling stockholder of the Company’s issued and outstanding common stock.
Chief Financial Officer Transition
On February 14, 2025, in connection with the closing of the Next Holding acquisition, the Company accepted the resignation of Michael Handleman as Chief Financial Officer and appointed Joel Kleiner as his successor.
| F-10 |
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not contain all information and footnotes required by U.S. GAAP for annual financial statements.
In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2026 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results for the full fiscal year or any future period.
These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on April 16, 2026, as the same may be updated from time to time.
Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the condensed consolidated results of its operations for the periods presented.
Liquidity and Going Concern
As reflected in the accompanying unaudited condensed consolidated financial statements, for the three months ended March 31, 2026, the Company had:
| ● | Net
loss available to common stockholders of $ |
| ● | Net
cash used in operations was $ |
Additionally, at March 31, 2026, the Company had:
| ● | Accumulated
deficit of $ |
| ● | Stockholders’
deficit of $ |
| ● | Working
capital deficit of $ |
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 $
The Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months ending March 31, 2027, and our current capital structure including equity-based instruments and our obligations and debts.
| F-11 |
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 unaudited condensed consolidated financial statements are issued.
The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management’s strategic plans include the following:
| ● | Expand into new and existing markets (commercial and residential); |
| ● | Obtain additional debt and/or equity-based financing for growth; |
| ● | Collaborations with other operating businesses for strategic opportunities; and |
| ● | Acquire other businesses to enhance or complement our current business model while accelerating our growth. |
Note 2 - Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by 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, where the Company is the primary beneficiary, possessing both (i) power over significant activities and (ii) the obligation to absorb losses or receive benefits. |
All intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45. The Company continuously evaluates its investments and relationships to assess consolidation requirements.
Business Combinations, Asset Acquisitions, and Reverse Acquisitions
The Company accounts for acquisitions in accordance with ASC 805, “Business Combinations,” and applicable SEC reporting requirements under Regulation S-X, Rule 3-05 and Regulation S-K, Items 101 and 303. Transactions qualifying as business combinations are accounted for under the acquisition method, while those classified as asset acquisitions follow the guidance in ASC 805-50. Additionally, the Company evaluates whether a transaction qualifies as a reverse acquisition under ASC 805-40 and applies the appropriate accounting and disclosure requirements.
Business Combinations
For transactions classified as business combinations, the Company:
| ● | Recognizes and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition date (ASC 805-20-25-1). | |
| ● | Records goodwill as the excess of the fair value of consideration transferred over the fair value of net assets acquired, including any previously held equity interests (ASC 805-30-30-1). | |
| ● | Expenses acquisition-related costs as incurred, per ASC 805-10-25-23. | |
| ● | Uses preliminary purchase price allocations, with adjustments permitted within the measurement period (not exceeding one year) per ASC 805-10-25-13. Adjustments beyond the measurement period are recorded in earnings. |
Significant judgments in fair value determinations include:
| ● | Intangible asset valuations, based on estimates of future cash flows and discount rates. | |
| ● | Useful life assessments, impacting amortization and financial results. | |
| ● | Contingent consideration, which is remeasured at fair value through earnings per ASC 805-30-35-1. |
For SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant. The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests.
| F-12 |
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); and | |
| ● | Capitalizes direct acquisition costs as part of the asset’s cost, unlike business combinations where such costs are expensed (ASC 805-50-25-1). |
The 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; and | |
| ● | The Company’s financial position and results of operations. |
Regulatory and Financial Reporting Considerations
For SEC registrants, acquisitions may trigger additional disclosure and reporting requirements:
| ● | Regulation S-X, Rule 3-05: Requires separate financial statements of the acquired business if it meets significance thresholds under Rule 1-02(w). |
| ● | Regulation S-K, Item 101: Requires disclosure of the impact of material acquisitions on the Company’s business operations. |
| ● | Regulation S-K, Item 303: Mandates discussion of the impact of acquisitions on the Company’s financial condition and results of operations in Management’s Discussion and Analysis . |
| ● | Regulation S-X, Article 11: Requires pro forma financial statements if the acquisition is significant. |
| ● | Form 8-K, Item 2.01: Immediate reporting requirements for material acquisitions, including reverse mergers. |
The Company continuously evaluates acquisitions, including reverse acquisitions, to ensure proper classification and compliance with ASC 805, SEC reporting requirements, and regulatory guidance.
| F-13 |
Segment Reporting
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 Company’s 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 in two reportable segments, as its CODM reviews the business as a whole rather than by distinct business components.
Application of ASU 2023-07 – Segment Reporting
In October 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances segment disclosures by requiring public entities to disclose significant segment expenses that are regularly provided to the CODM and used in assessing segment performance and resource allocation.
The adoption of ASU 2023-07 did not have a material impact on the Company’s condensed consolidated financial statements.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. 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.
| F-14 |
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 three months ended March 31, 2026 and the year ended December 31, 2025, respectively, include:
| ● | Allowance for doubtful accounts and other receivables |
| ● | Inventory reserves and classifications |
| ● | Valuation of loss contingencies |
| ● | Valuation of stock-based compensation |
| ● | Estimated useful lives of property and equipment |
| ● | Impairment of intangible assets |
| ● | Implicit interest rate in right-of-use operating leases |
| ● | Uncertain tax positions |
| ● | Valuation allowance on deferred tax assets |
Risks and Uncertainties
The Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic fluctuations. The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential business disruptions, supply chain constraints, and liquidity challenges.
In accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect its financial condition, results of operations, and business outlook. Key factors contributing to variability in sales and earnings include:
| 1. | Industry Cyclicality (ASC 275-10-50-6) – The Company’s financial performance is affected by industry trends, seasonality, and shifts in market demand. | |
| 2. | Macroeconomic Conditions (ASC 275-10-50-8) – Economic downturns, inflationary pressures, interest rate changes, and geopolitical risks may impact consumer purchasing behavior and the Company’s revenue streams. | |
| 3. | Pricing Volatility (ASC 275-10-50-4) – The cost and availability of raw materials, supply chain disruptions, and competitive pricing pressures can lead to fluctuations in gross margins and profitability. |
Given these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting liquidity, business continuity, and long-term strategic growth. The Company continuously assesses these risks and implements measures to mitigate their potential impact.
Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with 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.
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.
| F-15 |
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 March 31, 2026 and December 31, 2025, 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.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
At
March 31, 2026 and December 31, 2025, respectively, the Company did
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 $
At March 31, 2026 and December 31, 2025, 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 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. |
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 three months ended March 31, 2026 and 2026, respectively, there were no impairments taken.
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).
| F-16 |
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).
Applicability of ASC 326
The Company has assessed the applicability of ASC 326, Financial Instruments—Credit Losses, 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 March 31, 2026 and December 31, 2025:
Schedule of Accounts Receivable
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for doubtful accounts | ||||||||
| Accounts receivable - net | $ | $ | ||||||
For the three months ended March 31, 2026 and 2025, bad debt was as follows:
Schedule of Bad Debt
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Bad debt expense | $ | $ | ||||||
Bad debt expense is recorded as a component of general and administrative expenses in the accompanying unaudited condensed 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 FIFO method, as required by ASC 330-10-35-1.
Inventory Valuation and Reserve Assessment
Management assesses the recoverability of inventory each reporting period and establishes reserves for potential inventory write-downs when necessary.
The Company evaluates factors such as:
| ● | Market conditions affecting fuel prices; | |
| ● | Net realizable value based on estimated selling price; and | |
| ● | Inventory turnover trends (ASC 330-10-35-2). |
For
the three months ended March 31, 2026 and 2025, respectively, the Company did
At
March 31, 2026 and December 31, 2025, the Company had inventory of $
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.
| F-17 |
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.
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
| Customer | 2026 | 2025 | ||||||
| Three Months Ended March 31, | ||||||||
| Customer | 2026 | 2025 | ||||||
| A | % | % | ||||||
| Total | % | % | ||||||
Accounts Receivable
| Customer | 2026 | 2025 | ||||||
| March 31, | December 31, | |||||||
| Customer | 2026 | 2025 | ||||||
| A | % | % | ||||||
| C | % | % | ||||||
| D | % | % | ||||||
| Total | % | % | ||||||
Vendor Purchases
| Vendor | 2026 | 2025 | ||||||
| Three Months Ended March 31, | ||||||||
| Vendor | 2026 | 2025 | ||||||
| A | % | % | ||||||
| B | % | % | ||||||
| C | % | % | ||||||
| D | % | % | ||||||
| E | % | % | ||||||
| Total | % | % | ||||||
| Concentration risk percentage | % | % | ||||||
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.
| F-18 |
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.
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:
Impairment Results
For the three months ended March 31, 2026 and 2025, the Company did not record any impairment losses.
Original Issue Discounts (“OIDs”) and Other Debt Discounts
The Company accounts for OIDs 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).
OIDs
For certain notes issued, the Company may provide the debt holder with an 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 unaudited condensed 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).
| F-19 |
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 (“ROU”) Assets and Lease Obligations
The Company accounts for 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).
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 ROU assets and operating lease liabilities on the unaudited condensed 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 three months ended March 31, 2026 and 2025, respectively.
See Note 7 for details on third-party and related-party operating leases.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by 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.
| F-20 |
The Company generates revenue from mobile fuel sales, which can be purchased as a one-time transaction or through a monthly membership. Revenue from fuel sales is recognized at the time of delivery, and membership revenue is recognized at the end of each month, reflecting the satisfaction of the performance obligation over time within a one-month membership cycle.
The Company follows the five-step revenue recognition model outlined in ASC 606-10-05-4:
1. Identify the Contract with a Customer
A contract exists when the following criteria are met, per ASC 606-10-25-1:
| ● | The contract creates enforceable rights and obligations between the Company and the customer. |
| ● | The contract has commercial substance (i.e., it affects the Company’s cash flows). |
| ● | The payment terms are identified, and the consideration is determinable. |
| ● | It is probable that the Company will collect the consideration in exchange for the goods or services transferred. |
Contracts for mobile fuel sales and memberships meet these criteria. Collectability is assessed based on historical customer payment trends and credit risk in accordance with ASC 606-10-25-5.
2. Identify the Performance Obligations in the Contract
A performance obligation is a distinct good or service promised in the contract that is both capable of being distinct and distinct in the context of the contract, per ASC 606-10-25-19.
The Company has determined that its contracts, based on sales type, contain two distinct performance obligations:
| ● | Fuel Sales – The delivery of fuel to a customer, with revenue recognized at the point of delivery. |
| ● | Membership Fees – Monthly membership services, with revenue recognized over time within a one-month membership cycle, as the customer benefits from access to services throughout the period. |
These performance obligations are not bundled or combined, as each service is separately identifiable, in accordance with ASC 606-10-25-22.
3. Determine the Transaction Price
The transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the customer, per ASC 606-10-32-2.
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 three months ended March 31, 2026 and 2025, respectively, the Company granted insignificant discounts of less than 1% of total revenues. |
| ● | No financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15. |
| F-21 |
4. Allocate the Transaction Price to Performance Obligations
For contracts with a single performance obligation, the entire transaction price is allocated to that obligation, per ASC 606-10-32-40.
If a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices (“SSP”) as required by ASC 606-10-32-28. The standalone selling price is determined based on observable sales data.
The Company’s fuel sales and memberships each have a distinct standalone selling price, eliminating the need for allocation adjustments.
5. Recognize Revenue When (or As) Performance Obligations Are Satisfied
Revenue is recognized at the point in time when control over a product or service is transferred to the customer, in accordance with ASC 606-10-25-30.
| ● | Fuel Sales: Control transfers at the time of fuel delivery, at which point revenue is recognized. |
| ● | Membership Fees: Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services throughout the month. |
The Company does not recognize revenue based on customer invoicing dates; instead, it ensures revenue recognition aligns with the actual satisfaction of performance obligations per ASC 606-10-25-31.
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 |
| F-22 |
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 March 31, 2026 and December 31, 2025, the Company had $
The following represents the Company’s disaggregation of revenues for the three months ended March 31, 2026 and 2025:
Schedule of Disaggregation of Revenue
| Three Months Ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Revenue | % of Revenues | Revenue | % of Revenues | |||||||||||||
| Fuel sales | $ | % | $ | % | ||||||||||||
| Other | % | % | ||||||||||||||
| Total Sales | $ | % | $ | % | ||||||||||||
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.
Fuel costs include all costs incurred to acquire fuel, including supporting transportation costs prior to delivery to customers. Fuel costs do not include any depreciation of property and equipment as there are no significant amounts that could be attributed to fuel costs. Accordingly, depreciation and amortization are separately classified in the condensed consolidated statements of operations and are not recorded in cost of sales.
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-23 |
As
of March 31, 2026 and December 31, 2025, respectively, the Company had
The
Company also recognizes interest and penalties related to uncertain tax positions in other expense in the condensed consolidated
statement of operations (ASC 740-10-45-25).
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.
Valuation Allowance Determination
At March 31, 2026 and December 31, 2025, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting in a net carrying amount of $. 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 condensed 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.
| F-24 |
The Company recognized marketing and advertising costs during the three months ended March 31, 2026 and 2025, respectively as follows:
Schedule of Marketing and Advertising Costs
| 3 months | 3 months | |||||||
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Total Sales and Marketing | $ | $ | ||||||
The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, typically the vesting period.
ASC 718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. It also applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may be settled using equity instruments.
In compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees, aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting period in accordance with ASC 718.
The Company determines the fair value of stock options using the Black-Scholes option pricing model, considering the following key assumptions:
| ● | Exercise price – The agreed-upon price at which the option can be exercised. |
| ● | Expected dividends – The anticipated dividend yield over the expected life of the option. |
| ● | Expected volatility – Based on historical stock price fluctuations. |
| ● | Risk-free interest rate – Derived from U.S. Treasury securities with similar maturities. |
| ● | Expected life of the option – Estimated based on historical exercise patterns and contractual terms. |
Additionally, the Company follows the guidance under ASU 2016-09, which introduced amendments to simplify certain accounting aspects of share-based compensation, including:
| ● | The treatment of tax benefits and tax deficiencies in income tax reporting. | |
| ● | The option to recognize forfeitures as they occur rather than estimating them upfront. | |
| ● | Cash flow classification for certain tax-related transactions. |
The Company continues to evaluate and apply the latest Accounting Standards Updates (ASUs) and interpretive releases related to stock-based compensation to ensure compliance with evolving financial reporting requirements.
| F-25 |
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. |
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. |
| F-26 |
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. |
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). |
| F-27 |
Schedule of Dilutive Equity Securities Outstanding
| March 31, 2026 | March 31, 2025 | |||||||
| Series A, preferred stock | ||||||||
| Series B, preferred stock | ||||||||
| Series A, preferred stock - dividends | ||||||||
| Series B, preferred stock - dividends | ||||||||
| Warrants (vested) | ||||||||
| Total common stock equivalents | ||||||||
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 March 31, 2026, the Company has sufficient authorized shares of common stock () to settle any potential exercises of common stock equivalents.
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. |
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 Note 1, which discusses the common control merger between the Company and Next Holding, on February 13, 2025. |
| ● | See Note 4 for accrued liabilities – related parties. |
| ● | See Notes 5 and 12 for a discussion of related party debt. |
| ● | See Note 7 regarding right-of-use operating lease with the Company’s Chief Technology Officer. |
| ● | See Note 8 for a discussion of equity transactions with certain officers and directors. |
Related Party Agreement with Company owned by Avishai Vaknin
In
2023, the Company entered into a services agreement with an affiliate of Avishai Vaknin, the Company’s Chief Technology Officer.
Services include overseeing all matters relating to the Company’s technology. The Company agreed to pay $
In connection with this agreement, the Company issued shares of common stock. March 31, 2026 and December 31, 2025, and shares have vested, respectively. The remaining shares will vest in April 2026. See Note 8 for related vesting of shares and corresponding expense recognition.
| F-28 |
Recent Accounting Standards
In November 2023, the FASB issued ASU 2023-07, which enhances disclosure requirements for reportable segments by:
| ● | Requiring enhanced disclosures of significant segment expenses. |
| ● | Aligning segment reporting requirements with information regularly reviewed by management. |
The Company adopted ASU 2023-07 on January 1, 2024. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements by:
| ● | Standardizing and disaggregating rate reconciliation categories. |
| ● | Requiring disclosure of income taxes paid by jurisdiction. |
This ASU is effective for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. Early adoption is permitted.
The Company is currently assessing the impact of ASU 2023-09 on its income tax disclosures and reporting requirements.
In November 2024, the FASB issued ASUNo. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires additional disclosures of certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact this update will have on our annual disclosures; however, it will not impact our financial condition, results of operations, or cash flows.
Other Accounting Standards Updates
The FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
Reclassifications
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation, including the common control merger. 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.
| F-29 |
Note 3 – Property and Equipment
Property and equipment consisted of the following:
Schedule of Property and Equipment
| March 31, 2026 | December 31, 2025 | Estimated
Useful Lives (Years) | ||||||||
| Vehicles | $ | * | $ | |||||||
| Equipment | ||||||||||
| Office furniture | ||||||||||
| Office equipment | ||||||||||
| Property and equipment, gross | ||||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||||
| Total property and equipment - net | $ | $ | ||||||||
Asset Purchase – Vehicles - Shell
| * |
Deposit on Future Asset Purchase - Yoshi
In
2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, in February 2025 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 $
Depreciation
and amortization expense for the three months ended March 31, 2026 and 2025, was $
Depreciation and amortization are included as a component of general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
Impairment losses of property and equipment are included as a component of general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
| F-30 |
Note 4 – Accounts Payable and Accrued Liabilities including Related Parties
Accounts payable and accrued liabilities were as follows at March 31, 2026 and December 31, 2025, respectively:
Schedule of Accounts Payable and Accrued Liabilities
| March 31, 2026 | December 31, 2025 | |||||||
| Accounts payable and accrued liabilities | ||||||||
| Accounts payable and accrued liabilities - non-related parties | $ | $ | ||||||
| Accrued liabilities - related parties | ||||||||
| Accrued interest payable - related parties | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
Note 5 – Debt
The following represents a summary of the Company’s debt (notes payable – related parties and third party debt for notes payable) including those owed on vehicles, including key terms, and outstanding balances at March 31, 2026 and December 31, 2025, respectively.
Notes Payable – Related Parties
The following is a summary of the Company’s notes payable – related parties at March 31, 2026 and December 31, 2025:
Summary of Notes Payable
| Balance - December 31, 2025 | ||||
| Advances | ||||
| Debt discount | ||||
| Amortization of debt discount | ||||
| Stock conversion | ||||
| Repayments | ( | ) | ||
| Balance – March 31, 2026 | $ |
The following is a detail of the Company’s advances payable – related parties terms and history of each advance at March 31, 2026 and December 31, 2025:
Schedule of Advances Payable Related Parties
| Maturity | Interest | March 31, | December 31, | |||||||||||||||
| Debt Holder | Issue Date | Date | Rate | Collateral | 2026 | 2025 | ||||||||||||
| Chief Executive Officer/>50% control person | $ | $ | | |||||||||||||||
| F-31 |
Notes Payable
The following represents the terms and balances of the Company’s notes payable March 31, 2026 and December 31, 2025, respectively:
Schedule of Terms of Notes Payable
| December
31, 2025 | Face Amount of Note | Debt Discount | Amortization of Debt Discount | Conversion to Common Stock | Repayments | March
31, 2026 | ||||||||||||||||||||||
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||
| December
31, 2025 | Face Amount of Note | Debt Discount | Amortization of Debt Discount | Conversion to Common Stock | Repayments | March
31, 2026 | ||||||||||||||||||||||
| Loan #16 | ( | ) | ||||||||||||||||||||||||||
| Loan #20 | ( | ) | ||||||||||||||||||||||||||
| Loan #28 | ||||||||||||||||||||||||||||
| Loan #29 | ( | ) | ||||||||||||||||||||||||||
| Loan #30 | ( | ) | ||||||||||||||||||||||||||
| Loan #31 | ( | ) | ||||||||||||||||||||||||||
| Loan #32 | ( | ) | ||||||||||||||||||||||||||
| Loan #37 | ||||||||||||||||||||||||||||
| Loan #40 | ||||||||||||||||||||||||||||
| Loan #41 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| December
31, 2024 |
Face Amount of Note |
Debt Discount |
Amortization of Debt Discount |
Conversion to Common Stock |
Repayments | December
31, 2025 |
||||||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||||
| December
31, 2024 |
Face Amount of Note |
Debt Discount |
Amortization of Debt Discount |
Conversion to Common Stock |
Repayments | December
31, 2025 |
||||||||||||||||||||||
| Loan #2 | ( | ) | $ | |||||||||||||||||||||||||
| Loan #3 | ( | ) | ||||||||||||||||||||||||||
| Loan #4 | ( | ) | ||||||||||||||||||||||||||
| Loan #5 | | ( | ) | |||||||||||||||||||||||||
| Loan #6 | ( | ) | ||||||||||||||||||||||||||
| Loan #7 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #8 | ( | ) | ||||||||||||||||||||||||||
| Loan #9 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Loan #10 | ( | ) | ||||||||||||||||||||||||||
| Loan #12 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #13 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #16 | ( | ) | | |||||||||||||||||||||||||
| Loan #17 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #20 | ( | ) | ||||||||||||||||||||||||||
| Loan #22 | ( | ) | ||||||||||||||||||||||||||
| Loan #23 | ( | ) | ||||||||||||||||||||||||||
| Loan #24 | ( | ) | ||||||||||||||||||||||||||
| Loan #25 | ( | ) | ||||||||||||||||||||||||||
| Loan #26 | ( | ) | ||||||||||||||||||||||||||
| Loan #28 | ||||||||||||||||||||||||||||
| Loan #29 | ( | ) | ||||||||||||||||||||||||||
| Loan #30 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #31 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #32 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #33 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #34 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #35 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #36 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #37 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #38 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #39 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Loan #40 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| F-32 |
Loans #16, #20, #30-31 and #41 represent merchant cash advance (“MCA”) agreements entered into by the Company. Under these arrangements, the Company receives a specified gross advance amount, net of origination fees, discounts, and other transaction costs, in exchange for a fixed repayment obligation that typically exceeds the net funds received.
Repayment terms generally range from 21 to 78 weeks and are structured as daily or weekly fixed remittances. The Company accounts for these arrangements as debt in accordance with ASC 470, recognizing the full repayment obligation as a liability, with related issuance costs amortized over the term of the loan.
To manage liquidity and meet near-term obligations, the Company has, in several instances, refinanced existing MCA loans by entering into new MCA agreements with the same or alternative lenders. These refinancing arrangements often involve:
| ● | Using the proceeds of a new advance to pay off the remaining balance of a prior loan, including any unpaid fees or penalties; |
| ● | Rolling multiple MCA balances into a single new obligation; or |
| ● | Structuring overlapping repayment terms, which may temporarily reduce daily outflows but increase aggregate repayment obligations. |
While refinancing may provide short-term liquidity relief, it often results in higher cumulative borrowing costs due to upfront fees and the compounding effect of new obligations. These refinancings are typically executed close to the maturity of the original MCA or earlier if cash flow pressures arise.
The Company utilizes MCA financing primarily to support working capital and general operations. Given the short-term nature, fee structure, and recurring refinancing activity, these MCA obligations are classified as short-term debt. The Company continuously evaluates its funding options to manage cash flow and covenant compliance under these agreements.
Loan #28
In
December 2024, the Company executed a loan for $
This note held no issuance discount or interest rate.
Loan #32
In
July 2025, the Company entered into an unsecured note bearing interest at a rate of
The
Company is required to make monthly payments in the amount of $
Loan #37
In
November 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal
amount of $
| F-33 |
The
note bears no stated interest and matures
As
of March 31, 2026, there was a $
Loan #40
In
conjunction with Loan #37, the Company issued a note in the principal amount of $
As
of March 31, 2026, there was a $
Notes Payable – Vehicles (Loan # 29)
The following is a summary of the Company’s notes payable for its vehicles at March 31, 2026 and December 31, 2025, respectively:
Summary of Notes Payable - Vehicles
| Balance - December 31, 2025 | ||||
| Repayments | ( | ) | ||
| Balance - March 31, 2026 |
The following is a detail of the Company’s notes payable for its vehicles at March 31, 2026 and December 31, 2025, respectively:
Schedule of Detailed Company’s Notes Payable
| Notes Payable - Vehicles | ||||||||||||||||||
| Issue Date | Maturity Date | Interest Rate | Default Interest Rate | Collateral | March
31, 2026 | December
31, 2025 | ||||||||||||
| % | N/A | $ | $ | |||||||||||||||
| % | N/A | | | |||||||||||||||
| % | N/A | |||||||||||||||||
| % | N/A | |||||||||||||||||
| % | N/A | |||||||||||||||||
| Less: current portion | - | |||||||||||||||||
| Long term portion | $ | $ | ||||||||||||||||
| F-34 |
Debt Maturities
The following represents future maturities of the Company’s various debt arrangements as follows:
Schedule of Maturities of Long Term Debt
| Vehicle Notes | ||||
| For the Year Ending December 31, | Payable | |||
| 2026 (9 months) | ||||
| 2027 | ||||
| Total | $ | |||
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.
The
Company did
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 condensed 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-35 |
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
On
December 3, 2021, the Company entered into a lease agreement for
| ● | Lease
term: | |
| ● | Total
monthly payment: $ | |
| ● | Base
rent: $ | |
| ● | Initial
ROU asset recognized: $ |
The tables below present information regarding the Company’s operating lease assets and liabilities at March 31, 2026 and December 31, 2025, respectively:
Schedule of Operating Lease Assets and Liabilities
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | $ | |||||||
| Operating lease - ROU asset - non-current | $ | |||||||
| Liabilities | ||||||||
| Operating lease liability | $ | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
The components of lease expense were as follows:
Schedule of Components of Lease Expense
| March 31, 2026 | December 31, 2025 | |||||||
| Operating lease costs | ||||||||
| Amortization of ROU operating lease asset | $ | $ | ||||||
| Lease liability expense in connection with obligation repayment | ||||||||
| Total operating lease costs | $ | $ | ||||||
| Supplemental cash flow information related to operating leases was as follows: | ||||||||
| Operating cash outflows from operating lease (obligation payment) | $ | $ | ||||||
| ROU asset obtained in exchange for new operating lease liability | $ | $ | ||||||
| F-36 |
Future minimum lease payments under non-cancellable leases for the years ending December 31, were as follows:
Schedule of Future Minimum Payments Under Non-Cancellable Leases
| 2026 (9 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash flows | ||||
| Less: amount representing interest | ( | ) | ||
| Present value of operating lease liability | ||||
| Less: current portion of operating lease liability | ||||
| Long-term operating lease liability | $ |
Operating Leases – Related Party
On
August 1, 2023, the Company entered into a 48-month lease agreement for
| ● | Total
Monthly Payment: $ |
| ● | Annual Increase: The lease is subject to a 3% annual escalation. |
| ● | Initial ROU Asset: The Company
recognized a non-cash ROU asset addition of $ |
ROU 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 ROU Asset – Related Party
On
October 1, 2024, the Company signed a lease for
| F-37 |
Future minimum lease payments under non-cancellable leases for the years ending December 31, were as follows:
Schedule of Future Minimum Payments Under Non-Cancellable Leases
| 2026 (9 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash flows | ||||
| Less: amount representing interest | ( | ) | ||
| Present value of operating lease liability | ||||
| Less: current portion of operating lease liability | ||||
| Long-term operating lease liability | $ |
Finance Leases – Sale-Leaseback
In
2025, the Company entered into a sale-leaseback arrangement with Equify Financial, LLC pursuant to Master Lease Agreement No. 17348L
dated May 29, 2025. Under the arrangement, the Company sold a fleet of fuel delivery trucks previously owned by the Company to Equify
Titling Trust LTD and simultaneously leased the trucks back from Equify Financial, LLC under four equipment lease schedules executed
between May and October 2025. The aggregate sale price across all four tranches was approximately $
Each
lease schedule carries a 36-month non-cancellable term, with monthly payments ranging from $
The right-of-use assets associated with these finance leases are included within transportation equipment on the balance sheet and are depreciated on a straight-line basis over a five-year useful life from each respective commencement date. Interest on the finance lease obligations is recognized using the effective interest method at the rate implicit in each lease.
The following table summarizes the key terms of each finance lease schedule as of December 31, 2025:
Summarizes Finance Lease
| Schedule | Commencement Date | Financed Cost | Monthly Payment | TRAC Residual | Remaining Term | ||||||||||||
| 001 | May 29, 2025 | $ | $ | $ | |||||||||||||
| 002 | August 4, 2025 | $ | $ | $ | |||||||||||||
| 003 | August 29, 2025 | $ | $ | $ | |||||||||||||
| 004 | October 13, 2025 | $ | $ | $ | |||||||||||||
| F-38 |
For
the three months ended March 31, 2026, the Company recognized depreciation expense of approximately $
Contingencies – Legal Matters
NEXT/INGLE HOLDINGS, LLC, a Delaware limited liability company, and NEXT NRG OPS, LLC, f/k/a NEXTNRG, LLC, a Delaware limited liability company v. GSPP HOLDCO III, LLC, a New York limited liability company and GREEN STREET POWER PARTNERS, LLC, a New York limited liability company, currently pending in the United States District Court Southern District of New York, Case No. 1:25-cv-9836
This
litigation was filed by the Company’s subsidiary NEXT/INGLE HOLDINGS, LLC (“Next/Ingle”) and NEXT NRG OPS, LLC,
f/k/a NEXTNRG, LLC (together with Next/Ingle, the “Next Plaintiffs”), alleging that the Next Plaintiffs purchased 100%
of a project company from Green Street Power Partners, LLC (“GSPP”) and its affiliate for approximately $
This
matter is currently in its early stages and the pleadings have not yet closed. Defendants have filed a Motion to Dismiss, which has been
fully briefed. Oral arguments were held April 9th
and we are awaiting the judges decision. The Next Plaintiffs intend to vigorously prosecute the action
and will also consider a negotiated resolution to the extent any settlement reasonably compensates the Next Plaintiffs for the losses
alleged to have been caused by defendants’ conduct. In the Complaint, the Next Plaintiffs seek damages of approximately $
COHEN GLOBAL ENERGY LLC, a Delaware limited liability company v. NEXT/INGLE HOLDINGS LLC, Delaware limited liability company, and MICHAEL D. FARKAS, individually, currently pending in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, Case Number 2025-024817-CA-01
This
litigation alleges that on December 16, 2024, Next/Ingle executed a $
In addition, from time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and adverse results in matters may arise from time to time that may harm our business. As of the date of this Annual Report, we believe that there are no other claims against us which we believe will result in a material adverse effect on our business or financial condition.
| F-39 |
Note 8 – Stockholders’ Deficit
As of March 31, 2026, the Company had four classes of stock, detailed as follows:
Preferred Stock
The Company’s undesignated preferred stock provides flexibility for future corporate financing and strategic transactions.
| ● | Authorized Shares: | |
| ● | Issued & Outstanding: | |
| ● | Par Value: $ per share | |
| ● | Voting Rights: | |
| ● | Ranking: Senior to all other classes of stock, including Series A and Series B convertible preferred stock, unless otherwise designated | |
| ● | Dividends: | |
| ● | Liquidation Preference: | |
| ● | Redemption Rights: | |
| ● | Conversion Rights: |
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: | |
| ● | Issued & Outstanding: shares as of March 31, 2026 and shares as of December 31, 2025. These shares were converted to common stock. | |
| ● | Par Value: $ per share | |
| ● | Stated Value: $ |
| F-40 |
| ● | Conversion Terms: |
| ○ | Fixed conversion rate: |
| ○ | Conversion price: |
| ■ | ||
| ■ | Results in a fixed number of common shares per preferred share |
| ○ | Total equivalent common shares at March 31, 2026 and December 31, 2025 were and respectively | |
| ○ | No variable number of shares are required for settlement |
| ● | Dividend Provisions: |
| ○ | ||
| ○ | Calculation: |
| ■ |
| ○ | No potential dilution beyond the fixed conversion amount |
| ● | Voting Rights: | |
| ● | Liquidation Preference: | |
| ● | Redemption Rights: | |
| ● | 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. |
During the three months ended March 31, 2026, the Company issued shares for the conversion of shares of Series A convertible preferred shares. As of March 31, 2026, there were Series A convertible preferred shares remaining outstanding.
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: | |
| ● | Issued & Outstanding: shares as of March 31, 2026 and December 31, 2025, respectively | |
| ● | Par Value: $ per share | |
| ● | Stated Value: $ |
| F-41 |
| ● | Conversion Terms: |
| ○ | Fixed conversion rate: | |
| ○ | Conversion price: |
| ■ | ||
| ■ | Results in a fixed number of common shares per preferred share |
| ○ | Total equivalent common shares at March 31, 2026 and December 31, 2025 were , respectively | |
| ○ | No variable number of shares are required for settlement |
| ● | Dividend Provisions: |
| ○ | ||
| ○ | Calculation: |
| ■ |
| ○ | No potential dilution beyond the fixed conversion amount |
| ● | Voting Rights: | |
| ● | Liquidation Preference: | |
| ● | Redemption Rights: | |
| ● | 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. |
Common Stock
| ● | Authorized Shares: | |
| ● | Issued & Outstanding*: |
| ○ | shares as of March 31, 2026 | |
| ○ | shares as of December 31, 2025 |
| ● | Par Value: $ per share | |
| ● | Voting Rights: | |
| ● | Dividends: |
*In connection with the common control merger, any shares issued to Next Holding , an entity under common control, were excluded from the total shares outstanding. This is because, under U.S. GAAP, a company cannot recognize an investment in itself. Accordingly, these shares are treated as constructively retired or held by the Company as treasury stock equivalent and are not considered outstanding for earnings per share or equity reporting purposes. Under ASC 810-10-45-1 and ASC 505-10-45-2, equity interests held by a parent, subsidiary, or an entity under common control in the reporting entity must be eliminated in consolidation. Similarly, shares held by entities consolidated into or controlled by the Company are treated as not outstanding, since they represent an indirect investment in the Company’s own equity.
| F-42 |
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.
Equity Transactions for the Three Months Ended March 31, 2026
Stock Issued for Cash
During
the three months ended March 31, 2026, the Company issued shares for cash consideration of $
Stock Issued for Services
In
the three months ended March 31, 2026, the Company issued
shares of common stock to consultants for services rendered,
having a fair value of $
Stock Issued for Conversion of Notes Payable
The
Company issued shares of common stock to convert the remaining balance of $
Equity Transactions for the Three Months Ended March 31, 2025
Stock Issued for Cash and Warrants – Public Offering
On
February 18, 2025, the Company sold
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 additional over-allotment shares of common stock at $
The
underwriter was also issued warrants for services rendered in connection with the offering, which will be accounted for as a
direct offering cost. These warrants are exercisable at $
| F-43 |
Stock Issued for Services
In
the three months ended March 31, 2025, the Company issued
shares of common stock to consultants for services rendered, having a fair value of $
Stock Issued as Loan Extension Fee
In
connection with the extension of loan #5, the Company was required to pay a fee of $
Series B Convertible Preferred Stock – Distribution – Related Party
On February 13, 2025, immediately prior to the consummation of the common control merger, the Company effectuated a non-cash distribution of shares of Series B convertible preferred stock to its Chief Executive Officer, a related party. The transaction was executed in fulfillment of a previously established arrangement between the CEO and NextNRG LLC, a wholly owned subsidiary of the Company and former holder of the Series B convertible preferred stock. Under this arrangement, the CEO had advanced personal funds to NextNRG LLC to facilitate the original acquisition of the shares on behalf of the Company.
As the transfer settled an internal capital funding obligation and involved no exchange of cash or services at the time of distribution, the transaction was accounted for as a capital contribution by a related party in accordance with ASC 505-10, Equity – Overall, and ASC 850-10, Related Party Disclosures. No gain or loss was recognized, and the Series B shares were recorded at par value, with the offset credited to additional paid-in capital.
The CEO meets the definition of a related party under ASC 850-10-20, which includes executive officers and entities under their control. Furthermore, in accordance with SAB Topic 5.G and Regulation S-X Rule 4-08(k), the Company has disclosed this transaction due to the material nature of the capital stock transfer and its occurrence with a related party.
This distribution did not impact the determination of net income (loss) available to common stockholders and was excluded from the calculation of earnings per share in accordance with ASC 260-10-45-59, as the issuance represented a capital transaction rather than an income or expense-generating event.
Series A and B Convertible Preferred Stock – Preferred Stock Dividends Payable in Common Stock
In accordance with the terms of the Company’s Series A convertible preferred stock and the Series B convertible preferred stock, the Company is required to accrue dividends on a quarterly basis. Similar to the Series A and Series 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.
At
March 31, 2026 and December 31, 2025, the Company had accrued dividends totaling $
| F-44 |
The following is a summary of the Company’s dividends:
Schedule of Dividends Payable
| Series A | Series B | |||||||||||
| Convertible | Convertible | Total Dividends | ||||||||||
| Preferred Stock | Preferred Stock | Payable | ||||||||||
| Shares issued and outstanding | ||||||||||||
| Stated value per share | $ | $ | ||||||||||
| Dividend rate (10%/12%) | % | % | ||||||||||
| Dividend shares due per year | ||||||||||||
| Market price - at issuance date | ||||||||||||
| Minimum price - 70%/80% discount to market price | % | % | ||||||||||
| Conversion price | ||||||||||||
| Dividend shares due per quarter | ||||||||||||
| Equivalent common shares - per year | ||||||||||||
| Total dividend shares due at reporting date | ||||||||||||
| Market price - at issuance date (fixed rate) | $ | $ | $ | |||||||||
| Fair value of dividends payable - at reporting date | $ | $ | $ | |||||||||
Restricted Stock and Related Vesting
Schedule of Company Nonvested Shares
| Weighted Average | ||||||||
| Number of | Grant Date | |||||||
| Non-Vested Shares | Shares | Fair Value | ||||||
| Balance - December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Cancelled/Forfeited | ||||||||
| Balance - March 31, 2026 | $ | |||||||
The Company has issued various equity grants to 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 for the shares to vest.
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 unaudited condensed consolidated statements of operations.
| F-45 |
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 March 31, 2026, unrecognized stock compensation expense related to restricted stock was $, which will be recognized over a weighted-average period of .
During the three months ended March 31, 2026, and 2025, the Company recognized compensation expense of $ and $, respectively, related to the vesting of these shares.
Warrants
Warrant activity for the three months ended March 31, 2026 and December 31, 2025 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, 2025 | $ | $ | ||||||||||||||
| Vested and Exercisable - December 31, 2025 | $ | $ | ||||||||||||||
| Unvested and non-exercisable - December 31, | ||||||||||||||||
| 2025 | $ | - | $ | |||||||||||||
| Unvested and non-exercisable - December 31,2025 | $ | - | $ | |||||||||||||
| Granted | $ | - | - | - | ||||||||||||
| Exercised | - | - | - | |||||||||||||
| Cancelled/Forfeited | ( | ) | $ | - | - | |||||||||||
| Outstanding - March 31, 2026 | $ | $ | ||||||||||||||
| Vested and Exercisable - March 31, 2026 | $ | $ | ||||||||||||||
| Unvested and non-exercisable - March 31, | ||||||||||||||||
| 2026 | $ | - | $ | |||||||||||||
| Unvested and non-exercisable - March 31,2026 | $ | - | $ | |||||||||||||
Note 9 – Intangible Assets
As of March 31, 2026 and December 31, 2025 the Company carried no identifiable intangible assets on its balance sheet.
Amortization
expense for the three months ended March 31, 2026 and 2025 was $ and $
Note 10 – Acquisition of Membership Interests in GSPP JEA Ingle FL, LLC – Accounted for as an Asset Acquisition – Solar Project Rights
In
December 2024, a disbursement of $
To
facilitate the acquisition, Next Holding formed Next/Ingle Holdings LLC, in which it holds a
| F-46 |
Next/Ingle
Holdings LLC obtained a $
Given the absence of a workforce, no substantive processes, and no outputs, GSPP JEA Ingle FL, LLC does not meet the definition of a business under ASC 805-10-20. Instead, the transaction qualifies as an asset acquisition, with the solar project representing a single identifiable asset under development.
Post-Acquisition Structure:
| ● | Next Holding |
 |
Formed Next/Ingle Holdings LLC ( | |
|
Retains unilateral control over Next/Ingle
Holdings LLC via operating agreement (this entity is consolidated with the Company and reflects a non-controlling interest for the
|
| ● | Next/Ingle Holdings LLC |
|
Acquired | |
|
Funded acquisition via $ |
| ● | GSPP JEA Ingle FL, LLC |
|
Holds rights to the Bryceville, FL solar project |
During
the year ended December 31, 2025, the Company recognized an impairment loss on this project deposit of $
Note 11 – Segment Reporting
The
Company operates in
Mobile Fueling
The Company’s mobile fueling segment provides on-demand fuel delivery services through a growing fleet of fuel trucks operating across a national footprint. These operations serve commercial fleets and other customers, offering a more efficient, time-saving alternative to traditional fueling stations. The Company is integrating sustainable energy solutions into its fueling operations, with the goal of assisting customers in transitioning to electric vehicles and incorporating advanced technologies such as wireless EV charging to enhance service efficiency and support the adoption of clean energy.
Energy Infrastructure
The Company’s energy infrastructure segment focuses on the development, deployment, and operation of AI/ML-powered smart microgrids, solar energy systems, battery storage, and wireless EV charging solutions. These systems are designed to improve grid resiliency, optimize energy use, reduce costs, and increase access to reliable, sustainable power for commercial, industrial, municipal, and tribal customers. Revenue is generated primarily through power purchase agreements, leases, and technology licensing, with projects spanning utility-scale installations, community energy systems, and integration of distributed energy resources.
| F-47 |
The following tables present certain financial information related to our reportable segments:
Schedule of Financial Information Related to our Reportable Segment
| Infrastructure | Delivery | Total | ||||||||||
| As of March 31, 2026 | ||||||||||||
| Energy | Mobile Fuel | |||||||||||
| Infrastructure | Delivery | Total | ||||||||||
| Cash | $ | $ | $ | |||||||||
| Accounts receivable – net | ||||||||||||
| Inventory | ||||||||||||
| Prepaids and other | ||||||||||||
| Property and equipment – net | ||||||||||||
| Operating lease - right-of-use asset | ||||||||||||
| Operating lease - right-of-use asset - related party | ||||||||||||
| Operating lease - right-of-use asset | ||||||||||||
| Deposits | ||||||||||||
| Total Assets | $ | $ | $ | |||||||||
| Infrastructure | Delivery | Total | ||||||||||
| As of December 31, 2025 | ||||||||||||
| Energy | Mobile Fuel | |||||||||||
| Infrastructure | Delivery | Total | ||||||||||
| Cash | ||||||||||||
| Accounts receivable - net | ||||||||||||
| Inventory | ||||||||||||
| Prepaids and other | ||||||||||||
| Property and equipment - net | ||||||||||||
| Operating lease - right-of-use asset | ||||||||||||
| Operating lease - right-of-use asset - related party | ||||||||||||
| Operating lease - right-of-use asset | ||||||||||||
| Deposits | ||||||||||||
| Total Assets | ||||||||||||
| Energy Infrastructure | Mobile Fuel Delivery | Total | ||||||||||
| For the Three Months Ended March 31,2026 | ||||||||||||
| Energy Infrastructure | Mobile Fuel Delivery | Total | ||||||||||
| Sales - net | ||||||||||||
| Cost of sales | ||||||||||||
| General and administrative expenses | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Total costs and expenses | ||||||||||||
| Interest income | ||||||||||||
| Other income | ||||||||||||
| Gain (loss) on settlement of liabilities | ||||||||||||
| Interest expense (including amortization of debt discount) | ( | ) | ( | ) | ||||||||
| Total other income (expense) - net | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Energy Infrastructure | Mobile Fuel Delivery | Total | ||||||||||
| For the Three months ended March 31,2025 | ||||||||||||
| Energy Infrastructure | Mobile Fuel Delivery | Total | ||||||||||
| Sales - net | ||||||||||||
| Cost of sales | ||||||||||||
| General and administrative expenses | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Total costs and expenses | ||||||||||||
| Interest income | ||||||||||||
| Other income | ||||||||||||
| Gain (loss) on settlement of liabilities | ||||||||||||
| Interest expense (including amortization of debt discount) | ( | ) | ( | ) | ( | ) | ||||||
| Total other income (expense) - net | ( | ) | ( | ) | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
Note 12 - Subsequent Events
The Company has evaluated subsequent events through the date these financial statements were issued and identified the following events requiring disclosure:
| F-48 |
Leviston Resources Senior Secured Convertible Note
On
April 1, 2026, the Company entered into a Securities Purchase Agreement with Leviston Resources, LLC (“Leviston”) pursuant
to which the Company issued a senior secured convertible promissory note in the principal amount of $
Cashera Term Loan
On
April 7, 2026, the Company entered into a Business Loan and Security Agreement, dated as of April 1, 2026, with Cashera Private Credit
Inc. (“Cashera”) for a term loan in the principal amount of $
Agile Hudson Secured Promissory Note
On
April 17, 2026, the Company entered into a Securities Purchase Agreement with Agile Hudson Partners LLC (“Agile Hudson”)
pursuant to which the Company issued a secured promissory note in the principal amount of $
FirstFire Secured Promissory Note
On
April 17, 2026, the Company entered into a Securities Purchase Agreement with FirstFire Global Opportunities Fund, LLC (“FirstFire”)
on substantially the same terms as the Agile Hudson transaction described above, issuing a secured promissory note in the principal amount
of $
Venture Debt Loan
On
April 27, 2026, the Company entered into a Business Loan and Security Agreement with Venture Debt, LLC for a loan in the principal amount
of $
Issuance of Common Stock
Subsequent to March 31, 2026 and through the date these financial statements were issued, the Company issued an aggregate of shares of common stock, comprised of the following:
| ● | shares issued on April 6, 2026 to Leviston Resources, LLC as additional consideration in connection with the Leviston Note (described above); | |
| ● | shares issued on April 16, 2026 to Agile Hudson Partners LLC as commitment shares in connection with the Agile Hudson Note (described above); | |
| ● | shares issued on April 17, 2026 to FirstFire Global Opportunities Fund, LLC as commitment shares in connection with the FirstFire Note (described above); | |
| ● | shares issued from the Company’s 2023 Equity Incentive Plan, comprised of shares issued on April 23, 2026 and shares issued on April 28, 2026 to employees and service providers; and | |
| ● | shares issued on April 28, 2026 to AJB Capital Investments, LLC ( shares) and Michael D. Farkas, the Company’s Chief Executive Officer ( shares). |
| F-49 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by or on behalf of NextNRG, Inc. (“NextNRG,” “we,” “us,” “our,” or the “Company”). The Company and its representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.
Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our unaudited condensed consolidated operating results and financial condition. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and the notes thereto included in this Quarterly Report on Form 10-Q, as well as our other reports filed with the SEC from time to time, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2025.
Overview
NextNRG is Powering What’s Next by implementing artificial intelligence (“AI”) and machine learning (“ML”) into renewable energy, next-generation energy infrastructure, battery storage, wireless electric vehicle (“EV”) charging and on-demand mobile fuel delivery to create an integrated ecosystem.
At the core of NextNRG’s strategy is its utility operating system, which leverages AI and ML to help make existing utilities’ energy management as efficient as possible, and the deployment of NextNRG smart microgrids, which utilize AI-driven energy management alongside solar power and battery storage to enhance energy efficiency, reduce costs and improve grid resiliency. These microgrids are designed to serve commercial properties, schools, hospitals, nursing homes, parking garages, rural and tribal lands, recreational facilities and government properties, expanding energy accessibility.
NextNRG continues to expand its growing fleet of fuel delivery trucks and national footprint. NextNRG is also integrating sustainable energy solutions into its mobile fueling operations. The company hopes to be an integral part of assisting its fleet customers in their transition to EV, supporting more efficient fuel delivery while advancing clean energy adoption. The transition process is expected to include the deployment of NextNRG’s innovative wireless EV charging solutions.
Revenue Sources
Sale of Electricity
Solar Electricity
NextNRG plans to derive its operating revenues principally from power purchase agreements, net metering credit agreements, solar renewable energy credits, and performance-based incentives. A portion of NextNRG’s power sales revenues is expected to be earned through the sale of energy (based on kilowatt hours) pursuant to the terms of Power Purchase Agreements (“PPAs”). NextNRG’s PPAs will typically have fixed or floating rates and are expected to be generally invoiced monthly.
Wireless EV Charging
NextNRG plans to sell energy to its wireless EV charging customers.
NextNRG also plans to sell its innovative solutions to property owners, parking facilities, municipalities, and government agencies, as well as charge point operators, empowering the growth of sustainable transportation infrastructure.
NextNRG plans to generate revenue from the deployment of solar and battery storage solutions where applicable to further take advantage of the renewable energy industry. Energy pricing is based on peak/off-peak rates at any given charging location. NextNRG plans to negotiate our own PPA accordingly. NextNRG is also planning to sell energy to electric vehicle owners via wireless EV charging.
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SaaS & Licensing
Software as a Service (“SaaS”) Agreements
NextNRG plans to generate revenue from the sale of its energy management software under SaaS agreements with utility companies; microgrid companies; and renewable energy generation companies. Additionally, any traditional customers which would like to own their own energy generation systems will have the option of entering a SaaS agreement to purchase rights to the technology.
Hardware Licensing
NextNRG plans to generate licensing revenues from competitors or ancillary business participants who desire to utilize or integrate NextNRG’s intellectual property, hardware, or software solutions within their proprietary product.
Sale of Hardware
NextNRG plans to generate revenues from the sale of hardware, e.g. solar panels, battery storage solution equipment, wireless charging pad or bumper and vehicle receiver technology.
Potential Customers
Potential customers include property owners, electrical supply companies, management companies, all levels of government, original equipment manufacturers, tribal land, car manufacturers, EV charging companies, wholesale electricity providers, utilities, and fleet owners.
Mobile Fueling
Mobile Fuel Delivery
NextNRG’s mobile fueling solution is an on-demand and subscription fuel delivery service that brings fuel directly to consumers, commercial fleets, and specialty vehicles at homes, workplaces, and job sites. Leveraging digital technology and GPS-based systems, this service responds to the increasing preference for home and workplace product deliveries. Particularly, our fleet services are experiencing significant growth, providing a streamlined, efficient fueling option that allows commercial operators to optimize operations and reduce downtime. For the three months ended March 31, 2026 and the year ended December 31, 2025, we derived all of our revenues from mobile fuel deliveries.
Recent Developments
Promissory Note, dated as of December 26, 2024
On December 26, 2024, the Company and Gad International Ltd. (the “Lender”) entered into a promissory note (the “Gad Note”) for the sum of $2,500,000 (the “Loan”) to be used for the Company’s working capital needs, including without limitation the purchase of equipment. Unless the Gad Note is otherwise accelerated or extended in accordance with the terms and conditions therein, the balance of the Gad Note, along with accrued interest, will be due and payable in full on February 23, 2025. Further, the Company agreed among other things to pay the Lender a commitment fee of $400,000 in consideration of the Loan, and an optional extension fee of $200,000 for any month or part thereof in which the Company requests an additional 30-day extension to the Loan, upon the Lender’s written consent. If any amount payable under the Loan is not paid when due, whether at stated maturity, by acceleration, or otherwise, such overdue amount will bear interest at a rate of 21%. Additionally, the Company agreed to execute an irrevocable transfer instruction with its transfer agent to issue $5,000,000 worth of shares of Company common stock to the Lender if the Gad Note is not repaid on or before February 23, 2025. However, pursuant to an amendment to the Gad Note, dated January 15, 2025, between the Company and the Lender, no shares of the Company can be issued without the Company first receiving shareholder approval. The Company has commenced the process of obtaining shareholder approval and once the shareholder approval process is completed and the Company is authorized to issue the shares, the Company will issue the shares. The Company shall take no action to impair, hinder or impede either the approval process or the issuance of the shares in the event they become owed to Lender. Such shares of common stock will be valued based on the Nasdaq official closing price for the Company’s common stock as of date of the issuance of the Gad Note. The note was extended to March 23, 2025, and in exchange for the extension of the maturity date, the Company paid a fee of $200,000. The note was paid in full on March 26, 2025.
Promissory Note, dated as of January 15, 2025
On January 15, 2025, the Company and Alcourt LLC (“Alcourt”) entered into a promissory note (the “Alcourt Note”) for the sum of $1,000,000 to be used for the Company’s working capital needs, including without limitation, the purchase of equipment. The Alcourt Note was issued with an original issue discount of $50,000. The unpaid principal balance of the Alcourt Note has a fixed rate of interest of 15% per annum. Unless the Alcourt Note is otherwise accelerated or extended in accordance with the terms and conditions therein, the balance of the Alcourt Note, along with accrued interest, will be due and payable in full on April 15, 2025 (“Maturity Date”). If the Alcourt Note is not repaid by the Maturity Date, for any reason whatsoever, the Company will issue shares of the Company’s common stock with a then current value of $500,000 to Alcourt (the “Extension Fee”). The shares will be valued based on the greater of: (i) the closing price of the Company’s common stock on the Maturity Date; or (ii) $1.00 per share; if the Company’s common stock is trading below $1.00 per share, Alcourt can elect to receive the Extension Fee of $500,000 in cash. The Company agreed to execute an irrevocable transfer instruction with its transfer agent to issue $500,000 worth of shares of Company common stock to Alcourt if the Alcourt Note is not repaid on or before April 15, 2025. Upon payment of the Extension Fee, the Maturity Date shall be extended until July 15, 2025. Additionally, if the Alcourt Note is paid at any time after the initial Maturity Date, the Company shall pay a $50,000 termination fee together with the repayment of the principal, accrued unpaid interest, and any other charges due to Alcourt. No shares of the Company shall be issued without the Company first receiving shareholder approval. The Company has commenced the process of obtaining shareholder approval as soon as reasonably practicable after execution of the Alcourt Note. The note was repaid in full in February 2025.
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Shareholder Approval
On January 15, 2025, the holders of a majority of the Company’s voting capital stock approved the following corporate actions via written consent (the “Authorizations”):
(i) the possible issuance of shares of the Company common stock with a then current value of $500,000 under that certain promissory note, dated as of January 15, 2025, by and between the Company and Alcourt, in the event that such note is not repaid by April 15, 2025 (this note was repaid in full in February 2025);
(ii) the possible issuance of $5,000,000 worth of shares of Company common stock under that certain promissory note, dated as of December 26, 2024, by and between the Company and Gad, as amended by that certain amendment to promissory note, dated as of January 15, 2025, in the event that such promissory note is not repaid on or before February 23, 2025 (the note was extended to March 23, 2025); and
(iii) the possible issuance of shares of Company common stock under those certain promissory notes by and between the Company and NextNRG Holding Corp., dated as of November 14, 2024, December 2, 2024, December 3, 2024, December 17, 2024 and December 30, 2024, respectively.
Such consents were obtained in compliance with Nasdaq Listing Rules 5635(a) and 5635(d), as applicable, which require, in relevant part, that the Company may not issue shares of its common stock (or securities convertible into or exercisable for common stock) in other than public offerings or in connection an acquisition without stockholder approval if the aggregate number of shares of common stock issued would be equal to or greater than 20% of the Company’s issued and outstanding shares of common stock as of the date of issuance. The Company filed with the Commission, and disseminated to its stockholders, a definitive information statement in respect of the Authorizations.
Financial Overview
For the three months ended March 31, 2026 and 2025, we generated revenues of $21,059,130 and $16,272,673, respectively, and reported a net loss of $5,111,370 and $8,937,999, respectively, and cash flows used in operating activities of $[15,168,347] and $5,771,840, respectively. As noted in our unaudited condensed consolidated financial statements, as of March 31, 2026, we had an accumulated deficit of $159,080,034.
Results of Operations
The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 21,059,130 | $ | 16,272,673 | ||||
| Cost of sales | 19,347,420 | 15,754,704 | ||||||
| Operating expenses | 10,734,480 | 5,538,505 | ||||||
| Depreciation and amortization | 1,071,073 | 733,336 | ||||||
| Operating loss | (11,805,553 | ) | (5,753,872 | ) | ||||
| Other income (expense) | (672,649 | ) | (3,184,127 | ) | ||||
| Net loss including non-controlling interest | $ | (10,766,492 | ) | $ | (8,937,999 | ) | ||
For the three months ended March 31, 2026 compared to the three months ended March 31, 2025
Revenues
Revenues for the three months ended March 31, 2026 increased significantly compared to the three months ended March 31, 2025. This growth was primarily attributable to a rise in gallons delivered as well as an uptick in the average price per gallon. Several factors contributed to this performance:
| 1. | Expanded Customer Base. The Company successfully grew its presence in existing markets while entering new regions, resulting in a higher total volume of fuel delivered. This expansion was supported by focused sales efforts and brand-building initiatives that attracted both new commercial and residential customers. |
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| 2. | Fleet Partnerships. Strategic partnerships with commercial fleet operators continued to drive fueling volumes. These partnerships often involve recurring, contracted deliveries that provide a stable, predictable revenue stream. As more fleet operators adopt on-demand fueling to reduce downtime and optimize logistics, EzFill benefits from increased, repeat business. | |
| 3. | Enhanced Technology & Marketing. Ongoing enhancements to the EzFill mobile application—including user interface improvements and expanded scheduling features—improved the customer experience and streamlined order placement. Coupled with targeted marketing campaigns, these tech and branding initiatives boosted visibility and encouraged higher consumer adoption rates, further lifting revenues. |
Cost of Sales
Cost of sales rose in the three months ended March 31, 2026, compared to the three months ended March 31, 2025, in line with the higher sales volumes and expanded market coverage. Despite the increase in absolute costs, gross profit improved, reflecting disciplined pricing, higher-margin sales, and operational efficiencies. Key factors influencing cost of sales included:
| 1. | Higher Fuel Volume. As overall demand increased, the Company purchased and delivered a greater volume of fuel. Although this drove up the total cost of sales, it remained proportionate to revenue growth, preserving gross margins. | |
| 2. | Fuel Price Fluctuations. Commodity price swings can significantly affect fuel costs. However, the Company’s dynamic pricing strategies and supplier relationships helped ensure that these fluctuations did not adversely impact overall profitability. | |
| 3. | Logistics & Delivery Costs. Expansion into new geographic areas required additional delivery routes and staffing. While these investments raised labor and transportation costs, they were essential for meeting growing customer demand. Improved driver efficiency and delivery scheduling helped partially offset the impact of these higher costs, contributing to the year-over-year improvement in gross profit. |
Operating Expenses
We incurred operating expenses of $10,734,480 during the three months ended March 31, 2026, compared to $5,538,505 during the prior year, representing an increase of $5,195,975. This increase was primarily due to a stock based compensation expense of $7,859,677, partially offset by cost cutting measures by the Company, resulting in the ability to maintain steady operating expenses while scaling revenue.
Depreciation and Amortization
Depreciation and amortization expense saw an increase in the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily due to the purchase of additional trucks during the year ended December 31, 2025.
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Other Expense
Other expense consisted of the following:
| For the Three Months Ended | Period over Period Changes | |||||||||||||||
| March 31, | Increase (Decrease) | |||||||||||||||
| 2026 | 2025 | $ Amount | % Change | |||||||||||||
| Interest income | $ | 2 | $ | - | $ | 2 | 100 | % | ||||||||
| Other income | 7,945 | 139,270 | (131,325 | ) | (94.30 | )% | ||||||||||
| Interest expense (including amortization of debt discount)_ | (680,596 | ) | (3,323,397 | ) | 2,642,801 | (79.52 | )% | |||||||||
| Total other expense - net | ||||||||||||||||
| (672,649 | ) | (3,184,127 | ) | 2,511,478 | (78.87 | )% | ||||||||||
The Company’s other expense, net, decreased in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The primary drivers were a decrease in interest expense, partially offset by a decrease in other income. Below is a detailed breakdown of the major components.
Interest Expense (including amortization of debt discount)
There was a decrease of $2,642,801 in interest expense from $3,323,397 in the three months ended March 31, 2025 to only $680,596 in the three months ended March 31, 2026.
Interest expense in both periods was primarily due to:
| 1. | Amortization of Debt Discount: The amortization of debt discount increased due to additional debt arrangements with original issue discounts. Additionally, in connection with the conversion of debt converted to equity, related unamortized discounts were expensed at that time. | |
| 2. | Existing and New Borrowings: The interest expense recognized on outstanding debt instruments was lower than the three months ended March 31, 2025. |
Net Loss
| Three Months Ended | Period-over-Period Changes | |||||||||||||||
| March 31, | Increase (Decrease) | |||||||||||||||
| 2026 | 2025 | $ Amount | % Change | |||||||||||||
| Net loss including non-controlling interest | $ | (10,766,492 | ) | $ | (8,937,999 | ) | $ | (4,339,971 | ) | (75.43 | )% | |||||
Our net loss decreased in the three months ended March 31, 2026, as a result of the categories discussed above. Overall, the increase in revenues, driven by both volume and pricing, showcased the Company’s successful market expansion and deepening fleet partnerships. While costs of sales naturally rose with higher delivery volumes, disciplined operational execution and strategic pricing helped improve gross profit and maintain steady operating costs to improve net loss. Ongoing cost-optimization initiatives further reduced operating expenses, though the Company continues to invest in talent and technology to fuel long-term growth.
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Non-GAAP Financial Measures
Adjusted EBITDA and average fuel margin per gallon are non-GAAP financial measures which we use in our financial performance analyses. These measures should not be considered a substitute for GAAP-basis measures, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. We believe that the presentation of Adjusted EBITDA, a non-GAAP financial measure that excludes the impact of net interest expense, taxes, depreciation, amortization, impairment of goodwill, other intangibles and fixed assets, and stock compensation expense, provides useful supplemental information that is essential to a proper understanding of our financial results. We also believe that the presentation of average fuel margin per gallon, a non-GAAP financial measure calculated by subtracting cost of sales specific to fuel purchases and merchant fees from net sales and dividing it by the number of gallons delivered in the reporting period. Non-GAAP measures are not formally defined by GAAP, and other entities may use calculation methods that differ from ours for the purposes of calculating Adjusted EBITDA. As a complement to GAAP financial measures, we believe that Adjusted EBITDA assists investors who follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability.
The following is a reconciliation of net loss to the non-GAAP financial measure referred to as Adjusted EBITDA for the three months ended
March 31, 2026 and 2025:
| Three Months Ended | Period-over-Period Changes | |||||||||||||||
| March 31, | Increase (Decrease) | |||||||||||||||
| 2026 | 2025 | $ Amount | % Change | |||||||||||||
| Net loss including non-controlling interest | $ | 10,766,492 | $ | 8,937,999 | $ | (1,966,179 | ) | (42.81 | )% | |||||||
| Interest expense, net | 680,596 | 3,323,397 | (2,642,801 | ) | (79.52 | )% | ||||||||||
| Depreciation and amortization | 1,071,073 | 733,336 | 337,737 | 46.05 | % | |||||||||||
| Stock compensation | 7,859,677 | 1,485,724 | 6,373,953 | 429.01 | % | |||||||||||
| Adjusted EBITDA | $ | 1,155,136 | $ | 3,395,542 | $ | 2,227,241 | (64.85 | )% | ||||||||
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $208,048 and $2,116,932 as of March 31, 2026 and 2025, respectively.
Cash Flow Activities
Our cash balances at March 31, 2026 were as follows:
| Period-over-Period Changes | ||||||||||||||||
| March 31, | Increase (Decrease) | |||||||||||||||
| 2026 | 2025 | $ Amount | % Change | |||||||||||||
| Cash and cash equivalents | $ | 208,048 | $ | 2,116,932 | $ | (1,908,884 | ) | 90.17 | % | |||||||
Cash and cash equivalents decreased year over year. The primary drivers of this increase were the Company’s net loss from operations and repayment of outstanding debt positions throughout the period.
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Operating Activities
Net cash used in operating activities was $2,148,891 for the three months ended March 31, 2026, which was made up primarily by the net loss of $6,971,820 and offset by non-cash adjustments for a net amount of $8,617,601, most notably including an expense of $7.9 million related to stock issued for services. Net cash used in operating activities was $5,771,840 during the three months ended March 31, 2025, which was made up primarily by the net loss of $8,937,999 and offset by non-cash adjustments for a net amount of $3,166,159.
Investing Activities
During the three months ended March 31, 2026 and 2025 net cash used by investing activities was $0.
Financing Activities
Net cash provided by financing activities decreased significantly from $6,276,655 in the three months ended March 31, 2025 to $1,972,799 in 2026. This decrease reflects a decrease in proceeds from notes payable and from common stock issued for cash, partially offset by a decrease in repayments of notes payable.
Sources of Capital
The Company has sustained net losses since inception and does not have sufficient revenues and income to fully fund its operations. As a result, the Company has relied on equity and debt financings to fund its activities to date. For the three months ended March 31, 2026, the Company had a net loss of $10,766,492. At March 31, 2026, the Company had an accumulated deficit of $164,735,156. The Company anticipates that it will continue to generate operating losses and use cash in operations through the foreseeable future.
Historical Operating Performance and Financing
Since inception, the Company has incurred net losses and has not generated sufficient revenues or positive operating income to independently fund our operations. Consequently, we have depended on equity and debt financings—including those from related parties—to finance our activities and support our growth initiatives. This reliance on external funding has been critical for maintaining day-to-day operations, expanding our service capacity, and investing in technology and assets. However, it has also introduced risks related to interest expense, equity dilution, and dependency on the availability of future financing.
Current Liquidity Position
Our liquidity position primarily reflects a combination of cash on hand and available debt arrangements.
Despite recent improvements in cash balances due to targeted financing activities, we continue to face challenges in achieving sustainable cash flow from operations. The timing of expenditures and capital outlays, coupled with the inherent volatility in revenue generation in our industry, adds to the uncertainty of our liquidity profile.
Debt Obligations and Capital Expenditures
A significant portion of our near-term cash outflows is attributable to scheduled debt repayments and interest expense, including higher financing costs incurred from default penalty interest and increased debt discount amortization. Additionally, as we invest in capital expenditures—such as the purchase of new delivery vehicles and technology enhancements—to support expansion into new markets, our cash requirements remain elevated. These commitments, while essential for long-term growth, further strain our liquidity in the short term.
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Reliance on External Financing
Given the current financial dynamics, we have continually relied on external sources of capital. Our funding strategies have included:
| ● | Equity Issuances: Raising capital through the sale of common or preferred shares, including convertible securities from related parties. | |
| ● | Debt Financings: Securing loans and other debt instruments, often under terms that include default penalty interest or other onerous conditions, which have contributed to higher financing costs. | |
| ● | Related-Party Transactions: Engaging with supportive investors and related parties who have provided additional funds, albeit at terms that may affect our overall capital structure. |
Outlook and Mitigating Actions
In light of these challenges, we continue to closely monitor our liquidity position and are exploring multiple avenues to secure additional funding. These include:
| ● | Negotiating more favorable terms on existing and future debt. | |
| ● | Identifying new equity partners or investors. | |
| ● | Optimizing working capital through tighter control of receivables, payables, and inventory management. |
While these efforts are underway, our ability to meet operational and financial obligations over the next 12 months remains subject to significant uncertainty. Investors and stakeholders should be aware of the risks associated with our current liquidity and capital structure, and the potential need for additional financing that could result in further dilution or increased debt service obligations.
Going Concern Qualification
As reflected in the accompanying unaudited condensed consolidated financial statements, for the three months ended March 31, 2026, the Company had:
| ● | Net loss available to common stockholders of $10,880,521; and | |
| ● | Net cash used in operations was $2,148,891. |
Additionally, at March 31, 2026, the Company had:
| ● | Accumulated deficit of 164,735,156; | |
| ● | Stockholders’ deficit of $22,048,064; and | |
| ● | Working capital deficit of $25,004,379. |
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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 $208,048 at March 31, 2026.
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 condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management is actively pursuing strategies to enhance revenue generation, improve operational efficiencies, and secure additional financing on more sustainable terms. We are evaluating various initiatives, including cost-containment measures, operational improvements, and strategic partnerships, with the aim of transitioning to positive cash flow from operations. However, there remains a risk that these strategies may not yield the desired outcomes in the near term. Management’s strategic plans include the following:
| ● | Expand into new and existing markets (commercial and residential); |
| ● | Obtain additional debt and/or equity based financing for growth; |
| ● | Closed our transaction with Next Holding (occurred February 13, 2025); |
| ● | Collaborations with other operating businesses for strategic opportunities; and |
| ● | Acquire other businesses to enhance or complement our current business model while accelerating our growth. |
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, and expenses. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and those differences may be material.
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While our significant accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we believe the following discussion addresses our most critical accounting policies, which are those that are most important to our financial condition and results of operations and which require our most difficult, subjective and complex judgments.
Principles of Consolidation
The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation”.
In accordance with ASC 810-10, consolidation applies to:
| ● | Entities with more than 50% voting interest, unless control is not with the Company; and | |
| ● | Variable Interest Entities (VIEs), where the Company is the primary beneficiary, possessing both (i) power over significant activities and (ii) the obligation to absorb losses or receive benefits. |
All intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45. The Company continuously evaluates its investments and relationships to assess consolidation requirements.
Business Combinations, Asset Acquisitions, and Reverse Acquisitions
The Company accounts for acquisitions in accordance with ASC 805, “Business Combinations,” and applicable SEC reporting requirements under Regulation S-X, Rule 3-05 and Regulation S-K, Items 101 and 303. Transactions qualifying as business combinations are accounted for under the acquisition method, while those classified as asset acquisitions follow the guidance in ASC 805-50. Additionally, the Company evaluates whether a transaction qualifies as a reverse acquisition under ASC 805-40 and applies the appropriate accounting and disclosure requirements.
Business Combinations
For transactions classified as business combinations, the Company:
| ● | Recognizes and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition date (ASC 805-20-25-1). | |
| ● | Records goodwill as the excess of the fair value of consideration transferred over the fair value of net assets acquired, including any previously held equity interests (ASC 805-30-30-1). | |
| ● | Expenses acquisition-related costs as incurred, per ASC 805-10-25-23. | |
| ● | Uses preliminary purchase price allocations, with adjustments permitted within the measurement period (not exceeding one year) per ASC 805-10-25-13. Adjustments beyond the measurement period are recorded in earnings. |
Significant judgments in fair value determinations include:
| ● | Intangible asset valuations, based on estimates of future cash flows and discount rates. | |
| ● | Useful life assessments, impacting amortization and financial results. | |
| ● | Contingent consideration, which is remeasured at fair value through earnings per ASC 805-30-35-1. |
For SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant. The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests.
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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); And | |
| ● | Capitalizes direct acquisition costs as part of the asset’s cost, unlike business combinations where such costs are expensed (ASC 805-50-25-1). |
The 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; and | |
| ● | The Company’s financial position and results of operations. |
Regulatory and Financial Reporting Considerations
For SEC registrants, acquisitions may trigger additional disclosure and reporting requirements:
| ● | Regulation S-X, Rule 3-05: Requires separate financial statements of the acquired business if it meets significance thresholds under Rule 1-02(w). | |
| ● | Regulation S-K, Item 101: Requires disclosure of the impact of material acquisitions on the Company’s business operations. | |
| ● | Regulation S-K, Item 303: Mandates discussion of the impact of acquisitions on the Company’s financial condition and results of operations in Management’s Discussion and Analysis. | |
| ● | Regulation S-X, Article 11: Requires pro forma financial statements if the acquisition is significant. | |
| ● | Form 8-K, Item 2.01: Immediate reporting requirements for material acquisitions, including reverse mergers. |
The Company continuously evaluates acquisitions, including reverse acquisitions, to ensure proper classification and compliance with ASC 805, SEC reporting requirements, and regulatory guidance.
Segment Reporting
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 Company’s 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. |
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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 two reportable segments, as its CODM reviews the business as a whole rather than by distinct business components.
Application of ASU 2023-07 – Segment Reporting
In October 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances segment disclosures by requiring public entities to disclose significant segment expenses that are regularly provided to the CODM and used in assessing segment performance and resource allocation.
The adoption of ASU 2023-07 did not have a material impact on the Company’s condensed consolidated financial statements.
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 three months ended March 31, 2026, and 2025, respectively, include:
| ● | Allowance for doubtful accounts and other receivables | |
| ● | Inventory reserves and classifications | |
| ● | Valuation of loss contingencies | |
| ● | Valuation of stock-based compensation | |
| ● | Estimated useful lives of property and equipment | |
| ● | Impairment of intangible assets | |
| ● | Implicit interest rate in right-of-use operating leases | |
| ● | Uncertain tax positions | |
| ● | Valuation allowance on deferred tax assets |
Risks and Uncertainties
The Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic fluctuations. The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential business disruptions, supply chain constraints, and liquidity challenges.
In accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect its financial condition, results of operations, and business outlook. Key factors contributing to variability in sales and earnings include:
| 1. | Industry Cyclicality (ASC 275-10-50-6) – The Company’s financial performance is affected by industry trends, seasonality, and shifts in market demand. | |
| 2. | Macroeconomic Conditions (ASC 275-10-50-8) – Economic downturns, inflationary pressures, interest rate changes, and geopolitical risks may impact consumer purchasing behavior and the Company’s revenue streams. | |
| 3. | Pricing Volatility (ASC 275-10-50-4) – The cost and availability of raw materials, supply chain disruptions, and competitive pricing pressures can lead to fluctuations in gross margins and profitability. |
Given these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting liquidity, business continuity, and long-term strategic growth. The Company continuously assesses these risks and implements measures to mitigate their potential impact.
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Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with 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.
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 March 31, 2025 and December 31, 2025, 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.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
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. |
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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. |
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).
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).
Applicability of ASC 326
The Company has assessed the applicability of ASC 326, Financial Instruments—Credit Losses, 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.
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 FIFO method, as required by ASC 330-10-35-1.
Inventory Valuation and Reserve Assessment
Management assesses the recoverability of inventory each reporting period and establishes reserves for potential inventory write-downs when necessary.
The Company evaluates factors such as:
| ● | Market conditions affecting fuel prices, | |
| ● | Net realizable value based on estimated selling price, and | |
| ● | Inventory turnover trends (ASC 330-10-35-2). |
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.
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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.
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.
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.
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). |
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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:
Impairment Results
For the three months ended March 31, 2026 and 2025, the Company did not record any impairment losses.
Original Issue Discounts (“OIDs”) and Other Debt Discounts
The Company accounts for OIDs 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).
OIDs
For certain notes issued, the Company may provide the debt holder with an 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 unaudited condensed 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 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).
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 ROU assets and operating lease liabilities on the condensed 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.
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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 three months ended March 31, 2026, and 2025.
See Note 7 for details on third-party and related-party operating leases.
The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by 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.
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The Company has determined that its contracts, based on sales type, contain two distinct performance obligations:
| ● | Fuel Sales – The delivery of fuel to a customer, with revenue recognized at the point of delivery. | |
| ● | Membership Fees – Monthly membership services, with revenue recognized over time within a one-month membership cycle, as the customer benefits from access to services throughout the period. |
These performance obligations are not bundled or combined, as each service is separately identifiable, in accordance with ASC 606-10-25-22.
3. Determine the Transaction Price
The transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the customer, per ASC 606-10-32-2.
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 three months ended March 31, 2026 and 2025, respectively, the Company granted insignificant discounts of less than 1% of total revenues. | |
| ● | No financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15. |
4. Allocate the Transaction Price to Performance Obligations
For contracts with a single performance obligation, the entire transaction price is allocated to that obligation, per ASC 606-10-32-40.
If a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices (“SSP”) as required by ASC 606-10-32-28. The standalone selling price is determined based on observable sales data.
The Company’s fuel sales and memberships each have a distinct standalone selling price, eliminating the need for allocation adjustments.
5. Recognize Revenue When (or As) Performance Obligations Are Satisfied
Revenue is recognized at the point in time when control over a product or service is transferred to the customer, in accordance with ASC 606-10-25-30.
| ● | Fuel Sales: Control transfers at the time of fuel delivery, at which point revenue is recognized. | |
| ● | Membership Fees: Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services throughout the month. |
The Company does not recognize revenue based on customer invoicing dates; instead, it ensures revenue recognition aligns with the actual satisfaction of performance obligations per ASC 606-10-25-31.
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. |
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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.
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.
Fuel costs include all costs incurred to acquire fuel, including supporting transportation costs prior to delivery to customers. Fuel costs do not include any depreciation of property and equipment as there are no significant amounts that could be attributed to fuel costs. Accordingly, depreciation and amortization are separately classified in the condensed consolidated statements of operations and are not recorded in cost of sales.
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.
As of December 31, 2025 and 2024, respectively, the Company had no uncertain tax positions that qualified for recognition or disclosure in the financial statements (ASC 740-10-50-15).
The Company also recognizes interest and penalties related to uncertain tax positions in other expense in the condensed consolidated statement of operations (ASC 740-10-45-25). No interest and penalties were recorded for the years ended December 31, 2025 and 2024.
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).
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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.
Valuation Allowance Determination
At March 31, 2026 and December 31, 2025, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting in a net carrying amount of $0. This determination was based on cumulative losses in recent years and the lack of sufficient positive evidence to support the realization of deferred tax assets in the near term (ASC 740-10-30-24).
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 condensed 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.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, typically the vesting period.
ASC 718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. It also applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may be settled using equity instruments.
In compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees, aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting period in accordance with ASC 718.
The Company determines the fair value of stock options using the Black-Scholes option pricing model, considering the following key assumptions:
| ● | Exercise price – The agreed-upon price at which the option can be exercised. | |
| ● | Expected dividends – The anticipated dividend yield over the expected life of the option. | |
| ● | Expected volatility – Based on historical stock price fluctuations. | |
| ● | Risk-free interest rate – Derived from U.S. Treasury securities with similar maturities. | |
| ● | Expected life of the option – Estimated based on historical exercise patterns and contractual terms. |
Additionally, the Company follows the guidance under ASU 2016-09, which introduced amendments to simplify certain accounting aspects of share-based compensation, including:
| ● | The treatment of tax benefits and tax deficiencies in income tax reporting. | |
| ● | The option to recognize forfeitures as they occur rather than estimating them upfront. | |
| ● | Cash flow classification for certain tax-related transactions. |
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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. |
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. |
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.
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Participating Securities & Share-Based Compensation
Restricted stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively.
Therefore:
| ● | Before the requisite service is rendered for the right to retain the award, these instruments meet the definition of a participating security under ASC 260-10-45-59. | |
| ● | RSUs granted under an executive compensation plan, however, are not considered participating securities because the rights to dividend equivalents are forfeitable (ASC 718-10-25). |
Related Parties
The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and 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. |
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 Note 1, which discusses the common control merger between the Company and Next Holding, on February 13, 2025. | |
| ● | See Note 4 which includes accrued liabilities – related parties. | |
| ● | See Notes 5 and 12 for a discussion of related party debt. | |
| ● | See Note 7 regarding right-of-use operating lease with the Company’s Chief Technology Officer. | |
| ● | See Note 8 for a discussion of equity transactions with certain officers and directors. |
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 condensed consolidated financial statements.
ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
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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 condensed 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.
The Company is currently assessing the impact of ASU 2023-09 on its income tax disclosures and reporting requirements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires additional disclosures of certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact this update will have on our annual disclosures; however, it will not impact our financial condition, results of operations, or cash flows.
Other Accounting Standards Updates
The FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s condensed consolidated financial position, results of operations, or cash flows. These reclassifications had no impact on the Company’s condensed consolidated results of operations, stockholders’ equity, or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, the Company’s disclosure controls and procedures were effective at a reasonable assurance level as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.
ITEM 1A. RISK FACTORS
As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2026, and through the date of this Quarterly Report on Form 10-Q, the Company issued the following shares of its common stock in transactions not registered under the Securities Act of 1933, as amended (the “Securities Act”):
On April 6, 2026, the Company issued 243,300 shares of common stock to Leviston Resources, LLC at a price of $0.001 per share, pursuant to the terms of of an existing financing agreement with the holder.
On April 16, 2026, the Company issued 50,000 shares of common stock to Agile Hudson Partners LLC at a price of $0.40 per share, pursuant to the terms of an existing financing agreement with the holder.
On April 17, 2026, the Company issued 50,000 shares of common stock to FirstFire Global Opportunities Fund, LLC at a price of $0.40 per share, pursuant to the terms of an existing financing agreement with the holder.
On April 28, 2026, the Company issued 25,664 shares of common stock to AJB Capital Investments, LLC at a price of $0.40 per share, pursuant to the terms of their Series A preferred shares.
On April 28, 2026, the Company issued 21,739 shares of common stock to Michael D. Farkas, the Company’s Chief Executive Officer, at a price of $0.40 per share, pursuant to Series B preferred shares. The issuance to Mr. Farkas constitutes a related party transaction.
Each of the issuances described above was made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. Each recipient represented to the Company that it was an “accredited investor” as defined in Rule 501(a) of Regulation D, was acquiring the securities for investment and not with a view to, or for resale in connection with, any distribution thereof, and had access to information about the Company sufficient to make an informed investment decision. The book-entry positions representing the shares are subject to customary restrictive legends under the Securities Act. No underwriting discounts or commissions were paid in connection with these issuances, and there was no general solicitation or advertising.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) None.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.
(c)
During the registrant’s last fiscal quarter, no director or officer
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ITEM 6. EXHIBITS
| * | Filed herewith. | |
| ** | Furnished herewith. | |
| † | Management contracts and compensation plans and arrangements. |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| NEXTNRG, INC. | ||
| Dated: May 15, 2026 | By: | /s/ Michael D. Farkas |
| Michael D. Farkas | ||
| Chief Executive Officer (principal executive officer) | ||
| Dated: May 15, 2026 | By: | /s/ Joel Kleiner |
| Joel Kleiner | ||
| Chief Financial Officer (principal financial officer and principal | ||
| accounting officer) | ||
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Exhibit 31.1
CERTIFICATIONS
I, Michael D. Farkas, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 of NextNRG, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 15, 2026 | |
| /s/ Michael D. Farkas | |
| Michael D. Farkas | |
| Chief Executive Officer (principal executive officer) |
Exhibit 31.2
CERTIFICATIONS
I, Joel Kleiner, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 of NextNRG, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 15, 2026 | |
| /s/ Joel Kleiner | |
| Joel Kleiner | |
| Chief Financial Officer (principal financial officer) |
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of NextNRG, Inc. (the “Company”) for the quarter ended March 31, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, Michael D. Farkas, Chief Executive Officer of the Company, and I, Joel Kleiner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: May 15, 2026 | /s/ Michael D. Farkas |
| Michael D. Farkas | |
| Chief Executive Officer (principal executive officer) | |
| Date: May 15, 2026 | /s/ Joel Kleiner |
| Joel Kleiner | |
| Chief Financial Officer (principal financial officer) |
This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.