Financial Position and Capital Needs - The company anticipates needing significant additional capital by June 30, 2025, to continue operations, as current liabilities substantially exceed current assets [178]. - The principal sources of liquidity are expected to be sufficient only through June 30, 2025, necessitating additional equity or debt capital [179]. - As of June 30, 2023, NextNRG's stockholders' equity was approximately $1,799,365, below the Nasdaq requirement of $2,500,000, and by June 30, 2024, the stockholders' deficit was ($4,833,450) [225]. - The Company raised approximately $28.75 million from its initial public offering, with net proceeds of about $25.25 million after expenses [255]. - A public offering on February 13, 2025, priced at $3.00 per share, is expected to generate net proceeds of approximately $13.3 million for business expansion and debt repayment [257]. - The Company has not paid any dividends and intends to retain earnings for operational and business development purposes [254]. Market and Competitive Environment - The retail fuel market has been declining, with modest growth or decline in total demand expected in the coming years, impacting customer acquisition [195]. - The company faces competition from other mobile fuel delivery companies and alternative energy sources, which may negatively affect market expansion [196]. - The company is in a highly competitive EV charging services industry, facing competition from larger companies with greater financial resources [212]. - NextNRG's revenue growth is highly dependent on consumer adoption of electric vehicles (EVs), which is still in its early stages [214]. - The company operates in a highly competitive industry, facing risks from market dynamics, economic fluctuations, and supply chain constraints [282]. Operational Challenges and Risks - The company is currently dependent on two principal suppliers for almost all fuel needs, increasing the risk of supply interruption [200]. - High fuel prices can lead to customer conservation and attrition, reducing demand for the company's products [191]. - The company operates in a new industry segment with evolving regulations, which may affect its ability to service certain areas [204]. - The company's profitability is subject to volatile fuel pricing, which can impact gross margins significantly [201]. - The loss of a major customer could lead to a decrease in future sales and earnings, as sales may be concentrated among a few key customers [203]. - The company has a limited operating history, making it difficult to evaluate its business prospects and forecast future results [206]. Financial Performance - Revenues for the year ended December 31, 2024, increased by 19.61% to $27,770,279 compared to $23,216,423 in 2023, driven by a rise in gallons delivered and average price per gallon [349]. - The company delivered 7,231,618 gallons in 2024, a 24% increase from 5,853,167 gallons in 2023, with the average fuel margin per gallon rising to $0.71, up 9% from $0.65 [371]. - Operating expenses decreased by 3.31% to $8,505,461 in 2024 from $8,796,223 in 2023, attributed to effective cost-management initiatives [349]. - The net loss for 2024 was $16,189,008, representing a 54.59% increase from the net loss of $10,471,889 in 2023 [367]. - Other income (expense) deteriorated significantly, with a net expense of $8,906,889 in 2024 compared to $1,938,329 in 2023, primarily due to increased interest expenses and losses on debt extinguishment [360]. - Interest expense surged to $8,248,642 in 2024, a 379.77% increase from $1,719,296 in 2023, largely due to default penalty interest of $4,475,565 [363]. - Adjusted EBITDA for 2024 was $5,315,782, a decrease of 11.61% from $6,013,755 in 2023 [371]. Revenue Recognition and Accounting Practices - Revenue from mobile fuel sales is recognized at the time of delivery, with membership revenue recognized at the end of each month [301]. - The company follows the five-step revenue recognition model outlined in ASC 606, ensuring enforceable rights and obligations in contracts with customers [302]. - The Company has determined that it is the principal in fuel sales transactions, recognizing revenue on a gross basis [311]. - The Company evaluates uncertain tax positions and had no uncertain tax positions that qualified for recognition or disclosure as of December 31, 2024 and 2023 [317]. - The Company continues to assess the impact of recently issued accounting standards on its financial statements, including ASU 2023-09 [345]. Corporate Governance and Compliance - The Company is classified as an "emerging growth company" under the JOBS Act, allowing for reduced disclosure requirements [233]. - The CEO controls approximately 68.14% of the Company's common stock, qualifying it as a "controlled company" under Nasdaq rules [236]. - The company received a delist determination letter from Nasdaq for not meeting the equity requirement, but has been granted extensions to regain compliance [227]. - The Company regained compliance with Nasdaq's Equity Rule as of August 30, 2024, but will be subject to a mandatory panel monitor for one year [229]. - On January 10, 2025, the Company was notified of non-compliance with Nasdaq's Annual Meeting Requirement, with a 45-day period to submit a compliance plan [231]. Cybersecurity and Risk Management - The Company maintains a comprehensive cybersecurity framework, leveraging Microsoft cloud services and third-party providers to mitigate risks [241].
EzFill (EZFL) - 2024 Q4 - Annual Report