EzFill (EZFL) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents NextNRG's unaudited consolidated financial statements for periods ended June 30, 2025, and December 31, 2024, including retrospective adjustments for a common control merger Unaudited Consolidated Balance Sheets Total assets increased from $22.38 million to $25.52 million, driven by current asset growth, while total liabilities and stockholders' deficit also rose Unaudited Consolidated Balance Sheets | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Cash | $2,652,838 | $1,612,117 | | Accounts receivable - net | $3,047,133 | $1,614,664 | | Inventory | $227,070 | $126,400 | | Prepaids and other | $2,275,237 | $42,509 | | Total Current Assets | $8,202,278 | $3,395,690 | | Total Assets | $25,521,063 | $22,378,122 | | Total Current Liabilities | $38,029,561 | $34,749,156 | | Total Liabilities | $39,348,065 | $35,113,157 | | Stockholders' Deficit | $(13,644,028) | $(12,735,035) | Unaudited Consolidated Statements of Operations Net sales significantly increased, but a surge in general and administrative expenses led to a much larger net loss for both the three and six months ended June 30, 2025 Unaudited Consolidated Statements of Operations | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Sales - net | $19,691,568 | $7,394,778 | $35,964,241 | $13,991,897 | | Cost of sales | $18,121,752 | $6,847,452 | $33,876,456 | $12,982,785 | | General and administrative expenses | $31,779,768 | $2,766,945 | $37,318,273 | $4,695,900 | | Total costs and expenses | $50,457,272 | $9,995,231 | $72,483,817 | $18,452,506 | | Loss from operations | $(30,765,704) | $(2,600,453) | $(36,519,576) | $(4,460,609) | | Net loss | $(36,133,275) | $(5,616,385) | $(45,071,274) | $(8,291,637) | | Basic and diluted loss per share | $(0.30) | $(0.06) | $(0.39) | $(0.08) | Unaudited Consolidated Statements of Changes in Stockholders' Deficit The stockholders' deficit worsened to $(13,827,002) at June 30, 2025, primarily due to net loss, partially offset by increased additional paid-in capital from stock issuances Unaudited Consolidated Statements of Changes in Stockholders' Deficit | Metric | December 31, 2024 | June 30, 2025 | | :--------------------------------- | :------------------ | :------------ | | Total Stockholders' Deficit | $(12,735,035) | $(13,827,002) | | Additional Paid-in Capital | $54,789,949 | $99,114,597 | | Accumulated Deficit | $(67,535,701) | $(112,770,877) | | Common Stock Shares Issued | 106,707,827 | 122,051,560 | - Stock issued for cash contributed $15,226,134 to additional paid-in capital for the six months ended June 30, 2025[15] - Stock issued for services contributed $26,950,157 to additional paid-in capital for the six months ended June 30, 2025[15][16] Unaudited Consolidated Statements of Cash Flows Net cash increased by $1,040,721 for the six months ended June 30, 2025, driven by financing activities despite continued cash usage in operations Cash Flow Activity | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :---------------------------- | :---------------------------- | | Net cash used in operating activities | $(6,336,312) | $(8,331,359) | | Net cash (used in) provided by investing activities | $531,850 | $2,130,116 | | Net cash provided by financing activities | $6,845,183 | $5,514,049 | | Net increase (decrease) in cash | $1,040,721 | $(687,194) | | Cash - end of period | $2,652,838 | $334,067 | - Non-cash financing activities included $173,438 in Series A and B preferred stock dividends payable in common stock and $2,120,000 in common stock issued for conversion of notes payable[23] Notes to Unaudited Consolidated Financial Statements These notes provide detailed explanations for the financial statements, covering organization, accounting policies, specific accounts, debt, equity, and recent transactions, including the common control merger and going concern Note 1 - Organization and Nature of Operations NextNRG operates mobile gas delivery and is expanding into renewable energy, with a common control merger completed on February 13, 2025, and new executive appointments - NextNRG operates in mobile gas delivery and is expanding into renewable energy, including AI/ML-powered smart microgrids, solar, battery storage, and wireless EV charging[26][36][37] - On February 13, 2025, NextNRG completed a common control merger with Next Holding, issuing 100,000,000 shares of common stock for 100% of Next Holding's shares, retrospectively applied to financial statements[33][34][50] - Michael D. Farkas was appointed Chief Executive Officer and Executive Chairman, and Joel Kleiner was appointed Chief Financial Officer on February 14, 2025, following the Next Holding acquisition[55][56] Liquidity and Going Concern Indicators (as of June 30, 2025) | Metric | Amount | | :------------------------------------ | :------------- | | Net loss available to common stockholders | $(45,235,177) | | Net cash used in operations | $(6,336,312) | | Accumulated deficit | $(112,770,877) | | Stockholders' deficit | $(13,664,028) | | Working capital deficit | $(29,827,283) | - These factors create substantial doubt about the Company's ability to continue as a going concern within the next twelve months, necessitating immediate additional capital[67][62] Note 2 - Summary of Significant Accounting Policies This note details the company's accounting policies, including consolidation, business combinations, segment reporting, revenue recognition, and stock-based compensation, with retrospective adjustments for the common control merger - The Company consolidates entities where it has a controlling financial interest, including those with over 50% voting interest or as primary beneficiary of Variable Interest Entities (VIEs)[69][73] - Acquisitions are accounted for as business combinations (acquisition method) or asset acquisitions (cost accumulation model), with significant judgment required for classification[71][74][76] - The Company operates in two reportable segments: Mobile Fuel Delivery and Energy Infrastructure, based on economic characteristics and CODM review[49][328] Revenue Disaggregation (Six Months Ended June 30) | Revenue Stream | 2025 Revenue | % of Revenues (2025) | 2024 Revenue | % of Revenues (2024) | | :--------------- | :----------- | :------------------- | :----------- | :------------------- | | Fuel sales | $35,000,884 | 97.32% | $13,484,671 | 96.37% | | Other | $963,357 | 2.68% | $507,226 | 3.63% | | Total Sales | $35,964,241 | 100.00% | $13,991,897 | 100.00% | - The Company recognizes revenue from mobile fuel sales at delivery and membership fees over time within a one-month cycle, acting as the principal in fuel sales transactions[144][148][154][156][157] - A full valuation allowance is recorded against deferred tax assets due to cumulative losses and lack of sufficient positive evidence for realization[172] - Stock-based compensation is measured at fair value on the grant date and recognized over the vesting period, with forfeitures recognized as they occur[178][180][308] Note 3 – Property and Equipment Property and equipment, net, decreased to $6,500,295 at June 30, 2025, due to depreciation and the sale of 34 trucks, partially offset by new acquisitions Property and Equipment - Net | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Vehicles | $10,455,715 | $10,427,658 | | Total property and equipment | $10,898,853 | $10,870,796 | | Accumulated depreciation | $(4,398,558) | $(3,331,289) | | Total property and equipment - net | $6,500,295 | $7,539,507 | - Depreciation and amortization expense for the six months ended June 30, 2025, was $1,289,088, an increase from $773,821 in the prior year[211] - During the six months ended June 30, 2025, the Company sold 34 trucks for $899,640, resulting in a loss on settlement of $299,980[213] Note 4 – Accounts Payable and Accrued Liabilities including Related Parties Accounts payable and accrued liabilities significantly increased to $6,681,024, with related party liabilities also rising due to accrued interest and a new CEO guarantee fee Accounts Payable and Accrued Liabilities | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | Accounts payable | $3,801,000 | $878,475 | | Accrued expenses - other | $2,813,235 | $785,911 | | Total accounts payable and accrued liabilities | $6,681,024 | $1,721,527 | | Accrued interest payable - related parties | $2,449,365 | $1,473,201 | | Accrued guarantee fee - Chief Executive Officer | $212,247 | $0 | | Total related party liabilities | $2,734,862 | $1,546,451 | - The CEO will receive a 3% fee for personally guaranteeing certain Company debt transactions, with $212,247 accrued for the six months ended June 30, 2025[215] Note 5 – Debt Total notes payable (third party) decreased to $15,609,026 due to repayments, while related party notes increased, and the company frequently uses MCA agreements for liquidity Notes Payable – Related Parties | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Balance | $12,320,045 | $10,773,000 | | Advances (6 months ended June 30, 2025) | $2,001,594 | N/A | | Repayments (6 months ended June 30, 2025) | $(300,000) | N/A | | Interest Rate | 10% - 18% | 10% - 18% | | Collateral | Unsecured | Unsecured | Notes Payable (Third Party) Summary | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Total Notes Payable | $15,609,026 | $20,428,886 | | Face amount of new notes (6 months ended June 30, 2025) | $12,205,620 | N/A | | Repayments (6 months ended June 30, 2025) | $(17,992,795) | N/A | | Debt Discount (6 months ended June 30, 2025) | $(2,563,365) | N/A | | Amortization of debt discount (6 months ended June 30, 2025) | $4,300,680 | N/A | - The Company frequently uses Merchant Cash Advance (MCA) agreements, characterized by fixed repayment obligations and short terms (21-78 weeks), often refinanced to manage liquidity, which can lead to higher cumulative borrowing costs[221][222][223] - Loan 28, a $5,000,100 loan from Cohen Global Energy, LLC (a 50% owner of Next/Ingle Holdings LLC), was due March 31, 2025, and the Company is negotiating an extension[243] Note 6 – Fair Value of Financial Instruments The Company had no assets or liabilities measured at fair value on a recurring basis, with most financial instruments approximating fair value due to short-term maturities - No assets or liabilities were measured at fair value on a recurring basis at June 30, 2025, or December 31, 2024[247] - Financial instruments such as cash, accounts receivable, and accounts payable are recorded at historical cost, with carrying amounts approximating fair values due to short-term maturities[91] Note 7 – Commitments and Contingencies The Company recognizes ROU assets and lease liabilities for operating leases, with total non-related party operating lease liabilities at $1,564,387 and no material litigation identified Operating Lease Assets and Liabilities (Non-Related Party) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Operating lease - ROU asset - non-current | $1,569,992 | $61,151 | | Operating lease liability | $1,564,387 | $69,128 | | Weighted-average remaining lease term (years) | 3.03 | 0.25 | | Weighted-average discount rate | 8% | 5% | Operating Lease Assets and Liabilities (Related Party) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Operating lease - ROU asset - non-current | $262,474 | $314,957 | | Operating lease liability | $265,400 | $315,893 | | Weighted-average remaining lease term (years) | 2.25 | 2.75 | | Weighted-average discount rate | 5% | 5% | - The Company entered into new operating leases for office space and parking lots in early 2025, totaling $694,650 in ROU assets, and a lease for 34 vehicles on May 29, 2025, with an initial ROU asset of $875,486[255][258] - No material litigation, pending litigation, or other transactions requiring accrual or disclosure were identified as of June 30, 2025, and December 31, 2024[267] Note 8 – Stockholders' Deficit Authorized common stock increased to 500,000,000 shares, with significant equity transactions including a public offering of 5,000,000 common shares for $15,000,000 and issuances for services and loan conversions - On June 14, 2024, authorized common stock increased from 50,000,000 to 500,000,000 shares to support financings, conversions, compensation plans, and corporate transactions[268][269] Preferred Stock Details | Stock Type | Authorized Shares | Issued & Outstanding (June 30, 2025) | Stated Value | Conversion Rate (Common Shares per Preferred Share) | Dividend Rate | | :-------------------------- | :---------------- | :----------------------------------- | :----------- | :-------------------------------------------------- | :------------ | | Series A Convertible Preferred Stock | 513,000 | 363,000 | $10 | 4.53 | 10% per year | | Series B Convertible Preferred Stock | 150,000 | 140,000 | $10 | 5.18 | 12% per year | - On February 18, 2025, the Company sold 5,000,000 shares of common stock in a public offering for gross proceeds of $15,000,000, with net proceeds of approximately $13.3 million after offering costs[281][359][362] - The Company issued 7,336,821 shares of common stock to consultants for services rendered (fair value $21,326,731) and 1,889,002 shares for prepaid services (fair value $5,623,425)[284] - Accrued dividends on Series A and B preferred stock totaled $173,438 at June 30, 2025, with 93,576 common shares issued to settle prior dividends[294][296] Non-Vested Shares Activity | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------- | :------------------ | :------------ | | Balance - Non-Vested Shares | 26,000 | 1,039,000 | | Granted (6 months ended June 30, 2025) | N/A | 1,000,000 | | Vested (6 months ended June 30, 2025) | N/A | 13,000 | | Unrecognized stock compensation expense | N/A | $1,869,890 | | Compensation expense recognized (6 months ended June 30, 2025) | $251,333 | $981,211 | Note 9 – Asset Purchase Agreement In February 2025, the Company acquired vehicles from Yoshi, Inc. for $1,229,000, with consideration including cash, common stock, and a note payable - The Company acquired vehicles from Yoshi, Inc. in February 2025; $1,229,000 was reclassified to vehicles from a $2,035,283 deposit on future asset purchase[311] - Consideration for the Yoshi asset purchase included $1,250,000 in cash, 201,613 shares of common stock (fair value $535,283), and a $250,000 note payable[317] Note 10 – Intangible Assets Intangible assets, net, decreased to $4,829,998 due to amortization, primarily consisting of license agreements and tradenames acquired from STAT-EI, Inc. for $5,500,000 Intangible Assets - Net | Type | June 30, 2025 | December 31, 2024 | Estimated Useful Lives (Years) | | :-------------------- | :------------ | :------------------ | :----------------------------- | | License agreements | $4,900,000 | $4,900,000 | 15 | | Tradenames/trademarks | $600,000 | $600,000 | 5 | | Less: accumulated amortization | $(670,002) | $(446,668) | | | Intangibles - net | $4,829,998 | $5,053,332 | | - The Company acquired STAT-EI, Inc. in January 2024 for $5,500,000, recognizing $4,900,000 in license agreements and $600,000 in trademarks/tradenames[312][316] - Amortization expense for the six months ended June 30, 2025, was $223,334, an increase from $111,667 in the prior year[320] Note 11 – Acquisition of Membership Interests in GSPP JEA Ingle FL, LLC – Accounted for as an Asset Acquisition – Solar Project Rights Next/Ingle Holdings LLC acquired GSPP JEA Ingle FL, LLC for $3,929,161 in December 2024, accounted for as an asset acquisition of solar project rights - Next/Ingle Holdings LLC acquired GSPP JEA Ingle FL, LLC for $3,929,161 in December 2024, which was accounted for as an asset acquisition because the acquired entity only held solar project rights and was not an operational business[323][327] - The acquisition was funded by a $5,000,100 loan from Cohen Global Energy, LLC, which owns the other 50% of Next/Ingle Holdings LLC, but NextNRG retains unilateral governing control[324][326] Note 12 – Segment Reporting NextNRG operates in two segments: Mobile Fuel Delivery, which generated all net sales, and Energy Infrastructure, which incurred a significant net loss - The Company operates in two reportable segments: Energy Infrastructure and Mobile Fuel Delivery[328] - Mobile Fuel Delivery provides on-demand fuel delivery services, while Energy Infrastructure focuses on AI/ML-powered smart microgrids, solar, battery storage, and wireless EV charging solutions[329][330] Segment Financial Information (Six Months Ended June 30, 2025) | Metric | Energy Infrastructure | Mobile Fuel Delivery | Total | | :------------------------------------ | :-------------------- | :------------------- | :------------ | | Sales - net | $0 | $35,964,241 | $35,964,241 | | Total costs and expenses | $3,327,710 | $69,156,108 | $72,483,818 | | Net loss | $(6,119,828) | $(38,951,447) | $(45,071,275) | | Total Assets | $9,584,235 | $15,936,828 | $25,521,063 | Segment Financial Information (Six Months Ended June 30, 2024) | Metric | Energy Infrastructure | Mobile Fuel Delivery | Total | | :------------------------------------ | :-------------------- | :------------------- | :------------ | | Sales - net | $0 | $13,991,897 | $13,991,897 | | Total costs and expenses | $1,634,066 | $16,818,440 | $18,452,506 | | Net loss | $(3,027,782) | $(5,263,855) | $(8,291,637) | | Total Assets | $5,170,009 | $12,157,790 | $22,378,122 | Note 13 - Subsequent Events Subsequent to June 30, 2025, the Company issued common shares for consultants, loan extensions, and liability extinguishment, and entered new debt and lease agreements - Issued 651,337 common shares to consultants and 180,000 shares to extend the 'Alcourt Note' maturity to September 30, 2025[333] - Extinguished a $2,325,000 liability by issuing 1,081,395 restricted common shares at $2.15 per share on July 11, 2025[334] - Entered a $2,000,000 promissory note on July 15, 2025, for working capital, with 18% interest and 5% OID, and issued 197,802 restricted shares for interest and 126,373 shares as commitment shares[334] - Leased fuel trucks and equipment totaling $1,164,600 under a 36-month agreement with Equify Financial, LLC, on August 4, 2025[335] - Entered an agreement with Michael Weisz on August 8, 2025, for advisory board services, granting 1,250,000 common shares subject to vesting and a $10,000 monthly fee[336] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses NextNRG's financial condition and results, highlighting revenue growth in mobile fuel delivery, increased operating expenses, substantial net losses, and ongoing liquidity challenges Overview NextNRG is an integrated ecosystem company leveraging AI and ML in renewable energy, energy infrastructure, battery storage, wireless EV charging, and on-demand mobile fuel delivery - NextNRG integrates AI/ML into renewable energy, energy infrastructure, battery storage, wireless EV charging, and mobile fuel delivery[341] - Core strategy involves a utility operating system and smart microgrids using AI-driven energy management, solar power, and battery storage to enhance efficiency, reduce costs, and improve grid resiliency for various commercial and governmental properties[342] - The company is expanding its mobile fuel delivery fleet and integrating sustainable energy solutions, aiming to assist fleet customers in transitioning to EV with wireless EV charging solutions[343] Revenue Sources NextNRG plans diverse revenue streams from solar PPAs, EV charging, SaaS, and hardware sales, but currently all revenues are from mobile fuel deliveries - Planned revenue sources include power purchase agreements (PPAs) for solar electricity, energy sales for wireless EV charging, SaaS agreements for energy management software, hardware licensing, and direct hardware sales[344][345][346][347][348][349] - Potential customers span property owners, utilities, government, car manufacturers, and fleet owners[350] - For the six months ended June 30, 2025, all revenues were derived from mobile fuel deliveries, which include on-demand and subscription services for consumers and commercial fleets[351] Recent Developments Recent developments include the Next Holding acquisition, CEO appointment, a $15,000,000 public offering, and multiple debt agreements, many personally guaranteed by the CEO - On February 13, 2025, the Company completed the acquisition of Next Holding, issuing 100,000,000 common shares, making Next Holding a wholly-owned subsidiary[357] - Michael D. Farkas was appointed Chief Executive Officer and Executive Chairman on February 14, 2025[358] - On February 18, 2025, the Company closed a public offering of 5,000,000 common shares at $3.00 per share, raising $15,000,000 in gross proceeds, with net proceeds of approximately $13.3 million[359][362] - The Company entered into multiple Merchant Cash Advance (MCA) agreements (Redstone, Mr. Advance, WCG, Venture Debt, Funders App) and promissory notes (Alcourt, May 5, May 9, May 19, May 20, June 10), many personally guaranteed by CEO Michael D. Farkas[366][369][371][372][375][377][378][379][380][389][391][394][396] - The Company issued 250,000 warrants to the underwriter as compensation, exercisable at $3.75 per share[363] Financial Overview NextNRG reported significant revenue growth but incurred substantial net losses of $36,133,274 and $45,071,275, with cash used in operations and an accumulated deficit of $112,770,877 Key Financial Highlights | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Revenues | $19,691,568 | $7,394,778 | $35,964,241 | $13,991,897 | | Net loss | $(36,133,274) | $(5,616,385) | $(45,071,275) | $(8,291,637) | | Cash flows used in operating activities | N/A | N/A | $(6,336,312) | $(8,331,359) | | Accumulated deficit (as of June 30, 2025) | N/A | N/A | $(112,770,877) | N/A | Results of Operations NextNRG saw substantial revenue growth driven by mobile fuel delivery expansion, but a significant increase in general and administrative expenses, particularly a $25.5 million stock-based compensation grant, led to a magnified net loss Consolidated Results of Operations | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Revenues | $19,691,568 | $7,394,778 | $35,964,241 | $13,991,897 | | Cost of sales | $18,121,752 | $6,847,452 | $33,876,456 | $12,982,785 | | Operating expenses | $31,779,768 | $2,766,945 | $37,318,273 | $4,695,900 | | Depreciation and amortization | $555,752 | $380,834 | $1,289,088 | $773,821 | | Operating loss | $(30,765,704) | $(2,600,453) | $(36,519,576) | $(4,460,609) | | Other expense | $(5,367,570) | $(3,015,932) | $(8,551,698) | $(3,831,028) | | Net loss | $(36,133,274) | $(5,616,385) | $(45,071,274) | $(8,291,637) | - Revenue growth was primarily driven by an expanded customer base, strategic fleet partnerships, and enhanced technology and marketing in mobile fuel delivery[399][402][411] - Operating expenses increased by $29,012,823 for the three months and $32,622,373 for the six months ended June 30, 2025, primarily due to a $25.5 million stock-based compensation grant to employees and consultants[400][410] - Interest expense increased by $1,242,648 (40.39%) for the three months and $3,191,031 (80.68%) for the six months ended June 30, 2025, mainly due to amortization of debt discounts and new borrowings[403][407][412][415][418] - Net loss increased by 543.35% for the three months and 443.58% for the six months ended June 30, 2025, largely due to the significant stock-based compensation expense[406][415] Non-GAAP Financial Measures NextNRG uses Adjusted EBITDA as a non-GAAP measure, which for the six months ended June 30, 2025, showed a significant loss of $(10,640,661) due to higher stock-based compensation - Adjusted EBITDA is a non-GAAP measure used to analyze financial performance, excluding net interest expense, taxes, depreciation, amortization, impairment, and stock compensation expense[417] Adjusted EBITDA Reconciliation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Net loss | $(36,133,274) | $(5,616,385) | $(45,071,274) | $(8,291,637) | | Interest expense | $4,319,031 | $3,076,383 | $7,642,428 | $3,955,279 | | Depreciation and amortization | $555,752 | $380,834 | $1,289,088 | $773,821 | | Stock-based compensation | $25,499,097 | $251,334 | $25,499,097 | $251,334 | | Adjusted EBITDA | $(5,759,394) | $(1,907,834) | $(10,640,661) | $(3,311,203) | Liquidity and Capital Resources NextNRG's cash balance increased to $2,652,838, but the company faces an accumulated deficit of $112,770,877 and relies heavily on external financing, raising substantial doubt about its going concern ability Cash and Cash Equivalents | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :------------ | :--------- | :--------- | | Cash and cash equivalents | $2,652,838 | $334,067 | $2,318,771 | 6,806.50% | - Net cash used in operating activities was $6,336,312 for the six months ended June 30, 2025, primarily due to a net loss of $45,071,275, partially offset by non-cash adjustments including $25.5 million in stock-based compensation[425] - Net cash provided by financing activities was $6,845,183 for the six months ended June 30, 2025, including $13,669,129 from offerings and $11,468,849 from notes, offset by $19,549,80 in repayments[427] - The Company has an accumulated deficit of $112,770,877 and a working capital deficit of $29,827,283 as of June 30, 2025, creating substantial doubt about its ability to continue as a going concern[428][434][439] - Management's strategic plans include expanding into new markets, obtaining additional debt/equity financing, collaborating with other businesses, and acquiring companies to enhance growth[441][444] Critical Accounting Policies and Estimates This section details critical accounting policies and estimates, including consolidation, business combinations, segment reporting, revenue recognition, and stock-based compensation, highlighting the significant judgments involved - The Company's critical accounting policies involve significant estimates and assumptions, including allowance for doubtful accounts, inventory reserves, valuation of stock-based compensation, and impairment of long-lived assets[443][460][464] - The Company applies ASC 810 for consolidation, ASC 805 for business combinations and asset acquisitions, and ASC 280 for segment reporting, with retrospective adjustments for common control mergers[446][447][454] - Revenue recognition follows ASC 606, identifying distinct performance obligations for fuel sales (at delivery) and membership fees (over time), with the Company acting as the principal[509][510][514][520][521][522] - Stock-based compensation is accounted for under ASC 718, using the fair value method for both employees and non-employees, with compensation cost recognized over the vesting period[539][541] - The Company adopted ASU 2023-07 (Segment Reporting) on January 1, 2024, with no material impact, and is assessing ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures)[558][559][561] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that the Company has no applicable quantitative and qualitative disclosures about market risk - The Company has no applicable quantitative and qualitative disclosures about market risk[563] Item 4. Controls and Procedures As of June 30, 2025, the Company's disclosure controls and procedures were deemed ineffective due to insufficient accounting personnel, leading to inadequate segregation of duties and oversight - As of June 30, 2025, the Company's disclosure controls and procedures were deemed not effective[564] - The ineffectiveness is due to a lack of sufficient accounting personnel, resulting in inadequate segregation of duties, untimely reviews, and insufficient oversight over financial reporting[565] - No changes in internal control over financial reporting materially affected the controls during the quarter ended June 30, 2025, but management's conclusion on effectiveness was revised due to resource constraints[566] PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in various claims but is not aware of any material legal proceedings that would significantly affect its business or financial position - The Company is not aware of any legal proceedings currently pending or threatened that would materially affect its business, financial position, or results of operations[570] Item 1A. Risk Factors As a smaller reporting company, NextNRG is not required to disclose material changes to risk factors in this quarterly report - As a smaller reporting company, NextNRG is not required to disclose material changes to risk factors in this quarterly report[571] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered equity sales, including 100,000,000 common shares for the Next Holding acquisition, a preferred stock distribution, a public offering, and shares issued for services and loan fees - Issued 100,000,000 common shares as consideration for the Next Holding acquisition, with 50,000,000 vested on February 13, 2025, and the remainder subject to vesting/forfeiture[572] - Effectuated a non-cash distribution of 1,400,000 Series B convertible preferred stock to the CEO on February 13, 2025, prior to the common control merger[573] - Sold 5,000,000 common shares in a public offering for gross proceeds of $15,000,000, with an additional 75,378 shares sold for $226,134 under an over-allotment option[574][575] - Issued 410,774 common shares for services rendered (fair value $1,468,391) and 41,437 common shares as a loan extension fee (fair value $150,000)[576][577] - Issued 93,576 common shares to settle $258,271 in accrued Series A and B preferred stock dividends[578] Item 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities to report - Not applicable; no defaults upon senior securities[580] Item 4. Mine Safety Disclosures This section states that there are no mine safety disclosures to report - Not applicable; no mine safety disclosures[581] Item 5. Other Information This section reports no material changes to Board nominee procedures and no adoption or termination of Rule 10b5-1 trading arrangements by directors or officers - No material changes to procedures for recommending Board nominees[582] - No director or officer adopted or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the last fiscal quarter[583] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various promissory notes, lease agreements, stock purchase agreements, and certifications - The exhibits include various promissory notes, lease agreements, stock purchase agreements, and certifications, with references to their original filings or indication of being filed herewith[584][585] Signatures The report is signed by Michael D. Farkas, CEO, and Joel Kleiner, CFO, on August 14, 2025, certifying its submission - The report is signed by Michael D. Farkas, Chief Executive Officer, and Joel Kleiner, Chief Financial Officer, on August 14, 2025[589]