NEXTNRG, INC.

Note 1 -Organization and Nature of Operations

Organization and Nature of Operations

NextNRG, Inc. (formerly known as EzFill Holdings, Inc.) and Subsidiaries (“Next”, “NextNRG,” “we,” “our” or “the Company”), was incorporated on April 20, 2016, in the State of Florida. The Company operates an on-demand mobile gas delivery service and is 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.

Organizational Structure

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 100% of the membership interests of Next Charging (the “Membership Interests”) in exchange for up to 40,000,000 shares of common stock. Subsequently, Next Charging converted to a corporation organized in the State of Nevada named NextNRG Holding Corp. (“Next Holding”) effective as of March 1, 2024 (the “Conversion”), which Conversion continued the existence of the prior entity in the new corporate form and the prior members of Next Charging remained as shareholders of Next Holding.

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.

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 100% of the shares of Next Holding to 100,000,000 shares of the Company’s common stock.

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 50,000,000 shares will vest on the closing date, and the remaining 50,000,000 shares will be subject to vesting or forfeiture (such shares subject to vesting or forfeiture, the “Restricted Shares”). Next Holding completed the acquisition of SEI on January 19, 2024, and thus 50,000,000 vested on that closing date. The remaining 50,000,000 restricted shares are subject to vesting or forfeiture.25,000,000 of the 50,000,000 restricted shares will vest, if at all, upon the Company commercially deploying the third solar, wireless electric vehicle charging, microgrid, and/or battery storage system (such systems as more specifically defined under the Second Amended and Restated Exchange Agreement, as amended) and 25,000,000 of the 50,000,000 Restricted Shares will vest, if at all, upon the Company either reaching annual revenues exceeding $100 million, the Company completing projects with deployment costs greater than $100 million, or the Company completing a capital raise greater than $25 million.

Prior to closing, the Company (i) increased the number of its authorized shares of common stock from 50,000,000 to 500,000,000, (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 100,000,000 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.

Business Overview of NextNRG

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.

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:

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 70% of the Company and 67% of Next Holding.

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.

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”)

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.

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 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 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.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Liquidity and Going Concern

As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2025, the Company had:

Additionally, at December 31, 2025, the Company had:

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 $384,140 at December 31, 2025.

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, 2026, and our current capital structure including equity-based instruments and our obligations and debts.

These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these financial statements are issued.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Management’s strategic plans include the following:

Note 2 -Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”.

In accordance with ASC 810-10, consolidation applies to:

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:

Significant judgments in fair value determinations include:

For SEC registrants, Regulation S-X, Rule 3-05 may require audited financial statements of the acquired business if the acquisition is significant. The determination of significance follows Rule 1-02(w) of Regulation S-X, which considers investment, asset, and income tests.

Asset Acquisitions

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

The classification between business combinations and asset acquisitions requires significant judgment, particularly when applying the screen test. Incorrect classification can materially impact:

Reverse Acquisitions

A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the accounting acquiree, and the entity whose equity interests are acquired (the legal acquiree) is identified as the accounting acquirer under ASC 805-40, “Reverse Acquisitions.”

Accounting for Reverse Acquisitions

Disclosure Requirements for Reverse Acquisitions

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

For SEC registrants, a reverse merger with a public shell company may also trigger “Super 8-K” reporting requirements under SEC Form 8-K, Item 2.01, requiring disclosure within four business days of the transaction closing.

Regulatory and Financial Reporting Considerations

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

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:

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 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.

In accordance with ASC 250-10-50-4, changes in estimates are recorded in the period in which they become known and are accounted for prospectively. The Company bases its estimates on historical experience, industry trends, and other relevant factors, incorporating both quantitative and qualitative assessments that it believes are reasonable under the circumstances.

Significant estimates for the years ended December 31, 2025 and 2024 respectively, include:

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 FASB ASC 820, Fair Value Measurements, which establishes a framework for measuring fair value and requires related disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the Company’s principal market or, if none exists, the most advantageous market for the asset or liability.

Fair Value Hierarchy

ASC 820 requires the use of observable inputs whenever available and establishes a three-tier hierarchy for measuring fair value:

The classification of an asset or liability within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Level 3 valuations generally require more judgment and complexity, often involving a combination of cost, market, or income approaches, as well as assumptions about market conditions, pricing, and other factors.

Fair Value Determination and Use of External Advisors

The Company assesses the fair value of its financial instruments and, where appropriate, may engage external valuation specialists to assist in determining fair value. While management believes that recorded fair values are reasonable, they may not necessarily reflect net realizable values or future fair values.

Financial Instruments Carried at Historical Cost

The Company’s financial instruments—including cash, accounts receivable, accounts payable, and accrued expenses (including related party balances)—are recorded at historical cost. As of December 31, 2025 and 2024, 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 consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.

At December 31, 2025 and 2024, respectively, the Company didnot have any cash equivalents.

The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”), which is $250,000.

At December 31, 2025 and 2024, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits.

Investments

The Company accounts for available-for-sale (AFS) debt securities in accordance with FASB ASC 320, Investments—Debt and Equity Securities. These securities are recorded at fair value, with unrealized gains and losses recognized as a component of other comprehensive income (OCI) unless deemed other-than-temporary, per ASC 320-10-35-1.

Recognition of Gains, Losses, and Amortization

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:

If an OTTI is identified, the impairment loss is recognized in earnings as the difference between the amortized cost and the fair value of the security, per ASC 320-10-35-34. The new fair value becomes the adjusted cost basis, and subsequent recoveries are not recognized in earnings (ASC 320-10-35-35). During the years ended December 31, 2025 and 2024, respectively, there were no impairments taken.

Investment Activity

For the years ended December 31, 2025, and 2024, the Company received proceeds of $0 and $0, respectively, from the sale and liquidation of its investment portfolio.

Realized losses, including bond premium amortization, were $0 and $0 for the years ended December 31, 2025, and 2024, respectively.

Accounts Receivable

The Company accounts for accounts receivable in accordance with FASB ASC 310, Receivables. Receivables are recorded at their net realizable value, which represents the amount management expects to collect from outstanding customer balances (ASC 310-10-35-7).

The Company extends credit to customers based on an evaluation of their financial condition and other factors. The Company does not require collateral, and interest is not accrued on overdue accounts receivable (ASC 310-10-45-4).

Allowance for Doubtful Accounts

Management periodically assesses the collectability of accounts receivable and establishes an allowance for doubtful accounts as needed. The allowance is determined based on:

Accounts deemed uncollectible are written off against the allowance when determined to be uncollectible (ASC 310-10-35-10).

Applicability of ASC 326 (“CECL”)

The Company has assessed the applicability of ASC 326, Financial Instruments—Credit Losses (CECL), which requires an expected credit loss model for financial assets measured at amortized cost. However, ASC 326 primarily applies to financial institutions and entities with long-term financing receivables.

Since the Company’s accounts receivable are short-term trade receivables that do not meet the scope requirements of ASC 326-20-15-2, it continues to apply the incurred loss model under ASC 310 for estimating credit losses.

The following is a summary of the Company’s accounts receivable at December 31, 2025 and 2024:

For the years ended December 31, 2025 and 2024, bad debt was as follows:

Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations.

Inventory

The Company accounts for inventory in accordance with FASB ASC 330, Inventory. Inventory consists solely of fuel and is stated at the lower of cost or net realizable value (“LCNRV”) using the first-in, first-out (FIFO) method, as required by ASC 330-10-35-1.

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:

For the years ended December 31, 2025 and 2024, respectively, the Company didnot record any provisions for inventory obsolescence or impairment.

At December 31, 2025 and 2024, the Company had inventory of $609,861 and $126,400, respectively.

Concentrations

The Company evaluates and discloses significant concentrations of risk in accordance with FASB ASC 275-10, Risks and Uncertainties. These risks may arise from customer concentrations, vendor reliance, geographic dependence, or other economic factors that could materially impact the Company’s financial position, results of operations, and cash flows.

A concentration exists when a single customer, supplier, or market accounts for a significant portion (typically greater than 10%) of the Company’s total revenues, accounts receivable, or vendor purchases (ASC 275-10-50-16).

Customer and Sales Concentrations

The Company’s revenue stream may be dependent on a limited number of key customers. A loss of any significant customer, a decline in demand from such customers, or a deterioration in their financial condition could negatively impact the Company’s future revenues and profitability.

Accounts Receivable Concentrations

The Company extends credit to customers based on their financial strength, payment history, and other relevant factors. A significant concentration of accounts receivable from a limited number of customers could expose the Company to credit risk and potential collection issues. The Company regularly evaluates the creditworthiness of its customers and may require advance payments, letters of credit, or other credit enhancements to mitigate risks.

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:

Sales

Accounts Receivable

Vendor Purchases

Management’s Risk Mitigation Strategies

To address these risks, the Company implements the following strategies:

The Company continuously monitors these risks and adjusts its business strategies to reduce its exposure to customer, credit, and supplier risks, ensuring financial stability and operational continuity.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation, in accordance with ASC 360, “Property, Plant, and Equipment.” Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.

Repairs and maintenance expenditures that do not materially extend the useful life of an asset are expensed as incurred. Significant improvements or upgrades that increase the asset’s productivity, efficiency, or useful life are capitalized.

Upon disposal or sale of property and equipment, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the statement of operations, in accordance with ASC 360-10-40-5.

The Company evaluates the carrying value of property and equipment whenever events or changes in circumstances indicate that the asset may be impaired. If impairment indicators exist, the Company assesses recoverability based on the undiscounted future cash flows expected from the use and disposition of the asset. If the carrying amount exceeds the estimated recoverable amount, an impairment loss is recognized in accordance with ASC 360-10-35-17.

See note 3 for discussion of impairments of long lived assets.

Impairment of Long-lived Assets including Internal Use Capitalized Software Costs

The Company evaluates the recoverability of long-lived assets, including identifiable intangible assets and internal-use capitalized software costs, in accordance with FASB ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets.

An impairment review is triggered when events or circumstances indicate that the carrying value of an asset group may not be recoverable. Factors considered include, but are not limited to:

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).

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 years ended December 31, 2025, and 2024, the Company recorded an impairment loss of $0 and $13,422, respectively, related to various equipment, an impairment loss of $3,929,161 and $0, respectively, related to the impairment of certain project deposits, and an impairment loss of $4,606,664 and $0, respectively, related tothe impairment of certain intangibles related to the acquisition of Stat-EI. The impairment loss related to equipment has been recorded as a component of general and administrative expenses in the accompanying consolidated statements of operation and the impairment loss related to project deposits has been recorded under Impairment loss on project deposit in the accompanying consolidated statements of operation.

See Note 3 for further discussion of long-lived asset impairments.

Derivative Liabilities

The Company evaluates financial instruments containing characteristics of both liabilities and equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging.

Accounting for Derivative Liabilities

Derivative liabilities are revalued at fair value at each reporting period, with changes in fair value recognized in the results of operations as a gain or loss on derivative remeasurement (ASC 815-40-35-4). The Company uses a binomial pricing model to determine the fair value of these instruments.

Conversion and Extinguishment of Derivative Liabilities

When a debt instrument with an embedded conversion option (e.g., convertible debt or warrants) is converted into shares of common stock or repaid, the Company:

For equity-based derivative liabilities (e.g., warrants) that are extinguished, any remaining liability balance is reclassified to additional paid-in capital (ASC 815-40-35-9).

Reclassification of Equity Instruments to Liabilities

Equity instruments initially classified as equity may be reclassified as liabilities if they no longer meet equity classification criteria under ASC 815-40-25. In such cases, they are remeasured at fair value on the date of reclassification, with changes recognized in earnings (ASC 815-40-35-8).

Derivative Liability Balances

As of December 31, 2025, and 2024, the Company hadno derivative liabilities outstanding.

Original Issue Discounts and Other Debt Discounts

The Company accounts for original issue discounts (“OID”) and other debt discounts in accordance with FASB ASC 835-30, Interest—Imputation of Interest. These discounts are recorded as a reduction of the carrying amount of the related debt and are amortized to interest expense over the term of the debt using the effective interest method, unless the straight-line method is materially similar (ASC 835-30-35-2).

Original Issue Discounts (OID)

For certain notes issued, the Company may provide the debt holder with an OID, which is recorded as a debt discount, reducing the face value of the note. The discount is amortized to interest expense over the term of the debt in the Consolidated Statements of Operations.

Stock and Other Equity Issued with Debt

The Company may issue common stock or other equity instruments in connection with debt issuance. When stock is issued, it is recorded at fair value and treated as a debt discount, reducing the carrying amount of the note. These discounts are amortized to interest expense over the life of the debt (ASC 470-20-25-2).

The combined debt discounts, including OID and stock-related discounts, cannot exceed the face amount of the debt (ASU 2020-06).

Debt Issuance Costs

Debt issuance costs, including fees paid to lenders or third parties, are capitalized as a debt discount and amortized to interest expense over the life of the debt in accordance with ASC 835-30-45-1. These costs are presented as a direct deduction from the carrying amount of the debt liability rather than as a separate asset (ASC 835-30-45-3).

Right of Use Assets and Lease Obligations

The Company accounts for right-of-use (ROU) assets and lease liabilities in accordance with FASB ASC 842, Leases. These amounts reflect the present value of the Company’s estimated future minimum lease payments over the lease term, including any reasonably certain renewal options, discounted using a collateralized incremental borrowing rate (ASC 842-20-30-1).

The Company classifies its leases as either operating or finance leases based on the criteria outlined in ASC 842-10-25-2. The Company’s leases primarily consist of operating leases, which are included as Right-of-Use Assets and Operating Lease Liabilities on the consolidated balance sheet.

Short-Term Leases

The Company has elected the short-term lease exemption allowed under ASC 842-20-25-2, whereby leases with a term of 12 months or less are not recorded on the balance sheet. Instead, lease payments are expensed on a straight-line basis over the lease term.

Lease Term and Renewal Options

In determining the lease term, the Company evaluates whether renewal options are reasonably certain to be exercised, as required by ASC 842-10-30-1. Factors considered include:

If a renewal option is deemed reasonably certain to be exercised, the ROU asset and lease liability reflect those additional future lease payments. The Company’s operating leases contain renewal options with no residual value guarantees. Currently, management does not expect to exercise any renewal options, which are therefore excluded in the measurement of lease obligations.

Discount Rate and Lease Liability Measurement

Since the implicit rate in the leases is not readily determinable, the Company applies an incremental borrowing rate that represents the rate it would incur to borrow on a collateralized basis over a similar term and currency environment (ASC 842-20-30-3).

Lease Impairment

In accordance with ASC 360-10-35, the Company evaluates ROU assets for impairment indicators whenever events or changes in circumstances suggest the carrying amount may not be recoverable. No impairments of ROU assets were recognized for the years ended December 31, 2025, and 2024.

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.

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:

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:

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:

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.

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:

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

Contract Liabilities (Deferred Revenue)

Contract liabilities represent amounts received from customers before the satisfaction of performance obligations, which are subsequently recognized as revenue upon fulfillment.

Under ASC 606-10-45-2, the Company discloses contract balances related to deferred revenue when applicable. Any prepayments received for fuel deliveries or memberships are classified as contract liabilities until revenue recognition criteria are met.

As of December 31, 2025 and 2024, the Company had $0 deferred revenue.

The following represents the Company’s disaggregation of revenues for the years ended December 31, 2025 and 2024:

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:

Cost of sales is recognized in the same period as the related revenue in accordance with FASB ASC 705, Cost of Sales and Services. The Company regularly evaluates its cost structure to ensure efficient fuel procurement and operational cost management.

Income Taxes

The Company accounts for income taxes using the asset and liability method prescribed by FASB ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial reporting and tax bases of assets and liabilities. These amounts are measured using enacted tax rates expected to apply in the periods when temporary differences reverse (ASC 740-10-30-8).

The effect of a change in tax rates on deferred tax balances is recognized as income or expense in the period that includes the enactment date (ASC 740-10-45-4).

Uncertain Tax Positions

The Company evaluates uncertain tax positions in accordance with ASC 740-10-25, which requires that a tax position be recognized in the financial statements only if it is more likely than not (greater than 50% likelihood) to be sustained upon examination by tax authorities.

As of December 31, 2025 and 2024, respectively, the Company hadno uncertain tax positions that qualified for recognition or disclosure in the financial statements (ASC 740-10-50-15).

The Company also recognizes interest and penalties related to uncertain tax positions in other expense in the consolidated statement of operations (ASC 740-10-45-25). No interest and penalties were recorded for the years ended December 31, 2025 and 2024, respectively.

Valuation of Deferred Tax Assets

The Company’s deferred tax assets include certain future tax benefits, such as net operating losses (NOLs), tax credits, and deductible temporary differences. Under ASC 740-10-30-5, a valuation allowance is required if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The Company reviews the realizability of deferred tax assets on a quarterly basis, or more frequently if circumstances warrant, considering both positive and negative evidence (ASC 740-10-30-16).

Factors Considered in Valuation Allowance Assessment

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

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 December 31, 2025 and 2024, respectively, the Company recorded a full valuation allowance against its deferred tax assets, resulting in a net carrying amount of $0. This determination was based on cumulative losses in recent years and the lack of sufficient positive evidence to support the realization of deferred tax assets in the near term (ASC 740-10-30-24).

The Company will continue to evaluate its valuation allowance each reporting period and will recognize deferred tax assets in the future if sufficient positive evidence emerges to support their realization.

Advertising Costs

Advertising costs are expensed as incurred, in accordance with ASC 720-35, “Advertising Costs.” These costs are recognized as operating expenses in the period in which they are incurred and are classified within general and administrative expenses in the consolidated statements of operations.

The Company does not capitalize direct-response advertising costs, as they do not meet the criteria for deferral under ASC 720-35-25-1.

The Company recognized $346,223 and $164,296 in marketing and advertising costs during the years ended December 31 2025 and 2024, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” using the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, typically the vesting period.

ASC 718 establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. It also applies to transactions where an entity incurs liabilities based on the fair value of its equity instruments or liabilities that may be settled using equity instruments.

In compliance with ASU 2018-07, the Company applies the fair value method for equity instruments granted to both employees and non-employees, aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting period in accordance with ASC 718.

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

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

The Company continues to evaluate and apply the latest 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

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:

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.

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:

The following potentially dilutive equity securities outstanding as of December 31, 2025 and 2024 were as follows:

Series A and B preferred shares as well as the related dividends on each class of Series A and B preferred shares are convertible into common stock. See Note 8.

Warrants included as common stock equivalents represent those that are fully vested and exercisable. See Note 8.

Based on the potential common stock equivalents noted above at December 31, 2025, the Company has sufficient authorized shares of common stock (500,000,000) to settle any potential exercises of common stock equivalents.

On July 25, 2024, the Company effectuated a 1:2.5 reverse stock split of the Company’s issued and outstanding common stock. As a result, all share and per share amounts have been retroactively restated to the earliest period presented in the accompanying consolidated financial statements.

Related Parties

The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k). Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.

Related parties include, but are not limited to:

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:

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.

Related Party Agreement with Company owned by Daniel Arbour

In 2023, the Company entered into a consulting agreement with an affiliate of a board member to provide services as an outsourced chief revenue officer. Pursuant to the terms of the consulting agreement, the Company agreed to pay $5,000 per month and cover certain other expenses. The initial term of the agreement is for one year. All amounts have been paid. See Note 7.

Related Party Agreement with Company owned by Avishai Vaknin

In 2023, the Company entered into a services agreement with an affiliate of the Company’s Chief Technology Officer. Services include overseeing all matters relating to the Company’s technology. Pursuant to the terms of the services agreement, the Company agreed to pay $10,000 per month and cover other pre-approved expenses. The initial term of the agreement is for one year. All amounts have been paid.

In connection with this agreement, the Company issued 130,000 shares of common stock to Mr. Vaknin. At December 31, 2025 and 2024,117,000 and 104,000 shares have vested, respectively. The remaining 13,000 shares will vest in April 2026. See Note 7.

Due From Related Party

During the year ended December 31, 2024, the Company advanced $17,150 to an entity controlled by Michael Farkas (a former material debt lender), and greater than 20% stockholder in the Company. The advance related to fees incurred by that entity for professional services.

Recent Accounting Standards

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

The Company adopted ASU 2023-07 on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

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

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

Reclassifications

Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated results of operations, stockholders’ equity, or cash flows, and did not affect previously reported consolidated net income (loss) or financial position.

Note 3 –Property and Equipment

Property and equipment consisted of the following:

Asset Purchase – Vehicles - Shell

See Note 9 regarding related right-of-use operating leases.

Depreciation and amortization expense for the years ended December 31, 2025 and 2024, was $1,985,450 and $1,545,806, respectively.

During the years ended December 31, 2025 and 2024, the Company recorded an impairment loss of $0 and $13,422, respectively, related to leasehold improvements made to certain leased office space that is no longer used. This impairment loss has been recorded as a component of general and administrative expenses in the accompanying consolidated statements of operation.

Depreciation and amortization are included as a component of general and administrative expenses in the accompanying consolidated statements of operations.

Impairment losses of property and equipment are included as a component of general and administrative expenses in the accompanying consolidated statements of operations.

Note 4 –Accounts Payable and Accrued Liabilities including Related Parties

Accounts payable and accrued liabilities were as follows at December 31, 2025 and 2024 respectively:

Note 5 –Debt

The following represents a summary of the Company’s debt (notes payable – related parties, third party debt for notes payable (including those owed on vehicles), and line of credit, including key terms, and outstanding balances at December 31, 2024 and 2023, respectively.

Notes Payable – Related Parties

The following is a summary of the Company’s notes payable – related parties at December 31, 2025 and 2024:

During the year ended December 31, 2025, $2,080,000 of accrued interest on related party promissory notes owed to the Chief Executive Officer and Executive Chairman was converted from debt to equity pursuant to a Stock Purchase Agreement.

The following is a detail of the Company’s advances payable – related parties terms and history of each advance at December 31, 2025 and December 31, 2024:

Notes Payable

The following represents the terms of the Company’s notes payable as of December 31, 2025 and December 31, 2024, respectively:

Loans #1, #2, #6-#18, #20, and #30-31 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:

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.

Loans #3 and #4

In November 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 $2,035,283. In 2025, $1,229,000 of this amount was reclassified to vehicles, and the remaining value was expensed.

As part of the consideration due to the seller, the Company was required to pay $1,250,000, plus an additional $250,000, between six and nine months from the transaction date.

As of December 31, 2024, the Company had paid $650,000, however an additional $850,000 remained due and outstanding as a condition for closing the asset purchase.

During the year ended December 31, 2025, the remaining balance was paid.

Loan #5

In December 2024, the Company executed a two-month loan for $2,500,000. The Company was required to pay transaction fees of $440,000. The Company received the entire $2,500,000 as proceeds, rather than the transaction fees being netted from the closing. These fees totaling $440,000 were recorded both as an original discount and accrued expenses. In the event of default, the note would accrue interest at 21%. In February 2025, the Company obtained an additional 30-day extension, with a new maturity date occurring in March 2025, in exchange for $200,000. The loan was repaid in March 2025. In relation to this extension, the noteholder was issued 41,437 shares of Common Stock at a fair value of $150,000.

Loan #21

During the years ended December 31, 2023 and 2024, the Company entered into and amended three unsecured promissory notes totaling $2,420,000 (see below for Notes #1, #2 and #3) with a former related party at the time of the transaction. These notes were initially issued with original issue discounts and additional common stock issuances classified as debt discounts totaling $1,361,400. Of the total debt discounts recognized, $1,192,637 was amortized to interest expense in 2023, the remaining balance of $168,763 was amortized to interest expense in 2024.

Initial Issuance Terms

Global Amendment and Default Conversion Features

On January 17, 2024, the Company and the lender executed a global amendment to the terms of Notes #1, #2, and #3:

Extension-Related Stock Issuances

Conversion to Series A Convertible Preferred Stock

On August 16, 2024, the Company and the lender agreed to convert all remaining obligations under Notes #1, #2, and #3 into equity. The total principal converted was $2,420,000. The lender exercised a 150% penalty interest feature, increasing the total debt conversion amount to $3,630,000. As a result, the Company issued 363,000 shares of Series A convertible preferred stock with a stated value of $10 per share. The fair value of the preferred stock was determined based on its as-converted value into common stock as follows:

The Company accounted for the conversion as an extinguishment of debt under ASC 470-50, and the difference between the fair value of the equity issued and the carrying amount of the debt was recorded as a loss on debt extinguishment.

Common Stock Issuable –242,000 Shares

In connection with the initial debt issuances and amendments discussed above, the Company had previously classified 242,000 common shares as common stock issuable due to the 9.99% ownership blocker. Upon conversion of all outstanding debt on August 16, 2024, these shares were formally issued to the lender. Since the shares had already been reflected in equity, there was no incremental impact to stockholders’ deficit upon issuance.

Loans #22-#26

In October 2024, the Company entered into five unsecured, non-interest-bearing notes with an aggregate principal amount of $5,000,000 and a contractual term of 18 months. The notes were issued with an OID of $100,000, resulting in net cash proceeds of $4,900,000 at inception.

Although the notes had a stated maturity in 2026, the Company repaid the full $5,000,000 principal amount in February 2025, prior to maturity. The remaining unamortized debt discount of $83,547 was amortized on an accelerated basis as interest expense through the repayment date.

Loan #27

In January 2024, the Company acquired 100% of the equity interests in STAT in exchange for $5,500,000. STAT has patented technology that will be used in the Company’s expected future operations. Prior to the acquisition, the operations of STAT were insignificant.

In 2023, the Company paid a deposit of $250,000 towards this acquisition. In 2024, the Company paid an additional $1,550,000 for total cash consideration paid of $1,800,000 at closing. The balance of $3,700,000 was financed through a note payable. This note bears interest at 7%, is unsecured was due in May 2024 (“initial maturity date”). The Company also has the option to extend the due date to July 2024 for no additional consideration or change in terms (See Note 10). Subsequent to the initial maturity date, the lender has agreed to extend the due date of the note multiple times, for payments of $130,000, respectively. Each of these payments was recorded as interest expense.

In October 2024, without any additional extension payments required, the Company repaid the note plus accrued interest totaling $3,826,112. An additional $59,800 of accrued interest was forgiven by the lender and recorded as other income in the accompanying consolidated statements of operations during the year ended December 31, 2024.

Loan #28

In December 2024, the Company executed a loan for $5,000,100 with Cohen Global Energy, LLC. Cohen Global Energy is an unrelated third party that holds 50% of Next/Ingle Holdings, LLC. The Company owns the other 50% of Next/Ingle Holdings, LLC. Notwithstanding the split of ownership, the Company retains unilateral governing control over the entity, as outlined in the executed operating agreement. Next/Ingle Holdings LLC is a controlled holding company which has been consolidated into the Company, and shows a non-controlling interest for the 50% not owned. The loan was due March 31, 2025. On June 26, 2025, the note was extended until September 1, 2025. On September 1, 2025 the note was extended until October 1, 2025. On October 1, 2025, the note was extended to November 1, 2025. The Company is currently negotiating an additional extension of the due date, and as of the date of this filing the note is in default.

This note held no issuance discount or interest rate. Imputed interest was assessed on the note for $5,000,100 as of December 31, 2025.

Loan #32

In July 2025, the Company entered into an unsecured note bearing interest at a rate of 18% per annum with a principal amount of $2,000,000 and a contractual term of 12 months. The note was issued with an OID of $100,000, resulting in net cash proceeds of $1,900,000 at inception. The Company also issued 126,373 shares of common stock with the note, and the Company accounted for the issuance of the shares and the note using the relative fair value method. The total relative fair value was allocated as follows: $1,892,705 to the debt instrument (90%) and $207,295 to the shares of stock (10%), resulting in the recording of an additional $207,295 in debt discount. Additionally, $360,000 in interest was converted into Common Stock at a price per share of $1.82 in July of 2025.

The Company is required to make monthly payments in the amount of $100,000. During the year ended December 31, 2025, the Company made repayments of $250,000 and amortized $68,194 in debt discount.

Loan #33

In September 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal amount of $2,950,000, The note was issued at an 18% original issue discount, resulting in gross proceeds of $2,500,000.

The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.54 per share. The noteholder was also issued a warrant to purchase 750,000 shares of common stock at an exercise price of $5.00 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $2,030,922 to the debt instrument (69%) and $919,078 to the warrants (31%), resulting in the recording of an additional $919,078 in debt discount.

As of December 31, 2025, the noteholder converted the entire note balance of $2,950,000 at a price of $1.54 per share, and the Company amortized $1,369,078 in debt discount.

As of December 31, 2025, imputed interest was assessed for this note at a value of $28,625.

Loan #34

In conjunction with Loan #33, the Company issued a note in the principal amount of $295,000 and warrants to purchase 75,000 shares of common stock at an exercise price of $5.000 as a due diligence fee. The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.54 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $203,092 to the debt instrument (69%) and $91,908 to the warrants (31%), resulting in the recording of $91,908 in debt discount.

During the year ended December 31, 2025, the noteholder converted the full balance of $295,000 into 191,559 shares of common stock, and the Company amortized $91,908 in debt discount.

As of December 31, 2025, imputed interest was assessed for this note at a value of $2,308.

Loan #35

In October 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal amount of $1,475,000, The note was issued at an 18% original issue discount, resulting in gross proceeds of $1,250,000.

The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.91 per share. The noteholder was also issued a warrant to purchase 375,000 shares of common stock at an exercise price of $5.00 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $1,071,736 to the debt instrument (73%) and $403,264 to the warrants (27%), resulting in the recording of an additional $403,264 in debt discount.

During the year ended December 31, 2025, the noteholder converted the full balance of the note into common stock and amortized $628,264 in debt discount. See Note 8 for further detail on shares issued for the conversion of notes.

As of December 31, 2025, imputed interest was assessed for this note at a value of $21,700.

Loan #36

In October 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal amount of $1,475,000, The note was issued at an 18% original issue discount, resulting in gross proceeds of $1,250,000.

The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.82 per share. The noteholder was also issued a warrant to purchase 375,000 shares of common stock at an exercise price of $5.00 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $1,106,484 to the debt instrument (75%) and $368,516 to the warrants (25%), resulting in the recording of an additional $368,516 in debt discount.

During the year ended December 31, 2025, the noteholder converted the full balance of the note into common stock and amortized $593,516 in debt discount.

As of December 31, 2025, imputed interest was assessed for this note at a value of $23,085.

Loan #37

In November 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal amount of $2,950,000, The note was issued at an 18% original issue discount, resulting in gross proceeds of $2,500,000.

The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.69 per share. The noteholder was also issued a warrant to purchase 750,000 shares of common stock at an exercise price of $5.00 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $2,135,583 to the debt instrument (72%) and $814,417 to the warrants (28%), resulting in the recording of an additional $814,417 in debt discount. See Note 8 for further detail on shares issued for the conversion of notes.

As of December 31, 2025, the noteholder converted $2,749,800 of the note into common stock and amortized $1,264,417 in debt discount.

As of December 31, 2025, imputed interest was assessed for this note at a value of $40,629.

Loan #38

In conjunction with Loan #35, the Company issued a note in the principal amount of $147,500 and warrants to purchase 37,500 shares of common stock at an exercise price of $5.00 as a due diligence fee. The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.91 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $107,174 to the debt instrument (73%) and $40,326 to the warrants (27%), resulting in the recording of $40,326 in debt discount.

As of December 31, 2025, the noteholder converted the full balance of the note into common stock and amortized $40,326 in debt discount. See Note 8 for further detail on shares issued for the conversion of notes.

As of December 31, 2025, imputed interest was assessed for this note at a value of $970.

Loan #39

In conjunction with Loan #36, the Company issued a note in the principal amount of $147,500 and warrants to purchase 37,500 shares of common stock at an exercise price of $5.00 as a due diligence fee. The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.82 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $100,491 to the debt instrument (68%) and $47,009 to the warrants (32%), resulting in the recording of $47,009 in debt discount.

During fourth quarter 2025, the noteholder converted the full balance of the note into common stock and amortized $47,009 in debt discount. See Note 8 for further detail on shares issued for the conversion of notes.

Loan #40

In conjunction with Loan #37, the Company issued a note in the principal amount of $295,000 and warrants to purchase 75,000 shares of common stock at an exercise price of $5.00 as a due diligence fee. The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.69 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $213,558 to the debt instrument (72%) and $81,442 to the warrants (28%), resulting in the recording of $81,442 in debt discount.

As of December 31, 2025, the noteholder converted $204,000 of the note into common stock and amortized $81,442 in debt discount. See Note 8 for further detail on shares issued for the conversion of notes.

Notes Payable – Vehicles (Loan # 29)

The following is a summary of the Company’s notes payable for its vehicles at December 31, 2025 and December 31, 2024, respectively:

The following is a detail of the Company’s notes payable for its vehicles at December 31, 2025 and December 31, 2024, respectively:

Notes Payable - Vehicles

Debt Maturities

The following represents future maturities of the Company’s various debt arrangements as follows:

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 didnot have any assets or liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024, respectively.

**Note 7 –Commitments and Contingencies **

Operating Leases

The Company accounts for leases in accordance with ASC 842: Leases, which requires lessees to apply the right-of-use (ROU) model by recognizing a right-of-use asset and a lease liability for all leases with terms exceeding 12 months. Lease classification determines the pattern of expense recognition in the consolidated statement of operations:

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):

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:

Practical Expedients and Lease Components

The Company applies certain practical expedients to simplify lease accounting:

Lease Term and Expense Recognition

Company Lease Commitments

As of December 31, 2025, and 2024, the Company hadno finance leases under ASC 842.

On December 3, 2021, the Company entered into a lease agreement for 5,778 square feet of office space, commencing January 1, 2022.

The tables below present information regarding the Company’s operating lease assets and liabilities at December 31, 2025 and 2024, respectively:

The components of lease expense were as follows:

Future minimum lease payments under non-cancellable leases for the years ended December 31, were as follows:

Operating Leases – Related Party

On August 1, 2023, the Company entered into a 48-month lease agreement for 1,200 square feet of office space owned by the Company’s former Chief Technology Officer (CTO).

Right-of-Use Asset - Lease Termination – Related Party

On October 1, 2024, the existing lease was terminated with no additional consideration paid for early termination. Additionally, no penalties were incurred. For financial accounting purposes, the transaction was insignificant.

New Right-of-Use Asset – Related Party

On October 1, 2024, the Company signed a lease for 3,500 square feet of office space owned by the Company’s Chief Technology Officer. The lease term is 36 months, and the total monthly payment is $10,300, including base rent, estimated operating expenses and sales tax.

The lease is subject to a 3% annual increase. An initial Right of Use (“ROU”) asset of $340,368 will be recognized as a non-cash asset addition.

Future minimum lease payments under non-cancellable leases for the years ended December 31, were as follows:

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 $3,941,280. Each lease schedule is structured as a Terminal Rental Adjustment Clause (TRAC) lease and has been classified as a finance lease under ASC 842, resulting in the transaction being accounted for as a failed sale-leaseback. Accordingly, the trucks remain on the Company’s balance sheet and the sale proceeds are reflected as a financing obligation.

Each lease schedule carries a 36-month non-cancellable term, with monthly payments ranging from $25,515 to $35,685. The Company’s payment obligations are absolute and unconditional, with no right of setoff, abatement, or early termination. At the expiration of each lease term, the Company has the option to purchase the equipment at the TRAC Amount, which represents the parties’ agreed estimate of fair market value at end of term, or to return the equipment, in which case a rent adjustment is made based on the difference between realized sale proceeds and the TRAC Amount. The leases are governed by the laws of the State of Texas.

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:

For the year ended December 31, 2025, the Company recognized depreciation expense of approximately $531,726 and interest expense of approximately $259,618 related to these finance lease obligations. As of December 31, 2025, the aggregate finance lease liability is $3,577,478, presented within long-term notes payable on the balance sheet.

Employment Agreements

Year Ended December 31, 2024

During 2024, the Company executed employment agreements with certain of its officers and directors. These agreements contain various compensation arrangements pertaining to the issuance of stock and cash. The stock portion of the compensation contains vesting provisions and are expensed as earned.

Chief Technology Officer

In April 2023, the Company’s CTO was entitled to receive up to 130,000 shares of common stock, subject to vesting provisions for services rendered. These shares had a fair value of $832,000 on the grant date based upon the quoted closing trading price ($6.40/share).

For the year ended December 31, 2023, the CTO vested in 104,000 shares of common stock, having a fair value of $665,600. Additionally, the remaining 26,000 shares vest 13,000 each in April 2025 and 2026, respectively. A corresponding expense totaling $52,000 was recorded for those shares (26,000) which were part of this employment agreement that had not yet vested.

Total expense recorded during the year ended December 31, 2024 for the CTO was $34,666.

Total expense recorded during the year ended December 31, 2025 for the CTO was $34,666.

This expense was recorded as a component of general and administrative expenses for the years ended December 31, 2025 and 2024, respectively.

Board Members

In 2025, the Company granted certain members of the board of directors an aggregate of 450,000 shares of common stock having a fair value of $1,156,500 on the grant date based upon the quoted closing trading price ($2.57/share).

Additionally, the Company booked a liability for stock payable to board members for $520,000.

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 $4.1 million to acquire the development rights for a solar and battery energy storage project located in Ingle, Florida. The transaction was premised on the understanding that the project would support a viable power purchase agreement with JEA, the community-owned electric utility serving Jacksonville, Florida (“JEA”), at a rate of approximately $49/MW, and that the project could connect to JEA’s infrastructure through existing easements for a “gen-tie” line. The Next Plaintiffs allege that defendants made and repeated these representations in the parties’ Letter of Intent (“LOI”) and Membership Interest Purchase Agreement (“MIPA”), while contractually restricting the Next Plaintiffs from contacting JEA directly and agreeing to keep the Next Plaintiffs updated regarding communications with JEA. The Next Plaintiffs further allege that defendants failed to disclose that, prior to closing, JEA had informed defendants that the proposed $49/MW pricing would not be acceptable, that JEA would not permit the project to utilize its easements for the proposed gen-tie line, and that new resource planning was underway, all of which allegedly undermined the feasibility and value of the project. According to the Next Plaintiffs, these facts were discovered only after closing when the Next Plaintiffs contacted JEA directly. The Next Plaintiffs thereafter demanded indemnification and reimbursement, which defendants allegedly refused, and the Next Plaintiffs commenced this action asserting claims for breach of the LOI, breach of the MIPA, fraud in the inducement, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, unjust enrichment, breach of fiduciary duty, and rescission, seeking damages including the return of the approximately $4.1 million paid, together with attorneys’ fees, interest, and punitive damages.

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 and is scheduled for oral argument on April 9, 2026[PW1] . 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 $4.1 million, although the amount of damages claimed may fluctuate depending upon the evidence developed during discovery and any expert analysis relating thereto. Discovery has not yet commenced, and expert analysis concerning the nature and extent of the damages alleged in the Complaint has not yet been undertaken. Any estimate of potential damages will be further developed during the discovery process and with the assistance of qualified experts.

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 $5,000,000 promissory note in favor of the plaintiff lender, with repayment due by March 31, 2025 or upon receipt of project financing, and the borrower’s obligations were personally guaranteed by the guarantor, the Company’s CEO Michael D. Farkas, under an unconditional guaranty. Plaintiff filed suit asserting claims for breach of the promissory note against the borrower and breach of the guaranty against the guarantor. This matter is currently in its early stages. Next/Ingle has filed an Answer and Affirmative Defenses, and the pleadings are now closed. Among other defenses, Next/Ingle asserts that the loan underlying the action may be invalid due to alleged criminal usury. The parties have also begun engaging in informal settlement discussions. Next/Ingle intends to vigorously pursue its asserted defenses and any potential recovery arising therefrom, but it remains too early in the proceedings to meaningfully evaluate the ultimate outcome of the matter. Discovery has not yet commenced and expert analysis concerning the nature and extent of any potential damages has not yet been undertaken. Accordingly, any estimate of potential damages or exposure may fluctuate depending upon the evidence developed during discovery and any expert analysis relating thereto.

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.

**Note 8 –Stockholders’ Equity (Deficit) **

Change in Authorized Shares

On June 14, 2024, the Company’s Board of Directors approved an increase in authorized common stock from 50,000,000 to 500,000,000 shares. This increase was made to:

As of December 31, 2024, the Company had four (4) classes of stock, detailed as follows:

Preferred Stock (Undesignated)

The Company’s undesignated preferred stock provides flexibility for future corporate financing and strategic transactions.

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.

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.

Common Stock

Summary of All Classes of Equity

The following table summarizes the various classes of equity the Company is authorized to issue at December 31, 2025.

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.

All issuances under these plans for the years ended December 31, 2025 and 2024 are disclosed in the consolidated financial statements.

Equity Transactions for the Year Ended December 31, 2025

Stock Issued for Cash and Warrants – Public Offering

On February 18, 2025, the Company sold 5,000,000 shares of common stock for gross proceeds of $15,000,000 ($3/share). In connection with this offering, the Company paid direct offering costs of $1,538,914, resulting in net proceeds of $13,461,086.

The proceeds from the offering are expected to be used for:

● Expanding operations and infrastructure;

● Repaying outstanding debt; and

● Funding general corporate purposes, including working capital requirements

Additionally, the Company granted the underwriter the option to purchase up to 750,000 additional over-allotment shares of common stock at $3/share, for a period of 45 days (through March 3, 2025). In connection with this option, the Company issued an additional 75,378 shares of common stock for gross proceeds of $226,134 ($3/share). In connection with this offering, the Company paid direct offering costs of $18,091, resulting in net proceeds of $208,043.

The underwriter was also issued 250,000 warrants for services rendered in connection with the offering, which will be accounted for as a direct offering cost. These warrants are exercisable at $3.75/share. These warrants are exercisable beginning 6 months after the grant date and for an additional 4.5 years through February 13, 2030.

Stock Issued for Services

In the year ended December 31, 2025, the Company issued 17,970,160 shares of common stock to consultants for services rendered, having a fair value of $42,589,563 ($1.37 - $3.21/share), based upon the quoted closing trading price.

Stock Issued as Loan Extension Fee

In connection with the extension of loan #5, the Company was required to pay a fee of $150,000 in common stock. The Company issued 41,437 shares of common stock ($3.62/share) and recorded additional interest expense.

In connection with the extension of loan #12, the Company was required to pay fees of 386,000 shares of common stock with a fair value of $975,260 ($1.59 - $3.31/share) based upon the quoted closing trading price and recorded as additional interest expense.

In connection with the extension of loan #32, the Company was required to pay fees of 126,373 shares of common stock with a fair value of $207,295 (1.64/share) based upon the quoted closing trading price and recorded as additional interest expense. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as follows: $1,892,705 to the debt instrument (90%) and $207,295 to the warrants (10%). The Company recorded a $207,295 debt discount to be amortized over the life of the note.

Stock Issued for Conversion of Accounts Payable

The Company issued 22,013 shares with a fair value of $68,681 ($3.12/share) to a vendor to settle accounts payable of $40,000, resulting in a loss on settlement of liabilities of $28,681.

Stock Issued for Conversion of Notes Payable

The Company issued 256,667 shares of common stock to convert the remaining balance of $770,000 on loan #17 at a price per share of $3.00 or fair value of $770,000.

The Company issued 450,000 shares of common stock to convert the flat-rate interest owed of $1,350,000 on loans #30 and 31 at a price per share of $3.00, or fair value of $1,350,000.

The Company issued 1,081,395 shares of common stock to convert $2,075,000 of principle on Loan #9 at a price per share of $1.92 or fair value of $2,075,000.

The Company issued 197,802 shares of common stock to convert $360,000 of principle in Loan #32 at a price per share of $1.82 or fair value of $360,000.

The Company issued 6,863,305 shares of common stock to convert $8,649,800 of principle in Loans #33 and 35-37($0.92-$1.91 per share).

The Company issued 590,908 shares of common stock to convert $794,000 of principle in Loans #34 and 38-40 ($0.92-$1.91 per share).

The Company issued 2,000,000 shares of its common stock to its Chief Executive Officer and Executive Chairman, Michael D. Farkas, in connection with the conversion of $2,080,000 in accrued interest on related party indebtedness. The shares were issued at a conversion price of $1.04 per share.

Stock Conversion – Related Party

On September 18, 2025, the Company entered into a Stock Purchase Agreement with its Chief Executive Officer and Executive Chairman, Michael D. Farkas, pursuant to which the Company agreed to issue 1,000,000 restricted shares of its common stock at a price of $1.67 per share in exchange for the conversion of $1,670,000 of outstanding related party indebtedness.

On December 2, 2025, the Company issued 2,000,000 shares of its common stock to its Chief Executive Officer and Executive Chairman, Michael D. Farkas, in connection with the conversion of $2,080,000 in accrued interest on related party indebtedness. The shares were issued at a conversion price of $1.04 per share.

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 1,400,000 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.

During the year ended December 31, 2025,83,000 shares of Series A Preferred Stock were converted into 375,566 shares of common stock.

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 December 31, 2025 and December 31, 2024, the Company had accrued dividends totaling $147,500 and $258,271, respectively. In 2025, the Company issued 93,576 shares of common stock to settle the outstanding dividends due and another 188,517 in newly-accrued dividends.

Equity Transactions for the Years Ended December 31, 2024

Stock Issued for Debt Issuance Costs – Related Party

The Company issued 425,978 shares of common stock in connection with the issuance of several notes payable (See Note 5), having a fair value of $2,020,387 ($2.81 - $7.10/share), based upon the quoted closing trading price.

This lender (an entity controlled by the Company’s Chief Executive Officer) holds a greater than 20% ownership of the Company.

Vesting of Employee Shares – Related Parties

The Company issued 88,336 shares of common stock (par value of $9) in connection with the vesting of shares previously granted in 2023 to various board directors. The effect of issuing these shares had no net effect of stockholder’s deficit as the share issuance was reflected at par value. The Company recorded $251,334 of expense in 2024, related to the vesting of these shares in 2024.

The Company issued 136,484 shares of common stock to various board directors for services rendered in 2024, having a fair value of $520,000 ($3.81/share), based upon the quoted closing trading price.

Total share based payments with board directors were $771,334.

Also, see Note 7 for the expense recorded in 2024 of $34,666 related to the vesting of shares for the Company’s Chief Technology Officer.

Total share based payments with board directors and officers for the year ended December 31, 2024 totaled $806,000.

Stock Issued for Services

The Company issued 212,730 shares of common stock to consultants for services rendered, having a fair value of $725,640 ($0.0001 - $3.52/share), based upon the quoted closing trading price.

Series B, Preferred Stock Issued for Cash – Related party

The Company issued 140,000 shares of Series B, preferred stock to a related party for $1,400,000 ($10/stated value per share).

The related party holds a greater than 20% ownership of the Company.

Common Stock Issued in Debt Conversion – Related party

The Company converted all outstanding principal ($6,215,000) and accrued interest ($316,130) into 3,525,341 shares of common stock. At the time of conversion, the lender executed a 150% penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $3,265,565 for a total of $9,796,696 of debt that was converted. As a result of this debt conversion, the balance due to this lender was $0. The fair value of the common stock at the conversion date was $2.76/share. Accordingly, since this was a related party transaction, no gain on debt extinguishment was recorded. The related party holds a greater than 20% ownership of the Company. See Note 5.

Stock Issued to Settle Accounts Payable

The Company issued 2,703 shares of common stock to a vendor for services rendered, having a fair value of $10,000 ($3.70/share), based upon the quoted closing price.

Series A, Preferred Stock Issued in Debt Conversion – Related party

On August 16, 2024, the Company converted all outstanding principal ($2,420,000) and accrued interest ($0) into 363,000 share of Series A, Preferred Stock, $10/share stated value. At the time of conversion, the lender executed a 150% penalty interest feature. As a result, and just prior to conversion, the Company increased its interest expense and related debt by $1,210,000 for a total of $3,630,000 of debt that was converted. As a result of this debt conversion, the balance due to this related party lender was $0.

The related party holds a greater than 5% ownership of the Company.

See Note 5 regarding debt conversion and related loss on debt extinguishment.

Series A and B – Preferred Stock Dividends Payable in Common Stock – Related Parties

In accordance with the terms of the Company’s Series A and B, Preferred stock, the Company is required to accrue dividends on a quarterly basis. Similar to the Series A and B, convertible preferred stock, dividends are accrued using a fixed conversion price. There are no other provisions that could result in a variable number of shares required for settlement in the future.

Additionally, the Company has considered relevant accounting guidance, and has determined that there are no provisions related to its dividends that would require derivative liability treatment.

The Company has calculated its dividends payable as follows:

Restricted Stock and Related Vesting

A summary of the Company’s non-vested shares (due to service time-based restrictions) as of December 31, 2025 and December 31, 2024, is presented below:

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 consolidated statements of operations.

The Company recognizes forfeitures of restricted shares as they occur rather than estimating a forfeiture rate. Any unvested share-based compensation is reversed on the date of forfeiture, which is typically due to service termination.

At December 31, 2025, unrecognized stock compensation expense related to restricted stock was $429,298, which will be recognized over a weighted-average period ofone year.

During the year ended December 31, 2025, and 2024, the Company recognized compensation expenses of $1,471,611 and $286,000, respectively, related to the vesting of these shares.

Stock Options

Stock option transactions for the year ended December 31, 2025 is summarized as follows:

Year Ended December 31, 2025

The Company granted 4,307,000 stock options, having a fair value of $6,084,120. That is expensed over the vesting period. $3,539,822 of this expense was recognized during the year ended December 31, 2025.

The fair value of the stock options granted in 2025 were determined using the Black-Scholes Option pricing model with the following assumptions:

Warrants

Warrant activity for the years ended December 31, 2025 and 2024 are summarized as follows:

**Note 9 –Asset Purchase Agreements **

Yoshi, Inc.

In 2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, the Company acquired various vehicles as part of a growth and expansion plan.

The Company has access to and utilizes these vehicles for mobile fueling as part of its ongoing operations.

Since the transaction did not close until February 2025, the payments made/due as of December 31, 2024, have been classified as a component of deposit on future asset purchase totaling $2,035,283.

Consideration for this asset purchase consisted of the following:

1 Cash - $1,250,000;

2 Common Stock –201,613 shares of common stock; having a fair value of $535,283 ($2.66/share), based upon the quoted closing price; and

3 Note Payable - $250,000

1 At December 31, 2024, the Company had paid $650,000. The balance of $600,000 was paid in February 2025.

2 All shares were issued as of December 31, 2024

3 At December 31, 2024, the $250,000 had not yet been paid. In February 2025, the balance was paid.

Shell

In 2024, the Company executed an asset purchase agreement with Shell Retail and Convenience Operations, d/b/a Shell TapUp and d/b/a Instafuel (“Shell”) to purchase 73 vehicles ($5,139,877) and above ground storage tanks ($80,000) as part of a growth and expansion plan for a total purchase price of $5,219,877. The Company began its Shell related operations in January 2025, and at that time placed these assets into service. These vehicles have a useful life of five (5) years.

Right-of-Use Assets – Operating Leases - Shell

In connection with the closing of the Shell transaction, the Company assumed certain operating leases (parking lots and offices) subsequent to year end. These leases had commencement dates ranging from January – February 2025 ending between October 2028 – June 2029. Total payments over the remaining lease terms are approximately $814,000.

Note 10 –Intangible Assets

Acquisition of Stat-EI, Inc. (Business Combination)

In January 2024, the Company acquired 100% of the equity interests in STAT in exchange for $5,500,000. STAT has patented technology that will be used in the Company’s expected future operations. Prior to the acquisition, the operations of STAT were insignificant.

In 2023, the Company paid a deposit of $250,000 towards this acquisition. In 2024, the Company paid an additional $1,550,000 for total cash consideration paid of $1,800,000 at closing. The balance of $3,700,000 was financed through a note payable. This note bears interest at 7%, is unsecured was due in May 2024 (“initial maturity date”). The Company also has the option to extend the due date to July 2024 for no additional consideration or change in terms. Subsequent to the initial maturity date, the lender has agreed to extend the due date of the note multiple times, for payments of $130,000, respectively. Each of these payments was recorded as interest expense.

In October 2024, without any additional extension payments required, the Company repaid the note plus accrued interest totaling $3,826,112. An additional $59,800 of accrued interest was forgiven by the lender and recorded as other income in the accompanying unaudited consolidated statements of operations during the year ended December 31, 2024.

The Company has accounted for this transaction as a business combination.

The table below summarizes the estimated fair value of the assets acquired and liabilities assumed:

The valuation of the intangible assets acquired was based upon an independent third party valuation specialist.

At the time of acquisition, STAT had no revenues and historical losses from operations, it was deemed an immaterial acquisition and no additional financial reporting was required.

During the year ended December 31, 2025, the Company recognized a loss on impairment for the remaining value of the intangibles related to the acquisition of Stat-EI in the amount of $4,606,664.

See Note 5 for discussion of these intangible assets acquired from STAT in exchange for debt.

Intangibles consisted of the following at December 31, 2025 and December 31, 2024, respectively:

Amortization expense for the year ended December 31, 2025 and 2024 was $893,336 and $446,668, respectively. Impairment expense for the year ended December 31, 2025 and 2024 was $4,606,664 and $0, respectively.

**Note 11 –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 $3,929,161 was made by Next/Ingle Holdings LLC, a 50% owned subsidiary of Next Holding, to acquire 100% of the membership interests in GSPP JEA Ingle FL, LLC, a project company controlled by GSPP Holdco III, LLC. GSPP JEA Ingle FL, LLC holds the rights to a utility-scale solar energy project located in Bryceville, Florida. The purchase price consisted of a $3,600,000 acquisition fee and reimbursement for previously incurred capitalized development costs of $329,161 for a total payment of $3,929,161. These reimbursed costs included expenses related to securing a real estate option, engineering studies, and interconnection due diligence with the local utility.

To facilitate the acquisition, Next Holding formed Next/Ingle Holdings LLC, in which it holds a 50% ownership interest, with the remaining 50% owned by Cohen Global Energy, LLC, an unrelated third party. Notwithstanding the split of ownership, the Company retains unilateral governing control over the entity, as outlined in the executed operating agreement. Next/Ingle Holdings LLC is a controlled holding company which has been consolidated into the Company, and shows a non-controlling interest for the 50% not owned.

Next/Ingle Holdings LLC obtained a $5,000,100 loan from this third party to fund the acquisition (See Note 5). GSPP JEA Ingle FL, LLC had no employees, revenue-generating activities, or ongoing operations prior to the acquisition. Its only asset is the set of rights related to the Bryceville solar energy project, which is still in development. At the time of the transaction, the project was not yet operational; development activities were limited to permitting, feasibility analysis, and utility coordination.

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:

During the year ended December 31, 2025, the Company recognized an impairment loss on this project deposit of $3,929,161.

**Note 12 –Segment Reporting **

The Company operates intwo reportable segments: Energy Infrastructure and Mobile Fuel Delivery. The Company’s segments were determined based on the economic characteristics of its products and services, its internal organizational structure, the manner in which operations are managed and the criteria used by the Company’s CODM to evaluate performance, which include revenue, gross margin, and operating profit.

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.

The following tables present certain financial information related to our reportable segments:

Note 13 –Income Taxes

The components of the deferred tax assets and liabilities at December 31, 2025 and 2024 were approximately as follows:

The components of the income tax benefit and related valuation allowance for the years ended December 31, 2025 and 2024 were as follows:

A reconciliation of the provision for income taxes for the years ended December 31, 2025 and 2024 as compared to statutory rates is as follows:

Federal net operating loss carry forwards at December 31, 2025 and 2024 were approximately as follows:

The Company reviews its filing positions for all open tax years in all U.S. Federal and State jurisdictions where the Company is required to file. The tax years subject to examination include the years 2021 and forward.

There are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company incurs an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors.

Note 14 -Subsequent Events

Subsequent to December 31, 2025, the Company had the following transactions:

In January 2026, the Company terminated its At-the-Market Sales Agreement with ThinkEquity, H.C. Wainwright, and Roth Capital Partners, effective January 17, 2026, and indicated no immediate plans for a replacement ATM program. The Company also raised modest equity capital through a series of private stock purchase agreements, selling an aggregate of approximately 1,050,000 shares for total proceeds of approximately $1,125,000 at prices ranging from $0.75 to $1.08 per share across transactions dated January 20, January 28–29, and February 12–18, 2026.

In March and April 2026, the Company undertook a series of debt restructuring and new financing activities. On March 9, 2026, it entered into a Future Receivables Sale and Purchase Agreement, selling 6.87% of future receipts for $2,100,000 in gross consideration, with CEO Michael D. Farkas personally guaranteeing the obligation. As security for payment and performance of the Company’s obligations pursuant to the Future Receivables Sale and Purchase Agreement, the Company agreed to grant to the purchaser a first priority lien on all of the Company’s interest in all accounts, including, but not limited to deposit accounts, accounts receivables, other receivables and inventory, whether existing as of the effective date of the Future Receivables Sale and Purchase Agreement or thereafter acquired.

On March 11, 2026, the Company issued 3,181,818 shares of common stock at $0.55 per share to a noteholder in exchange for the forgiveness of $1,750,000 of outstanding principal, effectively retiring that note.

On April 1, 2026, the Company issued a senior secured convertible promissory note in favor of Leviston Resources, LLC (“Leviston”) in the face amount of $1,724,444 (net proceeds of $1,552,000 after a $172,444 OID), and issued 243,300 shares of common stock to Leviston as additional consideration, with Leviston receiving most-favored-nation, right of first refusal, rollover rights on future financings, and piggyback registration rights. The Leviston note bears interest at a rate of 10% and matures on October 1, 2026. Interest is guaranteed for the entirety of the six-month term of the Leviston note, regardless of any reduction of the principal amount, conversion or prepayment. The Leviston note is a senior secured obligation of the Company, with first priority over all current and future indebtedness; provided, however, that the Company may close equipment financing, with such financing secured by first priority lien(s) against the equipment being financed and second priority lien(s) (behind Leviston’s security interest) against the Company’s other assets. The Company’s obligations under the Leviston note are secured pursuant to the terms of the Pledge and Security Agreement, dated as of April 1, 2026, by and between the Company and Leviston (the “Leviston Security Agreement”).

The Leviston note is convertible into shares of the Company’s common stock only upon and following an Event of Default (as defined in the Leviston note), at the option of Leviston. Upon an Event of Default, Leviston may convert any portion of the outstanding principal, accrued interest, default interest, and a fixed conversion fee of $1,950 per conversion into common stock. The conversion price will be equal to 80% of the average of the three lowest daily volume-weighted average prices (VWAP) of the common stock during the 15 trading days immediately preceding the conversion date, subject to a floor price of $0.10 per share.

The Leviston note contains an equity blocker that prohibits Leviston from converting the Leviston note if such conversion would result in Leviston and its affiliates beneficially owning more than 4.99% of the Company’s outstanding common stock; provided, however, that Leviston may elect to increase this limitation to 9.99% upon 61 days’ prior notice to the Company, or immediately if Leviston is not subject to the reporting requirements of Section 13 of the Securities Exchange Act of 1934, as amended.

In addition, the Leviston note contains a hard cap on the number of shares issuable to Leviston at 19.99% of the outstanding shares. Pursuant to the terms of the Leviston note, the parties agreed that, notwithstanding any other conversion, adjustment or other provision, the Company may not issue a cumulative number of shares of common stock to Leviston and its affiliates pursuant to the Leviston note and the other transaction documents that would exceed the 19.99% limitation set forth in the Nasdaq Stock Market’s (“Nasdaq”) Listing Rule 5635(d), unless the Company obtains stockholder approval to exceed such threshold in accordance with Nasdaq rules.

The Company may prepay the Leviston note at any time prior to October 1, 2026; provided, however, that (i) if the prepayment date occurs within 60 days of April 1, 2026, the Company must pay Leviston the outstanding principal amount, all guaranteed interest for the full six-month term (regardless of how much of the term has elapsed as of the prepayment date), and any other amounts due under the Leviston note, with no prepayment premium; and (ii) if the prepayment date occurs after 60 days from April 1, 2026, the Company must pay Leviston 110% multiplied by the sum of (a) the outstanding principal amount, (b) all guaranteed interest for the full six-month term (regardless of how much of the term has elapsed as of the prepayment date), and (c) any other amounts due under the Leviston note.

The Leviston note contains customary Events of Default, the occurrence of which grant Leviston, among other things, the right to accelerate the entire unpaid balance of the Leviston note. Upon the occurrence of an Event of Default, the Leviston note provides that, among other things, all outstanding obligations under the Leviston note and related transaction documents, including principal, accrued interest, monitoring fees, and legal expenses, will automatically increase to 150% of the then-outstanding balance. Additionally, all outstanding obligations will accrue interest at a default rate equal to the lesser of 18% per annum or the maximum rate permitted by law.

On April 1, 2026, in connection with the issuance of the Leviston note, the Company and Leviston entered into the Leviston Security Agreement. Pursuant to the terms of the Leviston Security Agreement, the Company granted to Leviston a continuing, first-priority security interest in substantially all of its assets to secure the prompt payment and performance of its obligations under the Leviston note and related transaction documents. The collateral includes, but is not limited to, the Company’s accounts, inventory, equipment, general intangibles, deposit accounts, and 100% of the equity interests in the Company’s directly owned subsidiaries (the “Pledged Equity”). The Company is subject to negative covenants that, subject to certain exceptions, prohibit the sale, lease, or encumbrance of the collateral without Leviston’s prior written consent. Upon the occurrence and during the continuance of an Event of Default, Leviston may, among other remedies: (i) accelerate all obligations and take possession of the collateral; (ii) exercise all voting and consensual rights pertaining to the Pledged Equity; (iii) appoint a receiver over the Company’s assets; and/or (iv) sell the collateral at public or private sales to satisfy the outstanding debt.

The security interest will terminate only upon the full satisfaction or termination of the Company’s obligations under the Leviston note.

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., providing for a term loan in the principal amount of $750,000 (net disbursement of $712,500 after a $37,500 origination fee) with a total repayment obligation of $1,050,000, payable in 24 weekly installments of $43,750 through October 1, 2026, reflecting a stated APR of 173.06%. The Cashera facility is secured by a first-priority lien on all assets of the Company and its subsidiaries, and is personally guaranteed by Mr. Farkas, the Company’s Chief Executive Officer, Chairman of the Board and substantial stockholder, and cross-guaranteed by NextNRG Ops LLC, a wholly owned subsidiary of the Company.

On March 16, 2026, the Company received written notice (the “Bid Price Notice”) from the Nasdaq Listing Qualifications Department (the “Nasdaq Staff”) indicating that the Company is not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market. The notification of noncompliance has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market under the symbol “NXXT,” and the Company is currently monitoring the closing bid price of its common stock and evaluating its alternatives, if appropriate, to resolve the deficiency and regain compliance with this rule.

The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. The Bid Price Notice indicated that the Company will be provided 180 calendar days, or until September 14, 2026, in which to regain compliance. If at any time during this period the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq Staff will provide the Company with written confirmation of compliance and the matter will be closed.

Alternatively, if the Company fails to regain compliance with the Minimum Bid Price Requirement prior to the expiration of the 180 calendar day period, but meets the continued listing requirement for market value of publicly held shares and all of the other applicable standards for initial listing on the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then the Company may be granted an additional 180 calendar days to regain compliance with the Minimum Bid Price Requirement.

There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement, even if it maintains compliance with the other listing requirements. The Company is considering actions that it may take in response to the Bid Price Notice in order to regain compliance with the continued listing requirements, but no decisions regarding a response have been made at this time.