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):

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

Notes to Consolidated Financial Statements

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 had no finance leases under ASC 842.

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

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

 Schedule of Operating Lease Assets and Liabilities

The components of lease expense were as follows:

 Schedule of Components of Lease Expense

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

Notes to Consolidated Financial Statements

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

 Schedule of Future Minimum Payments Under Non-Cancellable Leases

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.

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

Notes to Consolidated Financial Statements

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

 Schedule of Future Minimum Lease Payments Under Non-Cancellable Lease

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:

 Summarizes Finance Lease 

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.

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

Notes to Consolidated Financial Statements

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.

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

Notes to Consolidated Financial Statements

This matter is currently in its early stages and the pleadings have not yet closed. Defendants have filed a Motion to Dismiss. Oral arguments were held on April 9, 2026. 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.