Item 1A. Risk Factors
Any investment in our securities involves a high degree of risk. You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Cautionary Note Regarding Forward Looking Statements.”
Our business, financial condition or operating results could be materially adversely affected by any of these risks. In such case, the trading price of our common stock could decline, and our stockholders may lose all or part of their investment in our securities.
Risks Related to Our Business
We will require substantial additional capital to support our operations and growth plans, and such capital may not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.
Revenues generated from our operations are not presently sufficient to sustain our operations and our current liabilities substantially exceeded our current assets as of December 31, 2025. Therefore, we will need to raise additional capital in the future to continue our operations.
We anticipate that our principal sources of liquidity will only be sufficient to fund our activities through April 30, 2026. In order to have sufficient cash to fund our operations beyond April 30, 2026, we will need to raise additional equity or debt capital.
There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. We will be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition. Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to curtail or cease operations.
Uncertain geopolitical conditions and trade policies could adversely affect our results of operations.
Uncertain and rapidly evolving geopolitical conditions, including ongoing armed conflicts in the Middle East and Ukraine, heightened tensions in the Strait of Hormuz through which approximately 20 million barrels per day of crude oil transit, expanded sanctions regimes, and the imposition of new tariffs and trade restrictions, may cause demand for our products and services to be volatile, cause abrupt changes in our customers’ buying patterns, and interrupt our ability to supply products or limit customers’ access to financial resources and ability to satisfy obligations to us. In particular, U.S. tariff rates have reached their highest levels since World War II, reshaping global trade flows and increasing costs across the energy supply chain. Retaliatory tariffs imposed by trading partners, potential further escalation of trade disputes, and supply chain disruptions resulting from geopolitical realignment could increase our cost of goods, reduce the availability of critical equipment and parts for our fleet and infrastructure, and negatively impact customer demand. Specifically, terrorist attacks, the outbreak or escalation of war, the existence of international hostilities, or the imposition of broad-based trade restrictions could damage the world economy, adversely affect the availability of and demand for crude oil and petroleum products, adversely affect both the price of our fuel and our ability to obtain fuel, and disrupt global supply chains upon which we and our suppliers depend.
Changes in U.S. trade policy, including tariffs and export controls, could increase our costs and disrupt our supply chain.
The imposition of significant tariffs on imported goods, including steel, aluminum, electronic components, and other materials used in our fuel delivery fleet, EV charging equipment, and smart microgrid infrastructure, has increased and may continue to increase our capital and operating costs. U.S. tariff rates have reached historically elevated levels, and retaliatory measures by trading partners have created uncertainty across global supply chains. These trade disruptions have contributed to delays in and, in some cases, abandonment of renewable energy projects industry-wide. NextNRG’s smart microgrid and wireless charging hardware may rely on components sourced from countries subject to tariffs or export controls, and any further escalation of trade restrictions could increase hardware costs, delay product development timelines, and reduce the cost competitiveness of our offerings. Additionally, trade policy uncertainty may reduce business and investor confidence in the energy sector, which could adversely affect our ability to raise capital on favorable terms. We cannot predict the scope, duration, or ultimate impact of current or future trade policies on our business, financial condition, or results of operations.
Operating and litigation risks may not be covered by insurance.
Our operations are subject to all of the operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing combustible liquids such as gasoline for use by consumers. These risks could result in substantial losses due to personal injury and/or loss of life, and severe damage to and destruction of property and equipment arising from explosions and other catastrophic events, including acts of terrorism. Additionally, environmental contamination could result in future legal proceedings. There can be no assurance that our insurance coverage will be adequate to protect us from all material expenses related to pending and future claims or that such levels of insurance would be available in the future at economical prices. Moreover, defense and settlement costs may be substantial, even with respect to claims and investigations that have no merit. If we cannot resolve these matters favorably, our business, financial condition, results of operations and future prospects may be materially adversely affected.
Changes in climate change laws, regulations, and federal energy policy, and the market response to these changes, may negatively impact our operations.
The regulatory landscape governing greenhouse gas (“GHG”) emissions and alternative energy is subject to significant and rapid change. While some states have adopted laws and regulations limiting GHG emissions for certain industry sectors, federal energy policy has shifted meaningfully. Executive Order 14154, “Unleashing American Energy,” signed in January 2025, directed federal agencies to pause certain grant program disbursements under the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”) pending program reviews. In addition, federal clean vehicle tax credits under Sections 25E, 30D, and 45W of the Internal Revenue Code were repealed for vehicles acquired after September 30, 2025, and the Alternative Fuel Vehicle Refueling Property Tax Credit under Section 30C was repealed for chargers placed in service after June 30, 2026. Proposed rules would also roll back fuel economy standards to model year 2022 levels. These policy reversals could reduce consumer incentives to adopt EVs and alternative fuels, which may adversely affect NextNRG’s addressable market while simultaneously reducing pressure on traditional fuel demand. Conversely, future administrations or state-level action may reimpose or strengthen GHG regulations, which could impose significant additional compliance costs on us, our suppliers, and our customers. Mandatory reporting by our customers and suppliers could have an effect on our operations or financial condition. The unpredictability of the regulatory environment makes long-term planning difficult and could have a material adverse effect on our business, financial condition, and results of operations.
Our auditors have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securities will have little or no value.
M&K CPA’s, PLLC, our independent registered public accounting firm for the fiscal year ended December 31, 2025, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2025, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern. If we are unable to improve our liquidity position, we may not be able to continue as a going concern.
We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable future. As further set forth above, we anticipate that we will need significant additional capital by April 30, 2026, or we may be required to curtail or cease operations.
The reduction or elimination of federal incentive programs for EV charging and clean energy infrastructure could adversely affect NextNRG’s growth prospects.
NextNRG’s business plan has been developed, in part, with the expectation that federal and state incentive programs would support the deployment of EV charging infrastructure and distributed energy systems. In 2025, the federal government repealed clean vehicle tax credits under Sections 25E, 30D, and 45W of the Internal Revenue Code for vehicles acquired after September 30, 2025, and enacted the repeal of the Alternative Fuel Vehicle Refueling Property Tax Credit under Section 30C for property placed in service after June 30, 2026. Additionally, the Federal Highway Administration rescinded all previously released guidance for the National EV Infrastructure (“NEVI”) formula grant program and suspended state plan approvals, with the President’s fiscal year 2026 budget proposing to cancel $6 billion in IIJA funds for EV charger programs. The loss of these incentive programs may reduce consumer and commercial demand for EV charging solutions, slow the deployment of charging infrastructure nationally, and make NextNRG’s products and services less economically attractive to potential customers. There can be no assurance that replacement incentive programs will be adopted at the federal or state level, or that any such programs will be available on terms favorable to our business.
If we are unable to protect our information technology systems against service interruption, misappropriation of data, or breaches of security resulting from cyber security attacks or other events, or we encounter other unforeseen difficulties in the operation of our information technology systems, our operations could be disrupted, our business and reputation may suffer, and our internal controls could be adversely affected.
In the ordinary course of business, we rely on information technology systems, including the Internet and third-party hosted services, to support a variety of business processes and activities and to store sensitive data, including (i) intellectual property, (ii) our proprietary business information and that of our suppliers and business partners, (iii) personally identifiable information of our customers and employees, and (iv) data with respect to invoicing and the collection of payments, accounting, procurement, and supply chain activities. In addition, we rely on our information technology systems to process financial information and results of operations for internal reporting purposes and to comply with financial reporting, legal, and tax requirements. Despite our security measures, our information technology systems may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, sabotage, or other disruptions. A loss of our information technology systems, or temporary interruptions in the operation of our information technology systems, misappropriation of data, or breaches of security could have a material adverse effect on our business, financial condition, results of operations, and reputation.
Moreover, the efficient execution of our business is dependent upon the proper functioning of our internal systems. Any significant failure or malfunction of this information technology system may result in disruptions of our operations. Our results of operations could be adversely affected if we encounter unforeseen problems with respect to the operation of this system.
NextNRG’s smart microgrid and connected charging infrastructure may be vulnerable to cybersecurity threats that could disrupt operations and expose the Company to liability.
NextNRG’s smart microgrid platform involves networked energy management systems, IoT-connected devices, and bidirectional communication with the electrical grid. These connected systems present an expanded attack surface for cyber threats, including unauthorized access to grid-connected infrastructure, manipulation of energy management algorithms, ransomware attacks on charging networks, and data breaches involving customer information. A successful cyberattack on NextNRG’s microgrid or charging infrastructure could result in physical damage to connected equipment, disruption of energy services, grid instability in affected areas, regulatory penalties, and significant reputational harm. Evolving cybersecurity regulations applicable to critical infrastructure and grid-connected systems may impose additional compliance costs. There can be no assurance that NextNRG’s cybersecurity measures will be sufficient to prevent all attacks or that the Company will not incur material costs in responding to security incidents.
High fuel prices can lead to customer conservation and attrition, resulting in reduced demand for our product.
Prices for fuel are subject to volatile fluctuations in response to changes in supply and other market conditions. During periods of high fuel costs our prices generally increase. High prices can lead to customer conservation and attrition, resulting in reduced demand for our product.
Low fuel prices may also result in less demand for our product.
Low fuel prices may lead to us being unable to attract customers due to the fact that we charge a delivery price that may make our pricing less competitive.
Changes in commodity market prices may have a negative effect on our gross margin.
Our current fuel supplier agreements set terms and establish formulas based on Oil Price Information Service (“OPIS”) pricing as of the time of wholesale acquisition, and we do not store inventory. OPIS is a leading source for worldwide petroleum pricing. There is a mark-up for retail fuel prices above wholesale cost, per standard practice in the retail fuel distribution model. Cost of goods sold includes direct labor, including drivers. Our gross margin as a percentage of revenue decreases as a result of increase in fuel costs.
The decline of the retail fuel market may impact our potential to get new customers.
The retail gasoline industry has been declining over the past several years, with no or modest growth or decline in total demand foreseen in the next several years. Accordingly, we expect that year-to-year industry volumes will be principally affected by weather patterns. Therefore, our ability to grow within the industry is dependent on our ability to acquire other retail distributors and to achieve internal growth, which includes the success of our sales and marketing programs designed to attract and retain customers. Any failure to retain and grow our customer base would have an adverse effect on our results.
Competition in the fuel delivery industry may negatively impact our operations.
We compete with other mobile fuel delivery companies nationwide. There is little to no barrier to entry and therefore, our competition in the industry may grow. Our ability to compete in our current markets and expand to new markets may be negatively impacted by our competitors’ successes. Additionally, fuel competes with other sources of energy, some of which are less costly on an equivalent energy basis. In addition, we cannot predict the effect that the development of alternative energy sources might have on our operations. We compete for customers against suppliers of electricity. Electricity is becoming a competitor of fuel. The convenience and efficiency of electricity make it an attractive energy source for vehicle drivers. The expansion of the EV industry may have a negative impact on our customer base.
Our trucks transport hazardous flammable fuel, which may cause environmental damage and liability to us.
Due to the hazardous nature and flammability of our product, we face the risk of a simple accident causing serious damage to life and property. Additionally, a spill of our product may result in environmental damage, the liability for which our Company may not be able to overcome. If we are involved in a spill, leak, fire, explosion or other accident involving hazardous substances or if there are releases of fuel or fuel products we own or are transporting, our operations could be disrupted and we could be subject to material liabilities, such as the cost of investigating and remediating contaminated properties or claims by customers, employees or others who may have been injured, or whose property may have been damaged. These liabilities, to the extent not covered by insurance, could have a material adverse effect on our business, financial condition and results of operations. Some environmental laws impose strict liability, which means we could have liability without regard to whether we were negligent or at fault.
In addition, compliance with existing and future environmental laws regulating fuel storage terminals, fuel delivery vessels and/or storage tanks that we own or operate may require significant capital expenditures and increased operating and maintenance costs. The remediation and other costs required to clean up or treat contaminated sites could be substantial and may not be covered by insurance.
Our cash flow and net income may decrease if we are forced to comply with new governmental regulation surrounding the transportation of fuel.
We are subject to various federal, state, and local safety, health, transportation, and environmental laws and regulations governing the storage, distribution, and transportation of fuel. It is possible we will incur increased costs as a result of complying with new safety, health, transportation and environmental regulations and such costs will reduce our net income. It is also possible that material environmental liabilities will be incurred, including those relating to claims for damages to property and persons.
Our current dependence on only a few fuel suppliers increases our risk of an interruption in fuel supply, impacting our operations.
Although we are in the process of establishing other sources, we currently purchase almost all of our fuel needs from four principal suppliers in the markets in which we operate; as such, if fuel from these sources was interrupted, the cost of procuring replacement fuel and transporting that fuel from alternative locations might be materially higher and, at least on a short-term basis, our earnings could be negatively affected.
Our profitability is subject to fuel pricing and inventory risk.
The retail fuel business is a “margin-based” business in which gross profits are dependent upon the excess of the sales price over the fuel supply costs. Fuel is a commodity, and, as such, its unit price is subject to volatile fluctuations in response to changes in supply or other market conditions. We have no control over supplies, commodity prices or market conditions. Consequently, the unit price of the fuel that we and other marketers purchase can change rapidly over a short period of time, including daily.
Loss of a major customer could result in a decrease in our future sales and earnings.
In any given quarter or year, sales of our products may be concentrated in a few major customers. We anticipate that a limited number of customers in any given period may account for a substantial portion of our total net revenue for the foreseeable future. The business risks associated with this concentration, including increased credit risks for these and other customers and the possibility of related bad debt write-offs, could negatively affect our margins and profits. Additionally, the Company does not have any long-term agreements with its customers. All customer agreements are cancelable at any time by either party and as such there cannot be any assurance that any customer will continue to use the Company’s services. The loss of a major customer, whether through competition or consolidation, or a termination in sales to any major customer, could result in a decrease of our future sales and earnings.
We operate in an industry that is often subject to very strict laws, regulations and oversight.
Our industry has very strict laws and codes that must be complied with. We are subject to oversight, including audits, in existing or future areas of operation. If we cannot comply with the Code, or County, State or Federal rules and regulations or the laws, rules and regulations or oversight in areas in which we currently operate or may seek to operate, we could lose the ability to service those areas and our earnings could be affected.
NextNRG’s renewable energy business has a very limited operating history, which makes it difficult to evaluate its business and prospects.
NextNRG has a very limited operating history, which makes it difficult to evaluate its business and prospects or forecast its future results. NextNRG is subject to the same risks and uncertainties frequently encountered by new companies in rapidly evolving markets. NextNRG’s business strategy centers on its smart microgrid platform and wireless EV charging technology, both of which remain in early stages of commercialization and face significant technical, regulatory, and market adoption risks. Smart microgrids involve the integration of distributed energy resources, energy storage systems, and intelligent load management, which are subject to complex and evolving interconnection standards, utility regulations, and grid reliability requirements enforced by entities such as state public utility commissions and the North American Electric Reliability Corporation (“NERC”). Failure to comply with applicable grid interconnection and reliability standards could result in substantial fines, delays in deployment, or inability to operate in certain jurisdictions. NextNRG’s financial results in any given quarter can be influenced by numerous factors, many of which it is unable to predict or are outside of its control, including:
the market’s acceptance of NextNRG’s smart microgrid platform, including the willingness of utilities, commercial property owners, and municipalities to integrate distributed energy and microgrid solutions into existing grid infrastructure;
the pace of development and adoption of industry standards for smart microgrid interoperability, vehicle-to-grid (“V2G”) integration, and wireless charging protocols;
the market’s acceptance of NextNRG’s wireless charging technology, including technical challenges related to charging efficiency, alignment tolerances, and cost competitiveness with conventional wired charging;
the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use;
concerns regarding the stability of the electrical grid, particularly as increased EV charging loads and microgrid deployments may stress local distribution infrastructure;
improvements in the fuel economy of the internal combustion engine;
the environmental consciousness of consumers;
volatility in the cost of oil and gasoline;
consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts;
government regulations and economic incentives promoting fuel efficiency, distributed energy resources, and alternate forms of energy;
the reduction or elimination of federal tax credits and grant programs supporting EV charging infrastructure and clean energy deployment, including the repeal of Sections 25E, 30D, 45W, and the scheduled repeal of Section 30C of the Internal Revenue Code, and the suspension of NEVI formula grant disbursements; and
the availability of tax and other governmental incentives to purchase and deploy NextNRG’s smart microgrid and wireless charging technology.
To date, NextNRG has not achieved profitability, and may never become profitable.
NextNRG has incurred net losses since inception and may not be able to achieve or maintain profitability in the future. NextNRG’s expenses will likely increase in the future as it develops and launches its products, expands into new markets, increases its sales and marketing efforts and continues to invest in technology. These efforts to grow its business may be more costly than NextNRG expects and may not result in increased revenue or growth in its business. NextNRG will likely be required to make significant capital investments and incur recurring or new costs, and its investments (if any) may not generate sufficient returns and its results of operations, financial condition and liquidity may be adversely affected. Any failure to increase revenues sufficiently to keep pace with such investments and other expenses could prevent NextNRG from achieving or maintaining profitability or positive cash flow on a consistent basis or at all. If NextNRG is unable to successfully address these risks and challenges as it encounters them, its business, financial condition, results of operations and prospects could be adversely affected. If it is unable to generate adequate revenue growth and manage expenses, NextNRG may continue to incur net losses in the future, which may be substantial, and it may never be able to achieve or maintain profitability. NextNRG also expects its costs and expenses to increase in future periods, which could negatively affect future results of operations if revenues do not increase. In particular, NextNRG intends to continue to expend significant funds to further develop its technology. Furthermore, if NextNRG’s future growth and operating performance fail to meet investor or analyst expectations, or if it has future negative cash flow or losses resulting from investment in technology or expanding operations, this could have a material adverse effect on its business, financial condition and results of operations.
The market for NextNRG’s platform and services may not be as large as NextNRG believes it to be.
We believe the market for our values-aligned platform is substantial, but it is still relatively new, and it is uncertain to what extent or how widespread market acceptance of our platform will be or how long such acceptance, if achieved, may be sustained. Our success will depend on the willingness of people to widely adopt the NextNRG experience, values and the products and services that we offer through our platform. If the public does not perceive our products and services sold through our platform to be beneficial, or chooses not to adopt them as a result of concerns regarding privacy, accessibility, or for other reasons, including an unwillingness to confirm that they respect our five core values or as a result of negative incidents or experiences they encounter through our platform, or instead opt to use alternatives to our platform, then the market for our platform may not continue to grow, may grow slower than we expect, or may not achieve the growth potential we expect, any of which could materially adversely affect our business, financial condition, and results of operations.
NextNRG has limited experience with respect to determining the optimal prices and pricing structures for its products and services, which may impact its financial results.
NextNRG expects that it may need to change its pricing model from time to time, including as a result of competition, global economic conditions, changes in product mix or pricing studies. Similarly, as NextNRG introduces new products and services, it may have difficulty determining the appropriate price structure for future products and services, including because we may pursue business lines or enter markets in which NextNRG’s current management team has limited prior experience. In addition, as new and existing competitors introduce new products or services that compete with NextNRG’s, or revise their pricing structures, it may be unable to attract new customers at the same price or based on the same pricing model as it has used historically. As a result, NextNRG may be required from time to time to revise its pricing structure or reduce prices, which could adversely affect its business, operating results, and financial condition.
NextNRG is in a highly competitive EV charging services industry and there can be no assurance that it will be able to compete with many of its competitors which are larger and have greater financial resources.
NextNRG faces strong competition from competitors in the EV charging services industry, including competitors who could duplicate its model. Many of these competitors may have substantially greater financial, marketing and development resources and other capabilities than NextNRG. In addition, there are very few barriers to entry into the market for its services. There can be no assurance, therefore, that any of NextNRG’s current and future competitors, many of whom may have far greater resources, will not independently develop services that are substantially equivalent or superior to its services. Additionally, there is no guarantee that NextNRG’s wireless EV charging solutions will be accepted by the market.
NextNRG’s competitors may be able to provide customers with different or greater capabilities or benefits than it can provide in areas such as technical qualifications, past contract performance, geographic presence and driver price. Further, many of its competitors may be able to utilize substantially greater resources and economies of scale to develop competing products and technologies, divert sales away from NextNRG by winning broader contracts or hire away our employees by offering more lucrative compensation packages. In the event that the market for EV charging stations expands, NextNRG expects that competition will intensify as additional competitors enter the market and current competitors expand their product lines. In order to secure contracts successfully when competing with larger, well-financed companies, NextNRG may be forced to agree to contractual terms that provide for lower aggregate payments to it over the life of the contract, which could adversely affect its margins. NextNRG’s failure to compete effectively with respect to any of these or other factors could have a material adverse effect on its business, prospects, financial condition or operating results.
NextNRG also faces competition in the smart microgrid space from established energy technology companies, utilities developing their own distributed energy programs, and well-funded startups with competing microgrid and vehicle-to-grid platforms. Many of these competitors have existing relationships with utilities and grid operators, established track records of regulatory compliance, and greater technical resources. The evolving nature of standards for microgrid interoperability and wireless charging means that competitors who achieve earlier standardization or certification may gain a significant first-mover advantage that NextNRG may be unable to overcome.
NextNRG’s revenue growth ultimately depends on consumers’ willingness to adopt EVs with wireless charging capabilities in a market which is still in its early stages.
NextNRG’s growth is highly dependent upon the adoption by consumers of EVs, and it is subject to a risk of any reduced demand for EVs. If the market for EVs does not gain broader market acceptance or develops slower than expected, NextNRG’s business, prospects, financial condition and operating results will be harmed. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements, long development cycles for EV original equipment manufacturers, and changing consumer demands and behaviors. Factors that may influence the purchase and use of alternative fuel vehicles, specifically EVs, include:
perceptions about EV quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs;
the limited range over which EVs may be driven on a single battery charge and concerns about running out of power while in use;
concerns regarding the stability of the electrical grid;
improvements in the fuel economy of the internal combustion engine;
consumers’ desire and ability to purchase a luxury automobile or one that is perceived as exclusive;
the environmental consciousness of consumers;
volatility in the cost of oil and gasoline;
consumers’ perceptions of the dependency of the United States on oil from unstable or hostile countries and the impact of international conflicts;
government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;
access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost to charge an EV; and
the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles.
The influence of any of the factors described above may negatively impact the widespread consumer adoption of EVs, which would materially and adversely affect NextNRG’s business, operating results, financial condition and prospects.
In addition, NextNRG’s smart microgrid solutions depend on favorable regulatory treatment of distributed energy resources and the willingness of electric utilities to support bidirectional power flows and microgrid interconnection. Regulatory frameworks governing vehicle-to-grid integration are still emerging, and there can be no assurance that utilities or regulators will adopt standards or rate structures that support NextNRG’s business model. Changes in net metering policies, demand response program structures, or interconnection requirements could materially limit the addressable market for NextNRG’s smart microgrid platform. Furthermore, the elimination or reduction of federal incentive programs, as described above, may reduce consumer and commercial demand for EV charging infrastructure, directly impacting demand for NextNRG’s integrated microgrid and charging solutions.
Risks Related to Ownership of Our Common Stock
Our stock price is expected to fluctuate significantly.
Our common stock is listed on The Nasdaq Capital Market under the symbol “NXXT.” There can be no assurance that an active trading market for our shares will be sustained. The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:
actual or anticipated fluctuations in our financial condition and operating results;
geopolitical developments affecting supply and demand for oil and gas and an increase or decrease in the price of fuel;
actual or anticipated changes in our growth rate relative to our competitors;
competition from existing companies in the space or new competitors that may emerge;
issuance of new or updated research or reports by securities analysts;
fluctuations in the valuation of companies perceived by investors to be comparable to us;
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
additions or departures of key management or technology personnel;
disputes or other developments related to proprietary rights, including intellectual property, litigation matters, and our ability to obtain patent protection for our technologies;
announcement or expectation of additional debt or equity financing efforts;
sales of our common stock by us, our insiders or our other stockholders; and
general economic and market conditions.
These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated to or disproportionate to the operating performance of the Company.
A significant percentage of the Company’s common stock is held by a small number of shareholders.
As of April 15, 2026, Mr. Farkas, our Chief Executive Officer and Executive Chairman, beneficially owns approximately 48.93% of our outstanding common stock, and our officers and directors collectively beneficially own approximately 58.05% of our outstanding common stock. As a result, these shareholders are able to influence the outcome of shareholder votes on various matters, including the election of directors and extraordinary corporate transactions, including business combinations. In addition, the conversion of existing convertible notes, occurrence of sales of a large number of shares of our common stock, or the perception that these conversions or sales could occur, may affect our stock price and could impair our ability to obtain capital through an offering of equity securities. Furthermore, the current ratios of ownership of our common stock reduce the public float and liquidity of our common stock, which can in turn affect the market price of our common stock.
Our Amended and Restated Certificate of Incorporation includes an exclusive forum provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any derivative actions, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us, our directors, officers or employees.
Our Amended and Restated Certificate of Incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; (iii) any action asserting a claim against the Company arising pursuant to any provision of the General Corporation Law of Delaware, the Amended and Restated Certificate of Incorporation or the Bylaws of the Company; or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine. To the extent that any such claims may be based upon federal law claims, Section 27 of the Securities Exchange Act of 1934, as amended, creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act provides for concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, and as such, the exclusive jurisdiction clauses of our Amended and Restated Certificate of Incorporation would not apply to such suits. The choice of forum provisions in our Amended and Restated Certificate of Incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. By agreeing to these provisions, however, stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation and bylaws has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the choice of forum provisions in our Amended and Restated Certificate of Incorporation” to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
We have never paid dividends on our capital stock, and we do not anticipate paying any dividends in the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases.
We have not paid dividends on any of our classes of capital stock to date and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of any future indebtedness we may incur could preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain from an investment in our common stock for the foreseeable future. Consequently, in the foreseeable future, you will likely only experience a gain from your investment in our common stock if the price of our common stock increases.
If we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a limited public market for our shares and make obtaining future debt or equity financing more difficult for us.
If we are unable to achieve and maintain compliance with such listing standards or other Nasdaq listing requirements in the future, we could be subject to suspension and delisting proceedings. A delisting of our common stock and our inability to list on another national securities market could negatively impact us by: (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) limiting our ability to use certain registration statements to offer and sell freely tradable securities, thereby limiting our ability to access the public capital markets; and (iv) impairing our ability to provide equity incentives to our employees.
We have elected to take advantage of specified reduced disclosure requirements applicable to an “emerging growth company” under the JOBS Act, the information that we provide to stockholders may be different than they might receive from other public companies.
As a company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
reduced disclosure about our executive compensation arrangements;
no non-binding advisory votes on executive compensation or golden parachute arrangements; and
exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting and delaying the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
We have elected to take advantage of the above-referenced exemptions and we may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens.
Additional stock offerings in the future may dilute your percentage ownership of our company.
Given our plans and expectations that we may need additional capital and personnel, we may need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership of then current stockholders.
