UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2023
or
☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from [____] to [____]
Commission
file number 001-40809
EZFILL
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
Registrant’s
Telephone number, including area code: (305)791-1169
Securities
registered pursuant to Section 12(b) of the Act:
Title of Class Trading Symbol(s) Name of each exchange on which registered
Common Stock, Par Value $0.0001 EZFL Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act:
Title of Each Class Name of Each Exchange On Which Registered
N/A N/A
Indicate
by check mark if the registered is a well-known seasonal issuer, as defined in Rule 405 the Securities Act Yes ☐ No
☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ☐ No
☒
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the last 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The
aggregate market value of common stock held by non-affiliates of the registrant based on the closing price of the registrant’s
common stock as reported on the Nasdaq Capital Market on June 30, 2023, was $6,588,410.
Indicate
the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.
As
of April 1, 2024, 4,673,470 shares of the registrant’s common stock, par value $0.0001 per share, were
outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
TABLE
OF CONTENTS
Item 1. Business 3
Item 1A. Risk Factors 17
Item 1B. Unresolved Staff Comments 27
Item 1C. Cybersecurity 27
Item 2. Properties 28
Item 3. Legal Proceedings 28
Item 4. Mine Safety Disclosures 28
Item 6. Selected Financial Data 30
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33
Item 8. Financial Statements and Supplementary Data 34
Item 9A. Controls and Procedures 88
Item 9B. Other Information 88
Item 10. Directors, Executive Officers and Corporate Governance 89
Item 11. Executive Compensation 95
Item 14. Principal Accounting Fees and Services 118
Item 15. Exhibits, Financial Statement Schedules 119
Cautionary
Note Regarding Forward-Looking Statements
This
annual report contains forward-looking statements and information within the meaning of Section
27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include,
but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected
costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “will,” “would”
and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these
identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and
you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks
and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without
limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which
they are made, and we do not assume any obligation to update any forward-looking statements.
As
used in this report, the terms “EzFill” “we”, “us”, “our” and “Company” mean
EzFill Holdings, Inc. and/or our subsidiaries, unless otherwise indicated.
PART
1
Item
1. Business
Overview
EzFill
is an on-demand fuel delivery company in South Florida and the only mobile fueling company that combines on-demand fills and subscription
services which fill customer vehicles on routine intervals for the consumer, fleet, marine and other specialty markets. The emergence
of digital technology, GPS-Based / On-Demand consumer deliveries, and the sharp increase in home delivery of products and services during
the COVID-era are trends expected to continue in the post-COVID economy. The increased adoption rate of such ‘at home’ or
‘at work’ delivery of products and services has become the method both individual and commercial customers prefer.
EzFill
provides customers in South Florida the ability to have fuel delivered to their vehicles (cars, trucks, and specialty vehicles) without
having to leave the comfort of their home, office, and job site. EzFill’s app-based platform conveniently brings the gas station
to customers with a growing fleet of EzFill-branded, Mobile Fueling Trucks. EzFill’s business verticals align to the high-use,
high demand cases in vehicle operations. These are individual CONSUMERS, COMMERCIAL entities and SPECIALTY vehicle markets.
For
CONSUMERS, EzFill services individual “consumer” customers directly at their residences or places of work. In the
consumer vertical, EzFill customers sign-up for EzFill services individually, or as part of an employer which offers discounted EzFill
services to their employees as an employee benefit while at work at offices, in office parks or on-job locations. Fuel deliveries are
completed at optimal times during the day for ‘at work’ customers or at night for residential deliveries.
In
the COMMERCIAL vertical, EzFill provides vital fuel delivery services to commercial fleets of delivery trucks, rental cars, livery
operators, and job sites. Deliveries for the commercial vertical are completed during down-times, when the majority of commercial vehicles
are at designated locations. This method also allows EzFill to complete multiple fills at once, while providing the commercial customers
the benefit of a fleet of fueled vehicles ready for operations on any given morning.
In
the SPECIALTY vertical, EzFill adapts to each market based on the type of vehicles that can benefit from “at location”
fuel delivery. In EzFill’s home market, Florida, their “specialty” vertical services hundreds of boat owners at their
homes or at marinas at which they are docked. EzFill’s specialty market also includes equipment rental companies, construction
job sites, agricultural operations, motorsports events and recreational vehicle grounds.
EzFill
Model – Resolving Pain Points in the Consumer and Commercial Fuel Customer Markets
EzFill’s
experience in this market indicates that the legacy gas station model is ripe for disruption specifically by a model which works to address
major issues with the status of the industry, such as:
Our
Product Offerings
We
provide gas delivery via our Mobile Fueling Trucks in the greater South Florida area as well as in the Tampa and Orlando areas and expect
to soon begin fueling in other areas in Florida. Our goal is to service all our customers across all our lines of business at predictable
locations during vehicle downtimes. Our fleet currently includes 24 Mobile Fueling Trucks that we utilize to deliver fuel directly to
our customers. We have three major lines of business and to our knowledge we are the only company in the space which fuels all three
verticals:
1. SERVICING CONSUMERS AT HOME AND AT WORK
We
offer residential fueling services to customers who can request a fuel delivery through our app and have fuel delivered directly to their
vehicle, from the comfort of their home or apartment building, while they go about their night. We offer convenient weekly schedules
to our residential customers, so they can live with the comfort of knowing that they will never be without a full tank of gas when they
need it. Additionally, our competitive pricing keeps our residential customers from having to travel out of their neighborhood for lower
gas prices. Our residential customers currently pay a delivery fee of $4.99 for each delivery or they have the option to pay $9.99 per
month for unlimited deliveries. We may increase these prices in the future. We currently offer delivery to residential customers in Miami-Dade,
Broward, and Palm Beach counties, as well as the Orlando and Tampa areas, and expect to soon begin deliveries in other parts of Florida.
Our service is a great new amenity for condominiums, which has been widely used by residents of the buildings we service and has been
enhancing residents’ experience.
Through
entering agreements with local and national businesses, we work directly with businesses human resource departments to offer employee
perks, and fuel employees’ cars while they are working. This is a creative benefit for employers to offer, enabling their employees
to have their cars filled, stress free. Additionally, we work directly with the landlords of corporate office parks to bring the amenity
of EzFill to their tenants. Our corporate employee fueling is currently done at competitive prices with no delivery fee. Our corporate
office park solution offers benefits to employers and EzFill. Benefits to employers include: (i) a new perk to offer their employees;
and (ii) happier employees who do not have to waste precious time going to the gas station. Benefits to EzFill include: (i) multiple
deliveries at one location creates efficiencies and cuts operating costs; (ii) the employers serve as “influencers” which
reduces our marketing costs for each location; and (iii) push-marketing by the employers also results in more residential consumer fills.
2. SERVICING COMMERCIAL ENTITIES
We
partner with and offer national and local businesses who operate fleets an alternative solution for fueling their fleet to reduce the
businesses operational costs and improve fleet efficiency. Our solution for fleets helps businesses: (i) save money spent on expensive
gas stations; (ii) save money on paying employees to go to gas stations; (iii) eliminate unnecessary wear and tear to Company fleet vehicles
on trips to the gas station; (iv) better monitor their gas consumption; (v) eliminate employee mistakes (putting regular gas into a diesel
engine); and (vi) prevent theft by employees (customers have reported instances where it was months before they realized their employee
was making unauthorized charges on their fleet card). This product offering is sold with zero fees, our fleet customers pay only for
the gas they consume. We may charge delivery fees to fleet customers in the future.
3. SERVICING SPECIALTY MARKETS
EzFill
delivers fuel directly to other, market-specific personal and commercial vehicles and tanks. In our home market, the prevalence of boats
and boat owners was the first specialty market we developed, particular to the south Florida area which is the base of our services.
Marina gas stations are some of the highest priced in the country. We offer low prices and pre-scheduling so our marine customers can
get affordable fuel whenever they need it. The same is true for the markets which we have targeted to enter. In these markets we find
similar, market-specific vehicles which our future customers use for; construction or agricultural purposes, personal or recreational
vehicle use, or sporting events where a large concentration of vehicles can be serviced at specific locations.
Customers
In
addition to our individual, residential customers, we also have structured relationships with property management companies and builders
who co-market our services as a benefit to their residents and allow our trucks to enter their communities to fill vehicle owners at
their single-family homes, condominiums or apartments. Employers who have offered at-work fueling as a corporate perk have included Ryder,
Norwegian Cruise Lines, Carnival Cruise Lines, Royal Caribbean, Telemundo, Loreal, Y Green, and more. Customers we have signed up through
our corporate offerings may also be customers of our residential offering. Our services are very flexible, and our residential customers
do not have to sign any long-term commitments with us and can decide not to use our service whenever they choose.
Our
commercial vertical has serviced the fleets for many national and local businesses, such as a leading national delivery company, a leading
national grocer, a leading OEM, Enterprise, Telemundo, Easy Scripts and Air Around the Clock.
In
our specialty market vertical, we service hundreds of boats at various marinas across Miami-Dade and Broward Counties, as well as boats
at customers’ homes. We are a preferred delivery partner for a mobile application with thousands of boat-owner users. We have recently
begun developing this line of business and it is growing, mostly through existing customer outreach and strategic partnerships with marinas.
Software
Systems, IT, User Interface and Experience
Our
software systems provide us with logistical and cost saving efficiencies that allow us to forecast the need for truckloads of fuel to
effectively service clusters of customers in a specific area or zip code. At the front end of our system, we employ an app-based approach
that provides all our customers with an easy-to-engage user interface and ordering system. Customers are able to select the times and
locations of their on-demand or routinely scheduled fills and manage their account on their mobile device or desktop system.
In
the back end of our system, we aggregate customer orders based on their location and expected gallon demand for their vehicles. The aggregation
of customer orders based on these variables triggers a truckload fill of one of our mobile tankers designated for each of the customer
orders our system generates.
Our
software and IT systems have been developed and customized in-house to provide cost-saving efficiencies which produce higher margins
than traditional, gas station fuel margins.
We
are planning to expand our software capabilities using AI and machine learning algorithms that will, among other things, automatically
generate outbound “fill reminder” communications to customers based on their recorded usage amounts and time intervals.
Our
Mobile Application
The
EzFill Mobile Application has been designed for iPhone and Android devices with our customers and convenience in mind.
Sign
Up: The EzFill App provides a quick and easy registration process.
Profile
Management: The EzFill App provides easy profile management where users can seamlessly update personal information, such as: vehicle
details and location, this way we are able to provide the best services to our customers.
Location
Sharing: This feature enables our customers to simply drop a pin at their location on an integrated map which lets our driver know
where to deliver the fuel.
Request
Fuel Delivery: The EzFill App lets our customers pick the type and quantity of fuel to be delivered in addition to the time and date
of availability.
Weekly
Delivery Schedule: The EzFill App also enables our customers to preschedule weekly deliveries, on a specific day of the week. This
feature enables our customers to request their delivery for a specific time window, this ensures they can schedule their fill up at convenient
times when they would be busy attending other tasks and their car is idle.
Push
Notifications: The EzFill App has a push notification feature. This allows us to keep customers informed of all the activities associated
with the service they have requested. We also use it to keep our customers updated with recent offers and discounts, which helps to boost
customer satisfaction and promotes our business.
Transaction
History: The EzFill App offers our customers the ability to always view their transaction history. This gives our customers an option
to check the previous fuel delivery requests and bills.
Our
Market Opportunity
Information
provided by Statista indicates that there are about 286 million registered cars in the United States as of Q1 2023. According to the
US Energy Information Administration, in 2022 the US used approx. 369 million gallons of fuel per day, with Florida utilizing nearly
21 million gallons per day. According to Statista.com, in 2022, US gas stations produced revenues of roughly 738 billion dollars. EzFill
wants to take advantage of the growing number of US drivers and the dwindling number of gas stations by bringing the gas directly to
the consumers. We feel that our service is years in the making and solves many problems posed by the legacy gas station. EzFill presents
a new way for Americans to get gas: at home, at the office, wherever, on demand.
The
on-demand market continues to grow. On-demand companies are operating and growing in the:
● Trucking & Delivery Services
● Food Delivery Services
● Beauty Services
● Housekeeping Services
● Healthcare Services
● Laundry Services
EzFill
believes that the on-demand market will continue to grow and this growth will benefit its gas delivery model.
We
believe our market opportunity is to expand into major MSAs across the continental U.S. with sufficient concentration of business and
residential customers. We want to be in locations where people rely heavily on their personal cars to get places. Based on our research,
we have identified several major MSAs across the U.S that would be attractive for expansion.
As
we expand to a new market, we plan to employ a strategy that has helped us build a strong base of business in our existing market. The
strategy we developed begins with sales in our fleet category to build a base of business in the target city, while developing and strengthening
our delivery operations. Next, after launch, we secure corporate and landlord agreements to allow us to begin marketing our services
to their employees and tenants. These agreements include fueling at large office parks during daytime hours and fueling at residential
buildings during nighttime hours.
We
generate business through establishing corporate and landlord partnerships, we then leverage companies’ internal communication
channels to market directly to their employees or residential tenants. By implementing our digital marketing campaigns as well as placement
of our content throughout residential and corporate facilities, we are able to develop greater brand awareness. We coordinate with our
partners to set up organic marketing efforts with our brand ambassadors to help increase recognition and assist users with downloading
the app and setting up their accounts.
Our
Growth Strategy
Our
strategy is to leverage our established business partnerships and generate organic methods of acquiring new markets. This has given us
significant brand recognition by the consumer and has enabled us to acquire competitor territories. In doing so, we have generated a
substantial presence and footprint in the regional area in which we operate. As we continue to develop our business relationships and
expand our geographic footprint in Florida, our goal is to open in new markets along the east coast.
EzFill’s
current focus is on expanding its geographic footprint. We aim to open in new markets along the east coast in the future both organically
and through acquisitions of existing companies in the space. We make our expansion decisions based off of research into optimal target
markets where public transportation is less prevalent, leading to more residents owning cars and the areas where a demand for lifestyle
improving technology is present. We also consider State/City/County regulations when assessing new areas to expand into. We are targeting
high potential locations with the least regulations on mobile fuel delivery.
EzFill
currently has strategic partnerships with businesses across industries such as property management, parking solutions services, travel
industry, delivery industry, transportation and logistics, marinas, and other diversified business sectors. By establishing these
strategic business-to-business relationships, we are able to offer cost effective business solutions, whether through human resource
departments as employee perks, optimization of efficiency for fleet companies, or tenant satisfaction by adding amenities.
EzFill
believes a strategic partnership with a major oil company will help with our expansion by enabling us to lower cost and attract a larger
customer base by selling branded gasoline. However, there cannot be any assurance that EzFill will be able to obtain such a strategic
partnership. The oil companies Exxon and Shell are both in the mobile fuel delivery space though investments in mobile fueling companies.
Technology
License Agreement
On
April 7, 2021, the Company entered into a Technology License Agreement with Fuel Butler LLC (“Licensor”), under which the
Company licensed certain proprietary technology. Under the terms of the license, the Company issued 33,216 shares of its common stock
to the Licensor upon signing. The Company also issued 41,520 shares to the Licensor in May 2021 upon the filing of a patent application
related to the licensed technology. Upon completion of the Company’s IPO, 23,251 shares were issued to the Licensor. The Company
will issue up to 91,344 additional shares to the Licensor upon the achievement of certain milestones. In addition, the Company has granted
stock options for 66,432 shares at an exercise price of $3.76 per share that will become exercisable for three years after the end of
the fiscal year in which certain sales levels are achieved using the licensed technology. The Company has the option for four years after
the achievement of certain milestones to either acquire the technology or acquire the Licensor for the purchase price of 132,864 of its
common shares. Until the Company exercises one of these options, it will share with the Licensor 50% of pre-revenue costs and 50% of
the net revenue, as defined, from the use of the technology. Under the Technology Agreement, the Company licensed proprietary technology
that it believed would enable the Company to expand its services to provide its fuel service in high density areas. Fuel Butler has delivered
a purported notice of termination of the Technology Agreement based on certain alleged breaches arising from our failure to issue equity
securities to Fuel Butler. The Company has been in communications with Fuel Butler regarding the termination of the Technology Agreement
and continues to believe that the Company is in compliance with the Technology Agreement and that the Technology Agreement continues
to be in force. While the Company contests Fuel Butler’s claims of breach and contends that in fact Fuel Butler is in breach, the
Company has communicated to Fuel Butler that it wishes to terminate the Technology Agreement. The Company has sent a proposal to Fuel
Butler whereby it would cease utilizing the Technology and Fuel Butler would return any shares it received under the Technology Agreement.
Accordingly, the Company considers the license to be fully impaired and has fully amortized the license as of December 31, 2022.
Competition
EzFill
is a mobile fuel delivery service and competes with other local fuel delivery companies and gas stations. We differentiate ourselves
by allowing our customers to request our service via a mobile app and delivering the fuel directly to the end user. We use our innovative
technology and excellent concierge service to offer convenient fueling solutions to all our vertical markets at different times of the
day to maximize the efficiency of each mobile fueling truck. To our knowledge, there are no significant mobile fueling competitors in
the markets we currently serve.
We
distinguish ourselves from our competitors by:
● Prioritizing our customer’s experience and satisfaction;
● Streamlining our customers ordering experience;
● Rigorously vetting and training our drivers;
● Providing the latest in scheduling, GPS technology, and payment systems;
● Offering competitive pricing in the zip codes which we service;
Though
the electric vehicle industry is growing, we do not consider this relatively new subsegment of the vehicle market a threat to our business
model or growth trajectory. The vast majority of vehicles are gas or diesel powered and the entire fuel industry is a major component
of the economy. According to way.com 6% of the vehicles sold in the U.S. in 2022 were electric vehicles. However, with the planned acquisition
of NextNRG, EzFill hopes to be prepared for the electric future.
Additionally,
the continued growth of the electric vehicle industry means more and more traditional gas stations are closing because of: (i) high overhead
because of rising real-estate prices; (ii) lack of demand due to electric vehicle adoption; and (iii) their inability to fuel vehicles
outside of their station. Our mobile fueling solution allows us to service many zip codes with one truck, so if sales slowdown in one
area we are able to transition seamlessly to areas with higher demand.
The
NextNRG Acquisition and Perceived Impact on EzFill
The Company into an exchange agreement dated as of August 10, 2023, as amended by the amended and restated exchange agreement dated November
2, 2023 (the “Exchange Agreement”) with the members (“Members”) of Next Charging LLC (now known as NextNRG Holding
Corp. and referred to as “NextNRG”), and Michael D. Farkas, as the representative of the Members (“Members’ Representative”),
with respect to the acquisition of 100% of the membership interest of the Members in NextNRG Charging (“Membership Interests”).
In exchange for the acquisition of the Membership Interests by the Company, the Exchange Agreement contemplates issuance of 100,000,000
shares of Common Stock of the Company (“Exchange Shares”), to the Members. The holders of a majority of the Company’s
common stock approved the NextNRG transaction. However, the closing of the transaction is subject to various closing conditions and there
cannot be any assurance that the transaction will close.
The
NextNRG transaction discussed below, while approved by our shareholders and management, has not closed yet. EzFill cannot tell
you whether the deal will close with any certainty. The discussion below is theoretical and only applicable if the deal closes. Additionally,
even if the deal closes, EzFill cannot tell you with any certainty that it will be able to properly integrate NextNRG, or that
the integrated entities will be able to achieve the lofty milestones set forth in the transaction agreement, or that the achievement
of any of the milestones will lead to the success of the combined entities.
If
the transaction closes, post transaction EzFill will continue normal operations and the below is expected to be added as additional lines
of business. There will likely be a new organizational structure as a result of the requirement of the Exchange Agreement to appoint
Mr. Farkas to our board of directors as Executive Chairman
Description
of NextNRG Holding Corp’s Business
Overview,
General Nature and Scope of NextNRG’s Business
NextNRG (formerly Next Charging LLC) is a developmental stage company working on solutions in the renewable energy/wireless electric
vehicle (“EV”) charging space. NextNRG has plans to develop and deploy smart microgrids coupled with renewable
energy generation, battery storage and wireless EV charging solutions all over the United States, and eventually
globally.
NextNRG believes that its merger with the Company/ EzFill is a component in its business plan and acquisition strategy. EzFill has many
fleet customers that are already beginning the transition to electric vehicles, and by offering wireless EV charging solutions NextNRG
can assist these fleet owners with their transition to EV.
NextNRG
LLC (“NextNRG”), a subsidiary of NextNRG, is a development stage company working on solutions in the renewable
energy/wireless EV charging space. NextNRG’s solutions are expected to be supported by exclusive licenses to seven patented
technologies developed by Florida International University (“FIU”) which it acquired from Stat-EI Inc. These technologies were tested on the largest smart
grid dataset in the world. The patents target two different renewable energy industry sectors - smart microgrids/Virtual power
plants (“VPP”), and wireless power transfer (“WPT”) technology, created to wirelessly charge EVs. The
licenses purchased from SEI are exclusive and worldwide, and require milestone payments of $75,000 upon the achievement of $2.0 million in
net revenues and an annual royalty payment of $50,000 in 2024, $60,000 in 2025 and $75,000 for each year thereafter (in the case of
microgrid technologies) and $40,000 in 2024, $50,000 in 2025 and $60,000 for each year thereafter (in the case of the wireless
charging technologies), subject to the receipt of change of control fee ($350,000 in the case of microgrid technologies and $300,000
in the case of the wireless charging technologies).
The
main drivers of renewable energy can be summarized in the following points:
● Increased global need for energy;
● Decreasing costs of renewable energy plants;
● Regulations aiming to decrease pollution from fossil fuel;
● Political will to use clean and sustainable energy sources; and
● Incentives and subsidies.
NextNRG believes that through strategic deployment it should be able to build and operate clean energy systems on commercial properties,
schools and municipal buildings. The electricity will help customers gain access to electricity where not otherwise available, reduce
electricity bills, progress towards decarbonization targets and support resource management needs throughout their asset lifecycles.
NextNRG expects its primary product offering will be entering into leases or easements with building or landowners and revenue
contracts to sell the power generated by the solar energy system to those landowners, or various commercial, utility, municipal and community
solar off-takers. In addition to the sale of clean power, NextNRG plans to address customer needs through wireless EV charging
and energy storage offerings, and where applicable, the delivery of gasoline.
The
primary challenge that the renewable sources market faces is the uncertainty around energy generation. This problem leads to system supply/demand
imbalances that can interrupt power and increase costs. The second challenge is the cost of building renewable energy microgrids. To address this challenge,
NextNRG hopes to capitalize on government incentives currently available for the deployment of renewable energy solutions. NextNRG
believes its offerings will provide multiple advantages to future customers relative to the status quo, such as:
In
simple terms, a microgrid is a small-scale power grid that can operate independently or collaboratively with other small power grids.
FIU’s technology is designed to mitigate risk of utilizing renewable energy, while maximizing energy output efficiencies. Microgrids
serve as an effective platform for integrating distributed energy resources (“DERs”) and achieving optimal performance in
reduced costs and emissions while bolstering the resilience of a city, a building, or rural communities’ electrification systems.
Additionally, they achieve cost savings through peak shaving and selling excess power to offtakers.
Upon satisfaction of related license obligations, NextNRG will benefit from a license to four patented
technologies which enable the creation of smart microgrids and virtual power plants (“VPP”). The algorithms used to secure
the patents were developed with the support and research of Federal agencies and have been tested and proven on the infrastructure of
the largest renewable energy company in the world. Certain of the above technologies are currently being utilized with approximately
6 million of a renewable energy company’s customers. The combined technologies are referred to as the Next Smart Microgrid and
potential products based on these technologies are explained in more detail below
The
RenCast Predictor
Smart
Microgrid Controller
The
Battery State of Charge (“SOC”) System
Battery
storage is vital. It supports integrating and expanding renewable energy sources, such as solar power, while reducing reliance on fossil
fuels. Storing excess energy generated during periods of high renewable generation (sunny or windy) helps mitigate the reliability issues
associated with renewable power sources. This equipment can dramatically improve electrification in rural areas, on tribal lands, and
in low-income communities in-need of clean, reliable power. Battery energy storage systems provide a versatile and scalable solution
for energy storage and power management, load management, backup power, and improved power quality.
The
Portable Emergency AC Energy (“PEACE”) Controller
The
RenCast Predictor, the Smart Microgrid Controller, Battery SOC, and PEACE Controller can be combined to turn a renewable energy
microgrid into a “smart” system that uses AI/ML to increase the system’s efficiencies by up to 10%.
NextNRG’s smart microgrid solution aggregates accurate estimates of future energy generation and SOC and programs the Smart
Microgrid Controller to optimize the energy use based on the customer’s needs.
HOPES
Controller (“VPP”)
● The HOPES controller is still under development.
The
HOPES Controller will be able to:
The
first deployments of the NextNRG Smart Microgrid are expected to be on tribal land in the United States. The reason NextNRG
is targeting tribal land is because, in 2022, the U.S. Energy Department’s Office of Indian Energy issued a report citing that
nearly 17,000 tribal homes were without electricity, with most being in southwestern states and in Alaska. Assistant Secretary for Indian
Affairs Mr. Bryan Newland testified before Congress that 1 in 5 homes on the Navajo Nation and more than one-third of homes on the neighboring
Hopi reservation are without electricity. Our goal is to work with the Native American Tribes to reduce this number to zero
At
each location where the NextNRG Smart Microgrid is deployed, NextNRG plans to evaluate the possibility of deploying NextNRG’s
wireless EV charging solutions. These solutions are explained in more detail below.
EV
wireless charging offers several benefits:
NextNRG’s primary patent covers an electric vehicle charging station, designed as a bumper, that ensures proper alignment between
the vehicle’s battery charger and the charger pad in the charging station.
● Integrated sensors detect the vehicle’s position as it parks.
The
licensed WPT solutions are based on a unique analog architecture. The static solution also provides a bi-direction (grid to vehicle and
vehicle to grid) power transfer which allows a charged EV to serve as a reserve generator for the home in case of power failure.
To
date, NextNRG’s static and dynamic solutions have been designed and prototypes are being tested at 25 kwh of output in a
laboratory environment at FIU. NextNRG expects for this static WPT solution to automate EV charging such that drivers do not need
to do anything to charge. There are no cables inside or outside of the car.
NextNRG expects for its dynamic WPT solution to be implemented on highways and public roads so it can provide essentially unlimited
range for EVs without plugging-in or stopping for recharging. These solutions will revolutionize the future of transportation systems.
NextNRG is working with FIU to deploy the dynamic WPT solution as a pilot for use on their campus and demonstrate its capabilities.
NextNRG’s solutions are not expected to be affected by rain, snow, ice, dust, or dirt. They will be a clean and safe way to charge
EVs. NextNRG expect that its bidirectional WPT systems will support connecting grid-to-vehicle (“G2V”) and vehicle-to-grid
(“V2G”). It also plans for its systems to be able to integrate with the grid to help create a resilient network to handle
disaster conditions. For example, during a hurricane in areas with power outages, EVs with V2G capability would be able to power hospitals,
homes, and other critical infrastructure to create a reliable, longer lasting energy source.
NextNRG believes that it is positioning itself to be able to offer a combination of: (i) wireless charging outputs from 25kwh; (ii)
bi-directional wireless charging; and (iii) both static and dynamic wireless EV charging.
The
microgrid, solar, and EV Charging markets in the U.S. have been growing steadily with the presence of key players engaged in research
and development to increase efficiency and decrease the cost of the components. NextNRG believes the confluence of multiple clean
energy trends creates a significant market opportunity. According to the U.S. Energy Information Administration (“EIA”),
the U.S. spends $400 billion on electricity each year, of which $200 billion is spent on C&I. An additional $98 billion of investment
will be required to meet the country’s 2030 sustainability goals. Renewable energy microgrids have proven an effective tool to
help communities respond to natural disasters, and support countries who depend on foreign oil supplies. It may be necessary to rapidly
increase the scale and scope of renewable generation assets in the U.S. in order to meet the various targets and commitments set by corporations
and governments.
Agreements
and Collaborations
License
Agreement with Florida International University
NextNRG
has purchased has exclusive licenses to a portfolio of seven patents owned by FIU. NextNRG
is be obligated to pay fixed royalty payments for the licenses to FIU on an annual basis. The terms of the licenses shall continue
for the life of the patents or until terminated by either party, pursuant to the terms of the licenses. NextNRG will also have
certain performance obligations pursuant to the terms of the licenses.
Intellectual
Property
NextNRG is the owner of US Patent No. 10,836,269 B2 which is a patent for an inductive charging parking bumper with automatic payment
processing.
NextNRG’s
licenses from FIU relate to the following U.S. patents covering wireless electric vehicle charging: US Patents Numbered: 10637294;
9919610; and 9731614.
NextNRG’s
licenses from FIU relate to the following U.S. patents covering smart microgrid technology: US Patents Numbered: 10326280; 10969436;
10958211; and 11022720.
NextNRG has also filed trademark applications for “NextCharge,” “Next Charge,” “Next Charging,”
“NextCharging,” “NextNRG,” “NextNRG,” and the Next logo.
NextNRG owns the domain names: NextCharging.com and NextNRG.com
Regulatory
Although
NextNRG is not regulated as a public utility in the United States under applicable national, state or other local regulatory regimes
where it conducts business, it expects to compete primarily with regulated utilities. As a result, it has developed and is committed
to maintaining a policy team to focus on the key regulatory and legislative issues impacting the entire industry. It believes these efforts
help it better navigate local markets through relationships with key stakeholders and facilitate a deep understanding of the national
and regional policy environment.
To
operate its systems, NextNRG will need to obtain interconnection permission from the applicable local primary electric utility.
Depending on the size of the solar energy system and local law requirements, interconnection permission will be provided by the local
utility directly to NextNRG and/or future customers. In almost all cases, interconnection permissions are issued on the basis of
a standard process that has been pre-approved by the local public utility commission or other regulatory body with jurisdiction over
net metering policies. As such, no additional regulatory approvals are required once interconnection permission is given.
NextNRG’s future operations will be subject to stringent and complex federal, state and local laws, including regulations governing
the occupational health and safety of our employees and wage regulations. For example, it is subject to the requirements of the federal
Occupational Safety and Health Act, as amended (“OSH Act”), and comparable state laws that protect and regulate employee
health and safety. NextNRG endeavors to maintain compliance with applicable OSH Act and other comparable government regulations.
Government
Incentives
Federal,
state and local government bodies provide incentives to owners, distributors, system integrators and manufacturers of solar energy systems
to promote solar energy in the form of rebates, tax credits, payments for renewable energy credits (“RECs”) associated with
renewable energy generation and exclusion of solar energy systems from property tax assessments. These incentives should enable NextNRG to lower the price it will charge future customers for energy from, and to lease, solar energy systems, helping to catalyze
customer acceptance of solar energy as an alternative to utility-provided power. In addition, for some investors, the acceleration of
depreciation creates a valuable tax benefit that reduces the overall cost of the solar energy system and increases the return on investment
The
Inflation Reduction Act of 2022 (the “IRA”), which was passed in August 2022, substantially changed and expanded existing
federal tax benefits for renewable energy. The IRA extended the existing framework for investment tax credits (“ITC”) offered
by the federal government under Section 48(a) of the Internal Revenue Code (the “Code”) for the installation of certain solar
power facilities owned for business purposes. Prior to the IRA, if construction on the facility began before January 1, 2020, the amount
of the ITC available was 30%, if construction began during 2020, 2021, or 2022 the amount of the ITC available was 26%, with additional
step downs in later years. Projects placed in service before January 1, 2022 are still set at 26%. However, with the enactment of the
IRA, solar power facilities installed between 2022 and 2032 will receive a 30% ITC of the cost of installed equipment for ten years so
long as the facilities meet wage and apprenticeship requirements or are less than 1 MWac, which will decrease to 26% for solar power
facilities installed in 2033 and to 22% for solar power facilities installed in 2034; and for those solar power facilities installed
in 2022, the ITC has increased from 22% to 30% if the ITC has not yet been claimed. The prevailing wage rates also must be paid for alteration
and repair during the 5 years after a project is placed in service.
Pursuant
to the IRA, certain ITC projects are eligible for a 10% domestic content bonus so long as the facilities meet wage and apprenticeship
requirements, if all the steel and iron are produced in the United States and at least 40% of the facility is produced in the United
States, which domestic content percentage requirement increases for facilities that start construction after 2024 and eventually reach
55% for projects which begin construction in 2027 or later.
Pursuant
to the IRA, certain ITC projects are eligible for an additional 10% or 20% energy community bonus so long as the facilities meet wage
and apprenticeship requirements, and if the facility owner applies for and receives an environmental justice allocation from the Internal
Revenue Service (the “IRS”). Solar (and certain related storage) facilities that are less than 5 MWac that are either located
in a low-income community or on Indian land, or are part of a qualified low-income residential building project or a qualified low-income
economic benefit project qualify. For example, qualified low-income economic benefit projects can receive a 20% bonus if low-income households
receive at least one-half of the financial benefits. The IRS provided taxpayers guidance in Notice 2023-18 for determining the requirements
for allocation of the ITC bonus. The IRA also included additional incentives, including in relation to stand-alone storage and claiming
interconnection costs under the ITC in certain situations.
Additionally,
the Inflation Reduction Act has secured historic levels of funding specifically for Tribal Nations and Native communities, including
$32 billion in the American Rescue Plan, $13 billion in the Bipartisan Infrastructure Law, and more than $720 million in the IRA.
The
U.S. Department of Energy’s Clean Energy for Low Income Communities Accelerator partnered with state and local leaders that committed
$335 million to help 155,000 low-income households access renewable energy and efficiency to save up to 30% or more on energy bills.
In
addition to the incentives at the federal government, more than half of the states, and many local jurisdictions, have established property
tax incentives for renewable energy systems that include exemptions, exclusions, abatements and credits. Approximately thirty states
and the District of Columbia have adopted a renewable portfolio standard (and approximately eight other states have some voluntary goal)
that requires regulated utilities to procure a specified percentage of total electricity delivered in the state from eligible renewable
energy sources, such as solar energy systems, by a specified date. To prove compliance with such mandates, utilities must surrender solar
renewable energy credits (“SRECs”) to the applicable authority. Solar energy system owners such as our investment funds often
are able to sell SRECs to utilities directly or in SREC markets. While there are numerous federal, state and local government incentives
that benefit our business, some adverse interpretations or determinations of new and existing laws can have a negative impact on NextNRG’s business.
Manufacturing
and Supply
NextNRG plans to purchase equipment, including solar panels, inverters, batteries, wireless charging station components from a variety
of manufacturers and suppliers. If one or more of the suppliers and manufacturers that NextNRG relies upon to meet anticipated
demand reduces or ceases production, it may be difficult to quickly identify and qualify alternatives on acceptable terms. In addition,
equipment prices may increase in the coming years, or not decrease at the rates it has historically experienced, due to tariffs or other
factors. Eventually, NextNRG believes it will be manufacturing some, if not all, of its products in-house.
Government
Regulation
Our
industry has certain government regulations, EzFill is dedicated to ensure that we are always operating in a way that is in compliance
with all applicable regulations.
Our
operations may also be subject to local fire marshal regulations, which varies in the different cities and counties. EzFill keeps up
to date on the local regulations in each of the locations it operates and does ample research into local regulations before opening in
any new location.