Item 1A. Risk Factors 39
Item 1B. Unresolved Staff Comments 55
Item 1C. Cybersecurity 55
Item 2. Properties 57
Item 3. Legal Proceedings 57
Item 4. Mine Safety Disclosures 57
Item 6. [Reserved] 59
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 92
Item 8. Financial Statements and Supplementary Data 93
Item 9A. Controls and Procedures 94
Item 9B. Other Information 95
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 95
Item 10. Directors, Executive Officers and Corporate Governance 95
Item 11. Executive Compensation 104
Item 14. Principal Accountant Fees and Services 139
Item 15. Exhibits, Financial Statement Schedules 140
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
annual report contains “forward-looking statements” 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. Forward-looking statements
reflect our current view about future events. When used in this annual report, the words “anticipate,” “believe,”
“estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these
terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements include,
but are not limited to, statements contained in this annual report relating to our business strategy, our future operating results and
liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to
inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from
those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future
performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause
actual results to differ materially from those in the forward-looking statements include, without limitation, our ability to raise capital
to fund continuing operations; our ability to protect our intellectual property rights; the impact of any infringement actions or other
litigation brought against us; competition from other providers and products; our ability to develop and commercialize products and services;
changes in government regulation; our ability to complete capital raising transactions; and other factors (including the risks contained
in the section of this annual report entitled “Risk Factors”) relating to our industry, our operations and results of operations.
Actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Factors
or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of
them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements.
As
used in this annual report, the terms “NextNRG” “we”, “us”, “our” and “Company”
mean NextNRG, Inc. and/or our subsidiaries, unless otherwise indicated.
PART
I
Item
1. Business
Overview
NextNRG: Powering What’s Next
NextNRG is Powering What’s
Next by implementing artificial intelligence (AI) and machine learning (ML) into renewable energy, next-generation energy infrastructure,
battery storage, wireless electric vehicle (EV) charging and on-demand mobile fuel delivery to create an integrated ecosystem.
At the core of NextNRG’s strategy is its utility operating system, which leverages AI and ML to help make existing utilities’
energy management as efficient as possible, and the deployment of NextNRG smart microgrids, which utilize AI-driven energy management
alongside solar power and battery storage to enhance energy efficiency, reduce costs and improve grid resiliency. These microgrids are
designed to serve commercial properties, schools, hospitals, nursing homes, parking garages, rural and tribal lands, recreational facilities
and government properties, expanding energy accessibility.
NextNRG continues to expand its growing fleet of fuel delivery trucks and national footprint. NextNRG is also integrating sustainable
energy solutions into its mobile fueling operations. The company hopes to be an integral part of assisting its fleet customers in their
transition to EV, supporting more efficient fuel delivery while advancing clean energy adoption. The transition process is expected to
include the deployment of NextNRG’s innovative wireless EV charging solutions.
What
is a microgrid?
In
simple terms, a microgrid is a small-scale power grid that can operate independently or collaboratively with other power grids. NextNRG’s
technology is designed to mitigate risk of utilizing renewable energy, while maximizing energy output efficiencies. NextNRG believes
that its smart microgrid technology will 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 off-takers.
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 Commercial & Industrial properties. It is expected
that 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 customers, expand electrical grid capabilities, gain access to electricity where it
is not easily accessible, respond to, and prepare for, natural disasters, and bring down electricity costs. Additionally, renewable energy
microgrids are a viable solution for countries who would like to scale their renewable energy production and lessen their dependence
on foreign oil supply. Finally, we believe it is 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.
Utility
Scale Smart Microgrid:
Additionally,
NextNRG plans to offer its proprietary AI/ML powered smart microgrid technology to utilities and other energy producers/distributors
through SaaS agreements. Next believes these customers will benefit from the Smart Microgrid technologies’ ability to:
● Continuously optimize the system based on operational data;
● Learn optimal scheduling and dispatch of energy generation and storage;
● Predict changes in renewable energy source output and demand;
● Integrate renewable energy while maintaining reliability;
● Autonomously identify and addresses technical issues;
● Enhance resilience and lower electricity costs;
NextNRG
Smart Microgrid:
NextNRG
believes that through strategic deployments it should be able to build and operate solar energy systems coupled with its smart microgrid
technology (“NextNRG Smart Microgrids”), on commercial properties, schools, hospitals, nursing homes, parking garages, large
rural tracts of land, recreational facilities, tribal land, and federal, state, county, and municipal properties. The NextNRG Smart Microgrids
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 Smart Microgrid’s revenue generation will primarily come from power
purchase agreements (PPAs) with the diverse range of aforementioned offtakers.
Wireless
EV Charging:
Finally,
in appropriate client locations, NextNRG anticipates deploying its wireless EV charging technology, once that product is ready for deployment.
NextNRG believes that its wireless charging technology solves problems such as:
NextNRG’s
prospective solutions are supported by seven patented technologies developed by Florida International University, exclusive licenses
to which NextNRG acquired through the purchase of Stat-EI Inc. These technologies were tested on the largest smart grid dataset in the
world. The patents target the support of 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.
In
an era where the demand for reliable, sustainable energy is rapidly growing, traditional power grids face challenges that necessitate
innovative solutions. AI/ML based smart Microgrids, which operate as smaller versions of the main power grid, provide a resilient and
flexible approach to energy management and distribution. With the proper technology, microgrids can operate autonomously during grid
failures and seamlessly integrate renewable energy sources, making them indispensable in today’s energy landscape. We believe that
NextNRG is at the forefront of this revolution, offering cutting-edge AI/ML based smart microgrid technology that enhances grid resiliency,
optimizes energy use, and reduces costs. These systems are designed to meet the challenges of fluctuating energy demands and supply,
ensuring consistent and efficient power delivery across various sectors.
The
Core Components of NextNRG’s technology:
The
main drivers of the renewable energy industry 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.
Next
Owned Smart Microgrid:
NextNRG
believes that through strategic deployments it should be able to build and operate solar energy systems coupled with its AI/ML based
smart microgrid technology (“NextNRG Smart Microgrids”), on commercial properties, schools, hospitals, nursing homes, parking
garages, large rural tracts of land, recreational facilities, tribal land, and federal, state, county, and municipal properties. The
NextNRG Smart Microgrids 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 power purchase agreements to sell the power
generated by the solar energy system to those landowners, or various commercial, utility, municipal and community solar off-takers. Additionally,
NextNRG plans to offer its proprietary AI/ML powered smart microgrid technology to utilities and other energy producers/distributors
through SaaS agreements.
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. NextNRG’s Artificial Intelligence/Machine Learning (“AI/ML”)
based patented technologies can:
● Continuously optimize the system based on operational data;
● Learn optimal scheduling and dispatch of energy generation and storage;
● Predict changes in renewable energy source output and demand;
● Integrate renewable energy while maintaining reliability;
● Autonomously identify and address technical issues;
● Enhance resilience and lower electricity 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:
NextNRG
is the owner of exclusive licenses to four patented technologies which cover the development and commercialization of AI/ML based 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 deployed by a large utility for approximately six million of its customers. The combined
technologies are referred to as the NextNRG Smart Microgrid and potential products based on these technologies are explained in more
detail below.
Smart
Microgrid Controller (US Patent No. 10326280)
The
RenCast Predictor (US Patent No. 11022720)
The
Battery State of Charge (“SOC”) System (US Patent No. 10969436)
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 (US Patent No. 10958211)
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%. Next’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
NextNRG Smart Microgrid is designed to maintain grid stability and enhance operational efficiency through advanced monitoring and control
systems. By integrating grid forming inverters and multi-level controllers, the microgrid dynamically adjusts to fluctuations in energy
demand and supply. These components work together to ensure a consistent and reliable power supply, reducing the risk of outages and
improving overall energy efficiency. The system’s real-time monitoring capabilities provide utility operators with valuable insights
into grid performance, enabling informed decision-making and proactive management.
The
first deployment of the NextNRG Smart Microgrid is expected to be in Bryceville, Florida.
Other prospective projects will be built on tribal land in the United
States. NextNRG currently is working on a deployment on tribal land in the State of Louisiana. 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.
NextNRG is in preliminary discussions with seven Native
American Tribes to deploy 5 mWh Smart Microgrids on their properties. In total, NextNRG has nearly approx. $750 Million in planned smart
microgrid deployments, all of these projects are in different phases of the project timeline. The projects vary from municipal property
to Tribal land, to commercial facilities (healthcare, office space, multifamily, and amusement parks).
Other planned deployments are in underserved communities located in the City of Newton, Texas and the City of Havana Florida.
NextNRG has filed grant applications with the DOE for those deployments.
NextNRG
also hopes to utilize its AI/ML Smart Microgrid systems to convert shuttered coal-fired power plants into solar energy producing facilities.
NextNRG
believes, that utility companies; microgrid companies; and renewable energy generation companies will all be able to capitalize on the
advantages of the NextNRG smart microgrid technology and therefore NextNRG plans to offer its technology to these companies under a SaaS
model.
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.
Wireless
EV charging uses resonant electromagnetic induction to transmit a current, this process is also known as “inductive charging”
or “wireless power transfer” (“WPT”). Wireless charging utilizes a charging pad installed in the ground and a
similar pad installed on the bottom of a car, when the pads align, charging automatically begins.
Wireless
EV charging offers several benefits:
● Wireless charging is more efficient than a traditional plug in charger.
Wireless
Charging Parking Bumper (US Patent No. 10836269B2)
NextNRG’s
primary patent covers an electric vehicle charging station, designed as a bumper which 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.
NextNRG
believes its parking bumper patent is the key to commercializing wireless EV charging, the automated verification and payment system
is expected to be the most seamless way to start a charge.
NextNRG
also holds the exclusive license for three patents in the WPT space - two for the static transfer of energy and one for the dynamic transfer
of energy. 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.
Bidirectional
Wireless Power Transfer (US Patent No. 10637294B2)
This
patent describes a system capable of wirelessly transferring power in both directions. This technology is designed for efficient and
safe power exchange, which could be particularly useful in scenarios where power needs to be sent back to the grid during peak demand,
and/or power outages.
Advancements
in Inductive Power Transfer (US Patent No. 9919610B1)
This
patent focuses on enhancing the capabilities of wireless power transfer systems. The improvements include increasing the efficiency of
power transfer, extending the longevity of the system and broadening its applicability across various contexts.
Wireless
EV Charging Station for Static and Dynamic Charging (US Patent No. 9731614B1)
This
patent details a wireless charging station specifically designed for EVs. It has the capability to charge EVs both when they are stationary
(static) and while they are in motion (dynamic). The dynamic charging allows for continuous charging, potentially revolutionizing the
way EVs maintain battery levels.
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, with plans to expand the output capacity to 1mwh and above. 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’s
static and dynamic 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 static WPT systems will be bidirectional, this means that they will support connecting grid-to-vehicle (“G2V”)
and vehicle-to-grid (“V2G”). NextNRG is unaware of any other WPT system which has V2G capabilities. For homeowners who want
to deploy solar and microgrid solutions at their home, with our WPT system we expect for those homeowners to be able to utilize their
car as a battery storage system. Additionally, in emergency outage situations homeowners with our WPT system will be able to maintain
power by using our V2G capabilities.
Additionally,
through an integration with our the Smart Microgrid deployments, NextNRG plans for its WPT 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
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
believes that it is positioning itself to be the only wireless EV charging company to able to offer a combination of: (i) wireless charging
outputs from 25kwh to over 1mwh; (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 Commercial & Industrial properties. It is expected
that 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 customers, expand electrical grid capabilities, gain access to electricity where it
is not easily accessible, respond to, and prepare for, natural disasters, and bring down electricity costs. Additionally, renewable energy
microgrids are a viable solution for countries who would like to scale their renewable energy production and lessen their dependence
on foreign oil supply. Finally, we believe it is 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.
Revenue
Sources
Sale
of Electricity
Solar
Electricity
NextNRG
plans to derive its operating revenues principally from power purchase agreements, net metering credit agreements, solar renewable energy
credits, and performance-based incentives. A portion of NextNRG’s power sales revenues is expected to be earned through the sale
of energy (based on kilowatt hours) pursuant to the terms of Power Purchase Agreements (PPAs). NextNRG’s PPAs will typically have
fixed or floating rates and are expected to be generally invoiced monthly.
Wireless
EV Charging
NextNRG
will sell energy to its wireless EV charging customers.
NextNRG
plans to sell its innovative solutions to property owners, parking facilities, municipalities, and government agencies, as well as charge
point operators (CPOs), empowering the growth of sustainable transportation infrastructure.
NextNRG
plans to generate revenue from the deployment of solar and battery storage solutions where applicable to further take advantage of the
renewable energy industry. Energy pricing is based on peak/off-peak rates at any given charging location. NextNRG plans to negotiate
our own Power Purchase Agreements (PPA) accordingly. NextNRG is also planning to sell energy to electric vehicle owners via wireless
EV charging.
SaaS
& Licensing
Software
as a Service Agreements
NextNRG
plans to generate revenue from the sale of its energy management software under SaaS Agreements with utility companies; microgrid companies;
and renewable energy generation companies. Additionally, any traditional customers which would like to own their own energy generation
systems will have the option of entering a SaaS agreement to purchase rights to the technology.
Hardware
Licensing
NextNRG
plans to generate licensing revenues from competitors or ancillary business participants who desire to utilize or integrate NextNRG’s
intellectual property, hardware, or software solutions within their proprietary product.
Sale
of Hardware
NextNRG
plans to generate revenues from the sale of hardware, eg. solar panels, battery storage solution equipment, wireless charging
pad or bumper and vehicle receiver technology.
Potential
Customers Include
Property
owners, electrical supply companies, management companies, all levels of government, original equipment manufacturers, tribal land, car
manufacturers, EV charging companies, wholesale electricity providers, utilities, and fleet owners.
Agreements
and Collaborations
License
Agreements with Florida International University
NextNRG
holds exclusive licenses to a portfolio of seven patents owned by FIU. Under the licensing agreements NextNRG is obligated to pay fixed
royalty payments for the licenses to FIU on an annual basis. The terms of the licenses continue for the life of the patents or until
terminated by either party, pursuant to the terms of the licenses. NextNRG also has certain performance obligations pursuant to the terms
of the licenses.
Agreement
with Midwest
NextNRG
and Midwest have entered an agreement to work together to establish a greenfield facility for the manufacturing of battery-energy-storage
systems (BESS) in the United States of America. While some of the components will be sourced from India in the initial phase, localization
of components and sub-systems will be made a priority of the parties. In the interim period, Midwest will supply the products and services
for NextNRG’s current planned deployments. The scope of such supply includes BESS, solar panels, as well as design services. The
collaboration with Midwest is expected to meet the requirements of the “Made in America” and produce local products which
are key to the energy transition goals of the US. Further, this activity is expected to qualify for and attract public financing, earn
tax credits, and cut down the overall costs of deployment of the solutions offered by NextNRG.
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 NextNRG logo.
NextNRG
owns the domain names: NextCharging.com; NextNRG.com; NXXT.energy; and NextNRG.energy
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 may 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, when needed 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 that through its agreement with Midwest, it will be manufacturing some, if not all, of its products in-house.
Mobile Fueling
NextNRG’s Mobile Fueling solution offers on-demand and subscription-based
fuel delivery services, catering to individual consumers, fleets, marine, and other specialty markets. Leveraging digital technology and
GPS-based systems, this service responds to the increasing preference for home and workplace product deliveries. Particularly, our fleet
services are experiencing significant growth, providing a streamlined, efficient fueling option that allows commercial operators to optimize
operations and reduce downtime. This innovation not only meets the modern demand for convenience but also aligns with the broader shift
towards more agile and responsive service models in today’s economy.
An EzFill Mobile Delivery Truck
NextNRG
Model – Resolving Pain Points in the Consumer and Commercial Fuel Customer Markets
NextNRG’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:
Mobile Fueling
Product Offerings
We
provide fuel delivery via our fleet of trucks in Florida, Texas, California, Arizona, Tennessee and Michigan. Our goal is to service all our customers across all our lines of business at predictable locations during vehicle downtimes.
Our fleet currently includes 140 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 $6.99 for each delivery or they have the option to pay $14.99 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.
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 NextNRG 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 NextNRG. 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 NextNRG 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 fuel 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).
3.
SERVICING SPECIALTY MARKETS
NextNRG
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 fuel 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.
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, as well as a leading equipment rental company.
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.
Mobile Fueling 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.
Mobile Fueling
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 approximately 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. NextNRG
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. NextNRG 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
NextNRG
believes that the on-demand market will continue to grow and this growth will benefit its fuel 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.
Mobile Fueling
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 fleet of trucks, our goal is to open in new markets throughout the US.
NextNRG’s
current focus is on expanding its geographic footprint. We aim to open in new markets in the future both organically