10-Q: NextNRG posts surge in sales, deep losses

Q3 revenue jumped to $22.9M on expanded mobile fueling, but heavy stock-based pay, debt costs, and a going-concern warning drove a $15.0M quarterly net loss.

Summary

• Quarter: three months ended September 30, 2025; filing date November 14, 2025; common shares outstanding 131,072,322 as of November 14, 2025.
• Q3 2025 sales (net): $22,860,041 vs $6,985,963 in Q3 2024; nine months 2025 sales (net): $58,824,282 vs $20,977,860 in 2024.
• Q3 gross margin: $2,441,967; nine months gross margin: $4,529,752.
• Q3 operating loss: $(9,001,867); Q3 other expense, net: $(5,973,126) including interest expense $(4,391,950) and loss on settlement $(1,592,837).
• Q3 net loss: $(14,974,993); nine months net loss: $(60,046,267).
• Stock-based compensation: approximately $5.6M in Q3 and $31.05M for nine months 2025 (included within G&A).
• Cash: $653,869 at September 30, 2025; operating cash outflow: $(14,104,694) for nine months 2025.
• Balance sheet at September 30, 2025: total assets $19,645,509; total liabilities $36,915,170; stockholders’ deficit $(17,269,661); working capital deficit $(29,972,856).
• Debt: current notes payable (third-party) $13,041,099 (net); related-party notes payable (current) $10,334,594 (net); long-term notes payable $56,335.
• Segment status: all 2025 revenue to date from Mobile Fuel Delivery; Energy Infrastructure segment has no revenue yet.
• Customer/vendor concentration (nine months 2025): Customer A 48.85% of sales; Vendor A 57.87% of purchases (top four vendors total 94.20%).
• Capital markets activity: Feb 18, 2025 public equity raise (gross $15.0M); Sept 2025 $2.95M secured convertible note (fixed conversion $1.54, 750,000 warrants at $5.00) plus a $295,000 diligence note; Oct–Nov 2025 additional secured convertible notes totaling $6.49M principal (approx. $5.0M net).
• Sale–leasebacks: 34 trucks on May 29, 2025 (proceeds $899,640) and 35 trucks between Aug 4–29, 2025 (proceeds $2,002,680), with recognized losses on settlement.
• Going concern: management states immediate need to raise additional capital to fund operations.

Sentiment

Score: 3

Explanation: Strong revenue growth is overshadowed by heavy losses, severe liquidity and working capital deficits, going-concern uncertainty, high-cost financing, and significant dilution risk.

Positives

• Material revenue growth: Q3 2025 sales (net) rose to $22,860,041 from $6,985,963 in Q3 2024; nine months 2025 sales (net) reached $58,824,282.
• Gross margin dollars improved alongside higher volumes (Q3: $2,441,967; nine months: $4,529,752).
• Interest expense in Q3 2025 decreased versus Q3 2024 ($4,391,950 vs $6,786,885).
• Successful equity raise on Feb 18, 2025 (gross proceeds $15,000,000; net approx. $13.67M including over-allotment) to bolster liquidity.
• Convertible note conversions reduced some debt balances during the period (e.g., $1,451,401 of the September 2025 note converted at $1.54/share).
• Geographic expansion supported by new operating leases in Houston, San Antonio, Dallas, and Austin to scale fueling operations.

Negatives

• Significant net losses: Q3 $(14,974,993); nine months $(60,046,267).
• Heavy stock-based compensation burden: approx. $5.6M in Q3 and $31.05M for nine months 2025, inflating operating expenses (nine months G&A $48,224,935).
• Severe liquidity constraints: cash $653,869; operating cash outflow $(14,104,694) (nine months 2025); working capital deficit $(29,972,856).
• Stockholders’ deficit of $(17,269,661) at September 30, 2025 and going-concern uncertainty.
• High reliance on short-term, high-cost financing (merchant cash advances, OIDs, and secured converts) and related-party funding ($10,334,594 current related-party notes payable).
• Concentration risk: Customer A accounted for 48.85% of nine-month sales; Vendor A for 57.87% of purchases (top four vendors 94.20%).
• Dilution risk from equity raises, preferred stock dividends paid in common shares, and multiple convertible notes with warrants.
• Losses on asset transactions (sale–leasebacks) and loss on settlement of liabilities (Q3 $(1,592,837)).

Risks

• Substantial doubt about the ability to continue as a going concern; immediate capital raise is required to fund operations.
• Dependence on related parties for debt financing; uncertainty of obtaining capital on acceptable terms.
• Customer and vendor concentration: a few counterparties account for large portions of sales, receivables, and purchases, exposing the company to counterparty risk.
• Exposure to commodity pricing and macroeconomic volatility that can impact fuel costs, demand, and margins.
• High leverage and financing costs (including OIDs, fees, and amortization of debt discounts) strain cash flows.
• Execution risk in new segments (energy infrastructure, wireless EV charging, SaaS/licensing) that currently generate no revenue.
• Potential dilution from preferred stock dividends payable in common stock and from outstanding convertible instruments and warrants.

Future Outlook

Management plans to expand mobile fueling into new and existing markets while developing energy infrastructure offerings (wireless EV charging, microgrids, battery storage, SaaS/licensing). Continuation of operations depends on securing additional debt and/or equity financing; management states an immediate need to raise capital.

Management Comments

• Anticipates needing to raise additional capital immediately to continue to fund operations.
• All revenue for 2025 to date is from mobile fuel deliveries; the energy infrastructure segment is being developed.
• Strategic plans include expansion into new markets, collaborations, and potential acquisitions to accelerate growth.
• Concluded disclosure controls and procedures were effective as of September 30, 2025.
• Will record equity reclassifications in APIC related to the common control merger; these adjustments do not affect net income or cash flows.

Industry Context

Mobile fueling demand is benefiting from fleet outsourcing and logistics efficiency trends, while energy transition themes support long-term opportunities in EV charging and microgrids. However, unlike established EV charging networks and microgrid developers, the company has not yet generated revenue from its energy infrastructure segment, leaving it more exposed to fuel price volatility and working-capital-intensive operations.

Comparison to Industry Standards

• Compared to EV charging networks such as ChargePoint and Blink Charging, which generate recurring software/services revenue, the company currently reports no energy-infrastructure revenue and relies entirely on fuel sales in 2025.
• Versus microgrid and distributed energy developers (e.g., Stem, Enchanted Rock), the company has not reported project-level PPA or lease revenue, indicating earlier-stage commercialization in energy infrastructure.
• Mobile fueling competitors are largely private (e.g., Booster Fuels, Filld). The reported $58.8M nine-month revenue demonstrates scale in fueling, but profitability and cash burn remain well below sustainable benchmarks for public peers in adjacent energy-tech verticals.

Management Changes

Corporate Governance

Legal Proceedings

• No material legal proceedings were disclosed.

Related Party Transactions

• Related-party notes payable (current) of $10,334,594 (net) at September 30, 2025; various promissory notes with the Chief Executive Officer in 2025 (12% fixed rate, OIDs).
• Fee Agreement dated March 25, 2025: 3% fee payable to the Chief Executive Officer for personally guaranteeing certain company debt.
• Operating lease with the Chief Technology Officer for office space (new lease commenced October 1, 2024).
• Series B convertible preferred stock non-cash distribution of 1,400,000 shares to the Chief Executive Officer on February 13, 2025 to settle a prior funding arrangement.
• Stock Purchase Agreement dated September 18, 2025 to issue 1,000,000 restricted common shares at $1.67 to convert $1,670,000 of related-party debt (recorded as Shares Payable as of September 30, 2025).

Stakeholder Impact

• Shareholders: dilution from public offering, preferred dividends paid in stock, and conversions under multiple convertible notes and warrants.
• Creditors: high leverage and short-term obligations increase refinancing risk; numerous MCAs and OIDs elevate effective borrowing costs.
• Customers: concentration risk with a single large customer may affect stability if volumes change.
• Suppliers: heavy reliance on a limited number of vendors (top four 94.20% of purchases) raises supply chain/price risk.
• Employees/consultants: significant stock-based compensation used for services and fees indicates dependence on equity for retention and financing.

Next Steps

• Pursue additional debt and/or equity financing to address immediate liquidity needs.
• Expand mobile fueling footprint in existing and new markets (supported by new Texas leases).
• Advance commercialization of energy infrastructure initiatives (wireless EV charging, microgrids, battery storage, SaaS/licensing).
• Implement equity reclassifications in APIC related to the common control merger as part of ongoing consolidation clean-up.
• Manage and refinance short-term and MCA obligations; evaluate terms of outstanding convertible notes.

Key Dates

Recommendation

Despite rapid sales growth, the combination of a going-concern warning, substantial working capital and stockholders’ deficits, persistent heavy losses, reliance on high-cost short-term financing, and ongoing dilution from equity and convertibles presents an unfavorable risk-reward profile for shareholders.

Keywords

mobile fuel delivery, NextNRG, EzFill, energy infrastructure, wireless EV charging, microgrids, battery storage, solar, public offering, convertible notes, sale-leaseback, merchant cash advance, going concern, Michael D. Farkas, STAT-EI