DEF: NextNRG Seeks Shareholder Approval for Nevada Redomicile

NextNRG, Inc. invites stockholders to its 2025 Annual Meeting to vote on director elections, a proposed redomicile from Delaware to Nevada, and the ratification of its independent public accountant.

Summary

• The 2025 Annual Meeting of Stockholders will be held on December 29, 2025, to address the election of five directors, the approval of a redomicile from Delaware to Nevada, and the ratification of M&K CPAs, PLLC as the independent public accountant for the fiscal year ending December 31, 2025.
• The proposed redomicile to Nevada is anticipated to generate annual savings of approximately $130,000 in Delaware franchise taxes and potentially enhance protections for directors and officers.
• As of October 30, 2025, NextNRG had 130,840,578 common shares, 350,000 Series A convertible preferred shares, and 140,000 Series B convertible preferred shares outstanding.
• Michael D. Farkas, the Chief Executive Officer and Executive Chairman, beneficially holds 57.8% of the company's total voting power, including 140,000 Series B Preferred shares convertible into 725,200 common shares.
• The company has engaged in extensive related party transactions, including numerous promissory notes issued to NextNRG Holding Corp. (controlled by Michael Farkas) totaling $6,215,000 in principal, which were subsequently exchanged for 3,525,341 common shares on August 16, 2024.
• Additional promissory notes from NextNRG Holding Corp. and Michael D. Farkas were issued in late 2024 and early 2025, with an aggregate outstanding principal balance of $9,840,045 and accrued interest of $2,269,707 as of December 4, 2025.
• An Exchange Agreement for the acquisition of 100% of NextNRG Holding Corp. involves the issuance of 100,000,000 shares of NextNRG, Inc. common stock, with 50,000,000 shares vesting at closing and the remaining 50,000,000 vesting upon the achievement of specific commercial deployment or financial milestones.

Sentiment

Score: 4

Explanation: The filing outlines routine corporate governance matters and a strategic redomicile for tax and D&O benefits. However, the extensive related party transactions, particularly the high volume of promissory notes with high interest rates and dilutive conversion terms, and the significant share issuance for the NextNRG Holding Corp. acquisition, introduce substantial financial and dilution risks. While the redomicile offers some positives, the overall financial structure and reliance on related party funding present concerns.

Positives

• The proposed redomicile to Nevada is projected to result in substantial annual savings in Delaware franchise taxes, estimated at approximately $130,000 for 2025.
• Nevada law may offer potentially greater protection for directors and officers, which could be beneficial for attracting and retaining qualified management.
• The Board of Directors has established independent Audit, Compensation, and Corporate Governance/Nominating Committees, which aligns with sound corporate governance practices.
• A written Code of Conduct is in place, applicable to all employees, officers, and directors, promoting ethical standards across the organization.

Negatives

• The company carries a significant amount of related party debt, with $9,840,045 in outstanding principal and $2,269,707 in accrued interest as of December 4, 2025, owed to Michael D. Farkas and NextNRG Holding Corp., raising concerns about potential conflicts of interest and financial dependence.
• Many related party promissory notes feature high default interest rates (18%) and include conversion rights into common stock at potentially dilutive prices (e.g., a $0.70 floor price for recent notes).
• The acquisition of NextNRG Holding Corp. involves the issuance of 100,000,000 shares of common stock, with 50,000,000 shares subject to vesting based on future performance, which could lead to substantial dilution for existing shareholders.
• The redomicile to Nevada, while offering some benefits, may result in less predictability in corporate affairs due to a more limited body of case law compared to Delaware.
• Certain investment funds and brokerage firms may be less inclined to invest in a corporation incorporated in a jurisdiction other than Delaware due to less familiar corporate laws.
• The company's reliance on related party financing for working capital needs suggests ongoing financial challenges and potentially limited access to alternative funding sources.

Risks

• **Legal and Regulatory Risk (Redomicile)**: Less developed case law in Nevada compared to Delaware may lead to less predictability regarding corporate affairs and stockholder rights.
• **Investor Perception Risk (Redomicile)**: Certain investment funds, sophisticated investors, and brokerage firms may be less comfortable investing in a Nevada corporation due to less understood corporate laws.
• **Anti-Takeover Implications (Redomicile)**: The change to Nevada law may have anti-takeover implications, potentially making it harder for stockholders to effect changes in control.
• **Dilution Risk**: The issuance of 100,000,000 shares of common stock for the acquisition of NextNRG Holding Corp., and potential conversions of numerous promissory notes into common stock, could significantly dilute existing shareholders.
• **Financial Dependence Risk**: Heavy reliance on related party financing (Michael D. Farkas and NextNRG Holding Corp.) for working capital needs poses a risk if this funding source becomes unavailable or terms become more onerous.
• **Default Risk**: The company has numerous promissory notes with high default interest rates (18%) and conversion rights at potentially low prices, indicating a risk of default and subsequent dilution.
• **Operational Risk (Vesting Conditions)**: The vesting of 50,000,000 restricted shares for the NextNRG Holding Corp. acquisition is contingent on achieving specific commercial deployment or financial milestones, which may not be met.
• **Market Perception Risk (Conversion Prices)**: The conversion prices for related party notes (e.g., $0.70 floor price) are significantly lower than the $6.40/share valuation for Avishai Vaknin's stock award in 2023, potentially signaling a decline in perceived value or highly favorable terms for related parties.

Future Outlook

The company intends to redomicile to Nevada to achieve tax savings and potentially enhance director/officer protections. The acquisition of NextNRG Holding Corp. is expected to close, leading to significant share issuance contingent on future commercial deployments or financial milestones related to solar, wireless EV charging, microgrid, and battery storage systems. The executive compensation program is designed to attract and retain key executives by tying a significant portion of total compensation to the achievement of business goals like revenue and Adjusted EBITDA targets, with equity compensation subject to multi-year vesting.

Management Comments

• "I am pleased to extend this invitation to attend the 2025 Annual Meeting of Stockholders." Michael Farkas, CEO and Executive Chairman.
• Our Board believes it is important to retain flexibility in allocating the responsibilities of the Chief Executive Officer and Chairman of the Board in any way that is in the best interests of our Company based on the circumstances existing at a particular point in time.
• We designed our executive officer compensation program to attract, motivate and retain key executives who drive our success. We strive to have pay reflect our performance and align with the interests of long-term stockholders, which we achieve with compensation that: Provides executives with competitive compensation that maintains a balance between cash and stock compensation, encouraging our executive officers to act as owners with an equity stake in our company; Ties a significant portion of total compensation to achievement of the Company’s business goals such as revenue, and Adjusted EBITDA targets; Enhances retention by having equity compensation subject to multi-year vesting; and Does not encourage unnecessary and excessive risk taking.

Industry Context

This filing primarily addresses corporate governance and financing matters rather than specific industry trends. However, the company's business activities, as implied by the vesting conditions for the NextNRG Holding Corp. acquisition, are in the renewable energy and electric vehicle charging sectors (solar, wireless EV charging, microgrid, battery storage). These are growth industries, but the filing does not provide specific competitive analysis or market positioning. The redomicile decision is an internal corporate strategy, not directly tied to broader industry trends, though it aims to optimize corporate structure for the company's specific needs.

Comparison to Industry Standards

• **Corporate Governance**: The company's board structure with independent committees (Audit, Compensation, Corporate Governance/Nominating) aligns with general industry best practices for public companies, particularly those listed on Nasdaq.
• **Executive Compensation**: The compensation philosophy of balancing cash and stock, tying pay to performance (revenue, Adjusted EBITDA), and multi-year vesting for equity awards is a common practice in many industries to align executive and shareholder interests.
• **Related Party Transactions**: The extensive related party debt and the terms of conversion (e.g., low floor prices) appear to be less favorable than typical arm's-length transactions and could be viewed critically compared to industry standards for corporate financing, potentially indicating a lack of access to conventional funding or a high cost of capital.
• **Redomicile**: While companies do redomicile for various reasons, the stated reasons (tax savings, D&O protection) are common. However, the potential for less developed case law in Nevada compared to Delaware is a known trade-off that sophisticated investors often consider.

Management Changes

Corporate Governance

Legal Proceedings

• No directors, executive officers, promoters, control persons, or nominees have been subject to bankruptcy petitions, criminal proceedings, court orders limiting business activities, or findings of federal/state securities or commodities law violations in the past 10 years.

Related Party Transactions

• **Consulting Agreement with Mountain Views Strategy Ltd.**: A company owned by Daniel Arbour (director) provided outsourced chief revenue officer services from February 2023 to June 2024, with monthly payments of $5,000 plus expenses.
• **Services Agreement with Telx Computers Inc.**: A company owned by Avishai Vaknin (CTO) provides technology oversight services for $10,000 per month plus pre-approved expenses, effective April 19, 2023.
• **Numerous Promissory Notes with NextNRG Holding Corp.**: A series of notes issued from July 2023 to August 2024, with original issue discounts (OID) of 10%, initial 8% annual interest for nine months, then 18% per annum. Default terms included 150% of unpaid principal/interest immediately due and conversion rights into common stock at various prices (e.g., average VWAP over 10 trading days or a floor price like $1.75, $0.70, $3.05, $5.13, $4.40, $5.00, $7.00, $6.45).
• **Exchange Agreement with NextNRG Holding Corp.**: On August 16, 2024, $6,215,000 in principal ($9,800,449 after default) from various promissory notes was exchanged and converted into 3,525,341 shares of common stock. Michael Farkas is CEO of NextNRG Holding Corp. and a beneficial holder of NextNRG, Inc.
• **Stock Purchase Agreement with NextNRG Holding Corp.**: On August 16, 2024, NextNRG Holding Corp. purchased 140,000 shares of Series B Convertible Preferred Stock for $1,400,000.
• **Exchange Agreement for NextNRG Holding Corp. Acquisition**: An amended agreement (September 25, 2024) to acquire 100% of NextNRG Holding Corp. for 100,000,000 shares of NextNRG, Inc. common stock. 50,000,000 shares vest at closing, and 50,000,000 restricted shares vest upon achieving specific commercial deployment or financial milestones.
• **Recent Promissory Notes with NextNRG Holding Corp.**: Additional notes issued in December 2024 (December 2, December 3, December 17, December 30) totaling $1,330,000 in principal, with 10% OID (for Dec 2 & 3 notes), 8% interest for nine months then 18%, and conversion rights at average VWAP or a floor price of $0.70.
• **Promissory Notes with Michael D. Farkas**: Between June 2023 and February 2025, a series of notes were issued to Michael D. Farkas, totaling $9,840,045 in outstanding principal and $2,269,707 in accrued interest as of December 4, 2025, bearing interest rates of 10%, 12%, or 18%.
• **Shareholder Approval for Other Notes**: Shareholder consents on January 15, 2025, approved potential share issuances for a $500,000 note with Alcourt LLC (repaid Feb 2025) and a $5,000,000 note with Gad International Ltd. (extended to March 23, 2025, with a $200,000 fee).

Stakeholder Impact

• **Shareholders**: Potential for significant dilution from the issuance of 100,000,000 shares for the NextNRG Holding Corp. acquisition and conversion of numerous related party promissory notes. The redomicile aims to reduce franchise taxes, potentially benefiting long-term shareholder value, but also introduces less predictable Nevada corporate law.
• **Directors and Officers**: The redomicile to Nevada is intended to provide potentially greater protection against lawsuits, which could be a positive for attracting and retaining talent.
• **Creditors (Related Party)**: Michael D. Farkas and NextNRG Holding Corp. are significant creditors, holding substantial promissory notes with favorable terms (high interest, default penalties, conversion rights), indicating their strong position.
• **Employees**: Executive compensation is designed to attract and retain key executives, aligning their interests with company performance through equity awards and performance-based incentives.

Next Steps

• Hold the 2025 Annual Meeting of Stockholders on December 29, 2025.
• Elect five director nominees.
• Vote on and approve the change in state of incorporation from Delaware to Nevada (Redomicile).
• Ratify the selection of M&K CPAs, PLLC as the independent public accountant for fiscal year ending December 31, 2025.
• If the Redomicile is approved, file the necessary certificates with Delaware and Nevada Secretaries of State to effectuate the change.
• The Board will cause the Redomicile to be effectuated as soon as reasonably practicable after approval.
• The company will report the results of the Annual Meeting in a Current Report on Form 8-K within four business days.
• Continue efforts to commercially deploy solar, wireless electric vehicle charging, microgrid, and/or battery storage systems to meet vesting conditions for 25,000,000 restricted shares.
• Work towards reaching annual revenues exceeding $100 million, completing projects with deployment costs greater than $100 million, or completing a capital raise greater than $25 million to meet vesting conditions for another 25,000,000 restricted shares.
• Obtain shareholder approval for issuing common shares to NextNRG in excess of the Nasdaq 19.99% Cap, or repay outstanding balances in cash if approval is not obtained.
• The Board will determine the initial officers of the Corporation promptly following the Conversion.

Key Dates

Recommendation

While the proposed redomicile to Nevada offers potential tax savings and enhanced director protections, the extensive and complex web of related-party transactions, particularly the substantial promissory notes with high interest rates and dilutive conversion features, and the massive share issuance for the NextNRG Holding Corp. acquisition, introduce significant financial and dilution risks. The company's heavy reliance on related-party financing for working capital suggests underlying financial fragility. The long-term benefits of the redomicile and the strategic acquisition are overshadowed by these immediate concerns about capital structure and potential dilution. A 'hold' recommendation is appropriate as investors should monitor the execution of the redomicile, the impact of the related party debt conversions, and the progress on the NextNRG Holding Corp. acquisition milestones before making further investment decisions. The high insider ownership (Michael Farkas at 57.8%) also means minority shareholders have limited influence.

Keywords

NextNRG, NXXT, Proxy Statement, Annual Meeting, Corporate Governance, Redomicile, Nevada Incorporation, Delaware Franchise Tax, Director Election, Auditor Ratification, Related Party Transactions, Promissory Notes, Stock Dilution, Michael Farkas, SEC Filing