NEXTNRG, INC. Revenue Disclosure

Revenue Recognition

 

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, as amended by Accounting Standards Update (ASU) 2014-09. Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

 

The Company generates revenue from mobile fuel sales, which can be purchased as a one-time transaction or through a monthly membership. Revenue from fuel sales is recognized at the time of delivery, and membership revenue is recognized at the end of each month, reflecting the satisfaction of the performance obligation over time within a one-month membership cycle.

 

The Company follows the five-step revenue recognition model outlined in ASC 606-10-05-4:

 

1.Identify the Contract with a Customer

 

A contract exists when the following criteria are met, per ASC 606-10-25-1:

 

	●	The contract creates enforceable rights and obligations between the Company and the customer.
	●	The contract has commercial substance (i.e., it affects the Company’s cash flows).
	●	The payment terms are identified, and the consideration is determinable.
	●	It is probable that the Company will collect the consideration in exchange for the goods or services transferred.

 

Contracts for mobile fuel sales and memberships meet these criteria. Collectability is assessed based on historical customer payment trends and credit risk in accordance with ASC 606-10-25-5.

 

2.Identify the Performance Obligations in the Contract

 

A performance obligation is a distinct good or service promised in the contract that is both capable of being distinct and distinct in the context of the contract, per ASC 606-10-25-19.

 

The Company has determined that its contracts, based on sales type, contain two distinct performance obligations:

 

	●	Fuel Sales – The delivery of fuel to a customer, with revenue recognized at the point of delivery.
	●	Membership Fees – Monthly membership services, with revenue recognized over time within a one-month membership cycle, as the customer benefits from access to services throughout the period.

 

 

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

 

These performance obligations are not bundled or combined, as each service is separately identifiable, in accordance with ASC 606-10-25-22.

 

3.Determine the Transaction Price

 

The transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services to the customer, per ASC 606-10-32-2.

 

The Company’s transaction price considerations include:

 

	●	Fixed consideration – Prices are clearly stated and do not vary based on performance.
	●	No variable consideration – The Company does not formally offer refunds, rebates, or pricing incentives. During the years ended December 31, 2024 and 2023, respectively, the Company granted insignificant discounts of less than 1% of total revenues.
	●	No financing component – Payments are made upon fuel delivery or at the end of the monthly membership cycle, per ASC 606-10-32-15.

 

4.Allocate the Transaction Price to Performance Obligations

 

For contracts with a single performance obligation, the entire transaction price is allocated to that obligation, per ASC 606-10-32-40.

 

If a contract included multiple performance obligations, the transaction price would be allocated based on relative standalone selling prices (“SSP”) as required by ASC 606-10-32-28. The standalone selling price is determined based on observable sales data.

 

The Company’s fuel sales and memberships each have a distinct standalone selling price, eliminating the need for allocation adjustments.

 

5.Recognize Revenue When (or As) Performance Obligations Are Satisfied

 

Revenue is recognized at the point in time when control over a product or service is transferred to the customer, in accordance with ASC 606-10-25-30.

 

	●	Fuel Sales: Control transfers at the time of fuel delivery, at which point revenue is recognized.
	●	Membership Fees: Revenue is recognized over time within a one-month cycle, as customers receive continuous access to fuel delivery services throughout the month.

 

 

NEXTNRG, INC. AND SUBSIDIARIES

FORMERLY KNOWN AS EZFILL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

 

The Company does not recognize revenue based on customer invoicing dates; instead, it ensures revenue recognition aligns with the actual satisfaction of performance obligations per ASC 606-10-25-31.

 

Principal vs. Agent Considerations

 

In evaluating whether the Company acts as a principal or an agent in its fuel sales transactions, the Company applies the guidance in ASC 606-10-55-36 through 55-40. The Company has determined that it is the principal in these transactions based on the following factors:

 

	●	The Company controls the fuel before it is transferred to the customer.
	●	The Company has discretion in pricing, as it sets the selling price of fuel.
	●	The Company is responsible for fulfilling the obligation of delivering fuel to the customer.
	●	The Company is exposed to inventory risk, as it procures and holds fuel before sale.

 

Based on these factors, the Company recognizes revenue on a gross basis, as it is the principal in fuel sales transactions in accordance with ASC 606-10-55-37A.

 

Summary of Compliance with ASC 606 and ASU Updates

 

Revenue Stream		Performance Obligation		Recognition Timing		Consideration Type
Fuel Sales		Fuel Delivery		At time of delivery		Fixed price per gallon
Membership Fees		Monthly access to fuel services		Over time (one-month cycle)		Fixed monthly subscription