Miami, FL – EzFill Holdings Inc. (NASDAQ:EZFL), a company operating in the automobile dealers and gasoline station industries, has entered into a material definitive agreement with NextNRG Holding Corp., according to a recent 8-K filing with the U.S. Securities and Exchange Commission. The agreement, dated Monday, includes a $165,000 promissory note, intended to support EzFill’s working capital needs.
The promissory note, which carries an original issue discount of $15,000, carries an annual interest rate of 8% for the first nine months, escalating to 18% thereafter. The note is scheduled to mature on August 24, 2024, with automatic two-month extension provisions unless NextNRG cancels the subscription with 10 days’ notice.
In the event of default, NextNRG reserves the right to demand immediate payment of 150% of the outstanding balance or to convert the debt into shares of EzFill common stock at a conversion price linked to the higher of the average VWAP for the 10 days prior to conversion or the lower of $0.70. However, the conversion price cannot exceed the closing price of EzFill common stock on the NASDAQ Capital Market as of the date of issuance of the note.
As part of the agreement, EzFill has committed to issuing 52,000 shares of its common stock to NextNRG, which are deemed fully vested as of the inception of the note. This issuance is subject to Nasdaq Listing Rule 5635(d), which limits the maximum number of shares issued to 19.99% of the Company’s outstanding common stock, unless shareholder approval is obtained at a higher amount. If such approval is not secured, any remaining balance on the Note must be settled in cash at NextNRG’s request.
Michael Farkas, CEO and majority shareholder of NextNRG, who also owns a significant stake in EzFill, was previously a participant in an exchange agreement that would have made NextNRG a wholly-owned subsidiary of EzFill. While this transaction has not yet closed, the current promissory note represents an ongoing financial relationship between the two entities.
InvestingPro Insights
(NASDAQ:EZFL) EzFill Holdings Inc. (NASDAQ:EZFL) has recently been on the radar for its financial maneuverings, including a material definitive agreement with NextNRG Holding Corp. To provide additional insight, InvestingPro data shows a challenging financial landscape for EzFill. With a market capitalization of just $9.82 million and a negative P/E ratio of -0.78, reflecting its lack of profitability in the last twelve months as of Q1 2024, investors should be cautious. The company’s revenue growth is a bright spot, increasing 37.06% over the past 12 months as of Q1 2024, which is in line with analyst expectations for sales growth in the current year, a notable take from InvestingPro.
However, the company’s cash burn rate and large debt load, as highlighted in two InvestingPro tips, are areas of concern, especially since EzFill may struggle to meet its debt interest payments. The company’s share price has also performed poorly over the past month, returning -16.05%, although it has shown a strong return over the past three months of 19.3%. For investors looking for deeper analysis and more InvestingPro tips, there are 11 additional tips available at: https://www.investing.com/pro/EZFL. To access these ideas, use coupon code Pro News 24 Get an additional 10% discount on your Pro and Pro+ annual or semi-annual subscription.
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