MIAMI, FL - EzFill Holdings Inc. (NASDAQ:EZFL), a company in the retail-auto dealers and gasoline stations sector, has entered into a material definitive agreement with NextNRG Holding Corp., securing a promissory note for $165,000 to support its working capital requirements. This financial maneuver, detailed in an 8-K filing with the Securities and Exchange Commission (SEC), was executed on Monday.
Under the terms of the promissory note dated Monday, the loan carries an original issue discount of $15,000, representing 10% of the total principal amount. The note will initially bear an 8% annual interest rate for the first nine months, escalating to 18% thereafter. The maturity date is set for September 10, 2024, with provisions allowing for automatic two-month extensions unless NextNRG opts out with a 10-day notice.
In the event of a default, the outstanding balance, including principal and interest, will be subject to a 150% penalty and may be converted into EzFill's common stock at NextNRG's discretion. The conversion price will be the greater of the average volume-weighted average price (VWAP) over the preceding ten trading days or a floor price of $0.70, but not exceeding the Nasdaq closing price on the date of the note.
EzFill has also agreed to issue 52,000 shares of its common stock as a commitment fee, which were considered fully earned as of the note's date. These shares are subject to the Nasdaq Listing Rule 5635(d), which limits the issuance to no more than 19.99% of the company's common stock without shareholder approval. If EzFill cannot secure such approval, the remaining balance must be repaid in cash upon NextNRG's request.
The agreement comes as EzFill Holdings and NextNRG are navigating a previously reported exchange agreement, where EzFill is set to acquire NextNRG, making it a wholly-owned subsidiary. Michael Farkas, NextNRG's CEO and controlling shareholder, is also a significant shareholder in EzFill Holdings, owning approximately 27% of its common stock.
This financial arrangement is part of EzFill's broader strategy to bolster its working capital and continue its operations amidst its ongoing business developments. The information provided is based on the company's recent SEC filing.
In other recent news, Miami-based EzFill Holdings Inc. has entered into a significant agreement with NextNRG Holding Corp. The agreement, a $165,000 promissory note, aims to support EzFill's working capital requirements.
The note carries an 8% annual interest rate for the initial nine months, which will then escalate to 18%. The note is due on September 5, 2024, with provisions for automatic two-month extensions unless NextNRG opts out with a 10-day notice.
In case of a default, EzFill faces a 150% penalty on the unpaid balance, with NextNRG reserving the right to convert the debt into EzFill's common stock. As part of the agreement, EzFill is committed to issuing 52,000 shares of its common stock to NextNRG, subject to NASDAQ's 19.99% cap on share issuance.
If shareholder approval for this issuance is not granted, NextNRG can demand cash repayment. These are the recent developments shaping the financial relationship between EzFill and NextNRG.
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