EzFill Holdings inks $165K promissory note with NextNRG

MIAMI-based EzFill Holdings Inc. (NASDAQ:EZFL), a retail auto dealer and gasoline station company, entered into a material definitive agreement with NextNRG Holding Corp. on Monday. The promissory note, dated July 5, 2024, secures a $165,000 loan for EzFill’s working capital needs, carrying an original issue discount of 10%.

The note stipulates an 8% annual interest rate for the initial nine months, which will rise to 18% thereafter. The full balance, including interest, is due on September 5, 2024, with a provision for automatic two-month extensions unless NextNRG opts out with a 10-day notice.

In the event of a default, the company faces a 150% penalty on the unpaid balance, and NextNRG has the option to convert the debt into EzFill common stock at a price based on the average volume-weighted average price (VWAP) preceding the conversion or a floor price of $0.70, whichever is greater. However, the conversion price cannot surpass the NASDAQ closing price on the note’s date.

As part of the agreement, EzFill will issue 52,000 shares of common stock to NextNRG as a commitment fee, fully earned as of the note’s date. The companies also agreed to adhere to NASDAQ’s 19.99% cap on share issuance, pending shareholder approval. If approval isn't granted, NextNRG can demand cash repayment.

In other recent news, EzFill Holdings Inc. has secured a $165,000 promissory note with NextNRG Holding Corp., a development aimed at bolstering its working capital. The agreement carries an 8% annual interest rate for the first nine months, which will increase to 18% thereafter. The note is set to mature on August 24, 2024, with options for automatic two-month extensions unless NextNRG opts out with a 10-day notice. In case of default, NextNRG can demand immediate payment of 150% of the outstanding balance or convert the debt into EzFill's common stock.

As part of the agreement, EzFill has committed to issuing 52,000 shares of its common stock to NextNRG. This issuance is subject to Nasdaq Listing Rule 5635(d), which limits the number of shares issued at 19.99% of the company's outstanding common stock. These are recent developments that continue to shape the financial relationship between EzFill and NextNRG.

InvestingPro Insights

EzFill Holdings Inc. (NASDAQ:EZFL) appears to be navigating through a challenging financial landscape, as reflected by the recent loan agreement to bolster its working capital. The company's significant debt burden and its struggle to maintain liquidity are underscored by the fact that its short-term obligations exceed its liquid assets. This precarious financial position is further highlighted by a market capitalization of only $9.24 million and a negative price-to-earnings (P/E) ratio of -0.78, indicating investor concerns about profitability.

Despite these headwinds, analysts within the InvestingPro community see a silver lining, anticipating sales growth in the current year, with revenue growth reported at 37.06% for the last twelve months as of Q1 2024. However, the company's gross profit margin remains low at 6.79%, reflecting challenges in converting sales into profit. This is a critical metric for investors to watch, especially considering the company's rapid cash burn and lack of dividend payouts.

For investors considering EzFill's stock, it's worth noting that the price has fallen significantly over the last five years, and currently, the stock price often moves in the opposite direction of the market. Those with an interest in EzFill's financial health and future prospects can find additional InvestingPro Tips, which provide deeper insights into the company's performance. To enhance your investment decision-making, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and unlock access to a total of 11 InvestingPro Tips for EzFill at https://www.investing.com/pro/EZFL.

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