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EzFill Holdings Inc. (NASDAQ:EZFL), a $21.74 million market cap company in the retail-auto dealers and gasoline stations sector, has entered into a material definitive agreement with NextNRG Holding Corp. on Monday, securing a promissory note for $580,000 to bolster its working capital needs.
According to InvestingPro data, the company has been quickly burning through cash while maintaining moderate debt levels. This loan, carrying an 8% annual interest rate, is due by December 17, 2025, with specific provisions for early acceleration or extension.
The agreement stipulates that if EzFill defaults, the outstanding balance increases by 150%, becoming immediately payable. Furthermore, NextNRG reserves the right to convert the debt into EzFill's common stock at the greater of the average VWAP over the preceding five trading days or a floor price of $0.70, subject to a cap as per Nasdaq Listing Rule 5635(d).
Around $379,755.39 of the loan amount has been directly allocated to a third party as a down payment for equipment purchase. Despite revenue growth of 19.14% in the last twelve months, the company's gross profit margin remains low at 7.46%. The promissory note also includes an adjustment clause for stock splits, ensuring the conversion terms remain equitable.
This financial move is interlinked with prior agreements between EzFill and NextNRG. Michael Farkas, NextNRG's CEO and the controlling shareholder, is also the beneficial owner of approximately 70% of EzFill's common stock. Previous SEC filings detail an Exchange Agreement where EzFill agreed to acquire all NextNRG membership interests in exchange for issuing common stock to NextNRG members.
The recent acquisition of STAT-EI, Inc. by NextNRG, completed on January 19, 2024, has led to the vesting of 50,000,000 shares on the closing date and another 50,000,000 shares subject to vesting or forfeiture based on specific commercial and financial milestones.
This transaction is designed to support EzFill's growth initiatives and operational needs. The information regarding this financial arrangement is based on a press release statement filed with the SEC. InvestingPro analysis reveals 10 additional key insights about EZFL's financial health and market position, available to subscribers. The stock currently trades at $3.07, with InvestingPro's Fair Value analysis suggesting the stock is fairly valued.
In other recent news, EzFill Holdings Inc. has been making notable strides in its financial and operational developments. The company secured significant funding through promissory notes totaling $990,000 and a loan of $181,500 with NextNRG Holding Corp., aimed at bolstering its working capital. EzFill also revised its agreement with NextNRG Holding Corp. shareholders, adjusting the total shares to be issued from 40 million to 100 million as part of its planned acquisition of NextNRG.
In addition to these financial developments, EzFill has announced plans to acquire the fueling division of Yoshi, Inc., a move expected to enhance its national expansion efforts. The acquisition is anticipated to integrate Yoshi Mobility's assets, field technicians, and customer base into EzFill's existing infrastructure.
These recent developments reflect EzFill's current financial maneuvers and expansion efforts. The company continues to make progress, regaining compliance with Nasdaq's equity rule, converting approximately $13.5 million of its debt into equity through agreements with NextNRG Holding Corp and AJB Capital Investments. Investors should note that these developments are based on EzFill Holdings' SEC filings and the company's ongoing relationship with NextNRG.
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