Business Context and Reporting Period
This Form 8-K filing by NEXTNRG, INC. (Nasdaq: NXXT) reports material definitive agreements entered into on April 1, 2026, and April 7, 2026. The company, incorporated in Delaware, is classified as an emerging growth company. The filing details two significant debt financing transactions intended to provide liquidity.
Key Financial Metrics and Obligations
The filing discloses two new debt instruments with the following terms:
- Leviston Senior Secured Convertible Note:
- Principal Amount: $1,724,444
- Purchase Price: $1,552,000 (reflecting a $172,444 original issue discount)
- Additional Consideration: 243,300 shares of common stock issued immediately
- Interest Rate: 10% per annum (guaranteed for the full six-month term regardless of prepayment)
- Maturity Date: October 1, 2026
- Security: First-priority lien on substantially all company assets
- Cashera Term Loan:
- Principal Amount: $750,000
- Net Proceeds: $712,500 (after $37,500 origination fee)
- Total Repayment Obligation: $1,050,000 (includes $300,000 interest expense)
- Effective APR: Approximately 173.06%
- Repayment Schedule: 24 weekly installments of $43,750
- Maturity Date: October 1, 2026
- Guarantees: Personally guaranteed by CEO Michael D. Farkas and cross-guaranteed by NextNRG Ops LLC
Note: The filing does not provide current revenue, profit, cash flow, or existing debt levels prior to these transactions.
Material Changes and Transaction Terms
The primary material change is the incurrence of approximately $2.47 million in new debt obligations (principal basis) and the issuance of equity. Key structural terms include:
- Conversion Rights (Leviston): Convertible only upon an Event of Default. The conversion price is 80% of the average of the three lowest VWAPs in the preceding 15 trading days, subject to a $0.10 floor. A fixed fee of $1,950 applies per conversion.
- Ownership Caps (Leviston): An equity blocker prevents conversion if Leviston would own more than 4.99% of outstanding stock (expandable to 9.99% with notice). A hard cap limits total issuance to 19.99% of outstanding shares to comply with Nasdaq Rule 5635(d).
- Prepayment Penalties:
- Leviston: Prepayment within 60 days requires payment of full principal plus guaranteed interest for the entire six-month term. Prepayment after 60 days requires 110% of the outstanding balance plus full guaranteed interest.
- Cashera: No specific prepayment penalty detailed, but strict covenants apply.
- Default Consequences:
- Leviston: Obligations increase to 150% of the outstanding balance; default interest accrues at 18% per annum.
- Cashera: Default fee of 25% of the outstanding balance; lender may file a confession of judgment in Utah.
Outlook, Risks, and Contingencies
Management commentary is limited to the transaction mechanics. Significant risks and contingencies identified include:
- Liquidity Constraints: The Cashera Loan requires immediate weekly repayments totaling $43,750, creating a significant near-term cash outflow requirement.
- High Cost of Capital: The Cashera Loan carries an effective APR of ~173%, and the Leviston Note includes guaranteed interest regardless of prepayment timing, indicating high financing costs.
- Collateral Encumbrance: Both agreements grant first-priority security interests in substantially all company assets, including accounts, inventory, equipment, and subsidiary equity. This limits future borrowing capacity without lender consent.
- Restrictive Covenants: The Cashera agreement prohibits additional debt without consent (subject to a $75,000 stacking fee) and mandates notification if bank balances fall below 33% of the funded balance.
- Dilution Risk: While conversion is default-triggered, the low conversion price (80% of lowest VWAP) and equity kicker (243,300 shares) pose potential dilution risks to existing shareholders.
Investor Verification Checklist
- Verify the company's current cash balance and ability to meet the immediate $43,750 weekly repayment schedule for the Cashera Loan.
- Confirm the total outstanding debt load prior to these transactions to assess leverage ratios.
- Review the company's revenue pipeline to ensure sufficient cash flow to service the high-interest obligations maturing in October 2026.
- Monitor stock price volatility, as the Leviston Note conversion price is tied to the lowest VWAPs, which could significantly impact share count upon default.
- Check for any existing liens on assets that may conflict with the "first-priority" claims asserted by Leviston and Cashera.