EzFill Holdings Inc (NASDAQ:EZFL), a retail auto dealer and gasoline station company, has amended its agreement with NextNRG Holding Corp. shareholders, revising the total shares to be issued from 40 million to 100 million, according to a Form 8-K filed with the SEC on September 27, 2024. The new terms set forth that 25 to 50 million shares will vest on the closing date, with the remainder subject to vesting conditions.
The amendment, dated September 25, 2024, changes the original exchange agreement related to EzFill's planned acquisition of 100% of NextNRG, a company that converted from Next Charging LLC to a Nevada corporation earlier this year. The adjustment in share distribution is contingent on whether NextNRG completes the acquisition of a target prior to the closing date of the deal.
If the acquisition is finalized, 50 million shares will vest immediately (termed "Vested Shares"), and the other 50 million will be "Restricted Shares" with vesting requirements. If the target acquisition is not complete, only 25 million shares will vest at closing, with 75 million as Restricted Shares.
This recent amendment also includes changes to the vesting schedule for the Restricted Shares and omits certain provisions of the Second Amended and Restated Exchange Agreement due to amendments in the company's certificate of incorporation.
The Shareholders' Representative involved in the amendment is also the CEO and controlling shareholder of NextNRG, holding approximately 70% of EzFill's outstanding common stock. This transaction represents an unregistered sale of equity securities, as noted in the SEC filing.
In other recent news, EzFill Holdings, Inc. has made significant financial strides, regaining compliance with Nasdaq's equity rule through strategic financial maneuvers. The company converted approximately $13.5 million of its debt into equity through agreements with NextNRG Holding Corp and AJB Capital Investments. NextNRG also invested $1.4 million in EzFill, which is expected to eliminate around $1.2 million in annual interest expenses and increase the company's cash reserves.
EzFill also secured a $165,000 promissory note with NextNRG, aimed at bolstering its working capital. The note carries an 8% annual interest rate for the initial nine months, escalating to 18% thereafter. If EzFill defaults, NextNRG has the option to demand immediate payment of 150% of the outstanding balance or convert the debt into EzFill's common stock.
EzFill announced record-breaking revenues for April, reaching approximately $2.6 million, a 32% increase from the previous year, and a net loss reduction by 69%. These recent developments continue to shape the financial trajectory of EzFill. Notably, EzFill's relationship with NextNRG and its CEO, Michael Farkas, continues to foster a financial relationship between the two entities.
InvestingPro Insights
EzFill Holdings Inc's recent amendment to its agreement with NextNRG Holding Corp. shareholders comes at a time when the company is facing significant financial challenges. According to InvestingPro data, EzFill has a market capitalization of just $18.73 million, reflecting its small-cap status. Despite this, the company has shown strong revenue growth, with a 27.26% increase in the last twelve months as of Q2 2024, reaching $25.85 million.
However, EzFill is currently unprofitable, with a negative operating income of $7.18 million in the same period. This aligns with two key InvestingPro Tips: the company is "quickly burning through cash" and "not profitable over the last twelve months." These factors may explain the strategic move to acquire NextNRG, as EzFill likely seeks to improve its financial position and market presence.
The stock's performance has been volatile, with the price falling significantly over the last three months (-35.29%) and five years, as noted in the InvestingPro Tips. This volatility is further emphasized by the tip that the "stock generally trades with high price volatility," which investors should consider when evaluating the potential impact of the NextNRG acquisition.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for EzFill Holdings Inc, providing a more comprehensive view of the company's financial health and market position.
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