NEXTNRG, INC. 8-K

What Happened NEXTNRG, Inc. (NXXT) announced in an 8‑K dated May 1, 2026 that on April 27, 2026 it entered a Business Loan and Security Agreement with Venture Debt, LLC providing a $1,000,000 loan (net proceeds $930,000 after a $70,000 origination fee). The loan carries approximately a 203.17% annual percentage rate, totals $1,450,000 to be repaid (including $450,000 interest expense), and is scheduled to be repaid in 24 weekly installments of $60,417 beginning immediately after disbursement, maturing October 13, 2026. CEO Michael D. Farkas personally guaranteed the loan, which is secured by a security interest in all of the company’s and Mr. Farkas’ assets.

Key Details

• Loan principal: $1,000,000; net disbursement to company: $930,000 (origination fee $70,000).
• Total interest expense: $450,000; total repayment obligation: $1,450,000; APR ~203.17%.
• Repayment schedule: 24 weekly payments of $60,417; maturity October 13, 2026.
• Prepayment: full prepayment reduces remaining unpaid interest by 25% (75% of remaining interest still due); partial prepayments do not reduce total interest over life of loan.
• Covenants & defaults: restrictive negative covenants (e.g., restrictions on merchant-cash-advance‑style financing with rates >10%), $145,000 fee for violations, broad events of default (including other creditor acceleration, tax liens, material ownership changes, additional financing without consent), and extensive lender remedies (debiting accounts, declaring all amounts due, seizing collateral, appointing a receiver, pursuing deficiency judgments).

Why It Matters This transaction provides NEXTNRG with near‑term cash (~$930k) but at a very high cost of capital (over 200% APR) and with tight controls and severe default remedies. The CEO’s personal guarantee and the grant of a security interest in all company and guarantor assets increase creditor leverage. The loan’s covenants and fees could limit the company’s flexibility to raise other financing and heighten downside risk if revenues fall short of meeting the aggressive weekly repayment schedule. Retail investors should note the tradeoff between immediate liquidity and substantially increased financing risk and costs.