NextBoat Inc. Enters $510K Convertible Loan Agreement

What Happened
NextBoat Inc. announced on Aug. 14, 2026 that it entered into a Loan Agreement with Greentree Financial Group, Inc. The lender agreed to provide a $510,000 loan evidenced by a 10% Convertible Promissory Note that matures on Aug. 14, 2028 and carries a 10% annual interest rate (payable quarterly). The note was issued with a 10% original issuance discount, producing net proceeds of about $459,000 (before a $10,000 legal fee allowance). As part of the transaction, NextBoat also issued a warrant to buy up to 100,000 shares of common stock and agreed to issue 20,000 restricted shares as commitment shares.

Key Details

• Loan principal: $510,000; net proceeds ≈ $459,000 (10% original issuance discount), before a $10,000 legal fee allowance.
• Note terms: 10% interest per year payable quarterly beginning Oct. 10, 2026; interest increases to 18% upon default; maturity Aug. 14, 2028.
• Conversion & dilution: Note convertible at lender’s option into common stock at $1.785/share, with a conversion-price reset every six months if the market price is lower; conversion subject to adjustment for splits/recaps and standard exempt issuances. Beneficial ownership cap of 4.99% (waivable to up to 9.99% with notice).
• Warrant & shares: Warrant to purchase 100,000 shares at $1.785/share (3-year term) with down‑round protection and cashless exercise until registration; 20,000 restricted shares issued as commitment shares.
• Other provisions: Company may prepay with 15 days’ notice (lender can convert before prepayment); lender can require repayment from proceeds of any Qualified Financing (≥ $5M) while the note is outstanding; company agreed not to issue variable-rate conversion/exercise securities for 12 months.

Why It Matters
This transaction provides NextBoat with short‑term liquidity but also creates a new debt obligation and potential equity dilution. If the lender converts the note or exercises the warrant, NextBoat’s outstanding shares could increase at or below the $1.785 per-share level (and potentially lower due to price resets or down‑round protection), which is important for investors tracking share count and ownership percentages. The interest rate, default penalty rate, and the lender’s ability to require repayment from a future large financing are material terms that affect cash flow flexibility and capital‑raising dynamics.