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Costly $1M venture loan tightens terms at NextNRG (NASDAQ: NXXT)

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

NextNRG, Inc. entered into a $1,000,000 Business Loan and Security Agreement with Venture Debt, LLC on April 27, 2026. The company received $930,000 in net proceeds after a $70,000 origination fee, and must repay a total of $1,450,000 in 24 weekly installments of $60,417 through October 13, 2026.

The loan carries an annual percentage rate of approximately 203.17%, is secured by all of NextNRG’s and CEO Michael Farkas’ assets and personal property, and is personally guaranteed by Mr. Farkas. It includes restrictive covenants limiting additional high-cost financing and broad default triggers that allow Venture Debt to accelerate repayment and enforce on collateral.

Positive

  • None.

Negative

  • Highly expensive short-term debt: NextNRG’s $1,000,000 loan requires $1,450,000 total repayment with an approximate 203.17% annual percentage rate over 24 weekly installments, creating significant cash flow pressure.
  • Onerous security and default terms: The loan is secured by all company and CEO assets, includes a personal guarantee, broad default triggers, and allows aggressive remedies, increasing financial and operational risk.

Insights

NextNRG adds costly, highly secured venture debt with tight covenants.

NextNRG has taken a $1,000,000 loan from Venture Debt, LLC with total repayment of $1,450,000 over 24 weekly installments ending by October 13, 2026. The stated annual percentage rate is approximately 203.17%, indicating very high-cost, short-term financing.

The agreement grants a security interest over all company assets and CEO Michael Farkas’ personal assets, coupled with a personal guarantee. It restricts additional high-interest financing, permits $145,000 fees for certain violations, and defines broad events of default, including material ownership changes and perceived impairment of repayment prospects.

On default, Venture Debt can accelerate all obligations, sweep company accounts, seize and sell collateral, and seek deficiency judgments. These terms increase financial risk: the company gains near-term liquidity but assumes expensive, tightly covenanted debt that could pressure cash flow if operations do not support the aggressive repayment schedule.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Loan principal $1,000,000 Business Loan and Security Agreement with Venture Debt, dated April 27, 2026
Net proceeds $930,000 After $70,000 origination fee deducted from loan disbursement
Total repayment obligation $1,450,000 Principal plus $450,000 interest expense over loan term
Annual percentage rate 203.17% Approximate APR for the Venture Debt Loan
Installment amount $60,417 24 weekly installments beginning immediately after disbursement
Maturity date October 13, 2026 Scheduled maturity of the Venture Debt Loan
Origination fee $70,000 Fee deducted from initial loan disbursement
Covenant violation fee $145,000 Fee Venture Debt may impose for each violation of certain financing restrictions
Business Loan and Security Agreement financial
"entered into a Business Loan and Security Agreement (the “Venture Debt Agreement”)"
annual percentage rate financial
"The annual percentage rate for the Venture Debt Loan is approximately 203.17%."
security interest financial
"The Venture Debt Loan is secured by a security interest in all of the Company’s and Mr. Farkas’ assets"
A security interest is a legal claim a lender or creditor holds on a borrower's asset as collateral to secure repayment; if the borrower fails to pay, the creditor can seize or sell that asset to recover money owed. Think of it like a pawnshop tag on an item that gives the pawnbroker the right to sell it if the loan isn't repaid. For investors, security interests matter because they change how safely lenders and bondholders can recover funds and affect the hierarchy of claims if a company faces financial trouble.
events of default financial
"The Venture Debt Agreement contains comprehensive events of default provisions."
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
material adverse change financial
"or if a material adverse change in the Company’s business or financial condition occurs."
A material adverse change is a significant, unexpected deterioration in a company's financial health, operations, or future prospects that meaningfully reduces its value or ability to meet obligations. It matters to investors because it can change valuations, activate legal protections in contracts, pause or cancel transactions, and signal higher risk—like discovering a large leak in a boat that forces everyone to decide whether it’s safe to keep sailing together.
emerging growth company regulatory
"Emerging growth company"
An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 27, 2026

 

NEXTNRG, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-40809   83-4260623

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

407 Lincoln Rd. #9F, Miami Beach, Florida 33190

(Address of principal executive offices, including Zip Code)

 

(305) 791-1169

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.0001 par value per share   NXXT   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On April 27, 2026, NextNRG, Inc. (the “Company”) entered into a Business Loan and Security Agreement (the “Venture Debt Agreement”), dated as of April 27, 2026, with Venture Debt, LLC (“Venture Debt”), pursuant to which Venture Debt provided the Company a loan in the principal amount of $1,000,000 (the “Venture Debt Loan”). The Company received net disbursement proceeds of $930,000 after deducting a $70,000 origination fee. The Venture Debt Loan carries a $450,000 interest expense, resulting in a total repayment obligation of $1,450,000. The Venture Debt Loan is scheduled to be repaid in 24 weekly installments of $60,417, beginning immediately following disbursement, with a maturity date of October 13, 2026. The annual percentage rate for the Venture Debt Loan is approximately 203.17%.

 

The Company may prepay the Venture Debt Loan in whole or in part. If the Company elects to prepay the Venture Debt Loan in its entirety, it is entitled to a prepayment interest reduction percentage of 25%. This reduction applies only to the aggregate amount of unpaid interest remaining on the Venture Debt Loan at the time of prepayment. Notwithstanding this reduction, 75% of the remaining unpaid interest remains due and payable upon such prepayment. The Company may make partial prepayments, but such payments will not reduce the total interest expense over the life of the Venture Debt Loan.

 

The Venture Debt Agreement contains customary representations, warranties and covenants for a transaction of this type. The Venture Debt Agreement also contains certain negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness. Specifically, the Company is prohibited from entering into any loan agreement or arrangement involving the sale or assignment of its future receipts (such as merchant cash advances) with any party other than Venture Debt, if such arrangement carries an interest rate greater than 10%. These restrictions are subject to certain exceptions, including the following:

 

Conventional bank loans and bank financing arrangements are permitted; and
Financing arrangements are permitted provided that the proceeds are used to repay Venture Debt in full at the closing of such financing and prior to the release of any funds to the Company.

 

Pursuant to the terms of the Venture Debt Agreement, Venture Debt can impose a $145,000 fee for each violation of this provision.

 

The Venture Debt Agreement contains comprehensive events of default provisions. In addition to customary defaults, such as non-payment and breaches of representations or warranties, the Venture Debt Agreement includes several restrictive triggers, including the following:

 

A default occurs if the Company’s indebtedness to other lenders could potentially be accelerated, or if the Company defaults on any other existing or future agreement with Venture Debt.
The filing of any federal or state tax liens, or the entry of a judgment exceeding 15 days without satisfaction or stay, constitutes a default.
Defaults are triggered by any material change in ownership or organizational structure, the death or dissolution of key control persons (including 10% stockholders), or the cessation of a substantial part of the Company’s current business.
Venture Debt may declare a default if it believes in good faith that the prospect of payment or performance is impaired, or if a material adverse change in the Company’s business or financial condition occurs.
Taking additional financing, such as credit card advances or additional working capital loans without Venture Debt’s prior written consent, is an express event of default.

 

 

 

 

Upon the occurrence of an event of default under the Venture Debt Agreement, Venture Debt may, without notice or demand:

 

Cease further loan advances and debit due amounts directly from the Company’s accounts;
Declare all outstanding obligations immediately due and payable;
Take possession of, assemble, and sell the collateral at public or private sale;
Appoint a receiver to manage the collateral and collect revenues; and
Seek a deficiency judgment against the Company or any guarantors if collateral proceeds are insufficient to satisfy the debt.

 

Venture Debt’s remedies are cumulative and may be exercised singularly or concurrently.

 

Michael D. Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and a significant stockholder, personally guaranteed the Company’s obligations under the Venture Debt Agreement.

 

The Venture Debt Loan is secured by a security interest in all of the Company’s and Mr. Farkas’ assets and personal property.

 

The foregoing description of the Venture Debt Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Venture Debt Agreement, a copy of which is filed herewith as Exhibit 10.1.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

 

The information contained in Item 1.01 is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
10.1   Business Loan and Security Agreement, dated as of April 27, 2026, by and between the registrant and Venture Debt, LLC.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  NextNRG, Inc.
     
Date: May 1, 2026 By: /s/ Michael Farkas
  Name: Michael Farkas
  Title: Chief Executive Officer

 

 

 

FAQ

What loan did NextNRG (NXXT) enter into with Venture Debt, LLC?

NextNRG entered a Business Loan and Security Agreement for a $1,000,000 loan from Venture Debt, LLC. The company received $930,000 net proceeds and must repay $1,450,000 in 24 weekly installments under a high-cost venture debt structure.

How much will NextNRG repay on its $1,000,000 Venture Debt loan?

NextNRG must repay a total of $1,450,000 on the $1,000,000 loan. Payments are structured as 24 weekly installments of $60,417, with a scheduled maturity date of October 13, 2026, reflecting very expensive short-term financing.

What is the interest rate on NextNRG’s Venture Debt loan?

The Venture Debt loan carries an approximate 203.17% annual percentage rate. This stems from a $450,000 interest expense on a $1,000,000 principal over a short repayment period of 24 weekly installments, making it extremely high-cost borrowing.

What collateral secures NextNRG’s loan from Venture Debt?

The loan is secured by a security interest in all of NextNRG’s and CEO Michael Farkas’ assets and personal property. Michael Farkas also personally guaranteed the company’s obligations, significantly tying both corporate and personal assets to the debt.

What covenants and default triggers are in NextNRG’s Venture Debt Agreement?

The agreement restricts additional high-interest financing, allows a $145,000 fee per certain covenant violation, and defines broad defaults, including tax liens, judgments, ownership changes, material adverse changes, and additional financing without consent, giving Venture Debt strong rights to accelerate and enforce repayment.

Can NextNRG prepay the Venture Debt loan and reduce interest?

NextNRG may prepay the loan in whole or in part. If it prepays the entire balance, it receives a 25% reduction on remaining unpaid interest, while 75% of that unpaid interest remains due. Partial prepayments do not reduce total interest over the loan’s life.

Filing Exhibits & Attachments

6 documents