SCHEDULE 13D/A: NextNRG CEO Michael Farkas Boosts Stake to Nearly 70% Through Share Exchange and Debt Conversion

Michael D. Farkas, CEO and Executive Chairman of NextNRG, Inc., has significantly increased his beneficial ownership to 69.779% of the company's common stock through a share exchange agreement and conversion of promissory notes.

Summary

• Michael D. Farkas, the CEO and Executive Chairman of NextNRG, Inc., now beneficially owns 77,919,613 shares of the company's common stock.
• This represents 69.779% of the 111,665,652 shares issued and outstanding as of February 19, 2025.
• The ownership includes 64,118,596 shares held directly by Mr. Farkas, 154,827 shares by SIF Energy LLC, 26,578 shares by Balance Labs, Inc., and 12,900,188 shares by Inductive Holdings LLC, all entities over which Mr. Farkas has voting and dispositive power.
• Additionally, 719,424 shares are convertible from 140,000 shares of Series B Preferred Stock held directly by Mr. Farkas, each with a stated value of $10.00 per share, convertible at 70% of $2.78.
• A significant portion of the shares (60,167,275 for Mr. Farkas and 12,900,188 for Inductive Holdings LLC) were acquired pursuant to the Second Amended and Restated Exchange Agreement dated June 11, 2024, as amended on July 22, 2024 and September 25, 2024, entered into among the Issuer, the members of Next Charging LLC, and the Reporting Person.
• An additional 245,689 shares were received as payment for commitment fees pursuant to certain promissory notes issued by NextNRG, Inc. to NextNRG Holding Corp. in the aggregate principal amount of $1,400,000.

Sentiment

Score: 8

Explanation: The significant increase in beneficial ownership by the CEO and Executive Chairman, Michael D. Farkas, to nearly 70% of the company, primarily through a share exchange and conversion of debt, indicates a strong vote of confidence and long-term commitment from key management. This is generally viewed positively by investors as it aligns management's interests with shareholders.

Positives

• Significant increase in insider ownership by the CEO and Executive Chairman, Michael D. Farkas, to nearly 70%, indicating strong confidence in the company's future.
• The acquisition of shares through an exchange agreement suggests a strategic consolidation of interests.
• Conversion of promissory notes into equity reduces debt burden on the company, potentially improving its financial structure.

Risks

• 42,372,880 shares held directly by Michael D. Farkas are subject to vesting and forfeiture as provided for in the Exchange Agreement, which could impact his long-term ownership if conditions are not met.

Future Outlook

The document does not contain explicit forward-looking statements or guidance regarding the company's future performance or strategic direction beyond the details of the ownership structure.

Industry Context

This filing primarily concerns a change in beneficial ownership by a key insider and does not provide specific details to analyze broader industry trends or competitive positioning. It reflects an internal corporate restructuring of ownership.

Related Party Transactions

• Michael D. Farkas, the Reporting Person, is the CEO and Executive Chairman of NextNRG, Inc. He acquired shares directly and through entities he controls (SIF Energy LLC, Balance Labs, Inc., Inductive Holdings LLC) from the Issuer.
• The acquisition of shares through the Second Amended and Restated Exchange Agreement involved the Issuer, members of Next Charging LLC, and the Reporting Person as the representative of the Members.
• The Issuer issued promissory notes to NextNRG Holding Corp., and shares were issued to Mr. Farkas as payment for commitment fees related to these notes. Given the name "NextNRG Holding Corp." and the context, this entity is likely related to the Issuer or Mr. Farkas.

Stakeholder Impact

• Shareholders: The substantial increase in insider ownership by the CEO could be seen as a positive signal of confidence, potentially increasing investor trust and aligning management's interests with long-term shareholder value. However, the issuance of shares for debt conversion could also imply some dilution for existing shareholders, though the document doesn't specify the impact on the total share count from these specific transactions beyond the overall outstanding shares.
• Creditors: The conversion of promissory notes into equity reduces the company's debt obligations, which could be viewed positively by creditors as it strengthens the balance sheet.

Key Dates

Recommendation

Keywords

NextNRG Inc., Michael D. Farkas, Beneficial Ownership, Schedule 13D, Insider Ownership, Common Stock, Share Exchange Agreement, Promissory Notes, Equity Conversion, Corporate Governance, SEC Filing