$510,000 in principal constitutes the face amount of the 10% Convertible Promissory Note NextBoat Inc. (NXB) issued to Greentree Financial Group, Inc. on August 14, 2026, per the company's 8-K filed with the SEC. A 10% original issuance discount strips $51,000 off the top, leaving approximately $459,000 in gross proceeds; subtract the $10,000 legal fee allowance payable to the Lender and the cash reaching NextBoat's balance sheet is closer to $449,000.
Note economics
| Term | Detail |
|---|---|
| Principal | $510,000 |
| OID | 10% ($51,000) |
| Gross proceeds (est.) | ~$459,000 |
| Coupon | 10% per annum, quarterly |
| Default rate | 18% per annum |
| Maturity | August 14, 2028 |
| Conversion price | $1.785/share |
| Warrant shares | 100,000 at $1.785 |
| Warrant term | 3 years |
| Commitment shares | 20,000 restricted |
| Beneficial ownership cap | 4.99% (waivable to 9.99%) |
The Note matures August 14, 2028. At 10% on $510,000, quarterly payments beginning October 10, 2026 run approximately $12,750 per quarter; across the two-year term, the interest burden at the stated coupon reaches $102,000 on the face amount. An event of default pushes the rate to 18% per annum.
Greentree holds an option to convert outstanding balances into NextBoat common stock at $1.785 per share. The conversion price resets every six months to the closing bid if it has traded below the then-applicable floor, and steps down on dilutive issuances subject to standard exempt-issuance carve-outs. A 4.99% beneficial ownership cap governs accumulation through conversion, waivable to 9.99% on 61 days' written notice.
Warrant and structural tripwires
The accompanying three-year warrant covers 100,000 shares at the same $1.785 exercise price, with cashless exercise rights until the underlying shares are registered. Down-round anti-dilution protection applies to the warrant exercise price on the same terms as the conversion price. NextBoat also committed to deliver 20,000 restricted commitment shares within five business days of signing.
One condition worth tracking: if NextBoat closes a financing of at least $5,000,000 while the Note is outstanding, Greentree may request that those proceeds retire the outstanding balance. NextBoat can prepay at any time without penalty on 15 days' notice, though Greentree retains the right to convert before any prepayment settles.
The Loan Agreement bars NextBoat from issuing any securities carrying a variable conversion or exercise rate for 12 months from the effective date. NextBoat, a Nevada corporation headquartered at 1701 Jel Wade Dr., Wilmington, NC 28401, trades on NYSE American under NXB.
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