AI Era Corp. 8-K

What Happened

• AI Era Corp. announced it issued two convertible promissory notes on January 22, 2026 to accredited investors (Vanquish Funding Group Inc. and Boot Capital LLC) totaling $107,000 in principal. The transactions generated $100,000 in net proceeds after fees and expenses and were completed as private placements under Section 4(a)(2) of the Securities Act.
• Each note bears 10% annual interest and matures on October 15, 2026. Conversion is permitted beginning 180 days after issuance at a price equal to 80% of the lowest trading price of the common stock during the 20 trading days prior to conversion (subject to adjustments) and includes a 4.99% beneficial ownership cap. The notes include default penalties (amounts becoming immediately due at 150% or 200% of the default amount depending on the event) and allow prepayment within the first 180 days at 120% of the outstanding balance.
• Proceeds will be used for general working capital. The purchase agreements allow for potential additional tranches of financing up to $865,000 over the next 12 months, subject to mutual agreement.

Key Details

• Total principal issued: $107,000 across two notes ($57,000 to Vanquish; $50,000 to Boot Capital).
• Net cash to company: $100,000 after $2,500 legal fee and $4,500 due diligence fee retained by Vanquish.
• Interest rate and maturity: 10% per annum, maturity date October 15, 2026.
• Conversion terms: convertible beginning 180 days post-issuance at 80% of the lowest trading price in the 20 trading days before conversion; 4.99% beneficial ownership limitation; prepayment and default penalty terms specified.

Why It Matters

• This is a short-term financing that provides immediate working capital but could lead to shareholder dilution if the notes convert into common stock at a discount to market price (conversion price set at 80% of a recent low).
• The 4.99% ownership cap limits conversion by any single noteholder, which may spread potential dilution across multiple financings or investors.
• The notes mature in less than a year, so the company will need to repay, convert, or refinance these obligations by October 15, 2026. The agreements also permit up to $865,000 more in similar financing over 12 months, which could further affect capital structure and dilution if pursued.