ScanTech AI Systems Inc. 8-K

What Happened

• ScanTech AI Systems Inc. announced on its Form 8-K that on December 22, 2025 it entered a securities purchase agreement with Vanquish Funding Group Inc. and issued a convertible promissory note with principal of up to $270,900. The Note carries a 10% annual interest rate, an original issue discount (OID) of $12,900, and matures on October 22, 2026. Vanquish may convert outstanding principal, accrued interest and fees into the Company’s common stock after 180 days following the note date and before the maturity or payment of a defined Default Amount.

Key Details

• Principal: up to $270,900; Original Issue Discount: $12,900; Interest rate: 10% per year; Maturity: October 22, 2026.
• Conversion: lender may convert after 180 days; conversion price = 75% of the average of the two lowest trading prices during the 10 trading days before conversion (i.e., a 25% discount to that measure).
• Ownership limits: Vanquish cannot convert into shares that would exceed 4.99% beneficial ownership (per-conversion limit) and the Note contains an overall Conversion Cap preventing issuance that would exceed 19.99% of outstanding shares or voting power without shareholder approval.
• Default/prepayment terms: a “Default Amount” equals 150% of remaining principal plus unpaid interest and Default Interest (22% rate applied on remaining principal/interest). Company may prepay in full with 3 days’ notice but faces a prepayment multiplier (120% if within 90 days; 125% if between 91 and 190 days).

Why It Matters

• This transaction creates a new short-term debt obligation (Item 2.03) and involves potential unregistered issuance of equity on conversion (Item 3.02). For investors, the note increases the company’s near-term liabilities by up to ~$271k and could dilute existing shareholders if Vanquish converts the debt into common stock.
• The conversion mechanism uses a discounted price formula (75% of a low-price average), which can be dilutive relative to market prices, though dilution is constrained by the 4.99% per-conversion beneficial ownership limit and the 19.99% overall cap. The default terms are punitive (150% multiplier plus 22% Default Interest), increasing downside if ScanTech cannot meet obligations.
• Retail investors should note the timing (conversion not allowed for first 180 days), the potential for dilution if conversion occurs, and the existence of prepayment penalties that affect the company’s flexibility to retire the note early.