ConnectM Technology Solutions, Inc. 8-K

What Happened ConnectM Technology Solutions, Inc. announced that in January 2026 it entered into three securities purchase agreements and issued senior unsecured convertible promissory notes to GS Capital Partners, LLC, Labrys Fund II, L.P., and Auctus Fund, LLC. The company issued initial notes on Jan 7, Jan 20 and Jan 22, 2026, and issued a total of 275,000 common shares as commitment shares to the three investors. The GS agreement contemplates up to $1,250,000 of convertible notes; the initial closings produced notes with aggregate principal issued of about $705,150 (GS $228,000; Labrys $227,150; Auctus $250,000).

Key Details

• Commitment shares: 150,000 to GS Capital, 75,000 to Labrys Fund, 50,000 to Auctus Fund (275,000 total); issued in unregistered transactions (Section 4(a)(2) / Rule 506).
• GS Capital Note (issued Jan 7, 2026): principal $228,000 (includes $20,000 OID), purchase price $208,000; one‑time 14% interest earned at issuance (added to principal); maturity Jan 7, 2027; six amortization payments of $43,320 starting 180 days after issuance; conversion option after default with initial conversion price $0.40 and post‑default conversion possible at 75% of lowest trading price in the 10 trading days before conversion notice; beneficial ownership cap 4.99%; default interest up to 24% p.a.
• Labrys Note (issued Jan 20, 2026): principal $227,150 (includes $20,650 OID), purchase price $206,500 (subject to fees); one‑time 10% interest ($22,715) earned at issuance; 12‑month maturity; conversion permitted on default/failure to amortize/or after 180 days at a formula tied to a percentage (95%–98%) times the lowest traded price in the look‑back period; default interest up to 22% p.a.; holder may require up to 25% of certain future cash proceeds be applied to repay the note.
• Auctus Note (issued Jan 22, 2026): principal $250,000 (includes $25,000 OID), purchase price $225,000 (subject to fees); one‑time 12% interest ($30,000) earned at issuance; 12‑month maturity; amortization payments begin 30 days after closing; conversion allowed on default/failure to amortize/or after 180 days at 65% of the lowest traded price during the prior 15 trading days (i.e., a 35% discount to the low price); default interest up to 22% p.a.
• The GS agreement contemplates additional note issuances up to $1.25M in the aggregate; GS note is prepayable without penalty; unpaid amounts bear high default interest rates and conversion features trigger upon certain defaults or missed payments.

Why It Matters These financings provide immediate cash but increase near‑term debt obligations and create potential dilution. The notes carry one‑time interest charges added to principal, short (≈12‑month) maturities and scheduled amortization payments that may strain cash flow. Conversion features permit holders to convert debt into stock at prices that can be materially below market (notably Auctus at 65% of recent lows), and the issuance of 275,000 commitment shares is immediate dilution. Investors should watch cash balances, upcoming amortization and maturity dates, any additional draws under the GS facility, and potential share issuance if conversions occur.