UNIVERSAL SAFETY PRODUCTS, INC. 8-K

What Happened

• On June 12, 2026, Universal Safety Products, Inc. (NYSE American: UUU) filed an 8‑K disclosing a Securities Purchase Agreement with SJC Lending LLC under which the company will issue convertible promissory notes with an aggregate principal amount of up to $10,600,000 in exchange for up to $10.0 million in purchase proceeds. The agreement contemplates up to eleven tranche closings; the initial tranche closed on the execution date with a $1,060,000 face‑amount note sold for $1,000,000.
• The notes bear 8% annual interest (increasing to 20% upon an event of default), mature one year from issuance, and are convertible into common stock after NYSE American approval of a supplemental listing application. Conversion is limited so issuances do not exceed 19.99% of outstanding shares as of the execution date unless the company obtains stockholder approval; the company agreed to file a proxy to seek that approval.

Key Details

• Financing size: up to $10.0 million purchase price / up to $10,600,000 aggregate principal; initial tranche: $1,060,000 face for $1,000,000 purchase.
• Conversion price: greater of $1.00 per share (floor) and 80% of the lowest 5‑day VWAP before conversion, capped at $10.00 per share.
• Notes: 8% interest (20% upon default), 1‑year maturity; standard default events apply.
• Covenants: 90‑day restriction on issuing new shares or convertible instruments (with exceptions); one‑year prohibition on variable‑rate transactions; SJC has one‑year right of first refusal on future equity financings.

Why It Matters

• This transaction creates immediate debt and a potential source of future equity dilution if the notes are converted. Without stockholder approval, conversion is capped at 19.99% of outstanding shares; obtaining shareholder approval and SEC registration are required steps before some tranches convert.
• The financing and its covenants (issuance limits, ROFR) may affect the company’s ability to raise other capital or issue shares in the near term. Investors should watch the company’s proxy filing, the SEC registration statement, and whether stockholder approval is granted for potential dilution and timing of future conversions.