LUDWIG ENTERPRISES, INC. 8-K
Research Summary
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Ludwig Enterprises (LUDG) Announces $250K Convertible Note and Warrants
What Happened
Ludwig Enterprises, Inc. (LUDG) announced on Form 8-K that on February 5, 2026 it entered a Securities Purchase Agreement with Alumni Capital LP under which it issued a $250,000 convertible promissory note and an attached common stock purchase warrant. The note was issued with an original issue discount and matures on May 4, 2026. Conversion and default terms in the note include a conversion price tied to 70% of the lowest traded price of the common stock during the 20 business days before a conversion notice (subject to adjustment) and accrual of default interest and potential redemption obligations upon an event of default. The warrant allows purchase of up to 4,166,667 shares at $0.06 per share, is exercisable beginning February 5, 2026, and expires five years after initial exercise.
Key Details
- Securities Purchase Agreement dated February 5, 2026, between Ludwig and Alumni Capital LP.
- Convertible promissory note principal: $250,000; maturity date: May 4, 2026; issued with original issue discount.
- Conversion mechanics: conversion price = 70% of the lowest traded price during the 20 business days before conversion notice (subject to adjustment); default interest and possible redemption on default.
- Warrant: up to 4,166,667 shares exercisable at $0.06/share; exercisable from Feb 5, 2026; five-year term from initial exercise.
Why It Matters
This transaction provides Ludwig with near-term financing but also creates a short-dated liability due May 4, 2026 and potential near-term dilution. If the note converts or the warrant is exercised, the company could issue up to millions of new shares (4,166,667 from the warrant alone), which would dilute existing shareholders. The conversion formula (70% of recent trading prices) and default provisions mean conversion could occur at a material discount to market if triggered. Investors should monitor subsequent filings for any conversions, warrant exercises, or additional financing that affect shares outstanding and the company’s balance sheet.