Smart Powerr Corp. 8-K

What Happened
Smart Powerr Corp. (CREG) announced on April 10, 2026 that it entered a Note Purchase Agreement with Streeterville Capital, LLC and closed the sale of a secured A-1 promissory note with an original principal amount of $1,050,000. At the April 10, 2026 closing the lender paid the Company $1,000,000 in cash (reflecting a $50,000 original issue discount); an additional $15,000 of lender expenses will be added to the A-1 principal. Interest on the A-1 Note accrues at 8% per year and the unpaid balance is due 24 months after issuance.

Key Details

• A-1 Note: $1,050,000 original principal (company received $1,000,000 at closing); 8% annual interest; maturity in 24 months; $15,000 legal/accounting fees to be added to principal.
• Prepayment & redemption: Prepayments require cash equal to 115% of the prepaid amount. Starting six months after issuance, lender may redeem up to $200,000 per month (cash due within two trading days of notice).
• Trigger/Default mechanics: Certain “Major” and “Minor” Trigger Events allow the lender to increase the outstanding balance by 15% or 5% respectively (each up to three times; aggregate Trigger Effect capped at 25%). Trigger Events not cured (generally within five trading days) can become Events of Default, enabling acceleration and a post-default interest rate up to 18% (or legal max). Bankruptcy-related triggers can cause immediate automatic default and acceleration.
• Additional financing subject to conditions: The agreement contemplates issuing an A-2 Note ($1,050,000) and a B Note ($8,000,000). If issued, $8M would be deposited to a newly formed CREG Holdings, LLC account and secured by a Deposit Account Control Agreement, a guaranty by the subsidiary, and a pledge of the subsidiary membership interest. The Company agreed to covenants limiting certain new debt, liens on the subsidiary’s assets, and restrictions on issuance of securities with variable or market‑based conversion mechanics without lender consent.

Why It Matters
This transaction provides Smart Powerr with $1.0M in immediate cash and a framework for up to roughly $9.05M of additional funded notes if conditions are met. However, the financing includes strict lender protections: monthly redemption rights, costly prepayment terms (115% of prepay amount), potential balance increases tied to trigger events (up to a 25% aggregate increase), acceleration rights, and higher default interest rates. The B Note structure would also place material collateral and covenants on a newly formed subsidiary and could limit the Company’s ability to take on certain types of financing or issue certain convertible securities without lender approval. Investors should weigh the immediate liquidity benefit against these restrictive and potentially costly terms.