Change Agents Corporation Issues Promissory Notes and Pre-Funded Warrants

What Happened

• Change Agents Corporation announced it issued promissory notes on August 14, 2026 with an aggregate principal amount of $616,000 (which includes a $66,000 original issue discount), generating gross proceeds of $550,000. The net proceeds were used to repay existing debt (including $144,000 to Vanquish Funding Group Inc., $125,000 to June 2025 notes, and $74,000 to a July 2024 business loan) with remaining funds for working capital and general corporate purposes.
• As an inducement to investors, the company also issued 1,000,000 pre-funded warrants to purchase common stock at a nominal exercise price of $0.0001 per share. The transaction was reported as the creation of a direct financial obligation and an unregistered sale of equity securities.

Key Details

• Promissory notes: aggregate principal $616,000 (includes $66,000 OID); gross proceeds $550,000; maturity May 14, 2027; interest 7% per year (rises to 15% or maximum permitted by law upon default); prepayable at 105% of original principal.
• Use of proceeds: $144,000 repaid to Vanquish Funding Group Inc., $125,000 repaid to June 2025 notes, $74,000 repaid on July 2024 loan; remainder for working capital.
• Pre-funded warrants: 1,000,000 warrants, exercise price $0.0001, immediately exercisable subject to ownership and Nasdaq limits — issuance limited so aggregated issuances don’t exceed 19.99% of outstanding shares without shareholder approval; individual exercise limited to avoid >4.99% ownership (can be increased up to 9.99% with 61 days’ notice).
• Other terms: notes include negative covenants (e.g., limits on additional indebtedness) and a “most-favored nations” provision for non-convertible debt.

Why It Matters

• The company took on short-term debt that matures in less than a year (May 2027) to refinance higher-cost obligations and provide working capital; investors should note the higher interest penalty on default and the prepayment premium.
• The pre-funded warrants are highly inexpensive to exercise and could be dilutive if exercised, but Nasdaq and shareholder-approval limits constrain immediate dilution. Retail investors should watch for any future shareholder vote and potential warrant exercises that would increase share count.
• The transaction changes the company’s near-term leverage and liquidity profile (new notes, repayments of specific prior debt) and imposes covenants that may limit additional borrowing while the notes are outstanding.