1606 CORP. 8-K

What Happened

• 1606 Corp. (CBDW) announced on May 2, 2026 that it entered into an Agreement and Plan of Stock Exchange to acquire a majority (51% on a fully‑diluted basis) of Sim Agro Inc. in a stock-for-stock transaction. The Company filed a press release on May 4, 2026 under Regulation FD announcing the Agreement. The transaction has not yet closed and remains subject to customary closing conditions and approvals.

Key Details

• At Closing, Sim Agro will issue newly issued shares equal to 51% of its fully‑diluted capital stock to 1606 Corp.; in exchange 1606 will issue 150,000,000 shares of its common stock to Karthik Raghavan (Sim Agro’s sole stockholder) at Closing and 100,000,000 additional shares on January 1, 2027 (or, at 1606’s option, pay $2,100,000 cash in lieu of the deferred 100M shares).
• 1606 will have a 36‑month right to buy additional newly issued Sim Agro shares to increase its ownership up to 81% (on a fully‑diluted basis) by issuing additional 1606 shares using the same valuation ratio as the initial exchange.
• 1606 agreed to assume a Sim Agro trade payable of approximately $2,324,033 owed to ENMAS EPC Power Projects Limited; this will be restructured at Closing as a $422,322 promissory note (10% interest, 18‑month maturity) plus issuance of 25,000,000 shares of 1606 common stock to ENMAS.
• Closing is conditioned on Sim Agro stockholder approvals, FINRA approval for 1606 share issuances, absence of governmental orders or material adverse effects, and delivery of closing deliverables; either party may terminate if Closing does not occur within 120 days.

Why It Matters

• The agreement would give 1606 immediate majority ownership (51%) of Sim Agro and optional control up to 81% over three years, expanding 1606’s business footprint through a stock-based acquisition rather than cash.
• The deal involves very large equity issuances (at least 150M shares at Closing, plus 100M deferred shares or $2.1M cash, and 25M shares to ENMAS), which will materially increase 1606’s outstanding shares and could dilute existing shareholders if issued.
• The Company is also assuming and restructuring roughly $2.32M of Sim Agro liabilities, converting part of that debt into a promissory note and equity—changing the company’s balance of cash obligations versus equity considerations.
• The transaction is not final: investors should note the deal remains subject to shareholder, FINRA and other approvals and may not close.