iPower Inc. 8-K

What Happened

• On December 22–23, 2025, iPower Inc. (IPW) entered a Securities Purchase Agreement for a 6% original-issue-discount (OID) senior secured convertible note facility with an institutional investor, aggregating up to $30,000,000 in original principal. At closing the investor initially purchased Series A notes of $5,184,024 and Series B notes of $1,815,976 (total $7,000,000 original principal), with an additional ~$2,000,000 of Series A notes to be issued upon effectiveness of a resale registration — bringing total notes sold to $9,000,000. The Company received $6,580,000 in gross proceeds at closing; Digital Offering LLC earned $394,800 in placement fees.
• The Convertible Notes bear 10% interest (rising to 17% upon an Event of Default), mature on December 23, 2027, and are convertible into common stock at a fixed conversion price of $17.70 per share (with alternate VWAP-based conversion mechanics and a floor price of $2.27). The notes are senior secured obligations, secured by the Company’s and guarantor subsidiaries’ cryptocurrency and related assets; the subsidiaries provided a joint and several guaranty. The Company also agreed to registration rights for the Series A conversion shares (file within 30 days; effective within 60 days) with a 1.5% per‑period cash penalty for missed deadlines.

Key Details

• Aggregate facility: $30,000,000 original principal (6% OID structure).
• Initial notes sold: Series A $5,184,024; Series B $1,815,976; Additional Series A ~$2,000,000 pending registration.
• Cash at close: $6,580,000 gross proceeds; placement fee $394,800.
• Note economics: 10% interest (17% on default), maturity Dec 23, 2027; fixed Conversion Price $17.70; Alternate conversion based on VWAP with a $2.27 floor.
• Security: First-priority security interest in the Company’s cryptocurrency and related assets; subsidiaries guaranteed obligations.
• Stockholder vote (Dec 21, 2025): approved the facility and related share issuances, increased authorized shares from 200M to 1B (950M common / 50M preferred), authorized Board to implement a reverse stock split up to 1-for-250, and authorized adoption of a mirror preferred stock; vote represented 53.1% of outstanding voting power.

Why It Matters

• Immediate liquidity vs. potential dilution: iPower received $6.58M now but issued convertible debt that can convert into a substantial number of shares depending on future prices and VWAP-based conversions. Conversion mechanics (fixed $17.70 price, alternate VWAP discounts with a low $2.27 floor) and the authorized share increase make future dilution possible.
• Collateral and creditor position: the notes are senior secured and specifically pledge the company’s cryptocurrency assets, which could affect asset availability and creditor priorities.
• Nasdaq/listing and capital flexibility: stockholder approvals (authorized shares increase and reverse-split authorization) give the company flexibility to issue shares and to pursue a reverse split if needed to meet Nasdaq requirements.
• Registration and timing risk: Series A conversion shares are unregistered now; the Company must file and obtain effectiveness quickly or incur cash penalties (1.5% of the holder’s original principal per relevant period), which could be costly if delayed.

(Press release announcing the transaction was furnished with the 8-K.)