Mag Magna Corp 8-K

What Happened
Mag Magna Corp (MGNC) announced in an 8‑K that it issued three 12‑month convertible redeemable notes to raise net proceeds of $417,000 and established an Executive Committee and an Audit Committee. The financings were: a 6% note to CFI Capital, LLC (principal $170,000; proceeds $153,000) dated April 1, 2026; a 12% note to Silvercrest Hybrid Capital LLC (principal $170,000; proceeds $153,000) dated April 29, 2026; and a 12% note to GW Capital Investments, LLC (principal $123,333.33; proceeds $111,000) dated May 6, 2026. Each note matures in 12 months, is convertible (holder’s option) after six months, and was issued with an original issue discount. The Company said proceeds were used for general working capital. The transactions relied on the Section 4(a)(2) / Rule 506(b) exemptions.

Key Details

• Total principal obligations: $463,333.33; total net cash received: $417,000. Original issue discounts: $17,000 each for CFI and Silvercrest; $12,333.33 for GW.
• Conversion terms: holder may convert after 6 months into common stock at a conversion price equal to 60% of the lowest traded price during the 20 trading‑day lookback preceding conversion; conversions are limited to 4.99% beneficial ownership per holder.
• Default and remedies: on customary default events the conversion price falls to 45% of the same 20‑day low; holders may convert default amounts after maturity. Prepayment is allowed with a sliding premium schedule (105%–140% depending on prepay timing); failure to pay forfeits future prepayment rights.
• Share reserve requirements: Company must reserve the greater of a fixed share amount or four times the shares issuable on full conversion (CFI: 2,083,333; Silvercrest: 2,023,810; GW: 1,447,574).
• Governance changes: Executive Committee formed on Feb 16, 2026 (Harpreet Sangha, Jamal Khurshid). Audit Committee formed on Apr 3, 2026 (Gonca Demir, Chair; Daniel Marcus — audit committee financial expert; Nicholas Gregory); Board determined members meet independence and financial/audit qualifications.

Why It Matters
These financings provide near‑term working capital but create short‑term debt that can convert into equity at steep discounts (60% of recent lows, or 45% on default), posing meaningful dilution risk to existing shareholders if conversions occur. The notes mature in 12 months, so investors should watch for refinancing, repayment, or conversion activity. The new Audit Committee (with an audit committee financial expert) and Executive Committee strengthen board oversight and may improve financial reporting and governance.