CLOUDASTRUCTURE, INC. 8-K

What Happened
Cloudastructure, Inc. announced on its Form 8-K that on June 30, 2026 it entered an Exchange Agreement with Streeterville Capital, LLC under which the Company issued a Promissory Note in the original principal amount of $1,299,870 in exchange for 1,170 shares of Series 2 Convertible Preferred Stock held by Streeterville. The exchanged Series 2 shares were surrendered and cancelled at closing. The exchange relied on the Section 3(a)(9) exemption from registration. Separately, on June 29, 2026 the Company filed an Amended and Restated Certificate of Designations for its Series 2 Convertible Preferred Stock to modify the rights and preferences of those shares (intended to cause the Series 2 to be classified as equity under U.S. GAAP).

Key Details

• Exchange Note: $1,299,870 principal, issued June 30, 2026; matures July 30, 2027 (13 months); unsecured; interest 9.5% per annum, compounded daily (360-day year).
• Monthly redemptions: beginning July 30, 2026 Streeterville may redeem up to $108,332.50 per calendar month (plus accrued interest); limited additional redemptions tied to certain trading-price conditions.
• Defaults & remedies: Note contains typical triggers (nonpayment, insolvency, “Fundamental Transaction,” covenant breaches, Nasdaq delisting, Series 2 Event of Default). On a trigger Streeterville may increase the note balance by 10% (one-time); if not cured within five trading days the note may be accelerated and default interest rises to 15% per annum. The note cannot be prepaid while Streeterville owns any Series 2 Preferred.
• Series 2 amendments: conversion into Class A common stock set at $0.40 per share with full‑ratchet anti‑dilution; “Deemed Liquidation Event” removed (holders no longer get a liquidation payout on merger/sale if Company is not surviving entity — shares convert into substantially equivalent preferred equity of the surviving entity); holder-initiated forced redemption on default was eliminated (remedies now limited to the automatic 10% stated-value increase, equitable relief, and injunctive relief).

Why It Matters
This filing creates a near-term financial obligation of about $1.3M with scheduled interest and monthly redemption capacity, which is relevant to the company’s short‑term liquidity and cash-flow planning. The changes to the Series 2 terms (fixed $0.40 conversion price with full‑ratchet protection and removal of certain liquidation and forced‑redemption rights) materially alter the economic and governance profile of Series 2 securities and could affect future dilution and creditor/holder priorities. The Company’s stated intent to classify the Series 2 shares as equity under GAAP may also affect how these instruments are reported on the balance sheet and income statement.