Sow Good Inc. 8-K

What Happened

• Sow Good Inc. announced on March 31, 2026 that it sold and issued 1,500,000 shares of Series AAA Convertible Redeemable Preferred Stock for total proceeds of $3,000,000 pursuant to a previously announced purchase agreement (as amended). The placement was made through a Panamanian holding company (PanamaCo) and other non‑U.S. investors and was sold as a Regulation S (offshore) private placement.
• The Series AAA preferred is initially convertible into 250 shares of common stock per preferred share (subject to adjustment and conversion limits in the Certificate of Designations) and includes liquidation, dividend and limited voting provisions set out in the Certificate filed with Delaware on the same date.
• In connection with the transaction, David Lazar resigned as Chief Executive Officer (remaining on the board but no longer chairman) and Donna Guy resigned as Chief Financial Officer. The Board appointed Yisroel Goldberg as CEO and CFO (he was Chief Commercial Officer), and accepted the resignations of five directors and appointed four new directors to the Board: Yisroel Goldberg, Binyomin Posen, Joseph Labkowski and Jack Wortzman.

Key Details

• Shares sold: 1,500,000 Series AAA Preferred for $3,000,000 (implied $2.00 per preferred share).
• Conversion: each preferred share convertible into 250 shares of common stock (subject to adjustment and ownership-based conversion limits).
• Redemption & priority: Series AAA ranks senior to common stock; redeemable at the Company’s option at $200 per preferred share (plus accrued dividends) and has liquidation preferences (including a stated $2.00 per share preference as described in the Certificate).
• Leadership/board changes effective with closing (March 31, 2026): CEO David Lazar and CFO Donna Guy resigned; Yisroel Goldberg named CEO & CFO; four new directors appointed to replace five departing directors.

Why It Matters

• Capital & use of proceeds: The company raised $3.0M for general corporate purposes and working capital via a private offshore placement, which provides near-term funding.
• Dilution risk: The preferred’s 1:250 conversion ratio implies a very large potential increase in common shares if conversion occurs (1.5M preferred × 250 = 375,000,000 common shares), although conversion is subject to contractual limitations and adjustments in the Certificate of Designations. Investors should review the Certificate for specifics on conversion limits and anti-dilution protections.
• Governance and strategy: The resignation of senior executives and a near-complete board turnover are material governance events that may signal strategic shifts. The new CEO (Goldberg) also assumes CFO duties, concentrating operational and financial leadership in one executive—an important factor for investors monitoring execution and financial reporting.
• Offering restrictions: The sale was made under Regulation S to non-U.S. investors and is not registered in the U.S., limiting resale options for those shares in the U.S. market.