Edgemode Secures $92K in Highly Dilutive Convertible Note with Punitive Terms

summarizeSummary

Edgemode, a micro-cap company, has secured additional working capital through a convertible promissory note with extremely unfavorable terms. The effective cost of capital is very high, with $92,000 in net proceeds requiring a $138,000 payback by December 2026, plus a $20,000 original issue discount. The conversion feature, triggered upon default, allows the investor to convert at a deep discount (61% of the lowest closing price over 20 days), which is highly dilutive for existing shareholders and creates a 'death spiral' risk. The punitive default penalties, including a 150% increase in principal and a $2,000 daily 'Fail to Deliver Fee,' highlight the company's distressed financial position and reliance on costly financing. This follows a similar convertible note just days prior, indicating an ongoing pattern of seeking capital under adverse conditions.

check_boxKey Events

• Secured Convertible Promissory Note

  Edgemode, Inc. entered into a securities purchase agreement on March 5, 2026, for a convertible promissory note with a principal amount of $120,000, including a $20,000 Original Issue Discount.

• Net Proceeds and High Cost of Capital

  The company received net proceeds of $92,000 after an $8,000 payment for the investor's legal costs. A one-time 15% interest charge was applied, resulting in a total payback of $138,000 by December 15, 2026.

• Highly Dilutive Conversion Terms

  The note is convertible into common stock at 61% of the lowest closing price during the 20 trading days prior to conversion, following an event of default. This conversion mechanism is highly dilutive for existing shareholders.

• Punitive Default Penalties

  Upon an event of default, the outstanding balance immediately becomes 150% of the principal, plus accrued and unpaid interest, and a 22% annual default interest. Additionally, a $2,000 per day fee is imposed if conversion shares are not delivered by the deadline.

auto_awesomeAnalysis

Edgemode, a micro-cap company, has secured additional working capital through a convertible promissory note with extremely unfavorable terms. The effective cost of capital is very high, with $92,000 in net proceeds requiring a $138,000 payback by December 2026, plus a $20,000 original issue discount. The conversion feature, triggered upon default, allows the investor to convert at a deep discount (61% of the lowest closing price over 20 days), which is highly dilutive for existing shareholders and creates a 'death spiral' risk. The punitive default penalties, including a 150% increase in principal and a $2,000 daily 'Fail to Deliver Fee,' highlight the company's distressed financial position and reliance on costly financing. This follows a similar convertible note just days prior, indicating an ongoing pattern of seeking capital under adverse conditions.